The Value of Losing in the new CBA

There has been much debate this season about the value of losing.  In sports like basketball and football where a draft pick can make an immediate impact there has always been the philosophy that you want to be really horrible or really good and that anywhere in between punishes your ability to improve your club.  For years under the old CBA teams could circumvent the competitive balance measures such as free agent compensation by spending all the money they wanted in the draft and internationally while blatantly ignoring unenforceable edicts from the commissioner’s office.

Under the new CBA there are hard slots for the pools that teams can use to pay for amatuer talent.  Teams can exceed the pool quantities but it comes at the price of essentially removing yourself from participating in that market for the following year.  Additionally, the value of these slots is determined by finishing order of the previous year, with larger gaps near the top (the difference between the 1st and 2nd pick of the draft in 2013 was 1.082 million, compared to the $27,000 difference between picks 29 and 30).  The extension of this into the international market doubles the incentives for teams to lose as many games as possible.

Briefly stepping away from slot values, protected picks are a large incentive for teams that want to lose, but even forfeiting a second round pick and losing the slot money associated with that pick is not an enviable position for any team.  Due to the loss of the large compensation round the #10 team lost the #47 overall pick last year which would have been in the middle of the old compensation round.  There are legitimate arguments to be made about the value of free agent, but the current system punishes a team for trying to acquire talent in multiple ways.

So how does this affect the Phillies as they have already put themselves in the position to receive a protect draft pick?  The money differences towards the top of the 1st round are not insignificant.  With 3 games to go the Phillies find themselves with the chance to receive the #7 pick and slot value.  Here are the value differences using the 2013 value of the slots for the various outcomes available (only using 1st round picks due to uncertainty with compensation picks)

Draft (1st round pick) Net Change International Net Change
#7 $3,246,000 0 $3,179,900 0
#8 $3,137,800 $108,200 $2,988,100 $191,800
#9 $3,029,600 $216,400 $2,817,100 $362,800
#10 $2,921,400 $324,600 $2,664,600 $515,300
#15/16 (Phillies 2013)* $2,299,300 $946,700 $2,289,700 $890,200

*The Phillies received the #16 pick in the draft because of the Pirates compensation pick, and the #15 slot in the international market.

The first thing to remember there is that in the draft that is a difference all the way down, so the $300,000 difference in the first is closer to a full difference of $500,000 over the course of the draft.  If that doesn’t seem like much, that is the bonus the Phillies handed Jarred Cosart in 2008.  In the draft much of this overage is sucked up into appropriate slot bonuses for your picks, but in that case you are getting a player three slots better for 40 rounds of the draft and you are paying for that, so it is not a consequence to throw away.

In the international market it is a larger deal.  The difference between the #7 and #10 slots is the bonus the Phillies gave to Jose Pujols a Top 20 International Signing in 2012.  In other words, losing just 3 more games over the course of the year is the difference between getting a free top international signing, and missing out.  Additionally those international slots are tradeable commodities and as the Astros showed you can use them to trade for a closer to the majors minor league talent.

All in all the difference in losing can have a profound impact in the ability for a team to acquire talent.  Don’t blame teams for tanking or fans for wanting to tank, because in reality they are trying to work within the system created.  Be mad at the owners for making the league less competitive in the name of supressing amatuer bonuses.

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About Matt Winkelman

Matt is originally from Mt. Holly, NJ, but after a 4 year side track to Cleveland for college he now resides in Madison, WI. His work has previously appeared on Phuture Phillies and The Good Phight. You can read his work at Phillies Minor Thoughts

83 thoughts on “The Value of Losing in the new CBA

  1. Of course, another significant difference in the NFL and NBA is that, if, say the Sixers desire to win now and spend money, they can trade their lottery pick for an established verteran or redundant young potential star on a better team. If the Phillies decide they don’t like the players available at Pick 7 or whatever, tough luck, draft one and deal with it. I’ve never understood Selig’s desire to protect teams from their own potential stupidity, but it is almost certainly outdated now.

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    1. But there is recourse and teams have already used it. Let’s say as the Phillies pick #7 that they don’t see anybody worth pick #7 $ — in fact what they see is a smear of a dozen players, whom they assign equal value — value equal to a #12 pick in a normal draft. Then, you do a pre-draft deal with your favorite guy out of the dozen player smear, and sign him for say #11 pick value. In this assumption, this is a guy who was projected to go at pic 14, so you are splitting with him the difference in bonus between pick 7 and pick 14. You use the money saved later in the draft to get a better player than you otherwise would in a later round. Other teams have already signed very early picks for significantly less than Selig’s slot $. Even doing this, the Phillies should be able to end up with a higher quality pick than Crawford.

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      1. But an NFL team can one up, if they decide their guy will be available at 14, they can trade with a team between 7 and 14, pick up some other compensation and still get the guy they want. I know what you’re saying, but it’s still inefficient and a little weird compared to how everyother sport league works.

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    2. Wasn’t one of the ideas of the current system to prevent the richest teams to just spend their way to a championship-caliber team? The NBA has the lottery system for the worst teams, doesn’t it – and perhaps from one sense protecting the bottom 10 teams and not just the worst one is equivalent to a lottery, but maybe not as equivalent as a true lottery in discouraging tanking.

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      1. That was the idea back when there was no draft pool and penalty for exceeding it. That was also back when team scoffed at spending much of anything on prospects. It’s 2013 and it makes no sense at this point for MLB to be stuck in the last 90’s. The NBA lottery is virtually the inverse of MLB. IT has nothing to do with protecting poor teams and everything to do with stopping teams from tanking. But in the NBA one single player can be the difference between just missing the playoffs and being Championship contenders in as little as two seasons.

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  2. A lot of discussion on the internet, regarding the 76ers, Celtics and Suns intentional tanking in Basketball this upcoming season. Hardly any discussion or acknowledgement of what is going on in baseball this past week with the bottom 13 or so teams, tripping over each other, trying to lose on purpose.

    BTW. Great job Phillies! One more loss all but clinches no higher than 10th.

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    1. If the goal is to reward poorly performing teams then yes. An international draft would do a couple of things, it would deflate bonuses further, give bad teams the exclusive ability to sign the top players, and devalue scouting and finding talent. It would further encourage tanking to rebuild.

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      1. A modest shrinking of the international bonus pool, along with a greater penalty for exceeding the pool limit would serve the same purpose with a lot less complexity. The greatest positive effect in giving the losing teams a fairer shot would be to make the Cubans and Japanese, regardless of age, subject to either the US amateur draft or the bonus pool cap. That is the greatest current opportunity for a big $ winning team to cut ahead of the pack.

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        1. Agree on the Cubans and the Japenese being subject to the June Rule 4 draft.
          Of course the LA players, due to their young ages (16), IMO, would have to be excluded.

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          1. Agreed. I think international players should just be in the normal player draft. There’s no reason why the 16 year old signing age has to remain for the draft. It would obviously take 3 years for the true Latin America pipeline to then enter the draft because the 1st year and 2nd year following a transition to Latin American players being drafted you’d have guys who signed at 16 under the current system already being part of MLB teams. Once that period passes they’d then have to be 18(or turn 18 by a certain point that draft year) in order to be drafted.

            You don’t see the NHL let teams sign european kids at 16 and then draft everyone else at 18…It’s the same system for everyone and it works better than what MLB does IMO.

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            1. One big obstacle. The Latin players,already in the major leagues, collectively voted last year against any draft, and further raising the signing/drafting age to 18 vs 16 is another matter of contention with the Latin contingency.
              Approx 25/30% of MLB is made up of Latin players.
              They more or less put up a solid barrier against Bud Selig and his ideas of a draft and made him table it for another year. He may retire before it is ever approved.

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          2. I don’t think it’s that easy with NPB players. MLB teams drafting, let’s say Yu Darvish would need to negotiate with both the Nippon Ham Fighters and Darvish (Nippon Ham to buy out the contract and Darvish to sign and play in the US). I suppose this happens to a certain degree already with the KHL and International basketball leagues already, so maybe it’s not as complex as I’m imagining.

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  3. I’ve always thought if you’re not making the playoffs you owe it to your francise to get the best possible draft pick that you can. I would rather have a top 5 pick then miss the playoffs by one game.

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    1. I understand your point if you are talking about a .450-.500 team vs. a top 5 pick., But there is value in being in a pennant race even if you miss the playoffs. It puts butts in the seats that means more revenue to spend.

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      1. That’s true for being a real contender and missing by a game or two or three. I don’t agree with you that it’s true for a team that only wins 82, 83, 84, even 85 games in many years. The Phillies of 2012 were clearly out of the race a while before the trade deadline, as were the 2013 Phillies, so 81-84 wins definitely doesn’t get it done for me and isn’t, over the longer haul, going to continue to put butts in seats. It did last season, because we had the hope that recently being a 100+ win team will give, but if we continue to not be true contenders, that will change quickly. The change is already underway with half a million fewer butts in the seats. The team MUST be a true contender in 2015.

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      2. I think that’s true for one year maybe 2 but even that might be a stretch and after that you’re looking at a serious reduction in attendance anyway

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  4. The Phillies have an extra incentive to play the horrible line-up they have been trotting out for the past few days. It gives them a real idea who can help and who can’t next year and it gets they a higher pick in both markets.

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    1. If you look at who is left on the bench, the Phillies really can’t field all that much better a lineup than the one they’re trotting out there. They could certainly play Mayberry instead of Bernadina. Ruiz can’t play every game, so Kratz or Rupp likely need to play at least one game in 3. Asche is tired and can’t go every game, either.

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  5. Here’s an article about the expected WAR value of various draft picks. Unsurprisingly, it follows a power law:
    http://baseballanalysts.com/archives/2009/06/draft_picks_and.php

    To put the numbers into perspective, here are the values of the 1st, 5th, 10th, 15th, 20th, and 30th pick:

    #1 — 19.8
    #5 — 8.8
    #10 — 6.3
    #15 — 5.1
    #20 — 4.4
    #30 — 3.6

    So the dropoff in value over the first several picks is huge, and is large throughout the first round.

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    1. I don’t see how they can even realistically calculate that, with so many drafts in which the best player fell quite a ways down the order. When SD took Bush #1, nobody was under the illusion that he was the best, second best, or even the third best player in the draft.

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      1. This is kind of confusing for me as well. For one thing, no two drafts are the same. For another, WAR isn’t even a predictive stat to begin with… I guess it’s kind of interesting to prove a point that no one really doubted (teams generally draft the best player available), but other than that I don’t see much of a point.

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        1. I was kinda thinking the same – it is not predictive but a reflection of record – an attempt to say what has player ‘a’ done so far – so it’s fun and useful to do these kind of exercises – really, what it says is that there has been a (statistical) tendency for a non-linear drop off in (one measure of) career performance (and so I guess you can infer to future drafts) as you move down the draft – which I think we all pretty much intuitively knew anyway.

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  6. Why not give the top picks to the teams the teams who didn’t make the playoffs from top to bottom, and then go in the other direction for the Int’l allocations, where the bottom finishers get the most money? Then it’s not so cut and dried to just lose lose lose.

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  7. Protected pick clinched!
    This may be 2nd straight year the Mets managed to play an entire season with no realistic hope and still manage to finish #11 in the draft. 1 spot out of protected pick status.

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    1. VOR, beat me to it as it looks the Phillies are following the Red Sox plan. Not happy about all these losses but it gives the Phillies a chance to get a top level FA.

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      1. We should still avoid the comped FA and use what will be a very good second round pick. There are enough places to spend money without surrendering a pick. We could go after Garza or the Japanese pitcher. There will be other guys not give QOs.

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  8. I believe the Phillies didn’t spend their entire international allotment yet this season. 2 questions. Are there still any international signings to take place and if not can what ever $$ not spent be caried over and addded for next season?

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    1. The money can not be carried over, but it does not expire until June 15th of next year. Then there is a 2-week freeze on International Signings until the July 2nd opening. Last year the Rangers and the Cubs signed players in May & June to use up the remainder of their 2012 international pool. Sometimes you see players who are already 16 or 17 get six-figure bonuses after physically developing and showing more in winter leagues/prospect leagues.

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      1. Exactly. In the past the Phillies have grabbed guys later, like Franco and Miguel Nunez, before the next years’ Latin FA period.

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        1. Any word on who may have signed Galindo?

          Wladimir Galindo – Maracay, Venezuela
          Height: 6’3″, Weight: 210 – Position: 3B
          DOB: 11/6/1996 – Bats: R, Throws: R
          Twitter: @wladidow
          Scouting Grades* (present/future): Hit: 3/4 | Power: 3/4 | Run: 2/2 | Arm: 4/5 | Field: 4/5

          MLB Scouting: ‘Listed as a shortstop, Galindo has also shown the ability to play third base and shined at the position at MLB’s International Showcase in January. Galindo could end up at one of the corner spots in the infield or make the shift to the outfield because of his size (6-foot-3, 210 pounds) and strong arm. But he might be athletic enough to stay at shortstop. Scouts like his big body and his raw power. Galindo also has the ability to hit for power to all fields and has a knack for putting the barrel of his bat on the ball. He is sometimes fooled by offspeed pitches and could use more game experience’.

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  9. Educate me. if we finish with same record as Mets and/or Brewers or Rockies, which is a distinct possibility, what is the tie breaker. Head to head records?

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  10. I believe the tie breaker was who had the worst record from the previous season.(2012) so we would draft after the Mets but before the Brewers.

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  11. Since Toronto won today, one more loss by our Phils will guarantee no worse than #9. That’s important because of what happened to the Mets last year. They finished at 10 and were bumped to 11 because one team (Pirates maybe?) got the 9 pick b/c they didn’t sign their pick from the previous season. Not sure if that can happen this season or not but I’d feel a lot better with 9 rather than 10.

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    1. I see Toronto did not sign pick 10 this year but i believe that will turn onto 11 next year or do they get 10 again? Looks like that may come into play again in the next draft.

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      1. Toronto did not sign the 10th pick in the last draft, so they get the #11 pick in the upcoming (June) draft. It is locked in.

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  12. Right now we are at #6 in the draft. Good loss today! Confirmed #6 if Colorado wins. They are now ahead 2-1 mid-game.

    At #6 we should be able to get some really promising (college) pitcher.

    Great day for Phils Phans with a loss!

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    1. Hope best player available is a right handed power bat. At any postition , doesnt matter, they dont have any locks, except utley, in the starting eight, and brown maybe.

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  13. Phils get the 7th pick, sweet. They’re eligible for a competive balance pick in in Next years draft as well, right?

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        1. The 10 smallest-market teams and the 10 lowest-revenue teams were placed in the lottery to have a chance to win one of these six extra picks in 2014. There aren’t 20 teams in the lottery because there’s plenty of crossover between the two lists.

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            1. They did it with JP Crawford @16.
              Larry Greene, Anthony Hewitt, Zach Collier, et al were all later picks.
              Number 7 should be a quality player.
              The remaining, well who knows!

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        2. With the 10 smaller markets having a distinct advantage in this system of acquiring premier talent, shouldn’t the remaining clubs have some type compensation. For example, increase their luxury tax salary threshold a percentage equivalent to the Comp Bal draft picks?
          Would only seem fair to me.

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    1. From Badler:

      “The Cubs have the No. 4 international bonus pool, which was $3.9 million this year, but won’t be able to sign a player for more than $250K.”

      So now they rank #6 in IL slot money.

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      1. The Cubs cleaned up pretty good in 2013 with LA signees. I believe 5 or 6 of the MLB Top 30.
        They are forced to take a year off in 2014 more or less, and then do it all over again in 2015.
        I like the Hoyer/Epstein plan.

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        1. I don’t like it as much because I hate the idea of passing up an offseason of opportunity. That being said they will likely trade most of their allotment next summer for other pieces, so it is not a bad strategy.

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          1. I can’t agree with this comment. The Cubs got 2+ seasons worth of LA talent. So they can’t add big talent this coming summer, in its place they have guys a year farther ahead in their development. Meanwhile, the Phillies made only one big signing and left about $1 million on the table. I know which approach I prefer. This coming summer, the Phillies get close to $1 million more than they were allotted for 2013. Are we going to leave closer to $2 million on the table? How can the 7th worst team in baseball, with a farm no better than average, not spend all of its international allocation? The Cubbies took the right approach. The Phillies? Not so much.

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            1. The Phillies are not done being able to sign players. They have until June to use this million dollars + they actually get to survey the field of new talent next year, something the Cubs won’t be able to do.

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            2. Yes we can still sign the dregs of this year’s class. We can’t use the $ to sign guys from next year’s class. Yes, the Cubs are restricted in the bonuses they can hand out for next year’s class, but they’ve already banked a ton of primo talent and it will be a year older and closer to the bigs than next year’s class. That is a very positive trade-off for them.

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          2. I like the strategy for the last sentence you mentioned.
            “Cheat” the system and spend unlimimted one year, trade the excess the following year for prospect upgrades. If Cubs can effectively work next year’s allotment into real trade value then the strategy is excellent.
            Cubs do run the risk of ‘missing’ a super talented player one year but with 16yr olds there is a massive risk so even missing a year is probably worth the excess spent ‘uncapped’.

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            1. This is why a guy like Epstein has been successful in the past.
              And Rube plugs holes year to year.
              Now granted Tocci, Grullon, Pujols and Encarnacion are nice prospects…..but over a three year period they were acquired. The Cubbies did it all this year…and lets not forget Soler , the Cuban from last year.
              Whats the use in stressing out over what Ruben does or doesn’t do!
              You just shrug your shoulders.
              He is an enigma.

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  14. Since this is a draft post, I’m gonna let this be known here…

    With the #7 overall pick, I would be most excited to see the following type of player be the best available (projected major league skill):

    1. Plus hit tool
    1a. Plus power
    1b. Plus plate discipline
    4. Average Speed
    5. Average Defense
    6. Average baserunning

    And one of the first 3 be a plus/plus tool.

    I don’t really care what position either, I have zero desire to insist on a preimum defensive position. What I care most about is having a player with a chance at a averaging .900+ OPS on the phillies major league roster for 5-7 years. (Just as a comparison, there were only 11 players in all of major league baseball with a .900+ OPS this year so I’d say that’s pretty valuable)

    I’m hesitant to invest this pick in a pitcher due to the high injury risk.

    Thoughts?

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    1. The risk is indeed high with HS pitchers but the potential reward is massive. IMO, when drafting that high it always has to be best available player regardless of position or organizational need. FWIW early reports suggest the strength of the top of the 2014 draft is pitching.

      I expect a pitcher heavy draft for the Phillies. They have done a godd job of adding position players in the last 2-3 drafts and in the int’l market but there seems to be a real lack of high upside pitching in the law minors at the moment.

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      1. Agree. While we should take the best player available at #7, we should definitely have a goal of adding a couple of high ceiling pitchers in this draft. I hope there is a good fit out of the college arms, because the starting staff is looking weak in 2-3 years. There is no guarantee that Hamels and Lee will still be Hamels and Lee in 2016 and 2017. A college pitcher that would be ready in 2016 would fill a pretty big need, even if guys like Martin and Biddle develop.

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    2. Pick #7 – that’s great. Phils did what they needed to down the stretch. I thought 2-5 this past week would have gotten us #10 maybe #9, but things fell into place nicely for us this week. #7! I’m truly excited for the draft already

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  15. For me the optimal situation might be “in a pitcher heavy draft,” as this is supposed to be, that there will be one or two position players who get taken in the first ten picks who might normally go sooner if it weren’t for the number of good available pitchers. If memory serves me I believe Utley was a player acquired in this manner – he may have been only the 2nd or 3rd position player taken up to the Phillies pick (mid teens I think). In a way you can almost maximize the pick as others are focused on the pitching. I would love to see them get a high-powered position player – right handed hitting OF.

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    1. RH OF is way too specific for this high in the draft. A lot of how we look at this will depend on how the tiers develop. All things being equal I would prefer a pitch because you can never have too many high upside pitchers, I personally covet Tyler Kolek right now, but a lot can change. But 7 could be a spot where you are watching to see if a top guy slides to you because someone else reaches. It is ok to look hitter or pitcher and possibly HS vs college, but that shouldn’t stop you from taking the superior talent. No one they take with their pick will see a Phillies roster resembling the current one, if they make it to the majors.

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    1. A college bat is relatively safe and can be in the bigs a lot faster. This year, for example, we would have had our pick of Moran or D. J. Peterson at 3B, or Hunter Dozier at SS.

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  16. Obviously that #7 pick is important, but just as important will be the next few rounds where Phillies are drafting about 20 spots higher than they have in the last decade.
    I wonder how they will weigh the value of that 2nd round pick with the cost of a FA.

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    1. Tyler Beede, RHP, Vanderbilt seems far more likely then Tyler Kolek at this point (who would be off the board by then), but spring will have a very heavy influence on player values. You could still see several players move up or down 5-10 spots easily, even at the top. Kolek certainly has a higher upside though. You don’t see pitchers who throw up to 100mph and still have more velocity “projection” left…. The only downside for Kolek is he only has 2 projected plus pitches from what few scouting reports I’ve read, and neither is a changeup. Batters at the college level might not be able to keep up, and even in the low minors he’ll torch them, but he’s going to need atleast an above average changeup to profile as an ace.

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      1. As for hitters… one of Braxton Davidson, OF, TC Roberson HS (NC) or Michael Gettys, OF, Gainesville HS (GA) are likely to be available prep level players. Both the short stops are likely to be off the board by the time the phillies pick. Another prep option is Alex Jackson, C, Rancho Bernardo HS (CA).

        There are a glut of pitchers available, but if it’s going to be a position player, at this point it’s likely one of the 3 above.

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      2. Mack Ade had this report on Beede as of May:
        5-23-13 – Tyler Beede, RHP, Vanderbilt – The only other player who has a chance to challenge Rodon for the top pick in next year’s MLB draft is Beede, who would be one hell of a consolation prize. The 6’-4” right-hander has three plus pitches of his own in a mid-90s fastball with great movement, a power curveball and a deceptive change-up. He doesn’t have quite the command that Rodon does, but he is just as unhittable. On the year, he is 3-0 with a 1.45 ERA, 1.13 WHIP and 20 K/9 BB over 18.2 innings, allowing just 12 hits for third-ranked Vandy. LINK

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