The Pirates’ Game Theory Dilemma
In an age where most picks are revealed on Twitter by Jim Callis or Keith Law, the Astros managed to pull off a legitimate surprise and took shortstop Carlos Correa with the first overall pick in the 2012 draft. Correa offered the Astros premium potential and the likelihood of saving a little bit of money on the selection, which then gave them the opportunity to take Lance McCullers Jr. with their second selection — so the pick had multiple benefits for the team.
But it also created a chain reaction that caused presumed top selection Mark Appel to slide all the way to Pittsburgh at No. 8. And in turn, that is going to make the Pirates decisions today perhaps the most interesting in recent draft history.
The Pirates have a total draft allocation of $6.56 million for their first 11 selections, $2.9 million of which is allocated to the pick that was used on Appel. The slot bonus for the first overall pick — where Appel, a Houston native, had to have hoped he was going — is $7.2 million, so it seems unlikely that Appel (and his agent Scott Boras) are simply going to accept the slot bonus and sign for $3 million. Instead, Boras is almost certainly going to tell them that Appel still expects a bonus that reflects that he was one of the premier players in the draft, and will expect that the Pirates will make sacrifices in later rounds in order to leave enough money to make Appel a stronger offer.
Those sacrifices have to be made today, however. The Pirates already used their second pick, No. 45 overall, on Barrett Barnes, a player who was expected to be a first/sandwich round selection, so is unlikely to give the team a significant discount in order to sign. If the Pirates are planning on making Appel an over-slot offer, they’ll need to take a significant amount of easy-sign guys in rounds two through 10 to reallocate the cash from those suggested bonuses to their top selection. For instance, if they go for guys who were expected to be taken in the 10th round with each of their next nine selections, they could attempt so sign each one for $125,000 apiece, the slot recommendation for every pick from 300 to 338. That would cost them $1.125 million, leaving them with an surplus of $1.4 million that could then be shifted to negotiations with Appel and allowing them to offer up to $4.4 million without entering the penalty tier that requires the forfeiture of their 2013 first round pick.
But here’s the thing — if the Pirates go that direction, they’ve just handed all the leverage in the world to Mark Appel and Scott Boras. The Pirates would have punted almost the entire 2012 draft, rolling all of the value they could have expected from rounds two through nine into making Appel a better offer in hopes of getting him signed. Not signing him at that point would be something of a disaster. Yes, they’d get the No. 9 pick in next year’s draft as compensation for not signing Appel, but they wouldn’t get any compensation for the sacrifices made to make him a stronger offer.
In previous years, teams would protect their leverage by taking a slew of hard-sign guys after the 10th round, and if negotiations with their top selection fell apart, they’d simply take some of the money they were offering to the higher draft pick and give it to the guy who fell because of his asking price. Under the new rules, however, that’s off the table. If the Pirates don’t sign Appel, the $2.9 million they’ve been allocated to sign him disappears. So, the Pirates essentially have to decide today — before they really have any idea of whether or not they can sign Appel — whether or not he’s worth punting the rest of their draft. If they think they can get him signed for something in the $4 million to $4.4 million range — and that he’s worth more than the value they’d extracted by taking a slot guy at No. 8 and in rounds two through 10 — they should draft a lot of college seniors today. But, if they go that direction, Appel and Boras suddenly hold all the cards — which is probably not a situation they want to find themselves in.
So, I think the Pirates will just play it straight, mostly follow their draft board and take guys who might garner them a little bit of savings but not reach for guys several rounds earlier than you might expect. Maybe they’ll work in one or two senior signs to save half a million or so, but I can’t imagine they want to give up the rest of their selections on the hopes that Boras plays along. However, if they just draft as if everything was normal, the later picks begin to assume more leverage than they should have any right to.
The Pirates can offer some slightly below-slot deals to the guys they select today to try and save some money to offer to Appel, but their only bargaining chip is the player’s desire to play professional baseball. If the kid (and his agent) decide that they’re not going to sign for anything less than slot, the Pirates have nothing to gain by refusing to sign him at that price, since that money disappears from their total draft allocation. For instance, consider this scenario:
The Pirates draft Prospect X with 69th pick, which has a slot value of $746,300. The team offers $675,000, and he counters with $725,000. Pittsburgh will have more money to offer to Appel if they sign the kid for his higher counteroffer than if they stick to their guns. Having a firm stance in negotiations would not only cause them to risk losing the player they took in the second round, but would actually reduce the amount of money they had to offer Appel.
So, essentially, the Pirates have a couple of choices today:
A. Overdraft guys who you know will sign for a fraction of the slot recommendations and use the savings to make Appel a better offer and increase the odds of signing him.
B. Follow the draft board, make decisions without regard to Appel’s likely demands and then hope that the agents don’t realize how much leverage they have in negotiations.
It’s a pretty fascinating pair of options. By taking the best player on the board with the eighth pick, the Pirates have put themselves in a bit of a pickle. That’s probably not the scenario MLB was hoping for when they came up with these new rules, as it puts the team in a position of having to choose self-harm in order to hold the line on budgets for the league. Under the old system, the Pirates could be rewarded for taking the best player on the board, and could simply invest more in their future product to help their team build a winner. Under this system, though, the Pirates are probably either going to lose their first round pick or take some serious reaches in later rounds.
These new rules were pitched as a benefit to teams like the Pirates. I wonder if Neal Hutington and the rest of his team today feel like the total team allocations are actually working in their favor.
The Nationals are in a similar position with their choice of Lucas Giolito at 16, just without the Boras impact
That is true, but it is somewhat mitigated by the fact that Giolito had to know that he was probably going to slide on draft day, and the Nationals have had weeks to prepare for what they would do if they took him. Their board could have very well been setup with the plan to take Giolito in mind. I’d imagine the Pirates probably didn’t have a laid out scenario where they were taking Appel.
This is a really interesting dilemma. I wonder if you’re right, that they had no scenario laid out where Appel falls to them at #8. Considering the new rules, and that everyone is trying to figure out how they’re going to be applied, my guess is that most teams in the top 10 or so had run through enough mock drafts that they saw this scenario as plausible, if unlikely. Any smart organization would have asked the question, “What do we do if Appel falls to us?” Not the Yankees or the Red Sox but they asked the same question about Giolito, surely.
The main component of a solid draft has to be preparation and I have to believe that the Pirates envisioned this possibility, even if they saw it as a 1 in 100 shot. If I’m wrong, they deserve the conundrum they face.
They’ve been obviously working the phones ever since. Either:
1), they have a hard offer from Boras, which they’re now working to meet with their subsequent underdraft/underslot picks;
2), they got nothing from Boras, so they’ll go ahead and draft normally, recognizing unless Appel blinks they get the 9th choice next year in probably a better draft;
3), they got a bland promise from Boras as to “oh sure we’ll come down some now”, which if they believe and act according to, the Pirates richly deserve whatever Boras eventually jams up their heinie.
I see the Pirates as holding firm, maybe 10-20% over slot. Boras’ negotiating ploy that “Appel was clearly the top player in the draft and deserves $7m” is crap because no one gave him $7m and everyone refused to. If Appel and Boras were to walk away and he’s goes back to college, the Pirates get the #9 pick next year as well in what is assumed to be a better draft. In my mind, the Pirates have all the negotiating power here and should just assume that Appel is going to get – at most – 20% over his #8 slot amount.
Okay, you want to offer Appel $3.5 million, which is 20% over slot. Where are you getting that extra $500,000?
The first 5% or %10 over is taxed, but no future pick is taken, right?. Simply pay 1.75 on the dollar and give him the extra.
They could get to $3.228M by signing all their picks for slot value and then going exactly 5% over their total allotment. They would only have to pay the luxury tax. That’s still not $3.5M, but it’s about halfway there.
No, they start losing picks if they go over 5% of total budget.
The first 5% is taxed at 75%, but that only allows them an extra $300,000. If they sign everyone for slot and then give the entire overage to Appel, you’re up to $3.23 million. They can’t just offer him $3.5 million without coming up with extra money elsewhere.
So they draft a few college seniors that have to decide between signing for whatever is offered or going the independent league route and hoping for the best next year when they’re a year older with even less leverage.
You’re really making this situation out to be worse than it is Dave. You went into the draft with an opinion on the rules and completely warped the situation to fit that opinion. The Pirates have almost all of the leverage on Appel here. He can either take 3+ MM or take his chances of staying healthy and moving up draft boards next year.
Judging by the comments from the Neil H., this looks like the stance they will except for the 10-20% thing. They’re giving Appel a “take-it-or-leave-it” situation. What makes Appel/Boras think things will turn out better under the same system next year, with a stronger draft possibly. The Pirates will make their best offer and can legitimately say they can’t do better. Appel’s leverage means nothing if the Pirates can’t go higher. It comes down to if he’s willing to risk another season to improve his position. IMO, I think he’ll take the $3M+ and play pro ball. Worst case scenario, Pirates have 2 top 15 picks next year, not too shabby.
I think the real issue here that players are able to set their signing demands independent of where there talent is evaluated/drafted. This new system is intended to curb that, but it will take a while for the market to even out. I can’t see these huge bonus demands working out for the players.
Exactly. The entire point of the new system is that the draft itself functions as the valuating system. It does not matter if you thought you were the top player, the team picking first did not take you, therefore you are valued lower. I don’t understand why people can’t understand this. Teams can take whoever they think they should in a given slot, regardless of previous expected value.
Fascinating.
Very fascinating.
To be in threat of getting taxed, loosing your top pick, finishing with a deathly shallow top 10, and/or loosing your top draft pick because the commissioner didn’t accommodate for the way he ACTUALLY WANTED you to draft, is insane.
I’m glad to see this situation receive publicity so quickly. This is exactly what Bud Selig said shouldn’t be the focus of the MLB draft. I hope it works out for the Pirates.
After getting taxed, I meant loosing future top (1st round) picks…
I think you actually meant losing.
Don’t buy Dave’s propaganda. The Pirates still hold the leverage, not Appel. Chances are he’s not doing any better next year and he’s got to take on all the risk. They can just draft normally and possibly take a couple college seniors to open some extra money for Appel.
Haha sheesh. Thanks for the correction
It’s not propaganda… It’s something that many of us were wondering just after the Appel selection was made.
Dave had his mind made up about what the effects would be as soon as the rule changes were made. This is a terribly one-sided piece. A primary idea in game theory is that you make decisions based on your knowledge of the opposite sides thinking. When in this article does Dave ever bother to look at the weaknesses in Appel’s position that are well known to the Pirates? It doesn’t back his prior opinion so he just ignores it.
Sure, his weaknesses are important, but that might be another article. Right now the concern for the Pirates is “does this influence the way we draft rounds 2-10 today?”. They won’t know the cost of Appel until after that takes place, and with a $3m discrepancy right now, there’s no way of comprehending what to expect.
Essentially, The Pirates have to trust the system and act as though they do have all leverage, or strategize to free up money because they don’t see the system giving them enough leverage.
I understand what Dave was addressing, but re-read the tone of the article. The whole thing is a big slam piece on the poor Pirates and how much tougher things are for them because of the new rules. I could have told you the minute the Pirates selected Appel that a piece like this was coming from him. It’s an entirely one sided piece meant to get people against the new CBA rules. That’s what propaganda is. The fact that you’re taking this at face value just proves it’s good propaganda.
What leverage does Appel have to decline an offer slightly more than the slot amount for pick 8? Giolito can spend 3 years at UCLA and theoretically be the #1 overall pick. This was considered one of the weaker drafts in recent history, Is Appel can go back to Stanford or independent ball, so that he could maybe go 2-3 picks higher in what presumably will be a stronger draft?
Boras has a long history of taking guys to independent ball in order to attempt to improve their draft position in the following year. Whether or not its been a net benefit to his clients or not is up for debate, but it’s clearly a tactic he’s willing to employ.
But in the past, he had the thought that he could convince some team into throwing his client a huge wad of cash. Now with the restrictions on spending, the cost to the team is much more than a straight financial outlay.
But independent ball doesn’t gain Appel any real leverage. The Pirates would get the #8 pick next year and its slot assignment for failing to sign Appel. Appel goes back to Stanford (or to independent ball) hoping to be drafted in the first 7 picks of a better draft. That’s a roll of the dice. On top of that, next year he won’t have the leverage of being able to go back to school or return to independent ball so there’s no reason next year for a team to pay over slot to get him to sign. That means that he probably has to be chosen in the top 5 next year to get even $1 more than he would get from the Pirates this year. (It’s true that he could play a 2nd year in indy ball but wouldn’t that cause teams to further question his dedication or motives?)
So the Pirates do have to make a very quick decision on how to play this but I certainly, if I were them, wouldn’t yield all my leverage to Boras. It seems that the Pirates have more leverage than Appel does and they ought to be able to figure out rather quickly that they’re likely to win any game of chicken with Boras. Allocate somewhere between $3.25 – $3.5 M to Appel, draft 2-3 guys that will sign below slot, and proceed as normal for the rest. Dare Appel to go to indy ball or back to Stanford if he thinks he’ll do better next year.
So you’re just going to completely ignore the new draft rules when it hurts your position Dave? There isn’t the same upside for going back into the draft that there used to be. Boras is smart enough to realize this and for that reason will likely act differently than he has in the past. Stop ignoring the other side of the new rules just because you decided from the get go that you didn’t like them.
Rumor has it that Appel refused the Astros’ $6 million to sign first. If that is the case, and he did so on Boras’ advice, he should sue Boras for malpractice. The net result of that tactic was for him to slide on “signability” concerns to the Pirates. As Ajay points out, correctly in my opinion, Appel has no leverage. Either he signs at whatever the Pirates want to give him at No. 8 or he returns for a senior season into a more loaded 2013 draft with the hope he doesn’t get injured or have a bad season. Scott Boras is successful in getting clients top dollar for players – not necessarily any single player. I’m not certain I understand what’s going on here that is of any benefit to Appel.
let’s say the pirates think appel is the talent equivalent of strasburg or harper or whoever. what is the maximum offer they could give?
if i’m reading this correctly, they can theoretically offer anything–just that overslot is taxed at 100% and they lose their first round pick next year. so, while impractical, it’s not inconceivable that they could offer him 10MM to sign.
is that correct?
@jcxy, yes, that’s correct, but for a rebuilding team like the pirates, that pick next year is huge. I support the taxing of overslot bonuses, but the loss of picks just screws small market teams, which is the opposite of what Selig says he wanted. I don’t think i could see the pirates giving up their first rounder next year in order to sign appel, but i think it would be smart for the nats to do whatever it takes to sign giolito because first of all, he’s sick, and second of all, their pick next year is going to be really low, this is probably their last chance in a long time to get really high level talent in the draft.
How does sticking to their guns with 675K provide less money to Appel than giving into Player X demands for 725K? Wouldn’t it give them an extra 50K or potentially 675-725K if they don’t sign him?
Nope – if they don’t sign him, the slot money for that pick disappears.
I thought you could use your entire signing pool allocated for the first 10 rounds however you choose as long as you do not go over.
Nope. If you draft a player and don’t sign him, you lose that portion of the allocation. This is the rule that’s causing a lot of these issues.
Maybe they should discount the slot money instead of eliminating it completely. Maybe something like losing 60% of the money if the pick doesn’t sign. That way you can pool the money easier, but there is still an incentive to sign a player since you loose some money if you don’t. This would make the tradeoff a bit more balanced and give teams some options.
Alright, thanks for the clarification
I don’t think the loss of the money necessarily should cause problems. If they could draft a player and then not sign him with the intention of using that extra money for their 1st Round pick, the draft would become a sham.
Take Giolito for example. If he claims that he deserves 1st Pick money, you could basically take guys in Rounds 2-10 that you have no intention of offering an acceptable offer, in what we already know is an incredibly weak draft. When they don’t sign, you take all that money and give it to Giolito. Take a bunch of easy signs starting in Round 11 so you don’t lose depth in your organization and make off with the highest upside pitcher in the draft.
because if they sign him for a bit less, they get to save the change. but if he does not sign at all, then they lose all that money by not signing him. basically, whenever they fail to sign a pick, their total draft budget goes down by that slot value, as if they never had that pick to begin with.
This new draft system may have been pitched as a benefit to small-market teams, but anyone with half a brain could see it would have the opposite effect.
Bud Selig and his cronies aren’t stupid, just venal. They knew what they were doing.
I’m not sure what this situation has to do with small vs. big market teams. If he slipped to the Mets and they took him, they’d be in the same situation.
the difference is, a team like the Mets could (presumably) afford to go way over slot and thus forfeit their first round pick the next year(s), on the assumption that they can easily replace the forfeited talent by signing a free agent.
meanwhile, the best free agents won’t even consider signing with the Pirates. for example, last offseason Derrek Lee turned down a certain $8M from the Pirates and retired, and Roy Oswalt wouldn’t even return Huntington’s inquiry.
You’re only looking at it from one side. The new rules cut out most of the leverage that the draft picks had, allowing teams to draft based on talent instead of signability. Anyone who thinks they can tell you the exact affects of the new rules is either a liar or an idiot.
Does your boss’s last name start with S-E_L…?
Because that’s the only way anyone could see the new rules as a potential improvement, right? I like how everyone has already figured it out before we even know who is going to sign and what they are going sign for. Hell, Dave figured it out as soon as the new rules were announced.
If these rules didn’t exist, Appel would not have dropped to them in the first place. Secondly they had the option of not putting themselves in a pickle by drafting someone who would sign for close to slot. Plenty of guys will be unsignable this and every year because their draft position doesn’t correspond to their bonus demands.
But over the next couple years, if teams hold the line, players will have no choice but to accept the slot where they were drafted. That’s the whole point of penalizing teams harshly for going over slot; players would look for any team to give them a chance at leverage. If there is no better offer possible, their choice becomes take it or leave it.
Good writeup Dave.
The Astros also have a fascinating decision with McCullers. The magnitude in terms of dollars isn’t the same, but the practical issues go even deeper.
A) McCullers is a high school product, giving him even more leverage.
B) The Astros took him with a compnesation pick, meaning if they don’t sign him, they get nothing even next year, aside from losing the slot allotmnet.
It seems almost impossble for the Astros to make this work unless they can somehow get Correa to sign for less than #1 overall money. If Correa demands #1 money, the Astros are faced with either forgoeing McCullers and conceding the pick entirely with zero recompense, or likely losing multiple draft picks, possibly for two years.
If the Pirates and Astros are the types of teams the new rules were built for, they’re going to have to work some real wizardry to make them pass the first practical test. They could both get severly punished for drafting the best player available.
Well, the new rules were definitely not tailored for the Pirates, since they had just come off of a 4 year plan where they had outspent every other team in MLB in draft bonuses. Almost every Pirates fan was dreading these rules because us from doing what we had been doing since NH was hired.
Understood, I was being more than semi-fecetious with the comment at the end, but rereading see how that may not have come across, lol.
Also if they fail to sign him, won’t they be able to use that pick again next year along with the increased slot allowance that comes with it? Aren’t they just going to roll over these dollars to 2013 and not _lose_ them as the article implies?
These rules were never got teams like the Pirates. Frank (CEO) and Neil have been saying that for the last year. It’s a shame it has to come to this. We’ll see how Boras plays his cards. I hope Neil sticks to his board and sticks it to Boras
The Pirates didn’t have to take Appel. The difference with the new system is that there’s not much opportunity for a player to benefit from appearing unsignable, because the Tigers, Red Sox, etc. won’t be able to hand out huge bonuses to guys who drop.
The Pirates hopefully took Appel as part of a larger strategy (albeit on short notice). Either they will gut the rest of their draft and sign him, or will play a game of chicken with Boras and try to get Appel ‘cheap’. But the situation is one they created for themselves, and if it goes wrong that’s where the blame lies.
The “situation that they created for themselves” is taking the best player available. We’re now punishing small market teams for doing this?
He was the best player was only available because of the rules. Can’t have it both ways.
When a top player slides, it usually gives big-market teams an advantage. That’s no longer the case- If Appel slid much further the odds of him signing would have dropped even more. Small-market teams can’t necessarily benefit from the situation, but at least they aren’t put at a disadvantage.
The real issue seems to be that Appel/Boras have unrealistic bonus demands. That doesn’t point to any larger structural problems or contradict the increased fairness of the pool limits (generally smaller for the big markets due to their records).
Actually, when a top player slides, it gives teams that spend big on amateur talent an advantage. That was not necessarily synonymous with large market teams, as the Mets, White Sox and Dodgers were not particularly known for their draft spending while the Rays, Jays, Royals and Pirates spent what it took to get the top talent available, because they realized the efficiency in building through the draft.
But putting a team like the Pirates in a position to pass on this guy is not what the rules were [supposedly] intended to do. Seligula said that the new rules should ensure that talent, and not demands, dictates draft order. If the Pirates and every other team like them had passed on Appel, eventually a late first round team would have decided to take him, intending to go over slot to sign him, but willing to do so because losing the 29th overall pick in the next two drafts is not nearly so detrimental as losing a top ten pick in each.
I doubt that would have happened because Appel isn’t good enough to justify the penalties. If he was that special, he would have been taken #1 or #2. No system except hard slotting can prevent Boras from making excessive bonus demands.
Pretty sure NH and the Pirates figured out a long time ago that the new rules didn’t work in their favor.
Why don’t they go the other way and draft more hard to sign guys??? That gives the leverage back to the pirates. If Appel doesn’t sign they can allocate more money to other hard sign guys and they get a top pick in a better draft next year. This seems like the best option..
No, they can’t. If Appel doesn’t sign, their bonus pool gets slashed – you cannot reallocate money by not signing a drafted player. That’s the problem.
But since the 1st rounder is protected, if they don’t sign him, they’ll get that money back next year with the comp pick, right? Sounds like there is more leverage for them if this is the case.
Their pool gets slashed this year?? How can that be? Is there some sort of sequential order that the picks must sign in? For example, pick 1 must sign by 8/1 or the team loses that allotment. Pick 2 by 8/2, pick 3 by 8/3 and so on?
Because if they’re going for overdrafts later to save money what happens if they offer their 3, 6, 7 and 8 rd picks 125K and they ALL decline – then the Bucs have no more money to offer Appel anyways? And if somehow Appel has already signed then the Bucs are going into the 1-for-1 penalty and losing a pick next year?
Matt – Dave means the cash allotment for your team is slashed by the amount of the slot that unsigned.
In this situation, their #8 overall pick has a slot value of $2.9MM. If he signs, at ANY amount, their total draft budget is increased by $2.99MM – if his contract is worth less than that, they are able to utilize the savings elsewhere on other picks. If his contract is more, they must make up that missing portion by saving on other picks. And, if he does not sign – they get the n + 1 pick next year (pick #9 in the 2013 Draft) and whatever slot allotment comes with that – and also do not get to use any of the $2.9MM that is assigned to that slot.
Designed this way so the Pirates couldn’t just take Appel at 8th overall then draft a ton of schleps on their next 4 subsequent picks with no intention of signing them. If you sign one player, your draft allotment is whatever that pick was slotted at.
Matt – also in regards to the signing deadline, I don’t believe the MLB metes out any penalties for going over budget until after the dust clears on the Draft signing deadline – which was moved up this year to July 13th. On or around that day, the MLB will decide which picks signed, which determines how much a team has in their draft “budget”, and then sums all signings up to see if they go over this budget.
I don’t see Appel as having a lot of leverage here. If he wants to pitch another year in college and risk injury over a million or two dollars – just so Boras can make a point – let him. It’s chump change compared to what he could make in his career. He should want to get the clock started asap.
Yes, it’s nothing compared to what Appel could get in his career, but he could take the offer and get hurt in two years and never get another big contract. Many high draft pick pitchers never get another big contract after they are drafted. Appel’s choice is to take the Pirates $3 million or take the risk that he would be drafted higher next year in a stronger draft. He isn’t Strasburg – even if he pitches as well as he did this year and doesn’t get hurt, there’s a decent chance that he still goes outside of the top 5. If Boras cost him the top pick, I can see Boras advising him to go back to school, just so Scotty can save face, but Appel best play is to cut his losses and realize Boras’ gamble failed and he needs to take the Pirate’s slot offer.
Exactly, Boras has a lot of incentive to try and use Appel to bust the new slotting system and get a team to simply ignore slot and give up picks. If he can do that, then he can use that in future negotiations to drive up the price of his prospects. That is far more valuable to him than whether or not he gets his commission on Appel’s contract this time around.
Huntington could put Boras in a real pickle by drafting only Boras-represented college seniors in the next few rounds. I’d love to be a fly on the wall of those player-agent phone conversations:
COLLEGE SENIOR
What do you mean I have to sign for half a mil less than slot? You showed me all those spreadsheets and charts. This isn’t what I signed up for.
BORAS
Well, I did warn you that you had less leverage as a college senior.
COLLEGE SENIOR
Yah, but you reassured that you could get me slot money.
BORAS
Well, er, umm. it will take some time to figure out the new system. I have some connections in a few independent leagues.
COLLEGE SENIOR
Geez.
BORAS
Do you know any foreign languages?
This is a seriously incredible idea that I sincerely hope the Pirates adapt. Mutually Assured Destruction.
Huntington will draft just he was planning to draft – top selection on the board. He will sign who he can sign at slot or a little less. That will dictate what he can give Appel. Boras can take or leave it.
I think Appel realizes he messed up going with Boras as his advisor. He wants to plat baseball and will sign for <$3mm.
I think the Pirates made a brilliant pick. This is a reeeeeeally crappy draft. Even Boras commented before the draft how stupid it is to have all the draft slots valued the same each year because the quality of draft varies. The #8 pick this year probably will not provide as much value as the #9 pick next season.
So the Pirates can offer slot to Appel and the outcomes will be either:
1. get one of the top talents in the draft for $3M.
or
2. get a more valuable pick at #9 in next year’s draft.
This. Absolutely, positively this. Dead on.
What does Appel have to offer in next years draft to increase his possible signing bonus? He’ll be a college senior. There isn’t much leverage in his situation other than threatening to go to unaffiliated ball and become a NDFA.
Pretty sure he can’t be a Free Agent by going to Indy ball. Aaron Crow had to go back into the draft, correct?
Do we actually know what his bonus demands are? Feel like Law speculated about bonus demands because he fell and everyone went crazy and ran with it.
With the slotting system, he could get an extra $3-4M tops if he was drafted #1 next year. Or he can get drafted #8 again and have no more of a shot at more money than he did this year.
Wouldn’t he lose all of his leverage to negotiate his contract if he chose to re-enter the draft next year? Basically a team could pick him 30th, say hey we’ve got $1.5M, you can take this or take a year off of baseball. Feels like the player is just better off accepting in this case as it seems there is a low probability that he makes significantly more money to justify waiting an extra year.
Odds are teams are aware of what he was asking for. If a team is based their drafting philosophy on a random writer, then they are a terrible team.
I think the Pirates will draft as they planned from here on out. perhaps try to goad a couple picks to go slightly underslot but not tank the draft for the chance to sign Appel. As with the Pirate, Boras and Appel also had to be prepared for this.
Threatneing to go back to college/IND league means he has to improve, not get injured and hope someone likes him more than the incoming eligible players? I think he rolled the Boras lottery and lost some money. It gets spoken of with teams all the time in economic management. He get not get taken at 7mil. He’d have to go top 4? next year to make 5m unless someone tanks their draft? I do not think anyone is going to drop the entire draft for one player, especially a pitcher.
I wouldn’t be too surprised if some of the draft cap rules get changed before the next CBA. We’re one round into the first draft, and the rules clearly don’t help anybody, not the teams, agents, or players.
They’ve made changes before (instant replay/drug testing). Could happen here, too, if enough people on all sides complain.
No one has signed yet. Let’s wait a while before we judge this system. Appel has lost a lot of leverage and its not like next year is any better. If the Pirates can sign Appel for near slot, I think this system is a win. Too early to judge IMO.
It helps the MLBPA just fine. Fewer draftees will get signed, which means more money and more demand for the union’s current membership.
Does anyone know if the new draft rules will lead to qucker signings and 1st round picks in the minors by the 4th of July? Or will they still play the song and dance until August and we’ll see you next year?
Thanks.
The signing date has been moved up to mid-July (13th?).
If I’m the Pirates, I go about my strategy without regard to Appel. I get BPA for all rounds and if the bonus pool for Appel goes down, so be it. I would offer him slot at the beginning and say we are going to spend the rest on the rest of the draft. And my emphasis would be on signing players early, limiting the pool available for Apple and adding a sense of urgency to Appel to sign sooner before more of the pool disappears. If he doesn’t sign, fine. Pirates can take the #9 pick next year, and you have solid signings in 2-10.
I guess my main point is, time is actually on the side of the teams now, rather than the player. When there was no signing cap before, players had all the leverage. That’s not true now. The longer he waits to sign, the less money is available.
Funny, my reaction after Appel’s fall was the complete opposite – I think the Pirates have Appel in a bind, not vice versa. If he demands an over-slot deal and the Pirates say “no”, his only recourse is to not play this year and enter next year’s draft, where it’s no sure thing he’ll go any higher (everyone knows this was a thin draft at the top). And the cost to Appel will be a year of earnings and a year of minor league development. Frankly, if the Pirates want to play hardball and offer him less I think they could do it.
I know Boras is something of a dark wizard, but even he can’t put enough lipstick on that pig for his client…
Guess we have our answer with Wyatt Mathisen. This will be a good draft for the Pirates.
Definitely not punting their 2-10 picks…..
I’m not sure where the new draft are harming a small budget team more than in the old system. If I understand the new and old rules correctly:
Old system: Appel might slide due to perceived cost and a team can spend overslot to grab him a bit later than he “should” have gone. Or the he could have gone at 1-1 but with more money.
New system: Appel slide but all teams are assigned some set amount so a team can make the choice to overspend or not.
Best player available always had economic considerations. Under the old system, all teams had draft budget, which admittedly was more flexible, it just wasn’t transparent. Big spenders could if they wanted to go overslot. I’m not seeing how a relatively inflexible but transparent draft budget harms small-revenue teams more than large revenue.
It affects small revenue teams more because the draft is the one place they can hope to get top tier talent. Big revenue teams can wait for those players in free agency. The amount of cash spent on the draft is tiddlywinks compared to free agent dollars: consider, the Pirates broke all sorts of draft spending records before the new CBA. The Pittsburgh “big money” Pirates. And those spending records were along the lines of $17m last year for the entire draft, which doesn’t even pay for one year of one top tier free agent these days.
This is dumb. Top talent in free agency is massively overpriced compared to top talent in the draft.
If draft talent is so much more valuable than free agency, and free agency is massively overpriced (neither notion I disagree with – I fervently agree with you, to a point) – why wouldn’t Boston or New York move to implement a salary cap that limits spending to a level attainable by all teams? The answer is that even with the massive salaries, New York and Boston STILL have a big competitive advantage and business interest to steer the MLB to not implement a salary cap. Player’s union is also unbelievably strong and they share that want, but that’s a separate story.
Plus, lets consider too that in each of the four years, I don’t think the Pirates spent much north of $30MM, and that’s something that a big market team can easily surpass with ink on one, maybe even two free agent contracts depending on who they sign. Different value-worlds here, each was more valuable to the teams utilizing them.
New draft rules basically make the draft an even playing ground. Almost feels like the opposite of what a salary cap is intended to do.
Even playing field? Are you kidding? The crappy teams draft early and have access to the best talent. The good teams draft late, and it’s less likely that they’ll have access to solid talent because fewer players will fall to the end of the round due to signability issues. That was the reason for the new system, and I don’t see how this system makes it more even.
Its more even because most of the “good teams” you refer to are teams like the Yankees and Red Sox. While yes, historically those two teams in particular have been by far much better teams on the field – it’s also due to the fact that they can spend sometimes $100MM + more than any other team in the league, other teams can’t match that. So when a CC Sabathia, Carl Crawford, etc. come up in free agency, guess who’s in the running. NOT the teams who have “access” to the top talent in the draft – which, by the way, is NEVER a sure thing. Are you telling me the Yankees would be better off if they had gotten a chance to draft Pedro Alvarez? Or would you rather be “nice” and give Pittsburgh that nicety to draft that top tier talent? I love Pedro, but let’s call a spade a spade here.
It seems to me as though selecting Mathisen indicates the Pirates have no intention of ceding their leverage to Boras.
Taking Mathiesen makes it pretty clear that Coonelly and Huntington are going to play ball with Boras again. It might be dumb, but it’s at least gutsy.
Can someone explain to me how taking leverage from Boras is dumb? Why would the Pirates give up leverage by selecting below slot guys? This is a strategy of fear and inadequacy. It’s an easy choice. Draft the best, sign them what they’re worth. Sign Appel if he takes slot value. Take the #9 in a better draft next year if he doesn’t. This is an easy choice IMO.
Perfectly said.
You act as though there’s no cost to waiting a year. There certainly is a cost. The first cost is the lost year of development time. Even if the player they choose next year takes as little time as Appel would to reach the majors, it’s still 1 more year until that happens. The Pirates lose the time value of that lost year.
There’s also the uncertainty. We believe now that next year’s draft will be stronger but we don’t know that for sure. If there are a lot of injuries or a lack of production from certain players, the pool may shrink.
More importantly, it’s not altogether certain that the Pirates will be better off having a second 1st round pick next year. It’s true that they have the opportunity to get another really good player as well as the slot assignment for that pick but it’s also true that 1st round picks tend to receive more than their slot assignment. So having a 2nd 1st round pick may put them in a bigger financial pickle than they are this year. For instance, let’s say they end up with the #9 and #12 pick. If they have to pay each of these guys $500,000 over slot, that leaves them $1 M less to spend on their next 9 picks. They may gain by adding a 2nd #1 pick but it may cost them much more in the quality of their next 9 picks. Even if that turns out not to be true, we can’t possibly know that now so the uncertainty is, to the Pirates, a cost.
Telling Appel and Boras to “take this offer or else” has its costs. It’s not free. There is, therefore, an incentive for the Pirates to be somewhat flexible — without ceding all their leverage to Boras — in their negotiations this year.
“it’s also true that 1st round picks tend to receive more than their slot assignment:”
This is based on the old system with much lower slots for each pick. You have no idea how things are going to play out this year.
Of course there is a downside for the Pirates to not signing Appel. There is also a downside for Appel to not signing with the Pirates. It’s a two way street.
Yeah but the cost to wait a year is much, much higher for Appel. That’s the point. The leverage on the one year is all on the side of the Pirates. Use it.
Of course you take all of those factors into consideration. But I don’t think it suddenly makes you back off from being aggressive. The Pirates have the upper hand. No reason to back off from an at-slot offer or even lower. Appel will take it.
I hope that the Pirates don’t give in Boras, the whole bullying teams to get more money is over. I know that the draft rules are not the best, but bonus demands pushing players down in the draft so they can get more money or go to a team that they really want to play for should be over. The system is far from perfect but it seems better because the control has been taken out of the player’s and their agents’ hands, and it shouldn’t be there as it’s unfair to teams. I think that MLB should also create a rule for college juniors that they must declare for the draft and if they are drafted by round XX, they belong to the team for two years, not just one year. This would prevent people like Boras trying to bully the system more and would give much more leverage to the teams, which would protect the small market teams. I believe that players should get paid but it’s not fair for high draft picks to demand that much over slot because it will basically reduce the overall quality of the organization because they will have to underspend elsewhere.
I dislike Boras as much as the next guy but Boras isn’t “bullying” anyone. Amateur players, and by extension Boras, are actually the ones being “bullied”. Scott Boras is working to get amateur players paid within the confines of a system which is explicitly rigged to contain salary for that group of players–American high school and college players.
The sad, or inconvenient, fact is that vast majority of players fail out of baseball. Their one day of true leverage, prior to their Free Agency year, is on draft day..and yet a union–which amateur players don’t belong to or vote in along with MLB–have decided to cap what they will earn. Given that the market for amateur players (the Cespedes’, the Chapmans, etc) is clearly much more robust than this contrived one, I simply won’t begrudge anyone for trying to try to get closer to what a free market would dictate they receive.
Boras may be a douche bag for his techniques, but he’s not the villian here if you’re looking for one.
Well said. Both MLB and the MLBPA are exploiting these draftees and the minor leaguers while excluding these groups from the contract that determines their bonuses and salaries. The MLBPA is just a labor aristocracy. MLB is a predatory monopoly. A pox on both houses.
I totally agree, when i first read this article i could have sworn it was freaking opposites day because this guy made it sound like the poor poor Pirates might not be able to sign their first pick because it’s Boras vs the Pirates……
1) It’s almsot certainly not true. As much as people hate Boras (I know I do, but then again I’m not a baseball player with him as an agent) the man is not stupid. He knows the risks involved in having his player not sign the slot amount or slightly more if he can get it. Is he kicking himself for not being more flexible with teams with a higher pick? Yes. Is his client considering firing him? I’d almost have to think so.
2) The Pirates are, for all intents and purposes, likely getting who was considered one of the top 2 or 3 picks (most people had him one, some had him 2) because they were ballsy enough to take him and not afraid of the new rules. They smartly recognized that they can basically force him to sign for much less than he should have gotten simply because other teams were too afraid he would not sign and “waste” their pick and the worst case scenario is that they instead get the number 9 pick next year with the corresponding slot money. I don’t envy that position. Appel pretty much knows he has to sign or he greatly risks losing much more money that he already has.
3) What people are forgetting, and always forget in stuff like this, is that the player himself is losing money. Significant money probably whether he signs or not. While it’s hard to feel sorry for a guy who could make multiple millions of dollars in his lifetime to play a game, you have to wonder where people’s thought process on this is.
Do you guys realize the failure rate of even top 10 picks is? If i had to make a guess I’d say 50% or more never play significantly in the major leagues (more than a year or 2 as a starter). Lets take a sample draft for a year of players around their prime/early in their careers if they drafted from HS:
2006:(* not making money)
Luke Hochevar
Greg Reynolds *
Evan Longoria
Brad Lincoln *
Brandon Morrow
Andrew Miller*
Clayton Kershaw
Drew Stubbs
Bill Rowel*
Thats the top 10. 4 are bit players probably making at or around league minimum. it gets worse from there on.
My point is that the ONLY time these guys have any leverage is during the draft. Baseball is notoriously hard to draft for. It’s why there are 40 (!) rounds each and every year. you are trying to project the best hitters who you can only watch against bad pitchers. or the best pitchers against bad hitters. And then try to say 4 years from now they will be good.
It doesnt happen often and most guys fade away. And baseball took what money making opportunities they had and gave that extra cash to owners to give to overpriced free agents.
great post
Some on this board seem to think because the new draft system works the same for all teams, it has the same effect on those teams. Not so. As above, the draft is one of the only places small market teams have to go to to acquire top tier talent. If that place is squeezed, it hinders the Pirates and Royals much more than the Yankees, who can always rely on free agency.
Yeah agreed. It seems like the assumption in those comments is that small market teams want to save money on the draft. That is false. They want to SPEND money on the draft because it’s far cheaper than in free agency. The system hurts small market teams because it took away their ability to get more for the money, forcing them to try to compete in free agency. This system was not designed for small market teams. It was designed for cheap teams.
The idea is that teams like the Yankees Red Sox and Rangers(who all have better farm systems then there draft positions should allow) are no longer able to give out 7mm to a player late in the first round that no one took because of signability. You make it so they have to eat the lower talent picks. It is designed to make talent reflect pick number so that the 30th pick is worse then the 29 in front of him. You also in the CBA reduce the abilitiy of those higher budget teams from overspending internationally to outbid the smaller market teams. Do I think that teams should be given there budget plus a 1-2m cushion so they can go decently over slot on one player or have room to work with? Yes they need a little more wiggle room for it to streamline. Should the international market reflect the american amature market more closely? Yes also, under 3m to spend total each year on international players seems a bit skimpy. On the whole though you really wont be able to see how this new system works until a few more years in. I am personally of the opinion that the new restrictions do limit the ability of teams like the yankees from inflating their return on bad picks . I also recognize that some teams that like to give out 3m plus bonuses after the 20th pick of the draft like the Pirates last year will be affected too, but we wont really see the effect till we see a few drafts with the new pick lottos in place, where teams like the pirates would have had a better budget in the draft then the yankees courtesy of always getting extra small market comp picks. 2013-14 drafts will feature small market teams picking up extra first round picks which will give that grouping of teams an advantage. Also look at teams like the A’s that almost always get it done under slot, who will now get 1-3 extra picks in the first 2 rounds based off the new draft lottos. This system is nothing but a win for a team like Oakland, keep drafting as you always have with a few extra picks sprinkled in to raise your draft pool up and give you extra talent.
The new system helps the small market teams. It hurts Boras, and those clients who signed with him for his market-setting leverage.
In the past, Appel might have fallen to them, and they might have signed him for a boatload of cash. In this situation the Pirates have more leverage — not to sign Appel, but to keep his price down. That this potential savings seems incidental to the Pirates is a specific feature of their management team, not a general feature of the system.
When we say “big market vs. small market” we’re usually talking about haves and have-nots. Over a single season or a few years the correlation between market size and draft position is pretty noisy, but on a long enough timeline the money wins out; for the draft to serve a counter-cyclical function, the top players must be induced to sign at the top slots. They have a very strong incentive to do so, now.
Pittsburgh may be the exception which proves the rule. Appel may not sign for slot, may go back to Stanford or the independent route, and come back to the draft next year. The gain will be much less than it would have been in past years, however, while the risks will not have changed. I doubt he will do this.
In the long run, this may be the issue which juices an independent AAAA baseball league into existence. If Boras and ilk are willing to invest in a six-team system staffed by slotted non-signers, they might be able to craft a very compelling challenge to baseball’s antitrust exemption. To the extent this is possible, and to the extent they appear committed to it, they may be able to force some juicy concessions.
I agree. If Appel is 2-3 years away from MLB-ready anyway, he could go back to Stanford or go the indy ball route. If he drops to somewhere around the 8th pick again, and that club gives him a take-it-or-leave-it offer, he could go the Northern League route and then offer his services to the highest bidder. If he’s a #2 starter-type, what’s that worth on the open market? There’s a good deal of risk for the player in that kind of scenario, but there’s a boatload of financial upside as well.
There is a huge elephant in the corner with this assumption, that ALL development is the same. To assume that a college team, or independent league, would be able to cultivate a top tier player and have them MLB ready is ask a lot.
Shoot, a lot of MLB teams still haven’t figured out how to do it.
He still has to keep going through the draft until he either signs or goes completely undrafted. You don’t gain FA just by not signing with the team that drafts you and signing with an independent league team in the Northern League.
Great analysis and info, but there is another game you missed out on.
I’m Worthless Joe (expected to be drafted 2 millionth) who just got signed in a slot valued at $800,000. Now I could take the expected $10,000 and run, or I could say, “If I don’t take this, you lose most of the $800,000, so I’m in for $400,000 or bust. I just won the lottery and if you want that $400,000 to give Boras, you have to give me $400,000 too.” And for that player, it’s really only if they *really* want to play that they sign.
In the end, you don’t save that much drafting down.
If I were drafted at position X, I would expect my agent to start negotiations on whatever draft position X had slotted for it. Its tough for a team to argue that I am not good enough to make what position X has slotted, seeing as how they drafted me there. I might not play hardball, especially if I didn’t think I would get as good an offer in the future, but I wouldn’t be rushing to sell myself short.
Brilliant.
I am now declaring myself eligible for the 2013 draft. I can’t play ball worth a damn, but I will sign for 10% of slot, no questions asked. Feel free to use the other 90% on your real prospects.
I’m sure the team would have a deal in place with the agent of anyone whose drafted for slot purposes. The agent would have too much reputational risk to pull a move like that.
I realize that Baseball has a special status in the courts to collude among the owners, but colluding with the agents is probably not legally defensible.
Teams and players/agents talk about price before the draft, whether it’s MLB, NFL, NBA, etc. It’s common to find out what expectations the player has, as that impacts whether or not you draft him. When this happens, no team will get sued for collusion.
This is exactly how the draft is supposed to work. The owners and existing players want to hold the cost of drafted players down. They’ve chosen slotting as the mechanism. The only way to hold compensation to slot is if the cost of going over slot is prohibitive. Presumably Boras/Appel were asking over slot to begin with. Seven teams either didn’t agree on value or couldn’t see how to work it out.
The Pirates decided that (Value of Player) x (Chance to Sign) was highest for Appel. I don’t see how they can reasonably go over slot + 5% since the cost of going over (#1 pick + money) is greater than the gain (#1 pick).
I’ll set the O/U of Appel signing at 49%…and I’m not sure him not signing isn’t a terrible outcome for either Appel or the Pirates.
If you’re the Pirates, you took the best player available and, given the new reality of the slot system (whether Boras wants to admit it or not), you are going to make him a fair offer. If he doesn’t sign, you get pick #9 the following year–an allegedly deeper draft.
If you’re Appel, you’ve got an interesting decision. Given the rate at which pitchers flame out, there’s an argument to be made for going back and trying for more guaranteed money next year. That extra 2 or 3 MM might be all you make in professional baseball. Likewise, there’s a chance you get injured and you end up costing yourself even more.
However, the scenario described in the article–where you fold the next 10 rounds of your draft in an attempt to sign Appel seems riskier because you hand the leverage to Boras AND you don’t take the best available players for a team that, frankly, needs prospects. From what I’ve read, Appel isn’t a transcendant player–a can’t miss Strasburgesque talent–who is worth making this gamble on. But having said that, wouldn’t most teams trade their 2nd through 10th round picks for a top 10 pick most years? So maybe it’s not *that* farfetched.
Btw, what would happen if he went and pitched in NPB for two or three years?
The typical NPB player doesn’t reach free agency for 10 years. While it might (stress might) be possible to sign a contract with stipulations to become a free agent in less time – there is no incentive for the team to agree. Not to mention the cultural differences, it would be better for Appel to just stay here and play in an independant league for a year.
Apologies if this has already been stated, but let’s consider that the Pirates are deliberately putting themselves in this corner. If they draft guys “normally,” and make them all offers, their “take it or leave it” offer to Appel has some actual weight behind it. What might normally be mistaken for negotiating bluster has hard reality behind it. They can legitimately say, and Boras can know it to be true, that they can’t afford more, having already signed others. It removes the brinkmanship from the decision, and presents Appel with a simple yes-no decision about entering this year or next for that value.
Being in a corner is tough, but the key is it being OBVIOUS to everyone that you are. That includes Boras. He can’t extract money both sides know the Pirates don’t have.
Exactly!! Why would they acquiesce to Boras before they negotiate? That’s crazy!!
Pirates have a lot of leverage here. The #9 pick next year and the $2.8M in draft budget dollars have enough value where they’d be crazy to throw away the rest of their draft to please Appel. I wouldn’t go more than $3M on Appel. Take it or leave it. There’s a ton of injury risk to Appel to go the college/independent route as a pitcher.
I would love to have a recording of the call Boras made to the Pirates last night.
How quickly after signing a draft contract can a new non-draft contract be signed?
In the past taking a year off might allow a player to find a team to punch his ticket, but unless teams are willing to lose picks to justify huge bonuses (which we’ve assumed they’re not) I think that players will start to accept their slot if they want to play baseball. I don’t think this is a tactic we’ll see going forward for players who don’t have far up to move.
Waiting a year (and getting a year older) would have to justify the risk of ending up the same place next year, and/or getting injured, especially if you’re looking to move from #8 to the top 5.
This system is what the owners want to limit costs. It was put in place explicitly prevent players from extorting teams’ front offices, at the cost of the possibility of them not playing baseball. The owners designed this system. Now they have to live with its limitations.
Not sure I understand the point of the article really. What the new rules do is to remove negotiations from the drafting process. Kids are either going to sign for slot or not sign. The only real money up for grabs is the 5% teams can go over slot without incurring financial penalties and loss of draft picks. Some teams will use it on high school kids, some high end college kids might get some but the concept of leverage doesn’t really apply any more. High school draftee’s will have more options and more will probably opt for college.
A kid like Appel has the option to turn the Pirates down, but if he signs it’s going to be for around 3 million. The odds of him turning that down and then getting any significant amount more in next year’s draft is pretty low-even without taking into account the injury risk. Most of the same teams drafting early this year will do so again next year-and 7 of them didn’t draft him yesterday, off a solid college season. Multiple teams ahead of the pirates went college pitching and picked some one else.
The Pirates are probably quite happy he fell to them, he’s a good value at 8,but the 9th pick in next year’s draft could be just as good a player.
it’s time for boras to be outplayed in his game. if appel declines a good ~slot offer, he should be picked even lower next year and given less money or the same exact money. They’re just going to lose time and have their service time start later and later, that they’re just going to end up losing more money in the long run. Unless they get close to double, I don’t see how it would be worth it for the players to wait and go later and later.
Excellent, a bunch of billionaires should collude to stop a college kid from taking what could be his one chance to get a decent pay day from baseball. Hurray for the billionaires.
I don’t get why it was changed. I like the no-ML-contract change, but other than that, what is the point??
Keeping players from manipulating the system so they could get top of the first round money despite causing themselves to fall in the draft because of their bonus demands. The players don’t have nearly as much leverage anymore. Players should start being drafted more in order of talent level instead of having signability play such a big role.
One thing that I haven’t seen mentioned is if the Pirates had went the college route to save money, this statement by Mr. Cameron isn’t necessarily true.
“Yes, they’d get the No. 9 pick in next year’s draft as compensation for not signing Appel, but they wouldn’t get any compensation for the sacrifices made to make him a stronger offer.”
All the Pirates have to do to hedge against losing that extra 1.4 million they saved by drafting cheap in rounds 2-10 is draft high upside guys that drop to rounds 11-40 that are at least somewhat signable. Not signable for 125K but they could take five guys with upside and try and sign 2 or 3 for the extra 1.4 million. Just picking random names from the Baseball America top 500. Mitchell Traver, Freddy Avis, Hunter Variant, Walker Buehler, and Trey Williams (all still on the board currently). If two will sign for 800K (that’s around slot for the 2nd round) then the Pirates use the 1.4 million (since there is 100K built in for each) and it’s not completely wasted.
It isn’t the route they went, but the Pirates could have went that route and still had a backup plan.
they can, but if they’re high upside guys, and they only get offered 125k, they’ll probably decline, head off to junior college or college and get more experience/exposure so that they can get drafted higher later.
they went HS catcher with their 3rd pick…
MLB trade rumors reporting, they already turned down a 6 mil offer. crazy.
The $6M offer was from the Astros, whose first-round pick was worth $7.2M in slot allowance. So Appel and Boras were refusing to go $1.2M under slot.
Still they probably really regret not taking that deal, as Appel has now fallen down to the Pirates who are only allotted $2.9M for their pick.
The Astros have been Appel’s favorite team since childhood. Appel perhaps could have been chosen by his childhood favorite team with the prestige of the #1 overall pick for twice what he is now likely to get. Devastating.
(Of course, we don’t know for certain that the Astros passed on him simply because he refused the $6M; it may have been a matter of sincere talent evaluation.)
Even if a team goes over their draft cap in the 0%-5% range, they still lose the ability to gain lottery picks, right?
I think they’re eligible for the “competitive balance lottery” picks for small-market teams, but they can’t enter the lottery for any picks that other teams forfeit for going 5% over slot.
Not that it will happen this year, but what about a team just deciding “what the hey” and taking a whole draft of high-cost guys like Appel.
Once you cross that threshold of losing the 1st round pick, you may as well corner the market on high upside guys that slip, HS multi-sport stars, etc. Especially if the following year’s draft looks mediocre, this could be the right strategy if everyone else prefers to play it safe.
I don’t think TZ’s strategy will work that well…the penalties keep growing as the percentage of allotted pool increases. The monetary penalty grows and more future draft picks are lost.
If you want to see game theory in action, take a look at round 10, the final round where teams can “save” money by drafting a total schmoe or someone with no leverage and signing him for less than slot…
21 of the 30 picks in round 10 were college seniors, including two guys from military academies. The Dodgers were the most obvious about it, selecting Zach Babitt.
Babitt is 5’7″, 160 pounds, turns 23 years old this summer, and was a redshirt senior at … I swear I’m not making this up… “Academy of Art University,” which apparently is located in San Francisco and participates in D-II, where they went 6-44 this season. To Babitt’s credit, he did lead them in hitting at .313.
http://artuathletics.com/roster.aspx…&path=baseball
What Boras was trying to do and Pittsburgh disrupted, was trying to get Appel to a team that had more picks and a bigger pool to pay his bonus. He didn’t envision a team like Pittsburgh drafting Appel and I’m sure it ruined his plans. Now it should be classic to see how it plays out in the end.
I agree with Nitram. I think the Pirates hold all the cards here and Dave is overblowing the situation greatly. The vast majority of kids who turn down first round offers to back to school, end up getting less money the next year than they otherwise would have.
Appel will have absolutely no leverage next year. So if he has no leverage next year, he has NONE this year either! The Pirates hold all the cards! If Appel goes back to school there’s a 90% chance IMO he ends up with less than $3m next year.
Why may I ask are the Pirates fooling around drafting another Pitcher ? Last years #1 Gerrit Cole and James Tallion have been lights out down here at Bradenton in A ball. While the Pirates latest boost for the offense is calling up singles hitting corner OF Presley who couldn’t even hit singles the last time around. This organization is nearly bankrupt when it comes to bats. They shoulda’ drafted a hitter.
Even if that were to be the case it would abnegate this interesting situation. I am glad it happened.
You never draft according to need in baseball; it’s always best player available. The key is to accumulate value in your farm system of whatever variety. Then needs can be addressed via trade or free agency.
Yeah, the Orioles had an excess of young pitching once upon a time as well and very few of them have yet to have any real success. If you strike gold and all your pitchers make it to the majors unscathed and have success, trade one of them for a top hitter. The Mariners turned half a good season from Pineda into the top prospect in baseball. Young successful MLB starters are more valuable than unicorn blood.
Wait…the Mariners got Mike Trout for Pineda?
I know he’s not one but what happens if a college senior doesn’t sign? Does he go back into the draft the next year? Become a FA and sign with whoever?
Back into the draft the next year. You keep going back in the draft until you either sign with the team that drafts you or go completely undrafted (i.e. Brandon Beachy).
I love game theory and I love this post… but I totally do not understand how the draft rules work.
Boras, as much as anyone, has to realize that the money just is not there, for appel, or anyone entering the draft. No team is going to overpay for an unproven rookie anymore, it’s the rules. He got his cut when we paid fatty fat fats Pedro Alvarez to strikeout 200 times a year. New draft, new rules, new money. MLB is fine with it and the teams are too because it’ll nip the agents in the bud at this level.
They need to give the players the option of forcing the team to sign them for a certain % of slot. Say 80-90%. Imagine if there were two studs set to be in the draft next year. The Astros would have way too much leverage on the #1 pick if they could just punt it and get the #2 pick next year. Especially if those two players were college kids. I actually like the idea of the system, but there are definitely some foreseeable scenarios where teams could game the system.
I disagree and think the agents don’t have much leverage. If the pirates started altering their draft strategy that would provide boras with more chips to play but as is I don’t think returning to college is an attractive option for Appel when he may just end up in a similar slot next year in a stronger draft class
here’s a suggestion for the Pirates: go to Boras and Appel and tell them “sign for what we offer you or we will just pick you again next year.” he declines. OK, next year, same offer. Pirates pick Appel, he’s a year older and a year poorer. Sign for what we offer you or we pick you again next year. This continues until they recognize that they need to sign or his career is over.