The New Question at the Top of the Draft

The first round of the Major League draft is just a little over three weeks away, and the Houston Astros will select first for the second consecutive year. Right now, the consensus belief is that there are two college pitchers — Mark Appel of Stanford and Jonathan Gray of Oklahoma — who are a step ahead of the rest, though University of San Diego third baseman Kris Bryant is putting on quite the power display and could be an option if the Astros preferred to build around bats rather than arms. However, the decision for the Astros may not be made simply on talent alone.

Last year was the first draft under the new bonus structure, which assigns a fixed amount of dollars to each team based on where they pick in the draft, with some pretty severe penalties for exceeding those limits. Now, if a team is interested in paying over the slot value for a pick, they’ll have to borrow the money for that overpayment from another pick, making the draft as much a game of cost management as it is talent acquisition.

The Astros showed how the team with the top pick — and the largest overall bonus pool — could play that game last year. MLB assigned a $7.2 million bonus value to the #1 pick in the 2012 draft, a hefty total that was more than many teams were allotted for their entire draft. The Astros decided that they were better off spreading that $7.2 million throughout their draft rather than simply paying the slot bonus to the top pick, so this is how they allocated those funds, per Baseball America:

Round	Player	Bonus	Slot Value	Savings
1	Carlos Correa	$4,800,000	$7,200,000	$2,400,000
Supplemental	Lance McCullers	$2,500,000	$1,258,700	-$1,241,300
2	Nolan Fontana	$875,000	$844,100	-$30,900
3	Brady Rogers	$495,200	$495,200	$0
4	Rio Ruiz	$1,850,000	$360,200	-$1,489,800
5	Andrew Aplin	$220,000	$269,700	$49,700
6	Brett Phillips	$300,000	$201,900	-$98,100
7	Preston Tucker	$100,000	$151,400	$51,400
8	Tyler Heineman	$125,000	$140,700	$15,700
9	Daniel Minor	$50,000	$131,100	$81,100
10	Joe Bircher	$20,000	$125,000	$105,000
	Total	$11,335,200	$11,178,000	-$157,200

By saving $2.4 million with the top pick, the Astros also were able to sign Lance McCullers and Rio Ruiz for well over the slot values of their supplemental and fourth round picks. In essence, the Astros traded down in the draft, as we noted that the new bonus structures might incentivize a team to do. In the NFL or the NBA, this is totally common, but it actually involves making a trade with another franchise who would rather consolidate their picks into one higher selection. In MLB, you can now essentially trade down with yourself, taking a player who will sign for less than the slot value at the top of the draft in order to give your scouting director more money to play with in the later rounds.

In talking with some folks in the game, the discrepancy in the size of the bonus pools was described as nearly as large an advantage as the ability to pick at the top of the draft itself. There’s certainly a perception that the ability to diversify a large bonus pool and be the only one capable of selecting hard-sign guys who fall later in the draft is an additional advantage, and it’s one that we may very well see another team take advantage of this year. Jim Callis notes that the Astros, Cubs, and Rockies all have total pools over $10 million this year, and one (or more) might decide that the Astros path from last year is a better plan than giving a majority of that pool to their top pick.

However, I think history suggests that there is some real risk to going with quantity over quality when you hold one of the top few selections in the draft. Here is a very informative graph showing the average career WAR by where they were picked in the first round.

This data is a few years old, but the point would hold even if we re-ran the study to include the most recent data. The historical gap between the top selection and the next few picks has been enormous, and when Sky Andrecheck — now employed by the Cleveland Indians — published a follow-up, he noted that this trend had been increasing in recent years. While the #1 overall pick isn’t always a superstar along the lines of Bryce Harper, you are far more likely to land that kind of player with the top pick that you are to land that kind of player at #2 or #3.

Last year, the Astros passed on the consensus top high school talent, Byron Buxton, in order to select Correa, who was rated a few spots lower by most draft analysts. It’s ridiculously early in their careers, but Buxton is destroying the Midwest League right now, hitting .349/.452/.597, good for a 189 wRC+ in full-season ball. The bat was supposed to be the questionable tool with him, with the physical talents to be a superstar all present, but questions lingered about how well he could hit good pitching after playing at a small rural high school in Georgia. As Mike Newman noted a few weeks ago, if Buxton can be an impact bat, then he’s the best prospect in baseball, because everything else was already expected to be elite.

This isn’t any kind of shot at Correa, who is doing just fine in full-season ball himself — and is a nine months younger than Buxton to boot — but Buxton looks like he may very well be the kind of player that you could regret passing on, even if Correa, McCullers, and Ruiz turn into quality contributors down the line. Hitting in low-A ball isn’t the same thing as hitting in the majors, so it’s certainly possible that the Astros made the right call in going for quantity of prospects rather than betting their future on one toolsy outfielder, but it should at least be noted that they had to make a talent trade-off to get additional funds for their later picks.

I don’t think the data supports an open-and-shut case for either option, especially if a team is not convinced that there is a transcendant talent to be selected first overall in that particular draft. Appel, Gray, and Bryant all sound like they have their own strengths and weaknesses, and if there is little difference between them, taking the one that will sign for the least money in order to bump up the talent pool of the later picks would be a good strategy. But before we assume that teams with large bonus pools will actually benefit from distributing that money throughout the draft, let’s remember that they can only do so by taking a lesser prospect at the point where the diminishing returns of moving down a few picks are the greatest.

Essentially, the draft is now engulfed in the stars-and-scrubs debate. Teams at the top of the draft have the option of selecting the cream of the crop and paying the going rate for that type of player, or taking a slightly lower rated player in order to improve their secondary picks. In some years, it’s probably right to take the top player on the board, and in some years, the difference might be so small as to make “trading down” the right call. The key is to figuring out which year you’re drafting in. The Astros decision last year suggests that they did not see a big enough gap between Buxton and Correa to justify spending most of their bonus pool on their first pick. This year, they might decide that Appel, Gray, or Bryant is worth the full slot bonus, and play it straight the rest of the draft.

Either way, I think it is worth noting that no matter what they decide, they’re making a trade-off. There isn’t a clear cut best path, at least not without knowing the future of unpredictable young players. So, while the teams with the largest draft pools also have the most flexibility, I’m not sure that I see the ability to trade down as a huge advantage in addition to picking the best players. It’s mostly an either/or. They can pick the best player, or they can have flexibility in the rest of the draft. Under this system, they can’t really do both.