Aug 232011

MLB Draft 2011For the last five years, baseball has required teams to sign their draft picks by August 15th.  This has created a bizarre system where teams and players sometimes don’t even begin negotiations until two months after the draft because the commissioner’s office doesn’t allow teams to finalize big signing bonuses until the end in fear that it will allow other players to receive bigger bonuses.  For a lot of teams, this doesn’t curb draft spending at all.  Some still adhere to baseball’s slot recommendations despite them being quite arbitrary.  The Phillies tend to be one of those teams, but does it hurt them?

Their draft strategy

When the Phillies want to give out bigger signing bonuses in the draft, they prefer projection. For position players, that means a lot of athleticism. Their focus on recent years have been players that play the premium defensive positions, shortstop and centerfield. It may get tiring to some for them to always target the same position, but it makes sense. Players that can hit while playing the toughest positions on the field are the most valuable. Players that are already confined to a corner infield or outfield position as an amateur face an uphill battle because their bat has to provide value that their defense can’t. Sometimes, the middle infielders and centerfielders fill out and lose some athleticism, and their bats will have to carry them as they move to an easier position. Sometimes, a lot of times even, they don’t develop at all.

For pitchers, it’s about size and velocity. Not all pitchers they want presently have velocity, but it’s important that they have the size and body that indicates it could come. Of course there are a lot of pitchers with great fastball velocity that never make it. Scott Mathieson is one a lot of fans point to now. However, having a good fastball and being able to locate it is considered by many to be the key to pitching. Pitchers that have the stuff to get batters out can develop consistent mechanics and command and will get a lot of opportunities to do so, and it’s much more rare for pitchers that can command their pitches to improve their stuff to get major leaguers out. Some can succeed like that and there are plenty of examples, but those are exceptions.

The Phillies don’t draft 50 players like that though, no one does. A lot of college players taken will be organizational soldiers. They’ll fill roles on affiliates and most will never play in the majors, but the reality is that’s what most drafts are. Sometimes those players pan out, but teams don’t expect it after signing them to lower signing bonuses. Past the first few rounds, it’s rare to come across a college draft pick that has the upside of an impact player, but many do have higher “floors” than a lot of the overslot athletes.

There are a couple different kinds of overslot signings in the draft. There are teams that pour a lot of money into a few star prospects and hope they can make an impact. Washington did this in the 2011 draft. Aside from Anthony Rendon who was picked sixth overall and was going to get paid a lot anyway, they paid bonuses north of two million to their next three picks, pitchers Alex Meyer and Matt Purke and outfielder Brian Goodwin. The Red Sox and Yankees have been known to do this too. The other way teams can go overslot is to have a higher volume of signings for a few hundred thousand dollars. This can produce results too. The Pirates have brought this strategy to the forefront in recent drafts, but with their aggressive pursuit of Josh Bell this year, they moved closer to the first group of teams.

The Phillies are in that second group. In the early rounds, they stay at slot or slightly above. Larry Greene is the only player I can think of in recent memory that got a seven figure bonus from the Phillies when the slot recommendation didn’t call for a seven figure bonus. They prefer spreading money around multiple picks. Most prospects obviously don’t reach their full potential, so they feel that if they sign three players for one million total instead of just one for all of that money, they increase their chances of developing talent. Brody Colvin, Trevor May, Jarred Cosart, Domonic Brown and Brian Pointer are examples of talent that signed for less than a million.

Why draft spending is important

The underlying concept of Moneyball isn’t that walks build winning teams. It’s about finding an efficient way to build a winning team without having the resources of some of the competitors. Nine years ago, it was finding free agents with a skillset not valued in the mainstream baseball community. Now, it might be in the amateur baseball market. Smaller market teams like Pittsburgh, Kansas City, Toronto and Tampa Bay realize that the draft is where they can find talent to compete with the bigger market teams without paying big free agent contracts. The same principles can apply to big market teams in the draft, so why don’t all take advantage?

A lot of fans, executives and even the commissioner himself believe that signing bonuses that go towards players that don’t make it are a huge waste. Of course money that goes towards a player, amateur or professional, that doesn’t work out is down the drain, but in the grand scheme of things, there isn’t a lot of money spent in the draft, although that’s starting to change. This year, the Pirates set a record by spending a little over 17 million on their draft. That shattered the previous record of nearly 12 million by Washington last year. No one is asking the Phillies to spend that much. It’s not necessary for a big market team concerned about winning now.

The draft can actually be one of the biggest bargains in baseball. Take Jimmy Rollins for example. In 1996, the Phillies took him in the 2nd round and paid him a $340,000 bonus, overslot but not outrageously so. They developed him, and for his first three major league seasons, the Phillies only paid him 1.05 million, not per season, but total. That kind of cheap production is vital for small market teams, and it’s important for big market teams too. It can let them overpay others in free agency to fill holes the farm system couldn’t. The Phillies benefited in the same way by drafting and developing Chase Utley, Ryan Howard and Cole Hamels.

From 2008 to 2010 (information on 2011 isn’t available for every team yet,) the Phillies have spent less money on the draft than all but two teams. That’s not necessarily bad by itself, but four of the teams in their draft spending neighborhood (Mets, Braves, Twins and White Sox) are more active in the international amateur market than the Phillies. Estimates on this year’s draft are that the Phillies spent around 5 million. That’s significantly more than the 2009 and 2010 drafts, but it’ll still be below average compared to the rest of the league that’s averaged over 6 million spent per team the last three years.

What to do

This all may seem a bit silly to some as criticism of the Phillies often does these days. This isn’t a reflection on what’s going on at the major league level where it’s clear they’ve put themselves in a position to win another championship. They’ve embraced their big market status and take advantage of increased revenue in recent years.

However, they still spend like a small market team when it comes to amateur players. Still, it’s hard to argue with their success. A core of homegrown players won the team’s first World Series since 1980, and most of those same players are still contributing to the team. In addition, players signed and developed by the Phillies have been moved in trades to compliment the core with top major league talent.  There’s no reason for a team with the resources that they have to regularly be in the lower third in the league in amateur spending.

In the draft, a little money can go a long way.  If the Phillies had spent two more million in this year’s draft to reach the league average, they could add two players that are first round talent that slipped due to signability concerns, or they could continue spreading the money around.  They would’ve been able to add a few more players in the $250,000-$500,000 range and cut down on the signability college picks that don’t have much of a future.

Spending doesn’t solve every problem in the draft, but it gives teams a better shot at finding talent.  Draft spending has gone up and up in recent years, and that trend will continue.  Players know they can get bonuses well over slot because baseball’s slot recommendations have actually gone down since 2006.  The Phillies’ scouts clearly do a good job, but budget limitations hinder their ability to do their job when some players will be off the draft board entirely due to money which shouldn’t be the case for a big market team.  Of course a lot of draft picks will bust, but when $500,000 to $1 million is invested in them, it doesn’t damage a team.  Decisions that damage teams come in free agency when players like Julio Lugo and John Lackey are paid way more than what they’re worth.  If the team is going to use the farm system primarily to acquire proven ML talent, which is what big market teams can afford to do, what better way to make sure the system remains stocked with talent by investing 1 to 2 million more in signing bonuses?

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Scott Grauer writes for PSC and Bus Leagues Baseball – check him out!  Scott also regularly updates the PSC Minor League Thread with player stats, game results, and more…


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