Baseball Musings: Eliminate the Draft

September 15, 2007

Eliminate the Draft

Ken Rosenthal points out how the Yankees and Red Sox are using their financial clout to dominate the foreign free-agent market. He makes the point I made in a recent Baseball Prospectus (subscription required) article that the draft is no longer funneling the best talent to the bad teams. Here's Rosenthal:

Teams can spend on international free agents without restriction, an advantage for high-revenue teams such as the Yankees and Red Sox. The amateur draft, designed to funnel top talent to the weakest teams, instead rewards clubs that are willing to exceed the bonuses recommended by the commissioner's office -- another advantage for you-know-who.
Greater resources allow the Yankees and Red Sox greater margin for error as they pursue high-ceiling talent. Some teams backed off right-hander Joba Chamberlain in 2006 because of injury concerns. Not the Yankees. Other teams backed off right-hander Ian Kennedy because he was represented by Boras. Again, not the Yankees.

In '05, the Boras factor helped the BoSox land right-hander Craig Hansen, who thus far has been a bust. Right-hander Clay Buchholz fell to the Red Sox in the same draft after some teams backed off him due to his arrest in April 2004 for stealing laptop computers from a middle school.

Money also buys increased flexibility in the later rounds. Case in point: Red Sox Class A first baseman Lars Anderson, who was rated a supplemental first-round talent by Baseball America in '06 but fell to the 18th round due to his bonus demands. The Red Sox signed him for $825,000.

None of this is new: The Yankees and Red Sox didn't just start spending heavily on amateur talent.

The difference now is that they're better at it.

The draft restricts the supply of talent to the majors by limiting which players teams can sign. Once players figured out they could extract money from teams by refusing to sign, or saying they were going to college, prices of drafted players started going up, and the whole point of the draft broke down. If teams were able to compete for all players, sure, the rich teams would get the best. But they do anyway. At least the other teams would have a chance to sign the best of the rest, and find the gems the others missed. And with foreign and US players competing on the same level, my guess is the price of signing talent would go down overall. It's time to abolish the draft.

Posted by David Pinto at 11:18 AM | TrackBack (0)

Comments

Bad, bad idea.

When you consider that drafting a player is essentially equivalent to signing them to getting the first 3 years of a players' career for basically free and then controlling the next 3 years at below market value, you've got to think that teams are signing players for well-below their expected marginal revenue product. Heck, this is why players like Anderson and Kennedy were able to get signed for exorbitant bonuses: they're clearly worth it.

Taking that into consideration, eliminating the draft would do no more than allow these top prospects to seek out their market value, which is clearly higher than what they sign for in the draft (at least in the vast majority of cases).

So I guess I would expect to see bonuses rise dramatically if the draft were eliminating, hurting not only the smaller-market clubs that can't afford this additional money but also the larger markets who, all things equal, would rather not spend more money.

Instead of eliminating the draft, how about just fixing it? Or at least instead of this toothless "suggested slot" crap, actually dictate (or at least cap) the bonuses players get during the draft? Impose strict penalties on players for not signing, etc.

And as long as I'm dreaming, how about a real salary cap in addition to a salary floor? And how about we just get the whole team that turned the NFL into a top-quality league to come in and completely overhaul MLB? *sigh*

Posted by: mraver at September 15, 2007 11:54 AM

Outside of the salary cap thing, I'm with mraver.

There are so many things they can do to the draft, whether it's slot bonuses or eliminating the bonuses... it makes no sense to me that eliminating it altogether is a better option.

On the flip side of the "rich get richer now anyway" idea is that guys also slip through in the draft now anyway. It seems to me that allowing the Red Sox and Yankees to get Mark Prior and Joe Mauer without the Twins even having a chance at either is actually a worse scenario.

Posted by: Sam at September 15, 2007 12:12 PM

When Baseball Musings advocates abolishing the draft it's time to give it serious thought. But...

Still I'm hopeful we could look at shoring up the draft.
1-Lock in all signing amounts based on the position & round taken.
2-All players (Latin & Japanese alike) must apply to the draft in order to play. If they apply and are not drafted they are free to sign with anyone for that year. If they don't sign they must again apply for the draft. If they don't sign they are able to play minor league ball but must apply to the draft before they can reach the majors.
3-Dump the posting process with Japanese teams. We do need to compensate the Japanese leagues, but do so from a league pool.
4-Get all ML teams to co-op on academies, especially in the inner cities here in America. We don't put to good use our own talent and in particular don't build on a vast potential wasting away because baseball is much more difficult to organize than basketball leagues. How many NBA players are less than 6'2"? Not many.
5-Make sure the signing amounts are a decent living wade with full Medical coverage while active. Baseball needs to attract good athletes and must compete against football and basketball. Get serious about investing in the person, not just their ability. They will need the whole package to make it in the bigs anyway.
6-Living conditions in the minors is not good with crummy diets... and the road is long. Who the hell wants to ride the buses for 3-4 years before they get to the show? Modest improvements would do wonders.
7-Pass a federal law that restricts tax dollars used to support professional sports (building stadiums). Why do we subsidize billionaires? OK, I just threw in that last one.

Just a thought.

Posted by: Snuffy at September 15, 2007 12:23 PM

Or, we realize that baseball has been trying to screw big market teams for 80 years and it hasn't worked. Maybe we just let the market take care of things. How about this, anyone not on a forty man roster, minor or majors, is a free agent at the end of his contract. That would prevent teams from stock piling players in the minors, helping to create parity, and driving down the cost of signing as well.

Posted by: David Pinto at September 15, 2007 12:43 PM

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