When It Makes Sense to Give Up a Draft Pick

In 2010 the Pittsburgh Pirates had the 52nd pick in the draft, picking second overall in the second round.  Heading in to the draft, not much was expected from the pick.  They ended up drafting and signing Stetson Allie, who entered the draft as a top 10-15 prospect.

In 2011 the Pirates had the 61st overall pick in the draft, picking first in the second round.  Once again, not much was expected prior to the draft.  However, on draft day they saw Josh Bell, one of the top high school hitters, and a top 15 prospect, fall to them.

Heading in to the 2011-2012 off-season, the Pirates find themselves with a few holes, and one of those holes is behind the plate.  One of the top options available is Ramon Hernandez.  Yesterday, MLB Trade Rumors did their annual predictions of the top 50 free agents and where those free agents would sign.  One of the predictions had Hernandez signing with the Pirates. Sports Illustrated made the same prediction in their top 50 article.

Not many teams need catching this off-season, and there aren’t many solid overall catchers on the market, so it’s not hard to draw the line from the Pirates to Hernandez.  The one disclaimer that comes up is that Hernandez profiles as a Type A free agent, which means that any team signing him would have to give up a compensation pick.  The Pirates pick eighth in the 2012 draft, so their first round pick is protected.  However, they’d have to give up their second round pick if they were to sign Hernndez.

There are 31 picks in the first round this year.  There could be as many as 48 compensation picks before the second round, although that’s very unlikely.  In order for this to happen, all 48 players would have to be offered arbitration, all 48 would have to decline, and all 48 would have to sign elsewhere.  It’s more likely that there are around 30 compensation picks when it’s all said and done.  The Pirates pick eighth in the second round, so we’re likely talking about a pick in the 60-70 range.

That might not seem like much now, but keep in mind what we said prior to day two of the draft the previous two years.  Would you have suggested signing Hernandez if it meant you were passing up on getting Josh Bell?  I doubt many would have made that move, as the long term benefits outweigh the short term benefits.

The 2012 draft could be different.  The Pirates have four players eligible for compensation.  The Pirates are sure to end up with at least one compensation pick, and might even end up with multiple picks.  The extra picks would come earlier than their second round pick, likely in the 45-55 range.  That would allow them a better shot at getting a Josh Bell or a Stetson Allie, even if they sign Hernandez.

There’s still the issue of actually giving up a pick.  Is that something the Pirates can afford to do, even when they’re potentially getting extra picks?

If we look at it as one move – giving up a pick to sign Hernandez – it might not make sense.  If we look at it in the big picture, it might be more worthwhile to make the move.

Hernandez is a Type A free agent and it’s not exactly close.  MLBTR has unofficial rankings in which Hernandez was fifth of the seven Type A catchers in the NL.  The rankings are based on the previous two seasons.  If the Pirates signed Hernandez to a two year deal, he’d basically have to match his 2010-2011 production in 2012 and 2013 to maintain his ranking.  If they signed him to a one year deal, he’d have to match his 2010 production in 2012, since the 2012 season would replace his 2010 numbers in the updated rankings.

The Pirates might have to give up a compensation pick for Hernandez in the short term, but in the long term they’re potentially looking at two first round compensation picks if he maintains his current level of play.  If he sees a drop off, he’d probably still be a Type B free agent.  Chris Snyder rates as a Type B free agent this year, even though his 2010 and 2011 numbers aren’t much to write home about.  That would only net one compensation pick, thus replacing the pick they gave up for Hernandez.

If you look at it as a long term trade, it’s basically the Pirates giving up a pick in the 60-70 range in 2012, in exchange for one to two years of Hernandez and one to two draft picks, depending on how long they sign him, and how he rates going forward.  Of course, there are risks involved.

The first risk is that Hernandez struggles so much that he doesn’t get compensation.  I can’t really see that happening, unless he just completely misses an entire year to injury.  There’s also the risk of retirement.  How do we know Hernandez would re-enter the market at the age of 38 after a two year deal?  And would there be a team that was willing to give up their first or second round pick for a 38 year old catcher?  The price that the Pirates pay should also be considered.  If Hernandez receives $5 M in his final year, then arbitration would pay him a raise over that number.  That raise would be more than Hernandez would see on the open market.

Best case scenario the Pirates would get future picks for Hernandez, making up for the lost pick in 2012.  However, that’s not guaranteed.  So let’s focus on what is guaranteed.  The obvious thing would be that the Pirates would get Hernandez, who is the best option available to them right now.  He would be an upgrade, offensively and defensively, over the current internal options.

There’s also his impact throughout the system to consider.  Think of how Tony Sanchez and the other young catchers in the system could benefit from Hernandez’s experience.  The Pirates could have a lot of young pitchers arriving in the next year or two, with the two big possibilities being Gerrit Cole and Jameson Taillon.  How valuable would it be to have a talented veteran catcher like Hernandez working with that staff.

None of these reasons are reasons alone to sign Hernandez, but they’re added benefit.  The real reason to sign Hernandez is because he’s the best available option, and one of the few two-way catchers that the Pirates could acquire for the 2012 season.  But is that worth a second round pick?  I think when you look at the overall package, the answer is yes.  In one hand, you have a second round pick with no guarantees.  Yes, the Pirates saw Josh Bell fall to them in 2011, but they didn’t see a similar situation in 2009, and it’s not guaranteed in 2012.  Then there’s also the uncertainty with prospects versus the better bet with a guy like Hernandez.  Add in the experience he brings to the young Pirates, and the possibility of getting one or two picks in the future, and it sounds like a good trade off, especially when there’s a good chance that the Pirates have extra picks to work with in the 2012 draft.

Just because two outlets predicted that the Pirates would sign Hernandez doesn’t mean they will make the move.  However, if the only holdup is the loss of a second round draft pick, then the Pirates should make the move.  That second round pick is worth Hernandez and everything he brings to the table, plus the possibility of future picks down the line.

Tim Williams

Author: 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

    This is a well written article.  I think it makes a better case for not signing him however.

    There are some other points about Hernandez that need to be understood when evaluating his rewards to risks.  First, he has health issues.  Hernandez hasn’t played more than 97 games in a season in the past three seasons.  Do the Pirates really want to invested their limited resources on a player who misses half the season as his norm?

    Second, he will be costly to the Pirates.  There may not be many teams looking for catching but there will be enough to drive his cost up.  The Reds freed up salary when they declined Cordero’s option.  That puts them in the market.  The Red Sox would likely overpay for him to back their alphabet soup catcher.  The Nationals have been known to throw money lately, they may be interested in RH as a back up to Ramos. The Tigers, Dodgers, Marlins, Giants (depending on Posey’s health) and a few others may be interested in a part-time catcher.  It may be a small market, but there will be enough of a market to drive up Hernandez’s cost.

    Third, also related to cost.  RH made about $3M last year.  It will likely take at least $10M to sign him for two years.  That is too much, when added to the cost of losing the pick, for a part-time catcher.  As we’ve seen in the draft the past two seasons, there are much better ways to invest $10M.

    Finally, look at RH’s performance.  He has an .852 OPS at home in Cincinnati.  In his three years in Cincy, his road OPS has been .641 (2009), .763 (2010), and .637 (2011).  Last year, the difference between his road OPS and home OPS was 340 points.  His offense, based on the numbers is park generated. Based on limited data, he has just a .650 OPS in PNC Park.  I don’t think that translates to PNC Park. 

    RH is a nice player but not one we should give up a pick to get.  The costs and the risks significantly out weigh the benefits.  Maybe if the Pirates were making a run at the division, I would sign him, but not now, not in the position this team is in.  The Pirates should be racking up as many picks as possible, not letting them get away.

    • http://pulse.yahoo.com/_OGCKUSO5MA5VUCJHW2YSJ2K3TM Bob

      So how long are we just gonna rack up picks and continue sucking in the majors?  Picks are only as good as the people that coach them up through the ranks and to this point Pirates development hasn’t proven that they can do what the Rays do.  Basically from my perspective the FO just spends 10M in the draft so they can make excuses for not spending 25M in FA market.  

      • http://www.piratesprospects.com Tim Williams

        It takes awhile for picks to translate in to major league players. Look at Robbie Grossman. Drafted in 2008, and only now in 2011, after his third full season, is he breaking out and starting to get recognition as a top prospect. And that’s a normal timeline for a high school player.

      • Anonymous

        To stay competitive, the Pirates have to rack up picks forever, just like the Rays.

        Obviously they can’t suck at the major league level forever (although 19 years is probably close to forever).  But, none of these guys mentioned by SI/MLBTR, to include Hernandez is going to keep the Pirates from sucking.  They will suck next year (as they did this year) regardless of who they bring in or do not bring in.

        I would rather watch them suck with guys who might end up succeeding or will be here later than watch them suck with another group of stop gaps who are hoping to be traded to a contender or looking for their last contract.

  • Anonymous

    Perhaps I’m having a senior moment, but when did a team start getting multiple picks when a player goes to free agency? No coffee yet for me either  ;) so I’ll use that as my excuse.

    The Pirates don’t seek the #1 choice at any position. Folks you know better. If he’s the best available what earthly reason would he have to come to PNC?

    The BMTIBB certainly has an intenal value of something around half value for him. No one is worth $5MM/yr unless it’s a minor leaguer buried deep in the system is the view for the BMTIBB.

    Dropkick bought up some solid points. I feel like 97 games/yr for a catcher is pretty good tho. There will be competition for him. Expect the usual PR about the PBC being in “serious” discussions with Hernandez initially but all going quiet when once money enters the picture.

    Hernandez would be a serious upgrade even at 2yrs/$15MM. If you’re ever going to have success, and that is not the goal of the BMTIBB, you’re eventually going to  have to start overpaying. With so many holes to fill Hernandez would be a good one to start with. He’d be like a coach on the field. I don’t see him being anything beyond 2 yrs except assuming journeyman status. THAT will be when the Pirates strike.

    • http://www.piratesprospects.com Tim Williams

      A team gets picks for a ranked free agent. Type A free agents land two picks. Type B free agents land one pick. Hernandez is a Type A free agent.
      As for why he’d come to PNC, there aren’t many teams looking for catching. So it’s not like Hernandez has much of a choice.

      In regards to his playing time, he did miss 59 games at the end of the year in 2009 to a knee injury. He missed 13 games in 2010 with a knee injury. But he was relatively healthy in 2011, with only a few day to day injuries. His playing time was reduced mostly because the Reds were splitting time and giving him a reduced workload.

  • http://pulse.yahoo.com/_OGCKUSO5MA5VUCJHW2YSJ2K3TM Bob

    If he is actually willing to come play in Pittsburgh it is worth giving up the pick, no question.  

  • http://pulse.yahoo.com/_VG2DTCDBCSAPFH4V5EKVJ4RJQ4 Steve

    Another point is that the comp picks are unprotected, unlike the 2nd round pick.  Small point, but the Pirates loos leverage with the comp picks, makint it much less likely that they go for a risky pick.  If you look back at recent sandwich round picks, they are almost all players that would sign for sure ( a lot of college seniors).  That a legitimate point to consider when you start comparing the 2nd round pick the Pirates are giving up to the comp picks that they may receive for ranked ARB players.

    • http://www.piratesprospects.com Tim Williams

      That doesn’t apply for these compensation picks. These are protected. The ones that aren’t protected are the ones that are given when you don’t sign a draft pick. If you don’t sign your first round pick, for example, you’re given a compensation pick the next year, although that isn’t protected.
      In this case, a compensation pick is given, but it is protected. For example, in 2009, Toronto had the 37th pick in the draft. They drafted James Paxton, but he didn’t sign. So they got the 38th pick in the 2010 draft as compensation. The 2010 pick was unprotected. The 2009 pick was protected.

  • Anonymous

    Excellent article and analysis!