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.