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MLB remains vigilant about bonuses

By Jim Callis
June 25, 2002
Baker
Nick Swisher
Photo: Bob Libby

In case you missed it, negotiations for a new Basic Agreement between the owners and players have proceeded at a glacial pace. Teams have been signing their early draft picks at a similar rate, and those two situations are definitely related.

Starting with the 2000 draft, Major League Baseball annually has held a negotiating strategy session with scouting directors in May. MLB has recommended signing bonuses for every draft slot in the first few rounds, and asked teams to keep the commissioner’s office informed on all negotiations.

When a team pays more than MLB says it should, the front office hears about it.

That happened to the White Sox in 2000, when they took Stanford outfielder Joe Borchard 12th overall and signed him for a draft-record $5.3 million. Borchard, a top quarterback prospect for the 2002 NFL draft, since has developed into one of the top power prospects in the game.

(Funny, when the Yankees reacquired Drew Henson, another quarterback coveted by the NFL, and lavished him with a $17 million contract to give up football, MLB said nothing.)

Yet another possible work stoppage looms on the horizon, as the owners seek greater redistribution of money and the union tries to preserve as much of the status quo as possible. It’s also a possibility the negotiations will lead to a cap on signing bonuses—and teams are simply enacting a dress rehearsal this year.

Against that backdrop, MLB doesn’t want teams to spend too freely when commissioner Bud Selig has gone before Congress and claimed the industry lost $519 million in 2001. Especially not with a draft crop considered average overall, lacking in the frontline talent available a year ago and possessing little in the way of college position players.

Slow Pace

Players and their agents haven’t bought into that kind of thinking, however. Two weeks after the draft, just nine of the 30 first-round picks had agreed to terms. That includes California high school righthander Chris Gruler (No. 3 overall, Reds) and University of British Columbia lefthander Jeff Francis (No. 9, Rockies), both of whom accepted bonus parameters before they were selected. Their signings were announced shortly after drafting concluded on the first day.

Just six first-rounders had signed at the same point last year, while 13 had in 2000, when predraft deals were more prevalent than ever. But the big difference in 2002 is that the first-rounders who have come to terms have done so for bonuses 11 percent less than what their draft slots yielded in 2001.

Gruler accepted $2.5 million, which is more than he would have gotten had Cincinnati not taken him and he had lasted another four and five choices. Dewon Brazelton, who went No. 3 last year to the Devil Rays, held out all summer before getting a $4.2 million bonus as part of a five-year, $4.8 million major league contract.

Not only did the Reds pay $1.7 million below last year’s bonus for the No. 3 overall pick, but their offers to two of their next three picks—including two Texas college seniors—were significantly below market value as well.

Five of the first-rounders who had signed took less than their draft slot got a year earlier. Besides Gruler, that group includes California high school infielder Scott Moore (No. 8 to the Tigers, $2.3 million vs. $2.4 million), Francis ($1.85 million vs. $2.4 million), Virginia Tech lefthander Joe Saunders (No. 12 to the Angels, $1.825 million vs. $2.075 million) and North Carolina infielder Russ Adams (No. 14 to the Blue Jays, $1.785 million vs. $1.875 million). It wasn’t necessarily bad business, because otherwise the players would have slipped a few picks and received less anyway.

The four first-rounders who have improved on their slot’s 2001 bonus are Florida high school first baseman Prince Fielder (No. 7 to the Brewers, $2.4 million vs. $2.175 million), Ohio State outfielder Nick Swisher (No. 16 to the Athletics, $1.78 million vs. $1.5 million), San Diego State lefthander Royce Ring (No. 18 to the White Sox, $1.6 million vs. $1.509 million) and Texas high school first baseman James Loney (No. 19 to the Dodgers, $1.5 million vs. $1.3 million).

If this trend continues, it would mark the first time since Baseball America has tracked bonuses (beginning in 1989) that they have decreased in the first round from one year to the next. Last year’s average was $2.163 million, up from $1.873 million in 2000. But in general, the first-rounders who sign the earliest do so relatively cheaply.

Inflation Trend Slows

The supplemental first round was unfolding in similar fashion to the first. Just six of 12 picks had signed, compared to five of 14 last year. Three of the six players took less than their slot got in 2001, and overall the bonuses are down eight percent.

Only Florida high school third baseman Matt Whitney (No. 33 to the Indians, who signed for $1.125 million vs. $850,000) and Evansville righthander Steve Obenchain (No. 37 to the A’s, $750,000 vs. $600,000) significantly improved on the bonus for their slot in 2001.

As for the second and third rounds, the players just aren’t signing. Just 12 of 61 picks in those rounds have signed, while 21 of 62 had at the same stage in 2002. And among those 10, at least two have drawn the ire of the commissioner’s office.

Arizona high school outfielder Jason Pridie, a second-rounder taken 43rd overall, signed with the Devil Rays for $892,500—5 percent over the $850,000 recommended for his draft slot. No. 91 pick Mike Nixon, an Arizona prep catcher, went to the Dodgers for $950,000, nearly double the $480,000 that slot got in 2001.

Nixon gave up a football scholarship to play safety for UCLA and had been recruited as a quarterback by Arizona State and Notre Dame. Because of his dual-sport status, the Dodgers were able to spread Nixon’s bonus over five years.

Like Cincinnati, Baltimore has taken a hard-line approach to signing its picks and had signed only one player in the first eight rounds. Minnesota signed only two of its top 17 selections.

The Cubs, who had six extra picks and drafted aggressively, had signed only one of their first nine picks.

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