Using Last Year’s Money Lessons To Look Ahead

Baseball had worked for years to control signing bonuses through various de facto methods, but it wasn’t until the current labor agreement went into effect last year that rules actually legislated draft bonus budgets.

Each team has an overall bonus pool, determined by Major League Baseball based on a team’s picks in the first 10 rounds. (These are the assigned values for this year’s draft as well as each team’s overall budget.) Each pick has a recommended slot value, but the team only has to worry about the aggregate value of its signings, which includes everyone in the first 10 rounds and any player after that who signs for more than $100,000.

The penalties for going over budget are harsh: A 0-5 percent overage results in a 75 percent tax; a 5-10 percent overage results in a 75 percent tax and the loss of a first-round pick; a 10-15 percent overage results in a 100 percent tax and the loss of first- and second-round picks; and an overage of more than 15 percent results in a 100 percent tax and the loss of two first-round picks.

No teams spent enough last year to lose draft picks this year. High school players signed at basically the same rate out of the 2012 draft, as they did in 2011. Some teams got creative to shift money around between their picks, while others played it straight and followed their draft board. Here is a look at how teams used their bonus pools in 2012, with Budget Picks defined as players picked in the top 10 rounds who signed for less than $100,000.

TEAM TOTAL SPENT 2012 BUDGET PICKS
Twins $12,602,400 1
Astros $12,074,200 2
Padres $10,993,000 3
Blue Jays $10,486,000 7
Cardinals $9,909,490 4
Mariners $9,325,200 1
Cubs $9,164,700 3
Athletics $8,300,600 0
Red Sox $7,908,000 5
Royals $7,573,000 1
Reds $7,450,400 1
Orioles $7,433,200 1
Rangers $7,394,400 6
Brewers $7,200,100 0
Mets $7,007,400 2
Rockies $6,978,700 3
White Sox $6,452,100 1
Dodgers $6,277,300 1
Marlins $5,755,700 1
Indians $5,330,000 3
Yankees $4,898,400 4
Nationals $4,880,500 2
Phillies $4,787,800 2
Braves $4,758,000 4
Giants $4,630,500 0
Diamondbacks $4,594,800 2
Rays $4,427,300 2
Pirates $3,830,700 3
Tigers $3,172,300 2
Angels $2,289,800 2

In the second year under the new rules, it will be interesting to see if any teams change their approaches after seeing different strategies last year. Teams essentially used two methods if they wanted to fit tougher signs into their budgets: save on the first-round pick and spread the money around, or take college seniors or other discount players and use the savings elsewhere.

Last year, 69 player signed for $100,000 or less in the top 10 rounds. Most have been what you’d expect from that sort of pick—just OK or downright poor. Here are the 10 players performing the best so far:

1. Michael Roth, lhp, Angels
South Carolina’s College World Series hero signed for $20,000 as a ninth-round pick, Roth has gone 1-3, 3.91 so far in the minor leagues and became the second player from the 2012 draft to debut in the big leagues.

2. Joe Wendle, 2b, Indians
A senior out of Division-II West Chester (Pa.), Wendle signed for $10,000 in the sixth round. He has done nothing but hit, posting a .321/.378/.486 line so far between short-season and high Class A, but is currently out after fracturing his left eye socket.

3. Roman Madrid, rhp, Padres
The durable righthander from Central Florida signed for $95,000 in the seventh round and has been filthy out of the bullpen, going 12-1, 1.83 with 23 saves, 71 strikeouts and 23 walks over 64 innings between short-season and low Class A.

4. Grady Wood, rhp, Mariners
Wood was a 10th-round pick who got $40,000 out of Division-II Western Oregon. He’s moved to the bullpen for the Mariners and is 6-2, 2.51 with 60 strikeouts and 23 walks over 65 innings.

5. Pat Ludwig, rhp, Pirates
Ludwig probably could have made more money with his chemical engineering degree from Yale, but so far his decision to sign with the Pirates for $5,000 in the 10th round looks like a good one. He has gone 7-2, 1.89 with 57 strikeouts and 15 walks over 62 innings out of the bullpen between short-season and low Class A.

6. Taylor Garrison, rhp, Yankees
Garrison signed with the Yankees in the seventh round for $10,000. He’s now in high Class A and has gone a combined 2-2, 1.75 as a pro with 55 strikeouts and 10 walks over 51 innings out of the bullpen.

7. Sean Bierman, lhp, Rays
Bierman was a local pick for the Rays, coming from Division-II Tampa. He signed for $5,000 as a 10th-round pick and has since gone 7-5, 2.94 with 71 strikeouts and 15 walks over 95 innings, all as a starter.

8. Paul Sewald, rhp, Mets
Sewald, a senior from San Diego, has a good feel for pitching and a three-pitch mix. Since signing as a 10th-rounder for $1,000, he has gone 0-3, 2.14 with 52 strikeouts and just five walks over 46 innings out of the bullpen.

9. Kyle Kraus, rhp, Red Sox
The undersized righthander from Portland has a great feel for pitching and has gone 2-0, 2.54 with 46 strikeouts and seven walks over 50 innings, mostly out of the bullpen between short-season, low Class A and high Class A—not bad for a guy who got $1,000 as a seventh-round pick.

10. Chadd Krist, c, Cubs
Krist turned down the White Sox in the 13th round as a junior at California and wound up getting $10,000 from the Cubs in the ninth round in 2012. He is a good athlete who projects as a backup catcher. So far, over 315 at-bats between short-season, low Class A and high Class A, he is hitting .270/.355/.400.

Let’s also look at the most aggressive teams from last year’s draft to see where they saved money in their budgets and how they utilized those savings to add premium talent.

HOUSTON ASTROS
Picking first overall, the Astros liked several players at the top of the draft and signed Puerto Rican shortstop Carlos Correa for $4.8 million. With a slot value of $7.2 million, that gave the Astros plenty of extra money, which they used to sign righthander Lance McCullers Jr. for $2.5 million as the 41st overall choice, and polished prep third baseman Rio Ruiz for $1.85 million in the fourth round.

TORONTO BLUE JAYS
The Blue Jays were the most extreme of the bargain shoppers last year, spending a total of $31,000 for their picks from rounds four through 10. The savings allowed the team to sign Ohio prep lefthander Matt Smoral for $2 million in the supplemental first round, Arizona prep third baseman Mitch Nay for $1 million in the supplemental first round, Texas high school righthander Tyler Gonzales for $750,000 in the supplemental first round, California prep righthander Chase DeJong for $860,000 in the second round and Mississippi prep outfielder Anthony Alford for $750,000 in the third round.

BOSTON RED SOX
The Red Sox saved money on college righthander Pat Light and Austin Maddox and then took budget picks in rounds five through 10 to add North Carolina high school righthander Ty Buttrey to their draft crop for $1.3 million in the fourth round.

KANSAS CITY ROYALS
The Royals saved $500,000 on first-round righthander Kyle Zimmer and used the savings to land Louisiana prep lefthander Colin Rodgers for $700,000 in the third round, Stanford second baseman Kenny Diekroeger for $500,000 in the fourth round, Illinois high school catcher Chad Johnson for $340,000 in the fifth round and Alabama high school righthander Zach Lovvorn for $275,000 in the sixth round. Rodgers was the only one from that group to rank among the Royals’ Top 30 Prospects in last year’s Prospect Handbook.

A few other teams went after one extra player. The Rangers loved that power-hitting third baseman Joey Gallo got to them with the 39th overall pick and took several players at a discount to afford his $2.25 million signing bonus. The Yankees did the same to get toolsy outfielder Austin Aune (who signed for $1 million as the 89th overall pick) and the Cardinals did the same for third baseman Carson Kelly (who got $1.6 million as the 86th overall pick).

Of course, there’s no fault in playing it straight and sticking to the draft board, as several teams did in 2012. Over the past 10 years, the sixth round has produced players like Anthony Rizzo, Andrew Bailey, Bud Norris, Ben Zobrist, Matt Kemp and Sean Marshall. The seventh round has seen the likes of Doug Fister, Michael Brantley, Jon Niese and Brendan Ryan. The eighth round is where Paul Goldschmidt, Andy Dirks, Matt Moore and Allen Craig were drafted. The ninth round has produced David Freese, Tyler Clippard, Mike Carp and Bobby Parnell; and the 10th round produced Kris Medlen, Desmond Jennings, and Peter Bourjos. The probability is slim, however, as those are just a handful of players out of the 1,500 drafted in those rounds over the past decade.

The high school players in this year’s draft considered to be tough to pry away from their college commitment are righthander Connor Jones (Virginia), outfielder Cord Sandberg (Mississippi State for football), lefthander Matt Krook (Oregon), shortstop Riley Unroe (Southern California), catcher Dom Nunez (UCLA), second baseman Cavan Biggio (Notre Dame), righthander Chandler Eden (Oregon State), righthander Cal Quantrill (Stanford), righthander Brett Morales (Florida), outfielder J.B. Woodman (Mississippi), first baseman Joey Martarano (Boise State for football), second baseman Jamie Westbrook (Pepperdine) and second baseman Gosuke Katoh (UCLA). On the college side, Indiana State lefthander Sean Manaea has signability questions because of his down spring and nagging injuries. Similarly, outfielder Austin Wilson and righthander A.J. Vanegas from Stanford could be difficult signs.