The New Draft Rules Are Backfiring

Yesterday a lot of news came out regarding Brady Aiken, the first overall pick in the 2014 draft. To give a short recap, the Astros agreed to a deal with Aiken, but now they’re saying that he has an injury. Aiken is denying the injury. The Astros have delayed a deal with their fifth rounder, since his above-slot signing could only be possible if they actually sign Aiken (the agreed upon deal was under slot, and some of the rest of the bonus pool money would have gone to fifth rounder Jacob Nix). What complicates it even more is that the Astros are trying to sign Aiken to a lower bonus, which would allow them to also sign 21st rounder Mac Marshall, but raises the question as to why they’d want to sign Aiken if they’re concerned about his health.

I was going to write something on this subject today, then I read this article by Mike Petriello over at FanGraphs, making pretty much every point I would have made. Overall, this is just a sign that the new draft rules are broken. There wouldn’t be a problem here if the Astros were allowed to sign whoever they wanted, with no penalty involved. We wouldn’t have a system where a totally healthy fifth rounder can’t sign, all because there are health questions surrounding the first rounder. There wouldn’t be a situation where a 21st round pick is signable, but unable to sign due to the harsh penalties involved.

My hope is that this whole situation forces a change to the new draft rules. I love the fact that players are now signing faster, since MLB is no longer delaying over-slot deals. But the idea that teams can’t spend whatever they want in the draft, while teams can spend ridiculous amounts on free agency, Japanese players, and Cuban players over 23, is outrageous. The Pirates out-spent everyone in the draft from 2008-2011. Their total spending was around $50 M, or about what the Phillies gave to Jonathan Papelbon a few years ago to be their closer for four years. The Pirates got Pedro Alvarez, Jordy Mercer, Justin Wilson, Brandon Cumpton, Gerrit Cole, Jameson Taillon, Josh Bell, Tyler Glasnow, and a lot of other players who have either led to the Pirates being contenders, or have led to them having a top farm system. Then there’s the fact that the Pirates signed Josh Bell for $5 M, and spent $17 M in the draft in 2011, thus breaking the old system. Yet the Yankees are allowed to sign Masahiro Tanaka to a $155 M deal, paying him $22 M per year, despite never throwing an inning in the US.

The common argument against the old system is the fear that somehow the Yankees could take advantage of that route as well. That’s not really a valid fear. For one, they could have done that all along, and Boston was one of the teams that was spending in the draft. Second, even if the Yankees spent money, that wouldn’t impact the negotiations for the Pirates. Teams have exclusive negotiation rights with their picks, and the draft is set up so that teams can’t load up on all of the top talent. The Pirates might not have gotten Josh Bell in this scenario, but they’re still getting middle round picks like Nick Kingham, Tyler Glasnow, and Clay Holmes.

Personally I’d rather have the old system, even if it comes with the fear that the Yankees could also participate in loading up on draft talent. That would be better than the current system, where the Yankees continue to spend small in the draft, while the Pirates lose their ability to load up on a lot of high upside young talent.

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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  • leadoff

    Yet the Comish said yesterday that the competitive balance is better than it ever was, just look at the pennant races. The A’s the Pirates, the Royals.
    It is only that good for the Pirates, Royals and A’s because they made most of those draft picks before the new system came into effect. The Pirates present MLB team is not a product of the new system, it is a product of the old system.

    • freddylang

      I just repeated a lot of what you said leadoff…it’s about margin for error…and the less talent you can bring in, the margin for error gets thinner too obviously…teams that can go out and pay 150 mil for 29 year olds…the only margin for error is an injury or a freak off year. For young talent there are about 10 things that can go wrong. Advantage – RICH!

  • Rick Atkinson

    Major League Baseball profits when the big market, big money teams win. It’s ok to have a feel good story like the Pirates once in a while, but a level playing field would be a financial handicap. Someday they will change the rules to prevent team friendly long term contracts for young potential superstars so that the Cutch’s of the world can get to the Yankees sooner

    • leadoff

      Anytime the big market teams change the rules they throw the dog a bone then head for the bank. and I agree watching Cutch in Pitt is probably killing the big market teams right now, have change that.

  • capirate

    If you identify the worst possible solution for any baseball issue, you can be certain that Bud Selig will support it. The draft rules are just another example. He is retiring at least 20 years too late. Of course, he will soon be elected to the Hall of Fame.

    And the union doesn’t really have anything to complain about either. They agreed to the restricted draft spending with the hope that the saved money would be spent on them. They only start caring about players once they sign a professional contract and can start paying union dues.

    • John Lease

      They only care once they have a ML contract, very true.

  • piratemike

    MLB, the union and large market teams could careless about fairness or equality, the Pirates and other small market teams only exist to give the big market teams somebody to play.
    It is the same as the Generals playing the Globetrotters.
    If I grew up in this period I probably wouldn’t even watch baseball but I grew up in the 40’s and 50’s and baseball is ingrained in me so I will follow the Pirates and their minor league teams and players knowing that things will never change.

  • William Wallace

    I love the fact that players are drafted and they sign at a relatively quick pace. I agree that the Pirates and other small to mid-market teams are not going to sign a foreign player for a large some of money. The fix would be a total cap on signing/drafting players. If Tanaka wanted to ply in the MLB fine but whoever acquire him may have all of their money assigned to this player.

  • Doug Gray

    Tim, I’ve done a whole lot of thinking about this topic over the past few years, and if baseball is going to force a draft budget, they need to just go to the NFL system where it’s truly slotted. You get drafted in X spot, you get Y dollars. No negotiations. Take it or leave it.

    It keeps the fear of the Yankees doing what they’ve done on the international market this year in the draft out of the equation, and still gives baseball owners their “budget”. It creates a system where the perceived best players are drafted according to their talent rather than their budget demands. It would get rid of a big mess and resemble what the draft was meant to resemble.

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

      One complication baseball has is that they draft players out of high school, while the NFL drafts guys solely from the college ranks. Most of the negotiations come with the prep players, who have other options that would be more appealing than slot for the later rounds. I think this would prevent a lot of prep players from signing.

      Maybe they should have some sort of rights clause for prep guys, like in the NHL. The team drafts them, then gets negotiation rights for X amount of years.

      • Doug Gray

        I can see that being an issue at times, but if a team wants a prep player enough, they will take them early enough to get them signed or those kids will just go to college. The owners talked the MLBPA into selling these guys out (and really selling out the international kids), but both sides seem to be just fine with that happening so a few extra 38-year-olds can ride the bench around the league making $4M. If that is going to continue to be the case, there isn’t a good answer as long as teams are given “pool money” to work with, even if that pool money winds up being a hard slotting system. I’d prefer a hard slotting system though over one where things like this situation opens itself up or one where college seniors get $5,000 bonuses in places where non-seniors would get 30 times that or more. I’m all for teams trying to be smarter than others to exploit a system, but not when it comes at the expense of screwing over players and that unfortunately is what happens when it comes to the draft.

        As for the rights clause, I wouldn’t mind seeing the draft and follow rule come back as a part of things, but with a stipulation that you can offer them more money the next year if their stock does improve without punishment up to a certain point (what point, I don’t know – say 75% more than their pool slot was the year before?).

      • mike_carlini66

        Tim, This is what I never understood. For example, the Pirates drafted Trea Turner in 2011. Why is it we cannot retain his rights but hockey players get drafted, go to college and are retained by the team that drafted them. Why won’t MLB adopt this process? is it because there are many more rounds and most players can move up in the draft in 3 years?

      • CalipariFan506

        I actually like that draft and follow idea.

        If a team drafts a high school kid and he decides to go to college, he is still the rights of the drafted team until the day of the draft 3 years later when he is eligible to be redrafted.

        That would give guys like Cole the option to go to school, get a degree, and obviously sign for way more money from the Yankees before the 2011 draft. Or the SS we drafted three years ago that didn’t sign and went to NC State.

        The only issue would be the draft would need to be moved back until the college WS is over.

  • Mike C.

    Though not a big NBA fan, they did get the draft right. No draft “recommendations”, no negotiations, if you’re the 1st puck, you get x amount , you’re the 47th pick, u get x amount.
    Simple, quick, no drama.
    It doesn’t effect the current players so the mlbpa should be fine with this, but no.
    It’s too similar to the dreaded word “CAP” and all involved are too stupid to realize the current one is broken.

    • rip55

      nobody cares its broken except us.

  • http://batman-news.com NMR

    Excellent explanation of why it would be virtually impossible for a team like the Yankees to draft as they’ve just done with July 2 kids.
    .
    That fear was never, ever valid.

  • piratemike

    One thing that is funny is that the current leadership of the Yankees and Mets with all of their advantages can manage to f**** things up.
    People who complain about the Pirates front office and Bob Nutting should be Yankee fans. I can hear it now ” The Yankees are cheap , so what if we have a 200 million payroll go out and buy more players”

    • bucsws2014

      Say what you will about the Mets, but for all the criticism Alderson and ownership have taken, the Mets may very well have the best pitching staff in the NL come 2015 and for several years thereafter. They’ve adopted a small-market mentality regarding pitching prospects and also have the money to go after FAs to fill their position holes when they’re ready, which will be very soon.

      • piratemike

        bucsws, you are right about the Mets getting better but I was thinking about them being a large market team and not having the success given their advantages. They should be perennial front runners.

  • http://www.acme-tv.com LongJohnSilver

    Unfortunately MLB does not agree with Tim’s assessment. I was upset from the beginning with this whole new draft setup, so much so that I wrote to MLB to voice my displeasure about it.

    They thanked me for my “valuable input” and I’m sure, filed it under “W” for wastebasket. Fitting I guess, since that is where I filed their response :)

  • S Brooks

    At least Houston, if it fails to sign Aiken, will get the #2 pick in next year’s draft as compensation.

    The hope is that enough teams, agents and draftees have enough bad experiences with the draft to ditch it for the next CBA.

    I’m all for a shorter (20-25 rounds) draft with no cap, and if you make a minimum qualified offer (decreasing value by round) but fail to sign the player, you get a comp pick at the end of that round in the subsequent year’s draft. Probably would limit it to the first 5-10 rounds. I’d keep the signing deadline as is. That’s one aspect I do like.

    I’m also for an international “July 2″ draft – again, limited number of rounds, with no caps.

    The excess un-drafted players from each draft create a “free agent” class that smart organizations like the Pirates can exploit.

    I would make draft picks tradable. Limit it such that you could only trade one each of your first, second and third rounders every 3 years. Compensation picks should also be tradable.

    Major league free agency has been shown to be a “winner’s curse” market. I’d leave that alone, with the exception that I would only award draft pick compensation for first-time free agents.

    There’s a little something for everybody here. The draft gives teams exclusive negotiating rights in both markets but players aren’t capped on bonuses; on the other hand, the compensation for unsigned draftees protects teams from being railroaded by agents; large market teams can spend at will on free agents and, for 2nd+ time free agents, won’t have to give up a draft pick; shorter drafts increases the supply of undrafted free agents, so smart teams are rewarded for good scouting; and tradability of draft picks allow teams to take different philosophies toward building a system.

    Of course it’ll never happen.

  • freddylang

    I don’t know why the big revenue teams would care that small revenue teams are being aggressive and paying to sign guys in later rounds out of commitments because in the end a lot of the small revenue teams’ talent comes to the big revenue via free agency anyways. So, small revenue teams are developing guys into their prime and being a feeder system for the rich teams who then overpay and a lot of times never end up getting good value out of these megadeals. It was a system that was making things more even…in some odd bastardized way.

  • cfjohnsn56

    The “Yankees could just blow up the draft pool” argument is and always was a fallacy.

    What is stopping them from doing that same exact thing right now? A fine? Ohhhhh, the Yankees wouldn’t spend the extra to get the player(s) that they wanted because they will incur extra millions of dollars. Why, it’d be like they were incurring some kind of luxury cap fee for spending too much in that arena. Oh wait…..

    The Yankees (and now the Dodgers and Angels and a few other teams) don’t care if they have to spend the extra few millions or possibly even lose a draft pick the following year because they have the resources to just go out and buy the best available player at their position need in free agency and not have to wait the 2-6 years to develop a draft pick. That, coupled with the fact that they have almost always been drafting in the bottom 20% when most top players are already off the board and you have a logical fallacy to sell to the masses.

  • xHoratiox

    I have not looked in to this to deeply, but why can’t they just count all non-draft signings against the luxury tax? Including players who would be inclined to skip the draft to wait for big money from the yanks, and then playing international ball for a year? In turn, they could make the luxury tax penalties stiff enough that they yankees would actually care about it? Say first year over the luxury tax includes a penalty of 500 million, 2nd year over is 3 billion, third year is 15 billion? As far as the draft goes, just give a cap on total signing money based on record from the previous year, or add a lottery so teams don’t cave on purpose. I know their main interest is to reduce $ given out by owners, but a close second is to keep the top revenue teams in power so this is probably a dream anyway.

    • smurph

      I don’t disagree with you Brian. However, the high-priced players from Japan or other countries would then not come here. First of all the Japanese teams make you pay them a fee before you can even negotiate a contract. Then if it isn’t for big money, you don’t get the guy. Horatio’s idea makes more sense, which of course, is why MLB would never do it.

  • smurph

    For awhile the escalating salaries immensely favored the large market teams. Huge, unfair advantage. Still is. However, the small market teams have figured out a way to open a short window where they can be competitive. Stockpile prospects through the draft and by trading veterans to large market teams. Try to sign your best players to longterm contracts. This has helped level things a little bit – enough that the big market teams had to come up with a new tactic to make sure small market teams can’t compete at the highest level. Stock your team with not only the top FAs, but also the top foreign players. Checkmate again.

  • keithconto

    I think 2 things need to happen. One is for this current system to be scrapped. It essentially came about because some teams cried foul when the Pirates got the “unsignable” Bell. funny that they want a fair system the moment anyone has the gall to outspend them at something. If you want this system, CAP the big clubs.
    The second is an international draft. You wanna play here ? Great, you go through the process like every one else does. It allows all teams to have a shot at a Tanaka. And BTW, tell the Japanese league to take a hike with their negotiating fee. Their players wanting to play here is their problem, not ours. Our problem is not treating these guys like what they are. Unproven by ML stardards.