My suggestions to fix the MLB draft

If you sample 10 people within the sport of baseball, probably 6 of the 10 would tell you that they feel the draft process is one that needs to be fixed, 3 will probably tell you the system is fine, and one will probably tell you he doesn’t care. Maybe those numbers are off. But for me, I think there are a number of areas surrounding the draft that need to be fixed, and based on everything written over the last few years, the draft will be addressed in the next collective bargaining sessions. So, with all of that in mind, I’ve come up with a few ways to fix the draft. I think I wrote something similar to this last year, but I have some new ideas and improvements, so if I did write this last year, ignore that and focus on this. Check below for more. And if any important people find this, and they want to borrow my ideas, that’s fine, you could just toss me a consulting fee for my time!

Ok, so there are a number of issues that always come up, and a number of solutions that seem completely implausible. Here are a number of things that I think will never work

A. An international draft. While it seems like a nice idea, to have everyone under the same rules, it is a logistical nightmare. Teams around the world play on different schedules, teams in Asia, Latin America, Europe and North America operate at different times, and getting to scout these areas in preparation for drafting players from all of these areas at the same time would be impossible. While teams have different scouting departments for different areas, there is some overlap (it seems), and it would just be really tough. Not to mention having to alter the eligibility rules internationally, which infringes on the requirements those countries have for their own pro leagues. I just don’t think it can happen, and I don’t think it needs to happen.

B. Hard slotting down the line. Some people think this would solve the problem, but I think it causes more of a problem. If you set a hard value that a team can pay for each position, you are only going to get a few real superstar potential players out of every draft, with the rest, especially the prep players, just going to college because they know they won’t get paid. College coaches might love this, but pro teams won’t, and it will really curtail the work of scouting networks who spend lots of time focusing on prep players, only to see they can’t sign the kid because they don’t pick in the top half of the first round, and then can’t pay the player like a top half of the first round talent.

So putting those two big ideas in the trash can, I have a number of fixes that I believe can work, and can serve the greater good for all parties, those being the current MLB players, the owners, the agents, and college baseball coaches. Let’s do it number by number, but start at the top with the logistical changes that have to be implemented at the highest levels first. If you don’t have the energy to read what will surely be a long post, just scroll down to the bottom and read the conclusions. But if you care about the draft, I think you should take the time.

1. MLB Free Agent Compensation.

Over the last few years, this one has become a bit of a problem. Elias Sports Bureau goes about determining two classifications of players….well…three really; Type A, Type B, and Type C. Elias groups players into five categories for classification;

Catchers
Infielders (Second, Shortstop, Third Base)
Outfielders + 1B + DH
Starting Pitchers
Relief Pitchers

Within these classifications, they divide up the Top 20% (Type A), the next 20% (Type B) and then the other 60%

This seems simple. But its not. Elias uses some kind of arcane formula to come up with these “rankings”, and often times there is a disconnect between who you would think is a Type A free agent and who is a Type B or C. So at the very top level of my first point, this system needs to be overhauled, and the way we determine who the top players are needed to be fixed, using methods that we know are better suited for player evaluation (WAR, VORP, UZR, Dewan’s +/- for fielding, FIP, DIPS, etc etc) but on top of that, the actual parameters and timeframes should be altered. The current system looks only at the player’s last 2-3 years. But why? Free agency is determined after 6 years of service time, so why not evaluate what the player has done over his 6+ years of service time accrued instead of just his most recent 3 years? By using this method, you also eliminate guys who were maybe very poor early in their career, but are coming off 2 good seasons. Looking at a statistic like VORP, the top 15 players in 2009 scored between 61.3 and 98.3. So let’s just say that if we used a similar scoring scale, and figured for 6 years, then the players who would be “Type A” free agency would have to have a cumulative score of 225 or higher. That would be an average of “37.5” per season. That allows for a slower start in your rookie year, as long as its offset by superstar years at your peak before achieving your 6 years of service. This is the type of scale I want to see used, and I want it to be for 6 years, not just 2 or 3 years.

Once you determine the proper method of evaluating players, you determine how many players will achieve some type of compensation. My proposal would be that there would be a maximum of 15 players in any given free agency class that would garner this “Type A” label, and they would be scored using the scale above. If there are more than 15 eligible players in one free agency class, then that can be addressed, but there are generally never 15 superstar caliber players available in one free agency class. The top 15 players last year, based on BP’s VORP statistic, were Pujols, Mauer, Greinke, Hanley Ramirez, Felix Hernandez, Halladay, Jeter, Lincecum, Fielder, Carpenter, Wainwright, Braun, Pablo Sandoval, Utley, and Cain. Can you ever think of a FA crop that had 15 players of that caliber? No. To determine “Type B”, you would simply create another tier. If we are saying Type A guys would have a score of 225 or more (its theoretical, there is no real scale here, its a thought exercise), Type B guys might have scores between 190-225. If there are 10, then there would be 10 supplemental picks awarded, if there are 20, there would be 20 picks awarded, etc etc.

To summarize change #1. Free agent compensation will be reconfigured, where the method for evaluating the player is refined to include more sophisticated, more accurate evaluation tools, and the evaluation score covers the player’s 6 years heading into free agency. For players hitting free agency for the second time, it is their most recent 6 years of statistics that count. For instance, a guy with 10 years of service time heading into free agency would have years 6, 7, 8, 9 and 10 used to calculate his Compensation Rank, not just years 9 and 10, or 8, 9 and 10. The number of “Type A” free agents is not based on a percentage, but based on meeting a certain “score threshold”, say a cumulative score of 225 or more, based on whatever that metric is. The example I used was VORP, but its whatever the score is, based on a progressively increasing average score for 6 years. Newly categorized Type B supplemental picks will come at the conclusion of the first round, just the way the current system is set up.

2. Applying the FA Compensation to the draft.

Currently, a team must forfeit its first round pick (if that pick is #16 or later) if they sign a Type A free agent. If that team signs two Type A free agents, the Type A with the higher score, his team receives the signing team’s first round pick, while the team with the lower ranked Type A would only receive a 2nd round pick and a compensation pick. This doesn’t seem fair, right? Especially with the system for determining the rankings being so flawed right now. My system makes two key changes that eliminates this problem.

a.) After pick #15 in Round 1, a mini compensation round would be added to the draft. This is the area where the players who are the newly dubbed “Type A” free agents compensation picks will be given. Let’s use a theoretical example to make this clear.

In the winter of 2011, Prince Fielder, Albert Pujols and Adrian Gonzalez are all free agents. All 3 sign with new clubs, we’ll just say Clubs A, B and C. All three of these Clubs have picks in the 20-30 range. Under the old rules, these three clubs would lose their first round picks to the teams losing Fielder, Pujols and A-Gonz. In my system, these teams do not lose their first round picks. Instead, the Cardinals would get pick #16, and then lets say Fielder is ranked ahead of A-Gonz in the new system, the Brewers get pick #17, the Padres pick #18. Let’s say there are 5 more Type A free agents. Those 5 guys, if they are signed by new teams, their teams would get picks 19, 20, 21, 22 and 23. If those are the last picks, the rest of the first round resumes with pick #24, and the first round would end with pick 38, which would be the team with the best record the prior year.

b.) At the conclusion of the first round (pick 38, in the above scenario), there would be a compensation round similar to what is in place now, with teams who lost a Type A free agent receiving a compensation pick. Teams who lost a Type B free agent (under the new system, guys who scored in the second tier), would receive their compensation pick. Lets say there are 10 qualified Type B free agents

So the draft would look like this, theoretically, continuing the same examples above

Picks 1-15
1.16 = St Louis (for Pujols)
1.17 = Brewers (for Fielder)
1.18 = Padres (for Gonzalez)
19-23 = compensation picks for the other Type A free agents
24-38 = the rest of the first round, teams 16-30 based on previous year’s record
39 = St Louis (compensation for Pujols0
40-46 = Brewers, Padres, and 5 other compensation picks for Type A free agents
47-56 = Type B compensation picks for the 10 theoretical type B free agents discussed above
57 = First pick of Rd 2

This would finish the string out, from 57 through the end of the draft.

3. Changing draft eligibility

Currently, players who are drafted out of high school have three options. They can sign a pro contract and immediately head to the minor leagues (or the majors, in Mike Leake’s case), they can opt to attend Junior College or Independent ball and re-enter the draft the following year, or they can go to a 4 year program, where they can re-enter the draft after 3 seasons of college ball, or 2 if they meet certain age requirements. With these options, pro scouts are left trying to figure out who is signable, for what amount, and then hoping and praying the player follows through on what he says his demands are. Some guys change their minds at the last minute (going either to school or turning pro), and it can cause logistical issues up and down draft boards. My proposal here is a simple one, eliminate the ambiguity of the 1 year JuCo/Indy ball option and change the rule to restrict entry to either straight out of high school or waiting 4 years at college (or until you are 22). If you choose to not sign out of high school, you cannot enter the draft until you’ve played 4 years at college or have reached 22 years of age prior to June 1st of that draft year. This eliminates guys from going to a JuCo program if they don’t like their pro offer, then re-entering the draft the next year. It also eliminates the guys who come out after their junior year, get drafted, then decide to go play in some Indy League, turning the team into a circus, and then re-entering the draft a year later. When you’re drafted as a high school senior, you have to carefully weigh your decision. Do you want to start your pro career as an 18 year old, or do you really actually want the college experience. If you do, you’re there for 4 years or until you are 22. This gives college coaches something to aim for, and it gives prep prospects more to think about.

4. Establishing draft budgets

Everyone talks about hard slotting. Lots of people are against it, and lots of people hate the “recommended slot bonus” system that is in place now, where the Commish tries to bully teams in to spending what they deem a “fair” amount for each pick. So what is the answer? Well, a number of teams are playing by the fake rules now, either because they are scared or dumb, and that’s not fair. Other teams seem to thumb their nose at the Commish, and while that is good (and apparently not against the rules), it gives them an advantage they shouldn’t have. The draft was created to give the worst teams the best chance to get better, by giving them access to the best players. What has happened, though, is the Commish has threatened these terrible teams, told them to toe the line, and thus the best players often slide down the draft to the rich teams, who moon the Commish, take the talent, give them bonuses that far exceed the slot recommendations. In other words, the rich get richer, while the poor get dumber.

As I talked about above in the intro, if you set up hard slotting, you’re going to really cap the number of blue chip talents coming into the game out of high school. Some might think that is for the best, others obviously won’t. My plan is something simpler. You allot teams one central amount of money they can spend, and you base it on record, and you also cap the maximum amount any one team can spend on any one player. Here’s your example.

Pittsburgh finishes with the worst record in baseball in 2011. The 2012 draft is the first draft that will be governed by these new rules. It is agreed that the team with the worst record will receive a cap of $12M to spend, and they must spend 75% of that amount in total on the draft, or $9M. It is also bargained that the max amount of any one bonus in the draft will be $6.5M. No team in the draft can give out a bonus larger than $6M. Every team after Pittsburgh would be able to spend exponentially less than $13M. Teams would be given slightly more if they have compensation picks. Let’s do a theoretical example.

Pittsburgh $12M max, $9M minimum, $6M max on any one player.

So if Pittsburgh takes John Q Prospect #1 overall and pays him $6M, they would then have $6M to spend on their remaining picks at most, and they’d have to spend at least $3M on bonuses for their remaining 49 picks. They can spread this out however they’d want. If Washington has the 2nd worst record, they might have only $11.75M to spend. The team with the best record, maybe they only have $4M total to spend. This prevents them from just buying up the best talent that might fall to them later in the draft, basically preventing a Rick Porcello situation. Conversely, lets say the Phillies had the 4th best record, and would have the 4th from bottom amount of money to spend, maybe $4.5M total. If a great talent is there, and they are picking, say 35th in the draft, they could choose to spend a $3.5M bonus on him, but they’d then have only $1M total to spend on the rest of their picks.

5. Setting precedents on contracts for draft picks

I’d eliminate the concept of the major league contract for a draft pick. All draft picks would be eligible for a draft bonus (which counts against the cap the team can spend) and all rookies receive standard contracts which would then escalate on a scale, which I’ll discuss below.

6. Changes to minor league salaries/minor league options/service time

As it currently stands, players must be placed on the 40 man roster after 5 years in the pros if they signed at age 18 or younger, and after 4 years if they signed at 19 years or older. I’d change this to 5 years if they sign at 18 or younger (which is what it is now), but change it to 3 years if they sign out of college or at 22 years of age or older. Since you are taking away the option to come out of college as a junior, this removes a year of control from the team in terms of keeping the player in the minors.

Currently players have 3 option years, where the team can call a player up/option him down as many times as they want in a season. I’d reduce this to 2 option years, which will allow more movement for players.

Upon being drafted, players signed out of high school would receive a $400 per week, from the week they sign. Then this schedule

2nd year = $500 per week ($2000/month)
3rd year = $750 per week ($3000/month)
4th year = $900 per week ($3600/month)
5th year = $1100 per week ($4400/month)

Players drafted out of college would receive $750 per week, from the week they sign, then this schedule

2nd year = $1000 per week ($4000/month)
3rd year = $1200 per week ($4800/month)

Players on the 40 man roster but in the minors would make $75,000 per season, and a pro rated version of the minimum when in the majors.

Players would be eligible for arbitration after 2 full seasons, not 3 as it currently stands, and would be eligible for free agency after 6 years, the same as it is now. This gets players to arbitration 1 year sooner. With the new rules, players have fewer options, which means they have to get on major league rosters sooner, and it means they can reach arbitration sooner. From the MLB clubs perspective, they still have time if they sign players out of high school (5 years before 40 man, plus 2 option years), so they aren’t having to fork out big bucks, and with the elimination of the big league contract for high school players, they don’t feel like they have to rush players who aren’t ready to the majors.

So, lets do a really quick bullet point recap of the changes I’d make.

* The way free agents are ranked would be reformed and improved, so the best players are being ranked as the best players.

* Teams no longer lose their own first round pick for signing a Type A free agent, which doesn’t leave some guys out in the cold with very few legitimate offers.

* The worst teams receive more draft money to spend, the best teams don’t have as much money to poach the best players

* Teams are forced to spend 75% of their allotted draft funds, so they are making an effort to improve their team, which is the whole point of the draft

* Minor league players are given improved salaries, but big league contracts aren’t given out to prospects.

* Players reach arbitration sooner, but teams don’t have to give MLB contracts to players who aren’t ready, and draft budgets are capped in the sense that the best teams can’t poach the best talent because of signability concerns.

There it is. The simple solution to get the draft to serve the purpose it was created for….helping the worst teams!

17 thoughts on “My suggestions to fix the MLB draft

  1. Mostly good points but I’m not sure I can get behind teams not having to forfeit their first rounders for type A’s, in essence every team outside the top 15 except for the team that lost the player is punished under this system since all of their picks are getting pushed back and while the signing team’s pick gets pushed back they aren’t losing it so its like they are getting rewarded by signing the player and also getting to keep their pick, the Yankees would create the ultimate dynasty under that system.

    The only change I’d make to the draft is letting teams trade draft picks, every other sport allows it and would allow teams that are lacking in talent to stockpile picks (trading back NFL draft style) and fill more needs than they can do by making one significant pick.

  2. #1. I think we’re better off eliminating free agent compensation entirely at this point. It rarely benefits the poorer teams.

    #2. One of the big problems with draft compensation is illustrated by the Red Sox a few years ago. They received comp picks for losing free agents and they signed free agents to replace them. While they would lose one pick for signing a player, they gained two for losing one. It seems to me that plan would make the problem worse, if I’m reading it correctly.

    3. It probably leaves too much negotiating power in the hands of the teams, which will drive the agents and amateur players batty. Besides that, I don’t think it’s in the best interests of MLB to restrict player entry. If a player is extremely good, we want him in the system.

    4-5. Not in favor, just don’t see where the overall benefits are.

    6. Owners in most sports really cry foul over arbitration. Using arbitration a year earlier will further spike salaries.

    The way I see it, here are the biggest issues with the draft. One, it discourages teams from signing certain players who are Type A, especially middle relievers. It unfairly restricts salaries for those players in favor of unproven amateurs. Second, teams are discouraged from drafting the best players mostly because of external pressure from MLB to save money. I think simply eliminating compensation is the best way to solve the first problem. The second problem is a little trickier, because limiting spending will drive amateurs to other sports.

  3. I like alot of these ideas. I think most of them are pretty fair and feasable. My one area of contention is in the draft pick compensation for free agent signings. In the situation described, teams that finished in the top half of the league but didnt sign a type A free agent are then punished. In your example, a team signs pujols and st. louis gets the number 16 pick and so on. well if the rest of the draft resumes at 24, say a team like atlanta originally would have pick 17 in the draft, doesnt make a significant signing, Atlanta would then be bumped from pick 17 to pick 25.. which can be a significant talent bump depending on the draft. How is it fair to punish Atlanta who rightfully deserved pick 17 just because they didnt lose anyone to free agency.

  4. I understood that the purpose of your proposals were based upon the idea that changed the draft would be to help the worst team…. I saw that in the final sentence.

    I think it’s worth talking about the reasons why you could change the draft… Defining the different purposes might give you perspective on what potential changes you would make.

    For example:

    1. To create parity / fairness across teams – who can get the talent without worrying about price. (fairness view)
    2. To create salary floors for players (players view)
    3. To reward players who have succeeded in the system as opposed to rewarding potential (minor leaguers view)
    4. To create a higher profile draft that is less arcane and market it (a la NFL). (MLB marketing view)
    5. To create salary ceilings for labor (owners view – medium and small markets)
    6. Keep good players in one place for longer (fan’s perspective)
    7. To keep the rich getting richer (large market teams)

    These may not be mutually exclusive or exhaustive…

  5. If I understand you , I am 18 either I sign with the team that drafts me or wait 4 years to go back in the draft. Why if some team drafts me and low balls me or i really dont want to play for them, its my choice why cant I have that choice.go to junior college and try again??

  6. Considering what minor league guys in other sports make…its ridiculous how little MiLB guys make.

    AHL players make bank in comparison.

  7. How about multiple Regional Drafts?

    Break it down by region:

    1. North America (US, Canada, Mexico, Puerto Rico)

    2. Caribbean/Central America

    3. Pacific Rim (Australia, Korea, Japan, Taipei)

    That would take care of most of the scheduling issues but still bring it in line with the multiple seasons/scouting issues.

    Yeah, its not perfect but it might be a step in the direction of one overall draft.

  8. If there a way to force the bad teams to draft the best available prospects instead of trying to get a sign-able guy. For example cutting their revenue sharing money or instituting a minimum level of player salaries they must have on the big club. I know that some teams can’t compete with the big boys but if you can’t afford the players maybe you shouldn’t own a pro franchise. These are just some thoughts, maybe they are bad ideas but I do feel bad for the pittsburgh’s and kc’s of the world.

  9. If you really want the public to get interested and the draft to become both more interesting and a better tool for teams to improve quickly, you should permit teams to trade draft picks. The only way this would work, however, is if there’s a hard cap for drafted player bonuses/salaries (otherwise, it’s just a race for top 10 picks and the Yankees and Red Sox would, by default, set bonus and salary amounts, which would be a nightmare for the rest of the league), at least in the first round or two. But how cool would it be for a team like the Phils to own 3 first round picks? That would be great.

  10. 1. Eliminate draft pick compensation for free agents completely.

    2. Greater revenue sharing.

    3. Allow trading of draft picks (trade deadline is 24 hours prior to draft).

    4. I’m OK with draft pools which differ by record but think it should be a rolling 5 year average or something.

  11. Not sure why you think that a hard slot system would cause more players to go to college vs. entering the draft. If anything, it would have the opposite effect since guys would know that they can no longer use the threat of going to college as a bargaining chip to get teams to pay over slot. Players who want to go to college would go while the guys who don’t wouldn’t be able to use college teams as bargaining chips.

    This would also eliminate the “JD Drew” situations where players use the independent leagues as a way to avoid playing for particular teams.

    In addition, teams would have to draft guys with college commitments higher since that would be the only way to “buy” them out of that commitment.

    My trade-off to the players as part of the slotting system would be to reduce the number of years it takes for a players to become a minor league FA while increasing a team’s 40-man roster to 45 so they could protect more players.

    I like the idea of reducing options from 3 to 2 but don’t agree with the reduction in years to reach arbitration since it is the arbitration process that has really driven salaries higher and separated the haves/have-nots.

    My other trade-off to the players would also be a change in the salary structure for minor league players so that they are paid more for each year of service plus an additional bonus for being part of the 45-man roster.

  12. Where I think that FA compensation is necessary, it does need to be altered. Maybe watered down to more categories or something. I mean a lot of relievers don’t get signed purely because a.) they are not a closer and b.) they are type A. So a good quality pitcher that may just be a setup man doesn’t get signed becuase he did his job the best he could.

    I do like the idea of changing the draft to be more like the NFL draft where you can trade picks. Poorer teams will be able to take advantage more of stockpiling picks. A team that has the number one overall pick would most likely get atleast 2-3 picks for the very first pick.

    I do like the above mentioned regionalization of the draft. Seasons are different around the world so why should the draft be all at once.

    I definitely think that the super two status should be eliminated completely. If the player is called up before Sept. 1st, whether the first game of season or Aug. 31st. They all go to FA together. Teams would be more likely to call up players the previous season to maximize the amount of time as opposed to waiting until mid season. If Strasburg is really that good, he could have made a difference in 5-6 games so far. But the Nats want to get that extra year of arb so they wait. 5-6 games can be the difference between playing baseball or golf in Oct.

  13. Lots to think about here. I do not have solutions yet just some thoughts:
    I like the idea of allowing draft picks to be traded.
    I like some spending limit (and floor). Maybe determine it by last season’s win-loss (not number or value of picks). You get to spend what you are alloted despite trades that are limited only to that draft year.
    I think teams signing big time Free Agents need to lose something like a draft pick.
    I agree the Free Agent ranking could be adjusted, especially for the relievers category.
    I think the elligibilty and years of service and salaries make sense.

  14. I never really agreed with type a or b free agents and compensation picks. I think that overall free agency needs to be overhauled and handing out or taking away draft picks isn’t the way to do that.

    As far as the draft goes, I agree that baseball needs to shift to a more NFL style. Allowing teams to trade picks enables teams with the higher pick to trade down and get more for the value.

    The best way to stop drafted players from re-entering the draft the following year (i.e JD Drew), is to simply not allow them to do it. Prospects should have to declare for the draft, whether right out of high school or any year following, and once drafted their rights become that of the team that drafted him. The player wouldn’t be able to re-enter the draft again.

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