After three drafts under the current Collective Bargaining Agreement, spending patterns within the confines of the new draft system are emerging while major league payroll rises.
Bonus pool allotments that trigger steep penalties if surpassed, the loss of future picks, and the reduction in compensation picks have eliminated teams’ ability to spend freely as they desire. Although teams are flush with money, their avenues for spending that money on amateur talent has been put into silos and capped.
Organizations that have bolstered their teams through high-profile free agent acquisitions have been severely limited in the current draft system and the only way to have money to spend on amateur talent is to lose at the major league level, where the free agent cost of a win has never been higher.
Below is a chart detailing teams’ spending under the current CBA (2012-2014) through their draft bonus pool allotments and MLB payrolls, courtesy of Cot’s Baseball Contracts. Note: the draft spending listed is not total dollars spent but bonus pool spending. In 2014, bonus pool spending accounted for 88.9 percent of draft spending. Teams’ cumulative draft spending is on the Y axis (vertical) while total major league payroll is on the X axis (horizontal).
The chart showcases a few clusters, as well as a few outliers. The only three teams that have picked in the top six in all three drafts (Houston, Minnesota and the Chicago Cubs) form a grouping of top draft spenders as the only teams to exceed $25 million. The Cubs ($28.14 million) have spent more than any team in the last three years and were the highest spenders in the 2013 draft ($11.07 million). This upper 10th percentile has accounted for 14.3 percent of all spending.
The next vertical grouping (Miami, Colorado, Kansas City, San Diego and Seattle) and St. Louis (which has a greater payroll than the aforementioned clubs) have all benefitted from extra picks through the Competitive Balance Lottery. All but two of these (St. Louis and San Diego, which has one top-10 pick and selected No. 13 the two other drafts) have had multiple picks in the top 10. St. Louis is one of four teams that has spent above its bonus pool allotment and paid the 75 percent tax in each of the three drafts. Of the four clubs, St. Louis has spent the second-most above its slot at nearly $1 million ($956,390).
There is another cluster below that with nearly a dozen teams who fall into the middle to lower end of both measures.
The remaining 10 teams are scattered around the lower right quadrant and represent the nine highest payrolls over this three-year period and the 15th-largest (Atlanta).
Boston, which spent more in the draft than any of the other top 10 payroll clubs, has easily spent the most on the draft of this group and has spent the 12th most overall. Boston possessed two first-round picks in 2014, a top 10 pick in 2013 (No. 7 Trey Ball) and a pair of supplemental first-round picks in 2012 (Brian Johnson and Pat Light).
On the other end of the spectrum, the Angels drafted in the first round for the first time under the new CBA this season, and didn't even have their second-round pick in 2012. The Angels have spent slightly less than $10 million ($9,999,000), the lowest among all teams by more than 1.5 million.
Below is the numerical version of the graph shown above, displaying yearly spending. Over this time the ratio of dollars spent on major league payroll to draft bonus pool spending is $16.52: 1. The smallest ratio is the Astros at 5.04, the only team below 8.16. The Astros’ combined draft spending ($27.25 million) is larger than its 2013 payroll ($26.11 million). It would take the Angels nearly 42 drafts spending at the same rate ($3.33 million annually) to equal their lowest payroll during the stretch ($137,271,250 in 2013).
Four others have a ratio of less than 10:1. All but one (Minnesota: 9.80) are in the bottom 11 in payroll and three of the four (Miami: 8.16, San Diego: 9.45, Pittsburgh: 9.71) are in the bottom six in payroll.
Conversely, the Angels have spent $44.32 dollars on the major league payroll for every dollar spent on the draft, the highest ratio of any team and more than two and a half times the average. The second-highest ratio is the Yankees at 41.93. Those two were the only above 40, as the next highest (Dodgers: 34.44) was significantly less.
The Astros had the highest ratio at 5.04 without signing No.1 overall pick Brady Aiken. Houston’s bonus spending on the 2014 draft was $5.09 million, which was $8.27 million below its original slot value that was lost without signing Aiken and fifth-rounder Jacob Nix. Had the Astros signed the players and matched their original slot value, their total draft spending would have jumped to $35.52. This would have brought their ratio to 3.87.
The chart at the bottom of the shows where the Astros would have placed on the 2012-2014 chart if they had reached their bonus pool allotment earlier this month. Their place on the chart truly represents an outlier.
The Cubs have exceeded their bonus pool in every draft and have had the largest overages ($1.30 million). The Cardinals finished had the second highest total, followed by the Dodgers ($652,800) and Giants ($569,300).
Twelve teams have never surpassed their bonus pool threshold and the vast majority of these teams receive revenue sharing money.
|Team||2012 (P)||2013 (P)||2014 (P)||3 Yr. Total||Rank||2012 (DS)||2013 (DS)||2014 (DS)||3 Yr. Total||Rank||Ratio||Rank|
Let’s look back at the previous CBA (2007-2011) and see how teams fared by the same metrics. The chart has a more clearly defined structure and few clusters, with the majority of teams falling along two plots.
Pittsburgh and Washington represent the two highest draft spenders—the Pirates first at $52 million and Washington second at $51 million—and both resided in the lower quartile of payrolls. Pittsburgh ranked 29th in payroll and Washington ranked 26th. Kansas City, although further down the chart, fit this same description with the third-highest draft spending and 25th largest payroll.
Boston stands alone in the upper right quadrant as a high-payroll club who invested in the draft. The Red Sox had the second-highest payroll and spent the fourth most on the draft.
The Yankees also spent the 11th most money on the draft but were in a class by themselves in terms of payroll at $1.02 billion. The payroll gap from New York to Boston ($290 million) was larger than five team’s payrolls.
The White Sox spent less than any team in the draft under the previous CBA but have moved from 30th in draft spending to 11th under the current CBA after picking third in 2014 and consecutive drafts with a pick in the teens in 2013 (No. 17 Tim Anderson) and 2012 (No. 13 Courtney Hawkins).