The Draft’s Biggest Flaw.Warning: Spoiler! (Click to show)
The Major League domestic amateur draft takes place this week, kicking off with the first and second rounds on Thursday night, then continuing on with rounds 3-10 on Friday and rounds 11-40 on Saturday. We haven’t done a ton of draft preview stuff because that’s simply not our strength, and there are a lot of other places — Baseball America, most notably — who specialize in high quality draft coverage, and will give you all the information you need if you want to know who is going to be drafted where.
That doesn’t mean we don’t care about the draft, though. For the basics of the new draft system, you can check out Wendy Thurm’s first and second primers on how the setup works, and then J.D. Sussman asked whether or not we even need a draft to maintain competitive balance earlier this morning. Those pieces are worth reading.
I’m going to throw my hat into the ring of draft related articles, because I want to write about the order of picks in the 2013 first round, and because that selection order highlights the biggest problem with the current draft structure: the penalization of success.
Those who argue in favor of maintaining the draft for competitive balance reasons argue that, regardless of its other agendas, the draft does serve to push the best players to losing teams, equalizing the playing field to some degree. I agree that, overall, it is generally successful at helping redistribute talent to franchises who don’t have the same financial capabilities as some of the big market teams. However, the 2013 draft order shows that the system doesn’t always work towards that goal, and sometimes, the results of tying draft selection order to previous season winning percentage are just silly.
Here is the order of selections for the first 39 picks per Baseball America, which includes the first round and the compensation selections awarded to teams. The slot value for each pick is included for reference, and then I’ve also included the Forbes pre-season revenue estimates for each franchise as well.
Pick Team Reason Assigned Value Forbes Revenues
1 Astros Team Record $7,790,400 196M
2 Cubs Team Record $6,708,400 274M
3 Rockies Team Record $5,626,400 199M
4 Twins Team Record $4,544,400 214M
5 Indians Team Record $3,787,000 186M
6 Marlins Team Record $3,516,500 195M
7 Red Sox Team Record $3,246,000 336M
8 Royals Team Record $3,137,800 169M
9 Pirates For failure to sign Mark Appel $3,029,600 178M
10 Blue Jays Team Record $2,921,400 203M
11 Mets Team Record $2,840,300 232M
12 Mariners Team Record $2,759,100 215M
13 Padres Team Record $2,678,000 189M
14 Pirates Team Record $2,569,800 178M
15 Diamondbacks Team Record $2,434,500 195M
16 Phillies Team Record $2,299,300 279M
17 White Sox Team Record $2,164,000 216M
18 Dodgers Team Record $2,109,900 245M
19 Cardinals Team Record $2,055,800 239M
20 Tigers Team Record $2,001,700 238M
21 Rays Team Record $1,974,700 167M
22 Orioles Team Record $1,947,600 206M
23 Rangers Team Record $1,920,600 239M
24 Athletics Team Record $1,893,500 173M
25 Giants Team Record $1,866,500 262M
26 Yankees Team Record $1,839,400 471M
27 Reds Team Record $1,812,400 202M
28 Cardinals For loss of free agent Kyle Lohse $1,785,300 239M
29 Rays For loss of free agent B.J. Upton $1,758,300 167M
30 Rangers For loss of free agent Josh Hamilton $1,731,200 239M
31 Braves For loss of free agent Michael Bourn $1,704,200 225M
32 Yankees For loss of free agent Nick Swisher $1,677,100 471M
33 Yankees For loss of free agent Rafael Soriano $1,650,100 471M
34 Royals Competitive-balance lottery $1,623,000 169M
35 Marlins Competitive-balance lottery, from Pirates $1,587,700 195M
36 Diamondbacks Competitive-balance lottery $1,547,700 195M
37 Orioles Competitive-balance lottery $1,508,600 206M
38 Reds Competitive-balance lottery $1,470,500 202M
39 Tigers Competitive-balance lottery, from Marlins $1,433,400 238M
The team with the #2 pick in the draft is the Chicago Cubs. Forbes estimates their revenues at $274 million per year, and while Forbes’ estimates are almost certainly wrong, we don’t really care about the specific number as much as we do the relative distribution between franchises. That $274 million estimate ranks the Cubs #4 in all of baseball. By any definition of market size, revenue generation, or access to financial resources, the Cubs are a top tier MLB franchise. They pick second overall on Thursday.
Now, look at the #7 pick. The Boston Red Sox have a $336 million revenue estimate, second in baseball to only the Yankees. Again, by any kind of financial calculation you want to make, the Red Sox are a well off organization. They pick seventh, one spot ahead of the Kansas City Royals, who have estimated revenues almost exactly half of what Boston has access to.
We can keep going. The 11th pick belongs to the Mets, who have $232 million in estimated revenues. At #16, we have the Phillies, with $279 million in estimated revenues. The Dodgers ($245 million and owners with apparently no concern for the luxury tax) are picking 18th. The Tampa Bay Rays, the franchise with the lowest revenue estimate at $167 million, pick 21st. The A’s, who have the second lowest revenue estimate at $173 million, pick 24th.
That is, the Rays and Athletics do not pick in the 2013 draft until after Chicago, Boston, New York, Philadelphia, and Los Angeles have made their selections. Major League Baseball has steadily been pushing both the cities of Tampa and Oakland to provide new publicly funded ballparks for these, noting that their ability to compete will be compromise without access to increased revenues. And yet, in the draft, Tampa and Oakland are picking behind five of the wealthiest franchises in the entire sport.
When the prevailing argument for the draft is that it is intended to help distribute talent to low revenue teams, it is tough to argue that the current model is well designed when the two lowest revenue teams are both picking at the back end of the first round, behind five of the financial behemoths that they apparently can’t compete with. And, because of the new bonus pool structure, the A’s and Rays actually have less money to spend in the 2013 draft than the Yankees, who have the seventh largest bonus pool of any team because of the two compensatory picks they got for losing Nick Swisher and Rafael Soriano.
By bonus pool size, the Cubs are 2nd, the Yankees are 8th, the Mets are 10th, and the Red Sox are 12th. The Rays get basically the same overall amount to spend on their draft picks as the Rangers; the A’s get the same amount as the Phillies. If this is promoting competitive balance, then I’m the Prime Minster of England.
There’s no way around this simple fact: Tampa Bay and Oakland are being penalized for successfully building winning teams despite their disadvantages. The draft is taking away potential future value from those teams and redistributing it to the Cubs and Red Sox. That just doesn’t make any real sense.
Even if we accept that the league will never abolish the draft, so the basic structure of awarding players to teams in a sequential order is here to stay, we should at least consider changing the way in which those picks are distributed. MLB has already begun to hand out draft selections based on revenues with the competitive balance selections, and besides the selection that the Marlins traded away and now belongs to Detroit, you can see how those picks actually make some sense; extra selections were given to Kansas City, Pittsburgh, Arizona, Baltimore, Cincinnati, and Miami. None of those teams were estimated to bring in more than $206 million in revenues.
If we can hand out extra picks based on team revenues in the name of competitive balance, why not hand out all picks based on a calculation that gets us to a similar point? MLB clearly has access to more and better information than Forbes, so they wouldn’t need to settle for just picking something as simple as a revenue estimate, but could develop a system that ensures that the lowest revenue clubs always pick near the top of the draft while the higher revenue clubs always pick near the bottom.
Maybe you base it on a rolling average over multiple years so that there is no incentive to reduce revenues to raise your spot in the draft order. Maybe you setup a system of tiers, where draft order can fluctuate based on winning percentage but teams have a net that they cannot escape. Or maybe you just eliminate compensation picks being tied to free agent signings and start giving the lowest revenue teams some picks of real value near the top of the first round.
There are a lot of different ways to modify the current system. What I do know is this: the Yankees don’t need to be compensated for losing free agents, and the Cubs don’t need to be compensated for being terrible. There’s no reason to punish Tampa Bay or Oakland for putting a winning team on the field, and the league shouldn’t be too interested in sending premium prospects to Boston and Chicago as rewards for wasting giant piles of cash. The sport has done a lot of work to promote parity and create a more level playing field than there has in the past, but on Thursday night, the first round of the draft is going to be a great example of why this particular system needs some upgrades.
Domonic Brown and Getting There.Warning: Spoiler! (Click to show)
Sunday afternoon, Domonic Brown did something he’s been doing a lot of lately. Brown faced Mike Fiers in the bottom of the first, with two on and two out. After a first-pitch curveball found the zone, Fiers missed three straight times, with a heater and a couple changeups. Brown scooted up in the box, and Fiers came inside with a cutter, or a slider, as if that detail’s important. Brown saw it, swung at it, and blasted it, way out to right field for a three-run dinger. It was Brown’s 14th home run in 32 starts. It was his 16th home run of the season. Brown is the National League leader in that category, after a spring in which people were concerned he might not find enough playing time.
Sunday afternoon, Domonic Brown did something he hadn’t done for a while. Brown faced Tom Gorzelanny in the bottom of the seventh, with one on and two out. After a first-pitch slider found the zone, Gorzelanny missed three straight times, with a slider and a couple heaters. The 3-and-1 pitch was a fastball that Brown went after and tipped for a strike. The next and final pitch was a slider that just missed, a little low and a little away. Brown watched it, and Brown walked — unintentionally — for the first time since April 30. Brown had just walked the day before, too, but that one was done on purpose.
It’s June, now, but it’s crazy what Brown managed to accomplish in May. No one in baseball hit more home runs than Brown’s 12. Only three players beat Brown’s slugging percentage of .688, and two players beat Brown’s isolated slugging percentage of .385. Brown also didn’t walk once. Only Endy Chavez and David Adams also didn’t walk once in May among regulars and semi-regulars, and they batted half as often. And they weren’t good. It’s weird, what Brown pulled off.
Month splits are stupid. Specific month splits are stupider. There’s nothing particular about a month, and there’s definitely nothing particular about May. But what month splits do is allow us to generate helpful trivia. Like this! I looked at the history of Mays, given at least 100 plate appearances. A total of 46 different times, someone has hit at least a dozen home runs in May. In Brown’s May, he didn’t walk one time. The next-lowest walk total among those dinger-hitters is six, by Ryan Howard (2006) and Bing Miller (1922). Meanwhile, there have been 12 Mays in which a player didn’t walk once over at least 100 plate appearances. In Brown’s May, he slugged 12 dingers. The next-highest dinger total among those non-walkers is five, by Carlos Baerga (1994). Domonic Brown had an unusual month, and it leaves us somewhat perplexed. Excited but perplexed.
Home runs, of course, are more important than walks. When a player’s hitting home runs like Brown has been, it doesn’t make sense to be critical of his walk total, because that’s just being critical for criticism’s sake. Brown hadn’t hit for this kind of power before, and it seems like he’s beginning to achieve his considerable potential. That’s the exciting part. But the walks matter because they’re indicative of a potentially unsustainable approach. Phillies fans don’t want Brown to be productive for a month. They want him to become the player he was supposed to become, and so one has to wonder what’s up. How is Brown doing this, and what’s going to come next?
If you ask Brown, or a lot of other people, you’ll hear that Brown’s finally getting a chance to play every day. It’s true that he’s been kind of jerked around in the past, which is probably unhelpful for the development of a top prospect. Now Brown’s getting comfortable in the bigs, and he’s starting to hit like it. The explanation is just that simple. But what does that comfort mean? Where does it show up in the performance numbers, besides just the results?
As always, we can show correlations without demonstrating causation. But Brown’s power success has come with an adjustment in approach. He’s changed himself to become more aggressive, and this table will show how:
Split O-Swing% Z-Swing% Contact% Zone% BB% K% wRC+
2010-2012 28% 68% 81% 46% 10% 19% 90
Apr-13 29% 69% 80% 45% 9% 18% 84
May-13 36% 77% 81% 50% 0% 19% 172
In May, Brown swung a lot more often than he used to. Maybe that much is obvious, just given that he didn’t draw a walk. Here’s another sampling of data, showing ten-game rolling Z-Swing% averages:
In the first half of May, Brown hit four homers. In the second half, he hit eight, and you can see a corresponding rise in his rate of swings at strikes. Brown says he’s more prepared to hit early-count fastballs, and the data supports the idea that Brown’s been more aggressive at the plate, generating encouraging results. He’s swung at more strikes, and while he’s also swung at a few more balls, he hasn’t been hacking. He’s been hitting, in the classic sense.
Now, used to be that people liked Brown in part for his ability to draw frequent walks. So there’s some measure of concern that Brown went a whole month without a single one. But there’s no such thing as an ideal, single batting approach. Previously, the more patient Brown under-achieved. The newer, more aggressive Brown has found success, and that’s what’s most important. The idea isn’t to make prospects succeed a certain way. It’s to make prospects succeed. Brown’s finally doing that.
He’s swung in 16 of 20 3-and-1 counts. Before this year, he swung in 29 of 53. He’s swung in four of 14 3-and-0 counts. Before this year, he swung in three of 23. And here’s the thing: pitchers will adjust to the new Domonic Brown. They’ll pitch him differently, and more carefully, and then there will be a greater number of walk opportunities. If Brown proves that he’s dangerous, he’ll get pitched around more. As he gets pitched around more, he should walk more. Walks can follow power, more than power can follow walks.
But that’s going to require an adjustment from Brown, too. A simple idea of plate discipline is swinging at strikes and laying off balls. A better idea is swinging well at the right strikes, and laying off the rest. Brown — now more aggressive — has hit for power, but he’s hit for a very certain kind of power. From the ESPN Home Run Tracker:
Brown’s been aggressively trying to pull the ball. He’s been looking for fastballs early in counts. Oftentimes, hittable pitches have been there, allowing Brown to have his success. There are now probably going to be more plate appearances when Brown doesn’t get the pitch he’s looking for. The challenge will be still getting something out of those plate appearances, whether it be walks or base hits. It’s going to be a time for controlled aggressiveness, and that might well be Brown’s final test.
Brown knows he’s going to be pitched differently, but that’s going to happen because he’s earned it. Baseball is a game that’s just constantly adjusting, in both directions, and Brown’s made an adjustment that’s gotten him closer to breaking through. Perhaps as a consequence of playing every day, Brown learned to go up to the plate with a different idea. Now pitchers are going to have a different idea, and we’ll see if Brown’s able to blend both power and walks. That’s the destination. Not a certain amount of power, or a certain amount of walks — appropriate amounts, based on what Brown’s given.
Dustin Ackley just got demoted by the Mariners, in part because they determined he was too passive at the plate. People loved Ackley’s ability to draw walks. Ackley’s going to have to earn those walks by punishing strikes. Domonic Brown is in the process of taking that step, and there are only so many steps.
Does Baseball Need the Draft?Warning: Spoiler! (Click to show)
The Major League Baseball Rule 4 Draft begins this week. The modern draft was instituted in 1987, but a filtration system for entry-level talent existed before World War II. Today, the draft exists for two purposes — competitive balance and wage suppression, with the former being publicly cited as the reason for its existence but the latter being more of the actual motivation for the league. Let’s put aside the wage suppression issue for a minute, though — noting that nearly every corporation in America is essentially in the business of minimizing their labor costs — and focus on the competitive balance aspect of the draft.
To many, competitive balance is essential to their enjoyment of Major League Baseball. The satisfaction of these observers — fans — is directly related to the profitability of Major League Baseball. In other words, so long as fans are emotionally and economically invested in the sport, Major League Baseball will continue to profit.
The draft and revenue sharing are the two mechanisms in place to foster balance. Of course, Major League Baseball is the sole major American sports league without a salary cap. If the league removed the draft, some fear balance would erode and the American pastime would resemble the English Premier League. Whether said realization would have negative consequences is a contentious and interesting question for another day. For now, let’s assume that competitive balance is crucial to the league’s success.
Major League Baseball employs two distinct balancing techniques, the draft and revenue sharing, with distinct features. Wendy Thurm detailed the league’s revenue sharing procedure this winter after the Marlins’ firesale. The post is nothing short of a “must read” for collective bargaining nerds. Thurm writes:
“All 30 clubs contribute 34% of their Net Local Revenue to the base plan pool. The base plan pool is then distributed equally to the 30 clubs….[Then there is a supplemental plan.] The goal of the supplemental plan is to raise the overall percentage of revenue shared…from 34% (in the base plan) to 48%. But each [c]lub contributes a different amount to the supplemental plan, based on something a Performance Factor…”
Again, it’s a must read and Thurm explains other revenue sharing quirks that benefit small-market teams too. Remove all of the technical complexities and revenue sharing is a simple concept. Major League Baseball facilitates the transfer of profits from large-market to small-market organizations. Surely, a win for competitive balance — if the funds are reinvested.
Conversely, the draft structures entry-level talent procurement to benefit poorly preforming organizations, regardless of clubs’ finances. Should you be unaware of the new procedures, Thurm detailed them in a two part series over the last week.
Neither mechanism is without consequences. Revenue sharing contradicts America’s lust for capitalism. Why should the New York Yankees fund the Kansas City Royals’ operations? Typically, it would be offensive if one’s direct competitor asked for payroll funds. Of course, that assumes the big-market organizations and their ownership have earned their advantage over the competition. However, that is hardly the case. Major League Baseball and its owners have been gifted an anti-trust exemption and publicly financed stadiums by federal and state public officials. The former has an interesting history which can be attributed to Congressional inaction and judicial restraint. My favorite smirk inducing quote comes from Judge Cooper, who states, “The game is on higher ground; it behooves every one to keep it there.”
Well, not everyone. Due in large part to the anti-trust exemption and publicly financed stadiums Major League Baseball’s franchises operate within a unique goldmine. Ownership profits — so much so that revenue sharing is accepted — while Major League talent shares in those profits and fans get a superb product. Somehow the consequences of the draft are overlooked or even dismissed.
The draft serves competitive balancing purposes, but draftees suffer in the process. Draftees’ lack of rights are due to their lack of representation. Major League Baseball collectively bargains with the Players’ Association, of which draftees are not members. Without their interests being represented at the table, their interests are freely bargained away.
Ownership can cloak their adulation for the draft as a desire for increased balance, but their intent — or at least a major effect — is wage and movement suppression. The draft forces individuals to contract with specific teams if they are to enter the league.
The Players’ Association has a duty to its membership, not its potential future members. If the Association believes there is a chance salaries could increase due to strict rules regarding amateur spending, they will not resist. And they haven’t.
Many seem not to care that an intended consequence of the Collective Bargain Agreement is to suppress wages and prohibit movement of an unrepresented third party. The draft is deemed appropriate because it promotes competitive balance.
When discussing this topic in the past I’ve used the following analogy to put the consequences of the draft in perspective.
Imagine you have just graduated with your masters in accounting. You’re brilliant and have many desirable qualities. Instead of having the option to negotiate with any of the “Big Four” or other quality firms you are drafted by KPMG. KPMG tells you should you sign with them you will work in their Torabaz Khan Road office in Afghanistan. KPMG owns rights to your accounting career and if you want to have a career in accounting you need accept their offer, set at a heavily discounted rate by the industry. While considering their offer, KPMG informs you that you will remain in Afganistan or wherever they may assign you until you have proven yourself. The chance of proving yourself is small, maybe 25%. But, should you succeed you will be brought to New York to continue your career. Then, after working for several years at a discount, you will be eligible to negotiate with their competitors. Hopefully you are still useful.
For any other career a draft would be outrageous. When it comes to athletes few seem to care.
Removing draft eligible high school and college athletes from the open market greatly suppresses their earning potential and forces them to work and live for a specific team without choice. Today, the new pool system and its draconian penalties limit both parties from negotiating freely, decreasing draftees’ signing bonuses even further.
In baseball, more than any other sport, one’s first contract is greatly important because they may never get another contract. Even top prospects have an extremely high failure rate. For the majority of this season’s amateur draft class, their value will never be higher than it is on June 6th.
Years later, the prospects who develop into Major Leaguers still feel the effects of the draft due to today’s extensions craze. The suppressed signing bonuses and minimal wages minor leaguers earn increase their teams’ leverage when negotiating extensions. It’s impossible to say whether Evan Longoria or Chris Sale would have signed their extensions had they earned their fair market value when they entered the league, but it’s undeniable they would have had significantly more leverage when negotiating terms if they had more money in their pockets.
No one is crying for Longoria or Sale, but they were lucky. Consider the story of Matt Purke. According to Nolan Ryan, Purke had a pre-draft deal with the Texas Rangers for $6 million in 2009. However, Major League Baseball terminated the arraignment after they assumed an oversight role of the Rangers’ non-budged transactions. Unable to cash in after an inspired freshman year at Texas Christian University, Purke reentered the draft in 2011 after a shoulder injury. He was selected by the Washington Nationals in the third round and signed a 4-year/$4.15M dollar major league deal which included a $2.75M signing bonus. It’s likely Purke’s earning potential will never be higher than it was in 2009.
Balance the desire for a level field of play against the draft’s effect on high school and college athletes. Is sacrificing their rights necessary to competitive balance? Hardly.
Major League Baseball, the Players’ Association and fans all have an interest in keeping the status quo. If draftees want a slice of the pie, it will need to come from a legal challenge. Last month, Jean-Louis Dupont announced he would bring an action against the Union of European Football Associations’ Financial Fair Play regulation on the following grounds: Restriction of investments; Fossilization of the existing market structure; Reduction of the number of transfers, of the transfer amounts and of the number of players under contracts per club; Deflatory effect on the level of players’ salaries; and consequently, a deflatory effect on the revenues of players’ agents (depending on the level of transfer amounts and/or of players salaries.
Dupont also notes the regulation’s infringement on fundamental freedoms of the European Union, “free movement of capital, free movement of workers, and free movement of services (player agents).”
Financial Fair Play is a different regulation with different ramifications, but Dupont’s lawsuit and the draft’s consequences share a common thread. Its generally accepted that wage and movement suppression is frowned upon. Should Dupont’s name sound familiar, that’s because he had success in a similar past action. In 1995, Dupont won a landmark players’ rights case on behalf of Jean-Marc Bosman before the European Court of Justice. Athletes’ rights are just as important as your own and it’s only a matter of time before the American courts hear a similar case.
In 1999, Commissioner Selig created a “Blue Ribbon Panel” to come up with a plan to address the competitive balance issues the sport was facing. Since that time, the league has greatly increased revenue sharing and instituted the luxury tax, flattening salaries between the top and mid-level franchises, helping create the current era of unprecedented parity in Major League Baseball. Given the success of competitive balance manipulation through revenue adjustments, it’s fair to wonder if the draft is really even necessary to achieve that goal.
While the draft may promote competitive balance to some degree, it’s worth noting that it was in place for the entirety of the time that the sport was dominated by a few marquee franchises. The draft’s relatively minor impact on competitive balance compared to increased revenue sharing means that perhaps the effects of eliminating the draft could be offset with further financial adjustments. If we could maintain the current level of competitive balance while doing away with draft, perhaps that would be the fairest outcome of all.