Potential Draft Bonus and Compensation Changes

Buster Olney provided several updates on the possible changes that could take place under the new Collective Bargaining Agreement, which Olney reports is “on the ten-yard line”.

-The big issue has been the owners’ demands for hard slotting.  One solution involves bonuses for the top ten rounds.  Teams would have a ceiling based on the slot prices for the first ten rounds of the draft. This wouldn’t restrict a team from going over-slot on any individual pick, although a team would have to keep it under the ten round total.  Teams would be taxed the first time they went over the total, and they would “lose a top pick” the second time.

This past year, the slot prices for the top ten rounds for the Pirates totaled $6.13 M (using $150 K for rounds six through ten, where there are no official slot prices).  Gerrit Cole alone would have topped that ceiling, although the Pirates could have gotten around that by giving him a major league contract (because for some reason, MLB doesn’t care if a guy gets $8 M in the draft, as long as the bonus adheres to the slot price).  This pretty much eliminates any chance of getting another Josh Bell in the second round, unless the team is willing to pay a tax or lose a top pick.

This doesn’t seem to restrict bonuses after the top ten rounds.  The Pirates didn’t have any huge over-slot bonuses after the top ten rounds this year.  12th round pick Candon Myles received $125 K, and 23rd round pick Jordan Cooper got $100 K.  In 2010 the Pirates gave $468 K to 15th round pick Drew Maggi, $450 K to 17th round pick Ryan Hafner, $400 K to 23rd round pick Jared LaKind, and $100 K to 25th round pick Casey Sadler.  They gave $425 K to 2009 12th round pick Jeff Inman, and $900 K to 2008 20th round pick Quinton Miller.

If this does go in to place, I wouldn’t be surprised to see teams wait on the over-slot guys until after round ten.  We might see more 11-20 guys signing, like Jordan Dunatov, Kody Watts, Eric Skoglund, and Aaron Brown, the Pirates’ 14th-17th round picks in 2011.  All four were backups in the event that Josh Bell didn’t sign.

-Olney also mentions that first round draft pick compensation could disappear.  It’s unknown whether this is referring to all draft pick compensation, or just the pick that teams would have to give up for signing a Type A free agent.  I’d expect the latter.  That should boost the market for guys like Ramon Hernandez, or any relief pitcher, as teams won’t have to give up a draft pick to sign them in addition to the money it would take to get them signed.  Although if the new draft system eliminates any chance of getting a Josh Bell in the second round, it might have been more valuable for the Pirates to use that second round pick on a free agent, depending on the free agent they signed.

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Tim Williams

Tim is the owner and editor in chief of Pirates Prospects. He started the site in January 2009, and turned it into his full time job during the 2011 season. Prior to starting Pirates Prospects, Tim worked with AccuScore.com, providing MLB, NHL, and NFL coverage to various national media outlets, including ESPN Insider, USA Today, Yahoo Sports, and the Wall Street Journal. He also writes the annual Prospect Guide, which is sold through the site. Tim lives in Bradenton, where he provides live coverage all year of Spring Training, mini camp, instructs, the Bradenton Marauders, and the GCL Pirates.

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  • Anonymous

    It would appear that whatever they do is going to effect the Pirates in an adverse way!

  • Anonymous

    Tim,  what you are saying is, after round 10 they can still draft prep players and give them over slot money, just not round 1-10.  Nothing changes other than they will not get “Josh Bells” round 2 but could get them round 11 because noone will draft overslot guys until then.  Correct?

  • http://pulse.yahoo.com/_2K6ELYRR4HJLX6NRSWPSJ6IZ7E Jeremy

    This is horseshit.  The Phillies can pay Papelbon roughly $195,000 for every inning pitched and no one has a problem with it, but if small market teams, the Bucs and their $17 mil. especially, spend “too much” on the draft the whole system needs changed to limit small market teams from getting superstar talent?  Like I said, horseshit.

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