Visualizing the CBA’s Impact on Draft Spending

There have been many, many words written about the new CBA already, and the common consensus seems to be that two new provisions — the draft tax and hard cap on international signings — will impact competitive balance in baseball. By preventing teams from investing heavily in acquiring young talent, it will theoretically make it more difficult for small market teams to compete with large market teams, while also driving some young players away from baseball and into college or other sports. Dave Cameron explained this all yesterday, so check out his piece if you want further explanation.

This argument rests on one assumption, though: that small market teams spend more money on acquiring players through the draft than large market teams. Technically, since large market teams have huge revenue streams, couldn’t they also be pumping lots of money into the draft, using their late first round picks to sign top players to overslot deals? Why wouldn’t the smart front offices exploit their monetary advantage in every way possible?

So after the jump, you’ll find a two charts. The chart on the left lists the total amount of money invested by each team in the amateur draft from 2007-2011, and the chart on the right lists the amount of money each franchise spent on international signings in 2010. All the data comes from Baseball America, so a huge hat tip to them for the help.

I’ve divided teams into one of three categories: large market, mid market, or small market. The large market teams are the ones that baseball will declare ineligible for revenue sharing sometime before 2016 (excluding obvious smaller market teams like the Blue Jays, Nationals, Astros, and A’s). The distinction I drew between mid market and small market is entirely subjective — so please, feel free to suggest improvements there — but I wanted to draw a distinction between teams like the Rays and Tigers.

As you can see, the general trend is what you’d expect: large market teams spend less than small market teams in both the draft and internationally. If you look closer, though, you notice that certain large market teams are spending a good chunk of money on amateur players. Despite the fact that neither team has had a high draft pick in some time, the Yankees and Red Sox are both investing heavily in the amateur draft, and the Yankees are also large players on the international market. The Rangers and Cubs have also been putting lots of money into both areas.

So it’s too simplistic to state that the draft tax and international spending cap will have no positive effects on competitive advantage. The international spending cap will likely only affect a handful of small market teams — around four by my count — and it will affect a similar number of large and mid market teams. As for the draft, it will definitely hurt small market teams to not be able to spend liberally on prospects, but it will make it difficult for teams like the Red Sox to buy talent that slips to the end of the draft due to cost concerns.

In the end, I’m not sure if these changes will be a positive or negative development for small market teams, since much of that depends on if the talent pools for upcoming drafts are weakened (and if so, how much) due to amateurs choosing other paths instead of baseball. These rule changes are a mixed bag of good and bad, and the only way to determine their effect will be to watch how the next five years unfold.




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Steve is the editor-in-chief of DRaysBay and the keeper of the FanGraphs Library. You can follow him on Twitter at @steveslow.


82 Responses to “Visualizing the CBA’s Impact on Draft Spending”

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  1. Sean D says:

    This would require a lot more work, but it seems to me that in order to understand the impact on large vs. small market draft spending you’d probably have to look at how much these teams are spending over slot.

    The Pirates and Nationals top the chart, but were drafting high to begin with. Teams drafting lower can spend over slot, but those bonuses usually are nowhere near on par with the money spent on the top picks.

    Another thing to consider is that the Nationals spent a bunch of money on Strasburg. But, presumably, Strasburg would still be drafted in the exact same spot under the new system and paid less. In this table shown above the Nationals get credit for spending a lot there, but they get the same talent return.

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    • Sean D says:

      Just to be clear. I’m not criticizing the author so much as I’m trying to expand the discussion.

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      • Paul says:

        I think FG authors are big boys and girls. It’s a good article, but I agree that it’s just not so simple. I think it’s true that when you just look at dollars over a period, it doesn’t capture those huge bonuses to one guy very well. Under the new rules, what happens with that single phenomenon?

        Another really important question for me is, yes small market teams spend more, but what is happening with over-slot deals? And the question here is not “are they spending more on over-slot deals,” but “are they spending more than a large market team WOULD PAY FOR THE SAME PLAYER in an over-slot deal?”

        We know that free agents sign with small market teams all the time to bigger deals than they would get from large market, more competitive teams. If it wasn’t for the overpay, they wouldn’t go there. Seems logical enough that the same phenomenon takes place regarding prospect signings. So a couple years ago, does Kendrick Perkins sign for the same $650,000 he got from the Red Sox as a sixth rounder, or if the Pirates take him earlier in the round does he demand $1m or else he goes to play RB at Texas?

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      • sheath1976 says:

        You mean Kendrick Perkins who struck out 62 times in 200 palte apps with 3 homeruns in rookie ball last year. This guy should be playing college ball. He’s got the ceiling of Wily MO Pena.

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      • Paul says:

        What does that have to do with the subject at hand?

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    • Drakos says:

      Baseball America ran some numbers after this year’s draft showing the amount spent by each team compared to slot for (I think) the first 10 rounds. It’s subscriber only information though.

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  2. Craig says:

    Why are the Jays and Nationals obviously small markets? Can’t speak much to the Nationals other than the fact they’re a pretty large city with what seems to be wealthy ownership group. Toronto however is the 5th largest city in North America, have one of the richest ownership groups, and are also helped by a strong Canadian dollar. The reason the attendance is so low is because they haven’t sniffed the playoffs in almost 2 decades. Largely because of playing an unbalanced schedule against the two highest spending teams in baseball and bad management in between the Gillick and the Anthopoulos regimes.

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    • Big Jgke says:

      I was about to post something about this. Unless I’m not understanding the logic here, it seems ridiculous to count either of these teams as small-market.

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    • Beaster says:

      Agreed the Jays are one of the larger market teams. Plus they get the benefit of national TV coverage !
      Why not rank the teams in order of population of the metropolitan area they play in and divide from there

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      • Marcus says:

        Because by that logic Boston would be a small market team.

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      • Adam says:

        really, because Boston is the 10th largest market in the country, both by metro area size and media market size. Hardly small market.

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      • NEPP says:

        Also, Boston has a fanbase/market that spans pretty much all of New England outside of western Connecticut. NESN is on tv for all 18 million New Englanders. Thus, they are actually a HUGE market overall…probably the biggest in baseball as the Yankees have to share NY with the Mets.

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    • Matt M says:

      Toronto asked for the ‘small market’ standing in the Ricciardi era. Right now their payroll can be considered small market status and until they spend more they should continue to be considered a small market team. Management has indicated they will spend more when the team warrants it by winning consistently. Until then though.

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  3. Jonathan says:

    I think the bigger problem is the fact that the playing field is leveled to the point that doing well in the draft won’t be the advantage it used to be. The question isn’t just “who wins,” but also “how much does winning the draft mean anymore?” It seems like teams who draft well won’t be able to leverage their advantage anymore.

    If drafting means less, then having a huge payroll is more likely to be decisive. I actually expect the Cubs to benefit the most from the current CBA–the Yankees, Red Sox, Phillies, and Mets are all big market teams, but with the 2nd wild card, it’s going to be more important to play in a soft division. The Cubbies are by far the biggest market in its division, and given a few years to rebuild, should be regular playoff contenders. With the Astros gone, they don’t have any legitimately big markets with which to compete for division titles. If Theo runs the franchise well, then I predict a boatload of division titles starting a few years from now.

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    • Frank says:

      Except Theo’s calling card has really been building through the draft and supplementing with free agents. He even stated as much in his press conference – how he wanted to build from the ground up. It’s going to take a number of years picking somewhere in the top 10-15 of the draft to build the farm up. His free agent signings in Boston were pretty poor especially compared to other big market teams.

      I think the new CBA takes away from Theo’s strength.

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    • Tom says:

      At what point did doing well = going overslot?

      The draft is being treated as an exact science, the impact of player development is being completely brushed aside, and talent evaluation is now pretty much all a level playing field from team to team?

      Going overslot is now the key determining factor for having more homegrown talent? I’d actually like to see someone put some #’s to that rather than listen to yet another handwaving argument with no supporting data.

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  4. Mayor McFleas says:

    I think this is the first time I’ve ever seen the Brewers declared anything other than a small market team. They have the smallest market in baseball! Maybe I’m misunderstanding how “market” is being used, but just because they (currently) draw well doesn’t have anything to do with the size of the market. Toronto’s metro area is about 3 times the size of Milwaukee, plus they have all of Canada to themselves. Sure, they’re competing with hockey, but Wisconsin is primarily a football state, and they’re hemmed in on both sides by Minnesota and Chicago. A large or mid-market team that doesn’t exploit its market well doesn’t automatically make it small, nor vice versa.

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    • JCA says:

      The author seems to be treating poor performance and historic low payroll as a proxy for market size rather than demographics. The Nationals have 10 of the 20 richest jurisdictions (per capita) in the country within driving distance and a top 10 media market even without considering Baltimore. The Lerner family is also one of the wealthiest ownership groups in baseball. Yes, there TV ratings and fan attendance are small market, and they only have had one season under the current owners that puts them in the bottom half of the first round, but small market is just not right.

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  5. KJOK says:

    Right, the article is interesting, but if you don’t get the markets right, it makes no sense. The Astros are in a LARGE market, not small. Their poplulation market is about 5th, assuming their practically tied with Philadelphia, and their TV market is 10th in the nation.

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    • Brian says:

      MLB defines the size of a team’s market by their annual revenues, well, at least that is how they determine whether a team is eligible for revenue sharing.

      And to some degree, it makes sense. Astros and Blue Jays are located in big cities with large populations, but they can barely sell 25,000 tickets per game.

      On the other hand, some cities with small populations (ex. Brewers) are selling 35,000 tickets a game. It’s actually a very big difference when extrapolated over 81 home games per season.

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  6. Dean says:

    The Dodgers and White Sox appear to be skewing the results.

    Both teams rank at, or near, the bottom of both lists and are large market teams. Dodger ownership was skimping below the major league level to (essentially) strip mine the value out of the team. White Sox ownership has been parsimonious since the early part of the last century.

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  7. KJOK says:

    I realise market size categorization can be subjective, but most of them are pretty clear cut (trying to break it down into 10/10/10):

    LARGE
    NY Yankees
    NY Mets
    Chicago Cubs
    Chicago White Sox
    Los Angeles Dodgers
    Los Angeles Angels of A.
    Texas Rangers
    Philadelphia Phillies
    Boston Red Sox
    Houston Astros

    MEDIUM
    Miami Marlins
    San Franciso Giants
    Detroit Tigers
    Toronto Blue Jays
    Washington Nationals
    Atlanta Braves
    Arizona Diamondbacks
    Seattle Mariners
    St. Louis Cardinals
    Minnesota Twins

    SMALL
    San Diego Padres
    Tampa Bay Rays
    Colorado Rockies
    Oakland A’s
    Baltimore Orioles
    Pittsburgh Pirates
    Cleveland Indians
    Cincinnati Reds
    Kansas City Royals
    Milwaukee Brewers

    Based on Population and TV Markets. You might quibble at the edges, like moving Houston to Medium or Miami to Large, Minnesota to small and San Deigo to Medium, but no way Houston small, etc.

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  8. Mike Green says:

    Toronto’s television and internet market is “Canada” (the cable network extends that broadly and the internet blackout is that broad). For gate purposes, as Craig above points out, Toronto would easily qualify as large market. Toronto is, of course, a little smaller than Chicago, but the differing sizes of the media markets (in Toronto’s favour) and the fact that Chicago has two teams, should make it pretty clear where the three clubs stand.

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  9. MikeS says:

    Why do you limit foreign signings to just 2010? It skews the data to look at such a short time frame. Since 2007 the White Sox have spent quite a bit of money just on Cubans with Viciedo and Ramirez.

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  10. Paul Thomas says:

    Once you take DRAFT PICK POSITION into account (sorry for the capital letters, but the pigheaded unwillingness of apologists for the current system to pay attention to the fact that those large market teams who are “spending less” draft, on average, in positions which have far lower “slot values” bugs the crap out of me), it becomes clear that large market teams are not, in fact, spending less money on the amateur draft.

    Which makes perfect sense, when you realize that, on average, the GMs of large market teams are not imbeciles, and that if some people on the internet were able to figure out that prospects were a pretty good investment, it’s decently likely that they could figure that out, too.

    The Royals SHOULD be investing more money in the draft than the Yankees. They pick before the Yankees. If they were investing the same amount, that information, in and of itself, would indicate that the system favored large market teams.

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  11. sheath1976 says:

    It’s important to note that MLB and the players association have agreed to revisit this draft concept if it hurts “competitve balance” in two years which is three years prior to the end of this agreement. The new draft set up is going to help small market teams not hurt them. This upcoming year the Astros will have an 11.5 million dollar pool for signing players opposed to a 4.5 million total for the team picking last in each round. Players won’t be sliding due to signability issues any more so theoretically the least fortunate will be getting the best players without having to overslot for them. Same goes for international players who will sign with the have nots because they will have more resources to do so. I can tell you three things for sure.

    a. The RED SOX will slip from 4th to the bottom 3rd in draft expenditures over the next few years.

    b. The Yankees will slide from second in international signigs till at least the bottom third in international signigs.

    c. The teams who lose year after year will have the chance to draft and sign the best talent avilable in the draft and internationally year in and year out. Crappy Teams will have the highest draft positions, and the most money to sign those players. Same thing for IFA’s (after this year).

    THIS HELPS THE LESS FORTUNATE TEAMS IT DOES NOT HURT THEM!

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    • Craig says:

      Thing is the guys that were top talents like the Harpers, Coles, Mauers, Price’s, Strasburgs, Bundy’s, etc. weren’t slipping in the draft, it was the multi sport athletes like Bubba Starling or the HS pitchers with huge upsides that were slipping in the draft. Now some of those guys may not even make it to baseball because they may chose another sport or their college coach may blow their arm out. Diluting the talent pools where small market teams want to spend their money is not gonna help them. The Yanks and Red Sox can just fall back on the free agent market, the small market teams can’t. Of course this CBA hurts the small market team.

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      • Craig says:

        I don’t know why I said Bubba Starling, I meant to say the Austin Jacksons and the Carl Crawfords.

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      • sheath1976 says:

        Look how much the Red Sox used the draft. They overslotted as much as anynone. They just wooed Blake Swihart from going to Texas this year. Alot of these high ceiling guys were using college sholarships as leverage. Let’s see what happens without that leverage. MLB is calling their bluff and my guess is 90 percent of these guys go pro anyway. Look at the charts above. I’m a Red Sox fan but that they are fourth on that above list without having a top twenty pick over that time period is just wrong. They were gaming the system in a number of ways in addition to oversloting and I’m glad they can’t do that anymore.

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      • Craig says:

        The fact the Red Sox are losing out on the draft doesn’t mean it hurts them more, like I said they have other alternatives to draft spending and international spending. Limiting where small market teams can spend their money will not help them. Prince Fielder and Albert Pujols aren’t signing in these markets, they have to get these guys in the draft.

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      • Craig says:

        Riddle me this? How do the Tampa Bay Devil Rays sustain success when they usually pick in the bottom 3rd of the draft and go over slot and get the best players they can, trade away the players they develop for more prospects and never dip into free agency? Now they won’t be able to use this model anymore. Big market teams just dip back into free agency if they can’t get players in the draft, small market teams can’t.

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      • Paul Thomas says:

        This is hogwash. What other sport did Dustin Coleman play? Brett Hunter? Max Stassi?

        Those are just recent A’s overslot signings that I happen to know about because I’m an A’s fan. There have to be literally dozens of other examples of non-two-sport signings that went massively overslot– more than enough to dwarf the relatively small number of guys with credible threats to go pro early in other sports.

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      • Paul Thomas says:

        Craig, the Rays couldn’t sustain success under the CURRENT system. They built their success by stockpiling huge numbers of very high draft picks, and that stockpile stopped piling and started dwindling the first time they actually won a decent number of games in 2008. (Which isn’t to say they won’t stay good for several more seasons, just that it won’t last forever.)

        Same thing happened with the A’s back in the early 2000s. Once the high-pick pipeline dried up, it was only a matter of time (albeit, a fairly long time– eight years total) before the team ran out of gas.

        Now, if you’re talking about the model of PERIODIC success (win for a while, suck for a while, win for a while)– well, I just don’t see how it’s in any way negatively affected by this system. In fact, the strategy should be improved by the fact that teams picking earlier in the draft will actually have the leverage to take the best player available.

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      • Craig says:

        Longo, Price and to a certain extent Upton and Niemman are the only guys that really turned into superstars or servicible players for the Rays, so stockpiling had nothing to do with it. Dewon Brazelton, Rocko Baldelli, Josh Hamilton(never panned out), Wade Townsend, Delmon Young, and Tim Beckham have done nothing for them. The old system obviously wasn’t perfect for them but it was better than this new system.

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      • Paul Thomas says:

        Delmon Young got them nothing?

        WTF?

        He got them Matt Garza and Jason Bartlett. There’s no way they get that kind of return for a garden-variety player with Young’s stats as of the time that trade was made. His cachet as a mega-prospect is what made that trade possible. (It sure wasn’t his performance!)

        I have no idea why you’re qualifying Upton, who they’ve gotten 20 WAR out of, with a “to some extent.” And, Price and Longoria are like their two best players, or two out of three, at least.

        The early-2000s A’s weren’t entirely built on high picks, either (Tejada was free, Giambi was a third-rounder IIRC, and Hudson was a sixth-rounder). But that team doesn’t do squat without Eric Chavez, Mark Mulder and Barry Zito.

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      • Jeroen Blok says:

        Your argument assumes that small argument teams actually spend more then big market teams and this is not true as the article shows (especially if you take slotting into account. Plus I also don’t buy the argument of falling back on the free agent market as less talent in the drat will ultimately lead to less talent there as well.

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      • Craig says:

        I don’t assume small market teams spend more in the draft. I’m merely saying going over slot was one of the few ways forward thinking small market teams could really find bargains and obtain good players as their at a major disadvantage in free agency. You’ve just removed the best way for them to allocate their money. Also what sense does it make to provide such huge penalties for draft spending and not for actual spending on payrolls. Why is the maximum luxury tax 50% and not 100% like the draft tax? Also why isn’t the luxury tax distributed amongst the teams that didn’t break it like the draft tax is? Wait probably because that might actually hurt big market teams and help small market teams.

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      • Husker says:

        Craig’s comments make the most sense of anything in the article or comments section to me.
        The point isn’t so much who is or isn’t “small market” or which teams currently spend how much money on the draft and international FA.
        The point is that teams without much money used to have an opportunity to improve themselves by spending more in those areas without breaking the bank. Under the new agreement, they do not.
        These changes very clearly protect the big money teams and anyone who can’t see that is a fool.
        The changes, in fact, virtually zero in on one team, Tampa, who has had the greatest success with the least money of anyone recently. Now, they will have to try to compete in shackles.

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    • sheath1976 says:

      Look the Red Sox got the majority of their WAR from: Ellsbury, Pedroia, Lester, Papplebon, Bard Bucholz and Youkilis were all drafted. Beckett and Gonzalez were aquired for top prospects. When you look at draft per slot they have spent as much as anyone and have drafted better than most considering where they are drafting. Red Sox free agents in the starting lineup were Crawford, Drew, Scutaro, Lackey, Otiz, Daisuke. I’m not gonna waste my time going and looking up the WAR’s for different guys. Clearly you get the point.

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      • Craig says:

        So what the Sox did well with the old system. Unless small market teams get to pick in the top 10 of the draft every year there’s no other place that they can find bargains and sustain success than the draft and international free agency unless they rape other teams on trades. Top free agents are usually worth the money its the middle of the road guys that aren’t and small market teams are gonna start allocating money towards those middle of the road guys and big market teams are gonna allocate money towards the top free agents which isn’t gonna help the small guy.

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  12. Brian says:

    I refuse to believe that Cashman is so dumb that he’s just completely missed out FOR YEARS the alleged gold mine that is paying over slot. And he’s instead decided that giving out huge free agent contracts is better. And if that is true, it’s one of those inefficiencies that wouldn’t have lasted that long anyways.

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    • Brian says:

      sorry. bad example. I was going for “generic big market GM”. Seems like Cashman does spend quite a bit.

      Kenny Williams on the other hand…. based on the trades and pickups, I do tend to think he might be just that bad.

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    • sheath1976 says:

      If it had continued to happen it would have became more of a function of big market teams. Small market teams were pricing their way out of it. Every time they broke the bank and took a flier on a high upside kid they were setting a new precedent which only the big 5 or 6 teams could have sustained. I’m in agreement with you. The idea of this new CBA is to help small market teams.

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  13. Keystone Heavy says:

    Those charts make the WhiteSox look like one hellova dead beat organization.

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  14. Market Size? says:

    (excluding obvious smaller market teams like the Blue Jays, Nationals, Astros, and A’s)

    The Blue Jays, Nationals, and Astros are not from small markets. Someone needs to define this or find an official list to determine what market size each team is.

    This is my perception of market size (split arbitrarily into 3 groups of 10).

    Large
    NY Yankees
    NY Mets
    Chicago Cubs
    Chicago White Sox
    Los Angeles Dodgers
    Los Angeles Angels of A.
    Philadelphia Phillies
    Boston Red Sox
    Toronto Blue Jays
    San Francisco Giants

    Medium
    Houston Astros
    Washington Nationals
    Baltimore Orioles
    Texas Rangers
    Miami Marlins
    Seattle Mariners
    Detroit Tigers
    Atlanta Braves
    St. Louis Cardinals
    Arizona Diamondbacks

    Small
    Minnesota Twins
    Colorado Rockies
    Pittsburgh Pirates
    Cleveland Indians
    Cincinnati Reds
    Oakland A’s (San Jose soon?)
    San Diego Padres
    Tampa Bay Rays
    Kansas City Royals
    Milwaukee Brewers

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    • TtD says:

      The Jays are at least a small revenue team, and a team of small value compared to the league. They’re rated 27th of 30 teams by Forbes given total value. While the Jays have a large market to take from, they have a very small market share going up against the Maple Leafs, Raptors and Toronto FC. The spread of their fanbase across Canada also means they have poor game attendance.

      The only arguement you can have for the Jays being a large market currently is their insane TV ratings (average 500,000+ (250,000+ using the US rating system), which again is down to their spread out fanbase.

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      • Craig says:

        Blue Jays used to have the best attendance in the early 90′s when they were winning. Market is huge and revenues are understated because some revenues will show up in Rogers Communications income statement and obviously its a synergy for Rogers to own the baseball team and be the sole media provider for them.

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      • Market Size says:

        In addition to what Craig said:

        While the Jays have a large market to take from, they have a very small market share going up against the Maple Leafs, Raptors and Toronto FC.

        This is a poor argument. Nearly every city with MLB has teams from some combination of NFL, NBA, and NHL.

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  15. Joe says:

    Has anyone done an actual study on the correlation between spending overslot and major league success rate for those prospects. Is it an actual advantage or just a perceived and theoretical one?

    Baked into the sky is falling, small market teams are screwed because the draft is being slotted…. is the assumption that paying for picks (and more specifically going overslot) is the key variable for success. I’m not denying it’s certainly a factor but I’d think scouting and analysis, minor league development systems, making shrewd trades with big market teams as players near FA, and getting more picks via compensation or the new small market lottery is still far more significant.

    This article was a good start at trying to wrap some #’s around it but I think some of the suggested improvements are needed – cleaning up the small/mid/large market classifications and looking at overslot and not just raw spending. I think the necessary next step though before we mourn the death of going overslot is a measurement of how much of an advantage was obtained by going overslot (and this should probably be looked at after the first 10 picks or so as those overslot signing aren’t really changing their relative draft position that much)

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    • Paul Thomas says:

      If I recall rightly, yes, a study was done that showed that signing bonus is considerably better correlated with draftee success than draft pick position is.

      The problem with the “this screws small market teams” argument isn’t that overslot picks aren’t a good idea (wrong– they are) it’s that big-market teams bought more overslot picks, have always bought more overslot picks, and in the future would have continued to buy more overslot picks!

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  16. cs3 says:

    what is stopping teams from signing a player at the slot recommendation, but having an agreement in place to immediately (or at some point in time in the very near future) sign that player to an extension guaranteeing much more money?
    i dont see anything preventing this.

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    • Craig says:

      They’d have to put him on the 40 man before they extend him. Teams would have to love the player, and if teams did this it would scream pre draft deal and I’m guessing MLB would step in.

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      • cs3 says:

        Both Harper and Strasburg WERE immediately placed on the 40 man…. as would any similarly valued talent

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      • matt w says:

        This wouldn’t work for later-round overslot signings; there are too many of them to put them all on the 40-man. The CBA prevents a team from trying to get a decent quantity of prospects in the draft, which is important, because any individual prospect is risky.

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      • CJ says:

        The new CBA agreement also prohibits major league contracts for newly drafted players.

        “what is stopping teams from signing a player at the slot recommendation, but having an agreement in place to immediately (or at some point in time in the very near future) sign that player to an extension guaranteeing much more money?”

        All of the contracts have to be approved by the MLB office. If the agreement had terms that are an obvious circumvention of the bonus cap, MLB probably would not approve the contract. Unwritten agreements of this type couldn’t be stopped–but what agent is willing to accept a tacit agreement?

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    • Craig says:

      Harper and Strasburg signed major league contracts which is now banned for drafted players.

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      • cs3 says:

        ok that makes sense.

        but what prevents a team from drafting one elite prospect at slot, moving him to the 40 man, and then signing him to an extension?

        couldnt a 2 sport player still just walk away from the initial baseball contract and play a different sport in college?

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    • Paul Thomas says:

      One would hope that the commissioner’s office is not so slow on the uptick as to not notice that a team was violating the rules in such a blatant and obvious fashion.

      Now, are there ways to covertly slip money to guys if you really wanted to? Probably. But, it would be hard to keep a lid on it. Look at how many college guys get busted for illegal benefits that are in the three or four figures, just because they can’t keep their mouths shut/avoid showing their bling off/whatever.

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      • cs3 says:

        also, what is stopping a multi sport athlete from signing at slot, and then demanding an extension, while threatening to walk away from baseball if his demand is not met?

        wouldnt he still retain NCAA eligibilty for any non-baseball sport?
        or is college eligibility for all sports voided once a player signs any pro contract?

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      • cs3 says:

        ” One would hope that the commissioner’s office is not so slow on the uptick as to not notice that a team was violating the rules in such a blatant and obvious fashion. ”
        ================================
        i would hope not too, but at what point is it no longer a violation, and becomes ok to lock up your talent to long term deals by buying out arbitration and/or FA years?
        it becomes a pretty slippery slope

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  17. noseeum says:

    Thank you, Steve, for wiping Dave Cameron’s eyes with facts. That whine yesterday about the Yankees was ridiculous.

    First he argues the Yankees have unlimited resources, then he argues that small market teams had a competitive advantage over the Yankees in international market and drafting.

    Durr.

    Dave, how can you be so smart, and yet so blind with hatred for one team? Get over it. Say what you wish about the new CBA, it was clearly targeted to negatively impact the Yankees “unlimited resources”.

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  18. cs3 says:

    also wouldn’t this exercise be better if the teams were split based on revenue, rather than “market size”

    i mean just as 2 blatant examples… the Yankees and MEts play in teh exact same market, but their revenues are drastically different.

    Similarly the Giants generate much much more revenue than the Oakland A’s, but the market sizes are basically the same.

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  19. nyyfaninlaaland says:

    First, I didn’t quite get the rationale for the 3 market tiers, since it seemed to be predicated on the teams that won’t get revenue sharing towards the back end of this CBA. But that is the top 15 teams.

    The 10 smallest in size or revenue makes sense – that’s the determination of the round 1 supplemental draft lottery, with the losers rolling into the round 2 lottery.

    The simple fact is the 5 worst record teams are going to have significant draft advantage going forward. Their draft expense pool is likely to be at least twice that of the best 5. With the bottom slots having somewhere around 4-6 million to spend, and going over by a million costing them another million plus 2 #1 picks in the future (the future picks loss is the real hammer here), top teams simply can’t sign the top guys. Meaning the top prospects have a constrained market and their pricetags will likely fall. This is the core point of this structure.

    But saying the smaller market teams can’t compete in this system is simply inaccurate – their advantage is now institutionalized with a bigger budget if they’re struggling to go along with their higher picks.

    And do the math on the chart above – if the first drafting team has a budget of $11 MM, that is in excess of Pittsburgh’s average annual spending in the chart above. Projecting off the ’11 draft is a huge error – it was a better pool, forced by the uncertainty of the future, and a few teams went whole hog. NY and Boston, both past upper middle spenders, will be much more constrained assuming they continue to succeed in the short run. The Rays spending is bloated by a 2011 where they spent over $11 MM because of the 12 picks they had through the first 2 rounds. That won’t happen again. Their average in the other 4 years was more like $7MM.

    There’s a lot of woe. But baseball through it’s systems employs about 200 athletes per team – is that going to mean a flight of so many athletes to football. Where orgs carry less than a 1/3 as many players? Some more kids might go to college – not necessarily a bad thing – but in the long run they’d still be hurting their short term market value and risking injury without any payout.

    I still think this is largely a wait and see.

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    • Craig says:

      The vast difference in the spending budgets is mostly represented by the top 5 picks being budgeted at substantially more than the rest of the draft. Like the first pick is 7.2M and the last pick is worth 1.6M, thats 5.6M of the supposed 7M spread between 4.5-11.5M spending range. Once the first round and comp round is over every team is basically playing with the same amount of money, so small market teams that went over slot after the comp round basically lose this option to go over slot. I will admit the competitive balance lottery is helpful to the small market teams.

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      • Jeroen Blok says:

        That is actually a very interesting comment. This means that it could be very much worthwhile for team picking first to not sign the first pick but sign 3-5 players over slot in the later rounds.

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      • sheath1976 says:

        They should just allow the worst ten teams to pick in the first ten slots sfter the end of the first round. The six picks for ten teams lottery is gimmicky. Give the worst ten teams that extra pick.

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      • noseeum says:

        @jeroen, not really. The reason the top 5 picks are so expensive is because the expected value of the top 5 players is so much better than the rest of the available draftees.

        According to >a href=”http://baseballanalysts.com/archives/2009/06/draft_picks_and.php”>Sky Andrecheck over at Baseball Analystss, the Expected career WAR from a number 1 pick is 19.8. The expected career WAR for a number 5 pick drop all the way down to 8.9. By the time you get to pick 30, you’re down to an expected WAR or 3.6.

        Keep in mind that the data Andrecheck is using includes picks passed up due to cost and lack of hard slots, so one would imagine that under the new rules, Expected WARs will skew slightly more towards the earlier pics.

        Passing on a top 5 pick would never, ever be a good idea. Trading it may be, but that’s still not allowed.

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      • noseeum says:

        Sorry, my link must have had a typo!

        Try this

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  20. cs3 says:

    one more question…

    i read somewhere(maybe here on fangraphs) that teams are a allowed to trade a portion of their draft allocation money.
    is this true?

    if it is true, then why didnt MLB allow the the trading of draft picks themselves?

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    • Craig says:

      I think you can only trade a portion of your IFA spending money and not draft spending money. I think your also allowed to trade competitive balance lottery picks.

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  21. Candlestick Parker says:

    Assuming “market” refers to the population of a geographic region that a team can reasonably be expected to convert to ticket sales and ratings points, and thus revenue, these definitions are absurd.

    The A’s play in the same market as the Giants. They simply have failed to exploit that market (ie they are not popular). Maybe a move to San Jose, also in the same market, will help. But they don’t deserve MLB welfare based on having a small market.

    Conversely the Brewers fit any reasonable definition of small market, and they should not be penalized for the fact that they have done a superb job of maximizing their market’s potential.

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    • Adam says:

      The A’s don’t play in the same market as the Giants. There’s a big difference between San Francisco and Oakland, both in population, demographics, corporate money, etc. To lump it all in the same market is absurd.

      Besides, the Bay Area is by far the smallest market to have 2 teams.

      Though I absolutely agree with your point about the Brewers, your point about the A’s is way off.

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      • cs3 says:

        ” your point about the A’s is way off. ”
        =============================

        are you kidding?
        of course its the same market. the people who go to the games and spend money on A’s and Giants merchandise are all from the same general area. Just because MLB divides up the TV rights into arbitrary geographical areas doesnt mean that the actual fans dont overlap to a huge degree.
        *
        *
        *
        *

        ” There’s a big difference between San Francisco and Oakland, both in population, demographics, corporate money, etc. To lump it all in the same market is absurd.”
        =====================================
        whats absurd is that you seem to think that the only revenue generated by each team is coming ONLY from people who live in SF or ONLY from people living in Oakland.

        Think for just a second and youll see how your logic completely fails for the Yankees/Mets situation

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  22. Jack Zduriencik says:

    Crap…..

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  23. Candlestick Parker says:

    Saying Oakland is a different market from San Francisco is like saying the Cubs play in a different market from the White Sox. Nonsense. The Bay Area is a single media market, and each team theoretically has an equal ability to draw fans and viewers from the entire region.

    The A’s have completely failed to exploit the market during their 44 year existence. Their problems long predate the present era and go back to Charlie Finley. It’s not a problem of having a small “market.”. They play in a large market — which is not interested in them.

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  24. TBR also benefitted by being sucky for so many years and getting lots of high draft picks. They also didn’t have very good major league talent so these young players got ML playing time under team control.

    Having little money to sign FA for big contracts also prevents them from making big mistakes.

    Ben Zobrist turned out to be a gold mine because he went to a hitting mechanic to change his swing.

    What separates TBR from the rest,IMO, is that they keep having pitcher’s develop, much like the Braves.

    What this does for losing teams, if they play their cards right, is that they’ll get some of the best talent for slot price, and they can pick guys near the same age and potential so they can arrive at the ML level around the same time and get 3-4 years of ML time under team control.

    It’s not likely that any small market team can have a decade of sustained excellence, but they should be able to put together some good seasons every 5 years or so.

    What they get in return for trading these guys as they near FA or what FA they sign to go along with their team controlled talent could extend the length of their success.

    But this does keep the best talent and the best IFA from setting a “must meet my demand or I won’t sign” figure and then fall to the bottom of the 1st rd where a big spender will sign them at that number but less overall risk.

    Basically the deal removes leverage from non-union players, which helps the teams that need them the most.

    It gives more teams the ability to do what the Royals are doing right now, stock their MiLB system with players that can be MLB ready about the same time and make a run for 2-3 years.

    Smart FO will always figure out a way to analyze or scout better. Both the NYY and BRS built their foundation through the draft. Their budgets allow them to sustain with FA where teams like OAK cannot.

    We can also look at OAK’s recent 5 drafts and reasonably conclude that the drafting/signing years of Chavez, Hudaon, Mulder, Zito, Giambi, Tejada, etc were as much luck as anything else. Beane changed their drafting philosophy in 2003.

    BSR is a good example of a team that always has these highly rated prospects like Reddick and Lars Anderson but are continually blocked by an All Star at the ML level.

    As a baseball fan, I want to see the best young talent go to the worst teams and have them be in the ML as fast as possible. The teams probably feel the same way.

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