First off, thanks to Pete Toms over at Biz of Baseball for posting a summary of Rob Manfred’s speech at Harvard regarding the upcoming collective bargaining negotiations. I had somehow missed this and am so glad I caught it!
Before I tell you why I’m against hard slotting in the MLB draft and what my alternative suggestion might be, I’d like to make an observation. When I’m preparing to write something like this, I do a lot of research. I hate being corrected or proved wrong – maybe that’s the lawyer in me. Regardless, I came across something interesting. What’s even more interesting is that I still find it interesting, despite it being something I already knew! Anyhow, I digress, back to what’s so darn interesting. Do you know how many articles and blogs there are about NBA and NFL draft slotting? Not many. Do you know how many there are about MLB and whether or not there should be a slotting system? More than I can count! NBA and NFL players make big bucks, and there are certainly some dynasty-type teams in both leagues…so why do MLB fans care SO much more about issues like this? Well, because it’s the national pasttime, and we all want a piece of it, I guess. Anyone who follows sports even a little knows there are FAR more analysts and bloggers in baseball than the other sports, but I still continue to find it fascinating. What can I say, I’m easily amused.
Back to the issue at hand: slotting in the MLB first-year players draft. If you read my salary cap post, you can probably guess that I’m not a fan of hard slotting. It agitates that old free market economy concept I love so much. Even so, I’ve come up with an alternative I’m still mulling over. Before I get to that though, let’s review the NBA and NFL system and discuss why MLB does not have hard slotting at this point.
To set the stage for those who are unfamiliar with the NBA and NFL systems, here is a (super) brief overview. The NBA does not have signing bonuses. Instead, they have salary slotting. A player receives a set salary based solely on the slot where he is drafted. Period. It’s that cut and dry.
In the NFL, signing bonuses exist but are becoming less common. Any signing bonus paid to a player up-front is pro-rated over the life of his contract in terms of the team’s salary cap calculations If the player is cut before the end of his contract, the entire sum of signing bonus that remains is calculated into the upcoming season’s salary cap. So, there is an emerging trend of little to no signing bonus and more guaranteed contract years (in the past when signing bonuses were larger, contracts were not guaranteed and a player who was cut was not owed the remainder of his contract, nor was it calculated into the salary cap calculations).
Now to why hard slotting is absent from MLB. First, the NBA and NFL systems will not work in MLB. The biggest reason is because of the minor league system in baseball. A drafted player is not expected to perform at the big league level immediately, nor is he receiving much in the way of salary in those early years in the minors (with the exception of the very top picks).
Which leads me to what I hear most people say: shouldn’t the MLBPA support the idea of hard slotting? I hate to pick on anyone, but one of the first articles I found was by Jeff Fletcher at MLB Fanhouse. Here’s the pertinent part of his article:
I can’t figure out why baseball still doesn’t have a NBA-style bonus structure.
I mean, I know why. It’s because the players’ union has not allowed the owners to implement one in collective bargaining. One of these days the major league players in the union are going to realize: “Hey, all that money going to amateur kids could be going to us!”
I’m not here to blame Jeff Fletcher. He holds the same misguided belief I once had about why there is no hard slotting in MLB. Think about it…why would the MLBPA not want hard slotting? Like Jeff says, huge bonuses to unproven guys is money not being spent on MLB players. (As a side note for those who don’t know, the MLBPA does NOT represent the interests of minor league players.) So, why wouldn’t MLBPA be begging for hard slotting?
Keep it simple, stupid. 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.
Personally, I don’t support hard slotting. I have the same reasoning as my argument against a salary cap – why does this have to be about restricting a person’s ability to make money? When I was looking for my first attorney gig, there was a range of “signing bonus” money firms gave out for moving and bar expenses. Do I think the American Bar Association should come in and set the signing bonus? Of course not. I should be able to factor that into my decision. So should ballplayers. If they say they want to play for Team X or that they will only sign for $5 million or they’ll go play college ball, fine. That’s their right as an available employee.
Does signability affect the draft? Absolutely. Have I pointed out before when a player like Jeff Francoeur says he wants to play for the Braves or he’ll go play college ball? Yep! Does it keep the draft from being perfectly fair? Sure it does. But if the Nationals can come up with $15 million ($7.5 million signing bonus and the rest in pro-rated salary over 4 years) to sign the top pick, then clearly signing bonuses aren’t keeping clubs from getting their dream pick. So the Yankees pay first round money to guys they get in the fifth round, so what? If the guy was really first round material, he would have gone first round and gotten the money from someone else. Let the Yankees throw their money around to unproven players.
I can hear you screaming about fairness and the evil empire (aka, the Yankees), so I’ll offer an alternative that I could stomach. The MLBPA won’t support my alternative idea, but I’m throwing it out to appease the rest of you. The MLBPA might not be good at compromising, but I am!
I say MLB and the MLBPA sit down and set a threshold amount that can be spent by each club on signing bonuses for each year of the upcoming CBA. So, let’s just say for sake of having an example, each club can spend $15 million on signing bonuses for the 2010 draft. They can divide it up any way they choose between the rounds, but cannot exceed the maximum total amount. This still limits the amount a player is going to receive, but there’s some flexibility. If he’s really worth it, a team will spend a huge chunk of their allotted amount on him. In a hard slotting system, he’s got no chance.
The system is still flawed, because inevitably the teams will simply sign the player to a contract like Strasburg’s where he receives large sums over the next few years as salary. Then you have to go to a system like the NBA where there are no signing bonuses and only slotted salaries. Now I have a problem again. My free-market sensibilities cannot handle slotted salaries. Same reason I’m against a salary cap. Hey, at least I’m consistent!
So, even I have a hard time defending my alternative. It’s the best I’ve come up with if we simply must have some change. However, I’m ultimately not in favor. I don’t really believe that clubs are that greatly affected by the lack of hard slotting in the draft. Don’t believe me? Consider what I found in an article by the Pittsburgh Tribune-Review. The Pirates only signed 23 of their 50 picks in the 2009 draft, which John Grupp notes is the lowest number of signings amongst MLB clubs. However, the Pirates GM, Neal Huntington, revealed their strategy: they used large signing bonuses to get top high school pitching talent that slipped in the draft. He seems to think they were successful in their strategy. The Pirates spent $8.08 million on their top ten picks, which ranked sixth among all thirty clubs. What does that tell me? The Pirates might not be the richest club (not even close, actually), but they had a strategy and used what they did have to get what they wanted. I didn’t hear any remorse about the 37 guys they didn’t sign. I’m guessing they weren’t worth the money they wanted.
If you ask me (which you’ve basically done by choosing to read this), the real problem is in terms of international signings. Not all clubs can afford to play that game, which I think is a far bigger problem than signing bonuses. More to come in the future on what I think should be done there.
I’ll close with another random tidbit I find interesting. The large majority of my followers on Twitter and on this website are Yankees fans. We’re here talking competitive balance, revenue sharing, the competitive balance tax, salary caps and draft slotting, and my biggest contingent of followers are Yankees fans. Some of them even support all or some of these concepts! I find it endlessly intriguing. Yankees fans: watch for my post later this week about my weekend in Boston at the Red Sox-Yankees series!
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