MLB: Will the Draft Hold Up the Next CBA?
Draft Manipulation and the CBA: Current Methods
The current draft works with a slotting system to determine the value of picks. For instance, in this year’s draft, the #1 selection by the Phillies has a draft slot value of $9,015,000, while the #2 selection by the Reds has a draft value of $7,762,900. The values of all picks from rounds 1-10 are added together to form a team’s draft pool. In the 2016 draft, the #1 pool belongs to the team with the #2 overall selection, the Reds, with a draft pool of $13,923,700 due to having compensatory or competitive balance picks on top of their regular picks.
After the 10th round, all teams are given the same amount to spend across all their selections from round 11 to round 40. They can choose to load a significant amount to one player or spread it evenly across all of those selections, but they can also use any funds left over from rounds 1-10 in rounds 11-40. Each selection in those later rounds is “capped” at $100,000 and any selection over that amount requires additional funds from the draft pool from the first ten rounds.
Manipulation #1
This is where the first manipulation of the draft comes in. Watch the draft this year, and look back at previous years. Starting in roughly round 3, teams begin to load up on low-profile college players that they know will sign for low amounts of money in order to push more money toward the 11-40 rounds.
This has been the worst kept secret in the game thus far, something that all teams seemed to have figured out immediately in the 2012 draft already to buy extra signing bonus money for later in the draft. It’s simply a matter of when this draft manipulation begins for each team, not if.
Manipulation #2
Then we come to those compensatory and competitive balance picks I mentioned earlier. The old draft used to place a team that lost a significant player in the draft slot of the team that signed their player. Instead, now, the signing team loses their pick in the first round (this is protected for those teams in the first 10 picks), and the team that loses their player gets a compensatory pick after the first round.
Competitive balance picks were something new in the 2011 CBA. These were to seemingly help balance the small market teams with the large market teams by giving those teams with smaller markets an additional selection early in the draft to help build up their team with cheap, usable players. There are two rounds of CBA picks (as they’re termed), one after the compensatory round of the first round, and the second after the second round. The big thing – these picks are able to be traded!
When a team has multiple compensatory picks or competitive balance picks, that team can accumulate a high signing bonus pool. In fact, the top 4 bonus pools in the 2016 draft include three teams that make sense – the first three teams selecting in the draft, but one that may surprise, the San Diego Padres, who have the 3rd largest draft pool at $12,869,200 due to having the #8, #24, #25, and #48 teams in the top 50 selections in the draft.
Recent teams have used those high numbers to make deals with players before the draft for deals above their draft slot for their pick in order to have that player “fall” to them later in the draft. We’ll explore this further in the next slide.
Manipulation #3
The third manipulation happens when a team doesn’t necessarily use a bigger draft pool to make a deal with a player, but they pursue a “signable” player early to save money to pour into players they assume will want more money than other teams are willing to offer them.
We’ll explore all three of these in the next slide.
Next: Recent Examples