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What Would be the Effect of Hard Slotting in the MLB Draft?

Posted by Sean Forman on August 17, 2010

Last night was the amateur draft signing deadline and lots and lots of "over slot" deals came through at the end. Leading to gnashing of teeth and complaints about money going to unproven players.

One of the things that seems likely in the next collective bargaining agreement is that the players and teams will clear the way for hard slotting in the amateur draft--meaning a system where draft pick #1 gets $Y and draft pick #2 gets slightly less than $Y, etc. etc. with the commissioner's office setting Y. Some argue that the MLBPA (player's union) won't let this happen, but they are wrong.

1) The MLBPA does not and can not care one iota for players not on the 40-man and does not in any way shape or form represent them. They are the major league baseball players association. Their responsibility is to guys who have made (or will soon) make the show--full stop.

2) As such, they would love hard slotting (assuming it isn't a backdoor to the cap) that frees up money for major league vets, and they would love the removal of FA compensation, which only increases the value of existing major league free agents. I can freely sign Bengie Molina as he won't cost me any draft picks.

3) The league could possibly set a draconian slot system, but as someone else pointed out, they then will face issues with:
a) players saying screw you and going to play in Japan or the Frontier League or some such thing. "If I'm going to be riding a bus for three years, I'm going to do it with double the signing bonus." This is not as much of an issue as it is for the NBA and NHL with Euro leagues. in the NFL, I'm guessing the NFLPA represents those players, so the issues with slotting would need to be collectively bargained (I'm guessing).
b) legal challenges (IANAL, so I can't speak to the issues here) from the players whose value in the marketplace is being grossly distorted.
c) You'll never sign the two-sport athletes then as you can't buy them away from football.

I also suspect a slotting system would have some perverse effects.

Would there be more pressure on high schoolers to go to college since they have less leverage now and might increase their slot payment later?

What would the world of signability guys be like? and what would the effect be on them? Would teams draft them higher to give them a higher slot or lower to since you can't now throw money at them to get them to sign and who can risk not signing a third round pick?

Would money pour (and I mean really pout) into the latin markets as big market clubs can no longer use the draft as an opportunity for competitive advantage?

Would teams have to offer slot and be required to sign every player?

Any thoughts?

[ed. note] this originally started as a comment in this thread on BaseballThinkFactory.org.

This entry was posted on Tuesday, August 17th, 2010 at 12:39 pm and is filed under Draft. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

14 Responses to “What Would be the Effect of Hard Slotting in the MLB Draft?”

  1. I think a better idea might be to institute some sort of luxury tax for exceeding pre-determined slot money to discourage, but still allow over-slot bonuses. The other viable alternative, I think, would be to go full-on free market and get rid of the slots entirely.

  2. I think you would always get the quality baseball players in the MLB (even if there was slotting). I think the guys (draftees) that might jump to other leagues are aware that the money/prestige is in the MLB (eventually). For guys that don't plan on becoming good enough to get the big money eventually, hence the need to get as much money up front as possible, I don't think it is a big loss for baseball.

    For 2-sport athletes, you will probably lose great basketball players because of the short wait to the NBA and big money (but not sure how many guys that is - 1 maybe 2 per year?). As for football - if they want to choose to get beat up for probably less years/money (for comaprable success), then I guess that is their choice. As the saying goes..."You gotta be a Football Hero!!!", but remeber.."Chicks dig the long ball."; Not sure of the Baseball/Hockey combo (in terms of how many that affects). In all of these instances, the Agents may be the one's to steer their clients away from baseball, usually at the detriment of the player, not the MLB. How long that will last I guess will be determined by how long the clients let the agents get away with it.

    As far as money being poured into latin markets, I don't know if it is even possible, but I don't think anyone should be able to be signed by an MLB team without being subjected to at least 1 draft (until they are 25 years old). Meaning if they want to play in Japan until they are 25, then they can sign with whomever they want as a FA. I know this is not really the question of the post, but it would affect the money being used for latin players - more spent on scouting, less spent on signing (especially in conjunction with slotting).

    I think the only real problem the slotting has (from MLB owner's perspective) is that if there is a year where the talent level is not really that great - then the teams face the risk of overpaying for EVERY draft position...but maybe that is taken into account by the commisioner's "$Y" decision or they just allow it to happen given just how much money they would typically save year-to-year.

    as you can probably tell from my post, I am not well-versed in the draft rules, concepts, etc., so some of my points might sound ridiculous and that is why. If so, I apologize.

  3. Absolutely not an expert on the MLB draft, but I do know a little something about unions and management. I would think the slotting cash would be of an "up to and no more" dollar amount variety, so cash wouldn't really be "wasted" on lesser athletes.

    What I'm wondering, is say you have a #1 and a #2 pick (both are very close/similar in projected talent) and negotiations are ongoing with both. Once your #1 announces he is turning down the deal and going to school for another year, can you bump your #2 up to #1, and thereby increase your offer and your chances of signing at least one of your picks?

    Or would it work the other way, too? #2 turns you down so you re-slot your #1 into #2, reduce your offer, and say "take it or leave it?" Teams sitting on a rich farm system already might be tempted, eh?

  4. The draft process as it stands now is complete insanity. The Yankees gave their fourth round pick more than they gave their first round pick. So why not take the fourth rounder in the first, and vice versa?

    The Dbacks gave their FOURTEENTH round pick PICK $1.2 million dollars. If the kid was any good, he wouldn't have lasted til the 14th round.

    Why give a 17 year old kid a $9.9 million guarantee to play minor league ball for the next three or four years?

    The whole system is just plain stupid.

    The slot system clearly doesn't work. Maybe each team should have a draft cap, giving them the freedom to spend the money as they so choose. Maybe it would force teams to draft better, getting players who fit their needs positionally, instead of going for the proverbial "best available" kid.

    If Washington knew they had a $15 million cap for the whole draft, maybe they would dump it all on Harper, knowing they wouldn't be able to sign most of their bottom round picks. Maybe they would have come down a bit, knowing that next year's draft is expected to be alot better and can roll the dice there, believing they may get TWO better players for the same money.

    International players should be part of the draft, or at least subject to the same rules, such as age eligibility.

  5. Good stuff, Sean. But, I do want to point out that in my discussions with Michael Weiner, he has said that the MLBPA is opposed to hard-slotting. They are, however, open to an international draft, as is the league. Just a matter of sorting it out logistically.

  6. You're absolutely wrong about the MLBPA being in favor of hard slotting. In fact, Michael Weiner has already said they won't support it. It's one of the biggest myths out there that the MLBPA would/should favor hard slotting. Here's a clip of what I wrote about it awhile back on my blog (http://www.itsaswingandamiss.com/2010/05/10/hard-slotting-coming-to-mlb-draft/):

    The MLBPA loves seeing kids like Strasburg get giant bonuses. Why? Well, it makes it a heck of a lot easier to get more money for their players! If some unproven kid going to minor league ball is worth some enormous bonus, what is a proven and successful major leaguer worth? An ungodly amount, that’s how much. Player X is a right-handed reliever who was 17-4 last year with a 2.20 ERA. He just watched Player Y get a $7 million signing bonus from his club straight out of college. What can the club possibly say when Player X comes in for salary negotiations and wants $9 million next year? All Player X has to do is point out the $7 million given to the kid who might never make it to the Majors. The club now has no ground to stand on and better start drawing up the contract!

    Bottom line: the MLBPA is not going to support hard slotting, because it will have the upward effect of depressing salaries in the bigs. Don’t even argue with me that it might not – the point is the mere possibility that it will. The MLBPA isn’t taking that chance.

    -Kristi Dosh
    http://www.kristidosh.com
    Author of the forthcoming book "Balancing Baseball: How Collective Bargaining Has Changed the Major Leagues," due out in early 2011.

  7. Hard slotting will not help MLB, and will most likely end up hurting it by lowering the talent level, and forcing MLB to continue to seek more players born outside of North America.

    The amount of money that MLB teams spend on signing their draft picks is a drop in the bucket in their overall budgets. Perhaps each team might save a few million in each draft (probably not even that much, yet who cares on such a small amount) with hard slotting, but the downside has more to do with access to talent. MLB is already losing talented athletes to other sports. Hard slotting will not only continue that trend, it will increase it.

    Not only will MLB lose access to legitimate two-sports stars who will smartly decide to take more money from the other sports, but it will have a longer-range impact. There is already a great concern in MLB about the loss of black athletes to other sports. These kids already see the signing bonuses that top players get in other sports, as well as the endorsement contracts many sign before they even play a game, so this will further the preception (and it's more than a perception) that if they want to make money they should stay away from baseball. This will cause a further drain, because at a much younger age these kids will elect simply not to play baseball in even more numbers than they are already. (And, yes, I know that MLB is more lucrative once a player makes the majors, but this means nothing to a twelve-year-old deciding on what sport he'll play.)

    Last, and probably of greater concern than what I've mentioned above, it will also remove the flexibility MLB teams have in luring talented players on the bubble. I'm not talking about legitimate two-sports stars (those will be lost since MLB teams won't be able to compete with the other professional sports), I'm talking about other exceptional athletes debating what to do. One example is Austin Jackson, who the Yankees drafted in the 8th round. They gave a record-signing bonus to Jackson for an 8th-round pick (800K), because Jackson was going to George Tech on a scholarship to play basketball, which is his favorite sport. I'm guessing by his height (6'3") that Jackson wouldn't have been good enough for the NBA, but he was heading off to college to dedicate a lot of his time playing basketball. Even if he eventually signed to play baseball (an unknown), he'd still be in the minors, as opposed to being a MLB player. And while, in this case, some people used to question if the Yankees had an advantage in signing Jackson because they have more money, in reality the Yankees overall don't spend that much more money on their draft picks than any team. And in Jackson, it was Yankee money, but it's the Detroit Tigers who are benefiting, since not only do they get Jackson without spending the upfront 800K, they also unloaded Granderson's contract on the Yankees. The Tigers benefit. The Yankees benefit. MLB benefits here. Jackson benefits.

    If MLB ends up losing another 5% of top North American talent (including some of the most athletic players), all for the sake of a couple million in draft budgets, they're being stupid. That's why they'll end up doing.

    There is absoluetly no way a hard slotting system won't decrease the quality of talent in MLB.

  8. DoubleDiamond Says:

    One thing that hasn't been suggested yet (unless I read too fast to read it) is allowing teams to trade their draft picks, as is allowed in other sports. I've had a long day, and it's too late at night for me to think this through, but I know that there are arguments both for and against allowing this. Also, repealing the rule that was instituted after Pete Incaviglia was signed and then immediately traded to a team that was willing to meet his demands is something else that I favor. This rule prohibits a team from trading a drafted player until a year after they sign him, which includes not being allowed to trade a player whom they have drafted but are having difficulty signing.

    One of the minor leaguers that the Diamondbacks were supposed to get from the Angels in the Dan Haren trade had been signed by Los Angeles of Anaheim a few weeks short of the first anniversary of his signing. Because the teams had to wait for that milestone, the player sat around and just did long tosses. I guess they didn't want to run the risk of injuring him before the deal became official. Until the trade was made, this player was listed as "a player to be named later".

  9. MikeD, please email me if you see this. I'd love to republish your comment on my blog (www.itsaswingandamiss.com) if you don't mind. You can reach me at kristi [at] itsaswingandamiss [dot] com. Great points!

  10. [...] I’ve been following the debate on another blog, and I spotted this comment from Mike Darcy (who granted me permission to republish) that touches [...]

  11. MikeD,

    I agree with you in the case of the Lebron James' and Reggie Bush's of the world, but you mean to tell me that Austin Jackson wouldn't have taken $250k? I mean how much was he going to get paid at Georgia? Probably nothing, and I say probably because there would have probably been "favors" but it's hard if not impossible to put a price tag on this stuff.

    The vast majority of black athletes though are not Lebron, or Kobe, or Reggie. They are excellent athletes, but not other world-ly talents. That said, it the option is a scholarship or a six figure signing bonus, and money is an issue, they'll take the money. If they are good enough to go right to the NBA out of high school, I think riding the bus in the minor leagues would be a tough sell no matter how large the signing bonus.

  12. Meh... if the teams want to pay out... more power to 'em.

  13. Ryan, @11, yes, it's certain that Austin Jackson wouldn't have taken $250K to play baseball at that point in his life. He was committed to Georgia Tech on a basketball scholarship (although he would have played both basketball and baseball while there) and many thought he had the skills to be an NBA point guard. I think his height and size would have ultimately limited him, but that doesn't mean he wasn't about to spend the next four years of his life dedicating himself to basketball. Even if he ultimately signed a MLB contract after Georgia Tech, he'd probably be in AA right now, still learning parts of the game he now already knows, instead of being the starting CFer for the Detroit Tigers. Plus, there was no guarantee he would sign to play baseball once he went off to GT on his scholarship. The hard slotting system will lead to a loss of some players. Maybe Jackson would have been one of them. The signability issue is why he slipped all the way to the 8th round. He was also talented baseball player, but it was going to take some real money to buy him out of his scholarship, and that's what the Yankees did. Good for him. Good for the Yankees. Good for the Tigers today. And good for MLB.

    The only reason I mention Austin Jackson is he just happened to be playing on the MLB channel tonight against his former team, the Yankees, who traded him as part of a deal to acquire Curtis Granderson. It reminded me that the Yankees "excessive" bonus several years back has helped him reach the Majors today. Yet he is just one of many examples where having an open slotting system benefits teams and MLB. The Los Angeles Dodgers took what some thought was a crazy shot by drafting Zach Lee, who many thought was unsignable since he was all set to be LSU's starting quarterback. They were wrong. The Dodgers were able to land him with a five-year, $5.25 million deal. Good for him. Good for the Dodgers. And good for MLB.

    My point simply is that MLB should not be attempting to make moves that will potentially lead to a loss of some athletes who could be MLB players. It's already happening for a number of reasons. They shouldn't be adding in additional reasons. I threw out the number 5%. Maybe it'll be 10%. Maybe it'll only be 1%. I don't know. It will be something and it will be a loss. It certainly won't be a gain. No reason to go down this path. There's no reason to remove the flexbility it gives MLB teams to sign the better athletes, even if it simply means getting them to the Show earlier by drafting them earlier. And there's no reason to be taking money out of the pockets of young, gifted athletes, considering how the small the amount of money is to MLB teams. Think about it. In Jackson's case he probably walked away with about 400K after paying Uncle Sam and his agent. Not a stunning amount for a guy who gave up a scholarship to Georgia Tech and was about to bust his butt in the minor leagues for several years. In most cases, most players won't even make it to the Majors.

    Hard slotting will not help MLB. It will hurt it.

  14. [...] What Would be the Effect of Hard Slotting in the MLB Draft? (Baseball-Reference). Sean Forman asks an interesting question: “Would money pour (and I mean really pour) into the latin markets as big market clubs can no longer use the draft as an opportunity for competitive advantage?” Yes, I think it might. And I’m not sure that this is a bad thing, at least from an ethical standpoint. [...]