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Bonus Concerns Created Draft; Yet Still Exist
By Allan Simpson
June 4, 2005
Evolution Of The Bonus Record
Two weeks before the 2000 draft, Sandy Alderson, then Major League Baseball’s executive vice president of baseball operations, called a meeting of scouting directors in Dallas. Disturbed with the runaway inflation of signing bonuses in the 1990s, he sought to curtail the game’s age-old problem of reckless spending on untried amateur players.
He lectured his audience on the importance of getting a handle on bonuses. He counseled them on the art of dealing with agents, who often were more skillful and sophisticated in negotiating than they were.
“Bonuses were out of control, and that meeting was an attempt to reel them in,” an American League scouting director remembers. “It started out as a learning tool, a negotiating seminar. We needed to become better negotiators. We were scouts and trained to be scouts, but we were going up against agents that were lawyers in a lot of cases.”
MLB's motivation in that and other “negotiating seminars” that followed was to rein in bonuses and make clubs accountable if they didn't. Through Alderson’s direction, baseball established a systematic scale of bonus slots for players in the first three rounds (later expanded to five), similar to the more formal scales in the NFL and NBA drafts.
The 2000 draft effectively became a test of baseball’s ability to legislate limits on bonuses—a delicate maneuver that major league officials are uncomfortable discussing publicly because of possible legal repercussions.
“From a legal standpoint, it’s just a recommendation,” the AL scouting director said. “Baseball’s very clear about that. In the end, a team is free to do whatever it needs to do to get a player signed.”
The No. 1 pick in 2000, Adrian Gonzalez, signed with the Marlins for $3 million—about $1 million less than the No. 1 pick received the previous year. The second and third picks also received substantially lower bonuses than the corresponding picks in 1999. Overall, bonuses to first-round picks that year increased at a rate of just 3.5 percent, the most significant drag on bonus inflation in more than a decade.
The effects hit California high school righthander Matt Harrington, who likely would have been the first or second pick in 2000 if the old bonus pattern had continued. Not only did the clubs at the top of the draft order, the Marlins and Twins, pass on Harrington’s reported $4 million bonus demand, but the Rockies also didn't meet his price after drafting him with the seventh pick overall. Five years later Harrington still had not signed with a team in Organized Baseball.
But not everyone was listening to Alderson in 2000. The White Sox shocked the industry by signing Stanford outfielder Joe Borchard for a $5.3 million bonus—a record for a player signing with the team that drafted him. The White Sox decided to do what they felt was in their own best interest, regardless of the consequences, including the rebuke they knew they would receive from Major League Baseball.
A year later, the first five picks signed for bonuses averaging $4.41 million, with Mark Prior and Mark Teixeira getting record major league deals from the Cubs and Rangers that guaranteed them more than $20 million between them. But that has proven to be a year of exceptional talent.
Since then, first-round bonuses have taken a steady ride down. Through the continued supervision of MLB senior vice president of labor relations Frank Coonelly, the average first-round bonus, which had increased at a rate of around 30 percent annually in the 1990s, has leveled off the last three years. No individual records have been set since 2001.
“I think that this office has done a great job in the last three or fours years counseling clubs--and clubs have been more receptive--to the notion that they can lose a draft pick from time to time and it’s not the end of the world,” says Alderson, who now has taken a job as president of the Padres. “There’s no question that signability continues to be something of an issue in the draft, but there is a much more rational system that exists today than existed four years ago.”
Though his annual meetings with scouting directors were reduced to conference calls in later years and now are no longer held at all, the evidence suggests Alderson’s initiatives are working. Slotting has become a draft buzzword, an accepted part of the process.
“Initially we’d get yelled at, or admonished if we didn’t stick to slot,” the AL scouting director said. “But ownership is now more looped into the process. They’ve become much more educated about the effects exorbitant signing bonuses were having on the industry. If a team goes over slot now, it’s ownership that Major League Baseball will call. Most owners are reluctant to go against the wishes of the commissioner’s office, so it’s apparent the system is working.”
Slotting is baseball’s latest measure to curb excessive spending on amateur players—a practice that dates back to World War II, when the demand for baseball talent outstripped the supply. In 1936, the year the National Football League adopted its draft, the Cleveland Indians signed 17-year-old Iowa farmboy Bob Feller to a contact. The price? One dollar.
Players were happy just for the chance to play professional baseball in those days, and there was little competition for a player's services. By 1941, though, America's efforts in World War II began to siphon off much of the available talent. Competition drove the Tigers to sign outfielder Dick Wakefield to an unprecedented bonus of $52,000. Suddenly, the rush was on.
By the end of World War II, baseball had entered a new era. Interest in the game grew, minor league teams sprung up all over, and competition for players became fierce. Teams had to offer signing bonuses to top players to remain competitive. For the next two decades, major league officials wrestled with reckless spending and the competition for new recruits. Various solutions were proposed. None worked. Almost all were revised annually or simply thrown out.
“Traditionally, baseball has had three ways to combat bonuses,” says Astros president Tal Smith, whose involvement in the game as an executive predates the draft era. “We’ve had the bonus rule, the first-year player draft and the Rule 4 draft. None has been completely effective.”
The bonus rule was in effect from 1946-50, and from 1953-57. In its simplest form, it required a club to carry a player on its roster, often with no chance of being farmed to the minor leagues, if the player signed a bonus in excess of a fixed amount, usually $4,000-$6,000. The first-year draft rule, which was in effect from 1959 until the draft was enacted in 1965, required an organization to protect its top first-year prospects on its 40-man roster, or risk losing them to waivers or the annual Rule 5 draft.
“The bonus rule was difficult to enforce,” Smith says. “There were always rumors or suspicions of under-the-table payments to friends or relatives to circumvent the rule. And yet if you adhered to the intent of the rule, it was a detriment to the player’s development. It just didn’t work.
“The first-year rule was detrimental to a club that scouted and signed a player, then stood to lose him after only one year. But I still think it was the most effective means of curbing bonuses. What we have today is not effective. The draft no longer works in the way it was intended to work—to limit bonuses and level the playing field. It was effective for 20 years, but with all the bonus escalation since the late ‘80s it’s become a detriment to some of the small-market clubs.”
At the 1946 Winter Meetings, baseball made its first concerted effort to curtail bonuses by instituting the bonus rule. An agreement between the two major leagues and the National Association designated a bonus player as anyone signed to a contract that exceeded a fixed level. The rules often required bonus players to be placed on big league rosters before they were ready, and they could not be sent to the minors without being placed on irrevocable waivers.
Over the next four years, the rule was repeatedly tweaked, but bonus payments continued to escalate. In 1947, the Phillies spent $65,000 to sign 18-year-old lefthander Curt Simmons. A year later, the Boston Braves shelled out $75,000 for another young lefty, Johnny Antonelli, who began his career in the big leagues and had to remain there or be subject to waivers. The Tigers gave the same amount, plus two cars, to sign 18-year-old catcher Frank House.
By 1949, 38 bonus players were taking up space on big league rosters. Rumors were rampant that teams were evading the bonus rule by signing players to amounts in excess of the imposed limits and not reporting it.
One such rumor involved the Braves and future Hall of Fame third baseman Eddie Mathews. He was signed for an amount within the bonus limit, but some said Mathews’ father, a Western Union telegraph operator, was hired by the Braves as a part-time scout as a condition of the deal. As further compensation, the Braves supposedly bought a home for Mathews’ mother.
White Sox executive Roland Hemond, who began a 55-year front-office career as an assistant in the Braves' minor league department in 1951, heard the rumors, too, but questions their authenticity.
“I used to type the envelopes to all our scouts in those days,” Hemond recalls, “and I know I never typed one to a Mr. Mathews. But I know there was a lot of bending the rules in those days, especially when it came to allocating money between a player’s bonus and his salary—all to work around the bonus limit.”
There’s also a popular rumor that involved California bonus baby Billy Consolo. He was signed within the bonus limit—officially, at least--but the Red Sox supposedly enhanced their offer to as much as $75,000 by arranging to purchase the barber shop confectionary at the Los Angeles Hilton on behalf of his father.
Teams did a lot of creative things to dodge the bonus rule. Jackie Jensen, hero of the 1949 Rose Bowl, was paid $75,000 by the Pacific Coast League’s Oakland Oaks, reportedly the largest bonus ever given to a minor league player. The Pirates had wanted to sign Jensen for that amount, as did the Yankees. Oakland had a close working relationship with the Yankees at the time and signed Jensen at the Yankees behest. The Oaks let him play in the minor leagues for a year, then traded him along with second baseman Billy Martin to the Yankees for $80,000 and four players. Because the Yankees acquired Jensen in a trade, he was not subject to the bonus rule.
In January 1950, Pittsburgh took bonus payments to a new level when GM Branch Rickey astounded the industry—much as he had done four years earlier in signing Jackie Robinson for the Brooklyn Dodgers--by signing lefthander Paul Pettit to baseball’s first $100,000 bonus. It proved to be a foolhardy investment. The Pirates got almost no return on the deal as the sore-armed Pettit won only one game in the big leagues.
By then, it had become apparent that the bonus rule was not an effective deterrent, and the bonus rule was repealed at the 1950 Winter Meetings. With no restrictions in effect, clubs continued their spending frenzy for the next two years, which brought tough new rules in time for the 1953 season. The new rules said players with less than 90 days of pro experience were designated as bonus players if they signed multi-year contracts or were promised more than $4,000 from a major league team. Bonus players kept their tag for two years. They had to be placed on major league rosters immediately and could not be optioned to the minors unless they cleared waivers.
Just as before, from 1953-57 teams tried to amend or abolish the bonus rule amid charges of under-the-table payments, and numerous clubs were penalized for bending the rules.
“We’d pass a bonus rule and by the time we got out of the room, we already figured a way to skin the cat,” Tigers general manager Jim Campbell said. “There was no way really to police it. You could hire a kid’s uncle as a scout. He might actually be qualified, but it was still questionable.”
Baltimore became baseball’s biggest spender—and its most penalized club. Under new GM/manager Paul Richards, the Orioles spent roughly $700,000 in 1955 on untested players, including Arkansas high school third baseman Brooks Robinson, who went on to play in six big league games that season.
As stipulated by their contracts, five of Baltimore’s bonus players had to be placed on the club’s 25-man roster. One was Oklahoma high school righthander Bruce Swango. The Orioles won a major bidding war for Swango, signing him for $36,000, but it turned out he wasn’t nearly the prospect they thought and they released him less than three months later without him ever appearing in a game. As Hemond remembers, Swango originally worked out off a makeshift mound that was inadvertently stepped off at 54 feet. When forced to pitch at the customary 60 feet, six inches, he was nowhere near the same pitcher. So they just cut their losses and let Swango go.
Twice the Orioles ran afoul of bonus regulations in 1955, and both Richards and the club were fined. The most egregious charge came from signing Oklahoma State righthander Tom Borland, MVP of that year’s College World Series. The Orioles signed Borland to a three-year contract that provided for $40,000 in salary and bonuses but never reported terms of the deal to Major League Baseball. Borland made his first appearance as an Oriole in an exhibition game using a fictitious name. Upon investigation, commissioner Ford Frick ruled Borland a free agent and he signed later that year with the Red Sox.
The bonus rule stymied the careers of young players, who often rotted on major league benches. Sandy Koufax received a $25,000 bonus from the Brooklyn Dodgers in 1955, and had to stay on the big league roster for two years. He pitched 101 innings in 1955-56 and wasn’t totally effective for another six years.
In 1957, the World Series champion Braves handed out the biggest bonus ever, signing catcher Bob “Hawk” Taylor, for $112,000. Finally, at the 1957 Winter Meetings, the much-abused bonus rule was abolished.
With repeal of the bonus rule, major league clubs went on their greatest spending spree ever in 1958, spending an estimated $6 million on bonuses. Baltimore spent a record $120,000 for power-hitting outfielder Dave Nicholson, a high school dropout. Milwaukee topped that by signing shortstop Denis Menke for $125,000. Ohio State basketball star Frank Howard signed with the Dodgers for $108,000.
This time, baseball tried an unrestricted draft of all first-year players on minor league rosters. The rule specified that any free agent signed after Dec. 31, 1958, would be subject to the Rule 5 draft following his first season of Organized Ball if not placed on a 40-man major league roster. The rule required players to be kept on a major league roster the following year if drafted, rather than be sent to the minors for seasoning.
At the 1959 Winter Meetings, some executives proposed a formal draft of amateur talent, but it proved to be five years before its time and was defeated.
In 1960, the Cubs inked Massachusetts high school pitcher/outfielder Danny Murphy to a record $130,000 bonus and put him in the big leagues. A year later, shortstop Bob Bailey got $175,000 from the Pirates. At least six teams that year shelled out the largest bonuses in club history.
"Maybe we have to be saved from ourselves," Braves general manager John McHale said. "I think it's unfortunate that this is the system. A club like ours must be competitive. To achieve this, we must get ballplayers. If you're not prepared to pay, well, you just stand by and watch somebody else sign 'em.
"No, I don't know how to stop it. We've tried all kinds of ways, including several bonus rules. But nothing has worked. If a draft system similar to that used by football and basketball would hold up under our justice system, maybe that would be the answer.
"Certainly it would be a much healthier situation if the money that's paid for these tremendous bonuses could be channeled back into baseball. But right now it's as simple as this: If you want the kids, you've got to pay. We want 'em."
From 1958-63, an estimated $45 million was spent on bonuses and first-year player salaries. By buying up the game's best amateur talent, the Yankees and some of the game's wealthier clubs raised questions about competitive balance, one of the game's time-honored controversies.
To keep pace with the Yankees, who in 1964 had won nine of the last 10 American League pennants and 14 of 16, some of the smaller-market teams were committing financial suicide. The fledgling Los Angeles Angels opened owner Gene Autry's saddlebags that year and paid untested outfielder Rick Reichardt a record $205,000 bonus.
The more everyone spent on unproven amateur prospects, the less there was to prop up a sagging player-development system. Once vibrant and self-sustaining with 460 teams in 1949, the minor leagues had decayed 15 years later to a dangerously low 121 clubs, all of which were dependent on major league subsidies for survival.
Bonus payments continued to go through the roof. Led by Reichardt's lavish deal, a record $7 million was paid out to amateur players in 1964, more than was spent on major league salaries. Charlie Finley’s Kansas City A’s spent like no other team, signing 80 players, including Catfish Hunter, to bonuses totaling $634,000.
The timing was right for a sea change.
By 1964, all the other major team sports in the United States deployed a draft to equally distribute amateur talent. Football introduced the concept in 1936, basketball followed in 1947 and hockey adopted a draft in 1963. But baseball officials were reluctant to follow suit.
Some said a draft would penalize the industrious teams and be a form of socialism. Others opposed the draft for legal reasons. Baseball, unlike the other professional sports, operated under an antitrust exemption. There was concern that a draft, which would restrict a player's freedom and bargaining power, would jeopardize that special standing.
Opponents of a draft, however, were in the minority. Teams like the Dodgers and Yankees opposed it not on legal principle, but more for selfish reasons.
"There was some concern whether or not governmental interference would happen, whether some of the players and their representatives would challenge it," said Lee MacPhail, the Orioles' general manager in 1964 and mastermind of the powerful Yankees teams of the 1950s and early '60s. "But some clubs preferred things go on as they were, if they felt they were getting more than their fair share. They didn't want to change that.
"In the 10 years I was farm director of the Yankees (1949-58), we won nine pennants and won the World Series five years in a row. Kids wanted to sign with the Yankees, the most glamorous team in baseball at the time. If two or three teams were after them, and one was the Yankees, we generally had the inside track."
Baseball’s new amateur draft, officially known as the Rule 4 draft, initially was open to permanent residents of the United States only, with a focus on high school graduates and college players who were sophomores or age 21. The college rule was amended two years later and required that college players be juniors and 21 on the day of the draft. It wasn’t until after Dave Winfield, in 1972, and Danny Goodwin, in 1974, went undrafted as college juniors that the rule was changed to include all juniors.
Through the years, a number of loopholes were closed as Major League Baseball continued the struggle to keep a lid on signing bonuses. In 1983, in response to a $110,000 bonus the Brewers paid to lefthander Juan Nieves, a Puerto Rican attending a Connecticut private school, MLB made all players attending school in the U.S. subject to the draft.
By 1990, players from Canada, Puerto Rico and other U.S. territories were beginning to earn larger bonuses on the open market, so they were rolled into the draft. The potential for a full international draft has been the subject of heavy debate in recent years, but so far it has proven too unwieldy to put into practice.
Where once the draft had four phases annually—both the regular and secondary phases in June and January—all but the traditional June regular phase were abolished in 1987. The move was triggered primarily because players in the lower-profile phases still regarded themselves as first-round picks and expected to be paid accordingly.
While baseball remains the only major team sport whose draft is not televised, the commissioner’s office took secrecy to an extreme in the 1980s and ‘90s—all in the name of suppressing bonuses. First, MLB restricted access to names on the draft list for all but the first round. It didn’t release those names at all (except in alphabetical order) for four more months. The measures were aimed initially at college coaches, who would use the draft list as a quasi recruiting list or increase a player’s scholarship allotment as an inducement for him attend school. Later it was aimed at agents, who would use the list to contact players often before the teams themselves had an opportunity.
The draft's overriding purpose was twofold: to stop the spiral of bonuses and to more evenly distribute talent. One of the most immediate benefits of a draft, most clubs agreed, would be an improved game at the major league level. No longer would clubs be forced to clutter their 25-man rosters with untested youngsters. In 1964, major league teams had been forced to protect 77 first-year players.
The draft had an immediate impact on signing bonuses. While five players signed bonuses of $100,000 or more in 1964, only No. 1 overall pick Rick Monday signed a contract in six figures in 1965 and the average first-round bonus was $42,516.
No one would top Monday’s $104,000 bonus--$100,000 plus an additional $4,000 as part of baseball’s college scholarship plan--for another 10 years, when Goodwin, who was drafted No. 1 overall in both 1971 and 1975, signed for $125,000.
It wasn't until the Yankees signed Oklahoma high school first baseman Todd Demeter for $208,000 in 1979 that a player topped the bonus Reichardt received. By then, inflation had reduced that figure to a fraction of Reichardt's windfall.
In 1986, the Royals drafted Heisman Trophy winner Bo Jackson for $1.066 million--$100,000 as a bonus and the balance in guaranteed major league salary. But the industry actually applauded the historic signing as it lured Jackson away from the Tampa Bay Buccanneers, who made him the No. 1 pick in that year’s NFL draft.
As late as 1987, the draft succeeded at its goal of suppressing bonuses. Seattle paid $160,000 to sign Ken Griffey Jr., the first overall pick. And when the Twins won the World Series that year, it marked the 10th different champion in the last 10 years.
“It’s an unqualified success,” MacPhail said at the time. “Certainly, it’s evened competition. It’s given teams that have a difficult time competing for free-agent talent a fair share, or even more than a fair share. Close races in all divisions today goes back to the free-agent draft. If you didn’t have it today, it would be a disaster.”
By 1989, however, the tone of the draft began to change. Baltimore had the No. 1 pick that year and engaged in a contentious negotiation with Louisiana State righthander Ben McDonald that carried on through most of the summer. McDonald eventually agreed to an $824,300 three-year major league contract that provided for a record $350,000 bonus. Little more than a week later, the Blue Jays gave Washington State first baseman John Olerud a $575,000 bonus as part of an $800,000 three-year deal.
By then, the financial state of the game was so good that spending lavishly on amateurs wasn't seen as a crisis. In the early 1990s, though, the money took a quantum leap.
In 1990, Atlanta refused to select Texas high school pitcher Todd Van Poppel with the first selection because he said he was set on attending the University of Texas. The Braves settled instead for Florida high school shortstop Chipper Jones. Oakland took Van Poppel and drafted him 14th overall and signed him to a record $1.2 million, three-year major league contract with a $500,000 bonus.
A year later, the Yankees signed North Carolina high school lefthander Brien Taylor to a $1.55 million bonus--more than double the previous record. Average bonus payments to first-round picks escalated as never before, rising from $252,577 in 1990 to $613,037 in 1993.
In 1994, with a strike looming, the average first-round bonus reached $790,357, with five players receiving bonuses of $1 million or more. No. 1 pick Paul Wilson tied Taylor's record with the Mets, and that record was soon broken when the Marlins coughed up $1.6 million to entice shortstop Josh Booty from a promising football career at LSU.
Booty's record bonus held up until 1996, when teams suddenly had an opportunity to sign players without restraint. It began in January when the Marlins outbid every major league team for 20-year-old Cuban defector Livan Hernandez, who was signed to a four-year major league contract with a record $2.5 million bonus.
The wave of Cuban defectors was fueled by Oakland's selection of righthander Ariel Prieto in the 1995 draft. Prieto, 29, went fifth overall and signed for a $1.2 million bonus. That money got attention, but the draft's restrictive nature caused future Cuban defectors like Hernandez to take up residency in a foreign country that wasn't subject to the draft. Bonuses rose appreciably.
But in 1996, foreign players briefly weren't the only ones to benefit from a free-market system. Major league teams rarely followed draft rules as outlined in the Professional Baseball Agreement, specifically Rule IV (e), which required teams to tender formal contract offers to draft picks within 15 days of their selection.
At the behest of their agents, seven players--six first-round picks and a third-rounder--sought to become free agents after they were not offered contracts in 1996. Three didn't follow through with the grievance, but four did and were declared free agents by MLB.
Free to offer their services to all 30 clubs, the four signed the four largest bonuses ever awarded amateur prospects. First baseman Travis Lee, who had been drafted second overall by the Twins, signed a $10 million package with the expansion Diamondbacks. Righthander John Patterson (fifth, Expos) signed with the Diamondbacks for $6.075 million and lefthander Bobby Seay (12th, White Sox) signed with the expansion Devil Rays for $3 million.
The fourth player, righthander Matt White (seventh, Giants), completed the once-in-a-lifetime windfall by agreeing to terms with the Devil Rays for $10.2 million. Major League Baseball was quick to close the loophole.
Fearful of fallout from 1996, teams took a cautious approach in 1997. In many cases, players were chosen on the basis of signability, not ability. Several first-round picks reached agreements before the draft, an illegal tactic but a common one nonetheless. Others were passed over because their asking price was deemed too steep. Still, the record for players signing with the club that drafted them was broken again.
Florida high school lefthander Rick Ankiel, selected 72nd overall by the Cardinals, cut a deal for $2.5 million--$500,000 more than No. 1 pick Kris Benson got from the Pirates the year before. All teams passed on Ankiel in the first round because they couldn't get a handle on his bonus demands.
Ankiel's record lasted until Rice righthander Matt Anderson, the No. 1 overall pick by the Tigers, agreed on a $2.505 million deal after holding out for six months. The Tigers, along with other clubs, were in the position of having to defend themselves against paying $10 million bonuses--even as they were spending record amounts.
“Those were special circumstances involving expansion teams," then-Tigers GM Randy Smith said. “Two million dollars is a lot of money. We're not interested in signing any of these players for $10 million. If we're going to spend that kind of money, we're going to spend it on a proven major leaguer, not on someone who is unproven."
But agent Scott Boras, who engineered White's windfall and masterminded several other record deals, said the developments of 1996 proved conclusively that a draft system artificially stunts bonuses.
“What we've seen happen in the last two years, first internationally and then domestically, has given us a great barometer on the true worth of a select number of quality amateur players," Boras said. "The market has changed. I know from experience that there are many teams willing to pay optimum dollars for a premium talent."
And in outfielder J.D. Drew, Boras had a player who was willing to go to the limit to test the system. Drew was the consensus top player in the 1997 draft and was selected second overall by Philadelphia. Almost from the start, he was adamant that his rights were being stifled under a system that allowed him to negotiate with only one team.
He set his price at $10 million before the draft and told every club not to draft him unless it was prepared to pay that amount. The Phillies took him anyway and negotiations went nowhere from the start. Drew eventually signed a contract with St. Paul of the independent Northern League and played the summer there.
“We made it very clear to the Phillies the day before the draft, and even an hour before the draft, and they still picked me," Drew said. "We had things on the table that other teams would offer. And we let the Phillies know that if they weren't willing to match that, then don't draft us."
The Phillies viewed Benson's bonus as the benchmark, no matter what happened in 1996. “This kid is not a free agent," Phillies owner Bill Giles said. “There is a number we think is right, and it's more than Benson got. We're willing to go above that, but not a whole lot above."
The two sides never got close to a deal, and Drew went back into the draft pool in 1998. The Phillies had first pick and never considered Drew, taking Miami third baseman Pat Burrell while Drew slipped to the fifth pick, where he was selected by the Cardinals.
“Obviously, there's a lot of pressure on the Cardinals to handle the Drew situation with due diligence," one scouting director said. "The whole industry will be paying attention."
The Cardinals quickly agreed to terms with Drew on a complicated major league contract with a $3 million signing bonus and major league contract money and incentives worth a potential $8.5 million.
The Phillies, faced with the possibility of losing their first pick for the second straight year, quickly negotiated a five-year major league deal with Burrell that included a $3.15 million bonus and guarantees that brought the total value to $8 million. They ended up paying Burrell, a lesser player by all accounts than Drew, significantly more than they offered Drew less than two months before.
There was little joy in baseball at the reality that Burrell had just been guaranteed more money than the defending World Series champion Marlins were spending on their entire 1998 major league roster.
One important factor that the Burrell and Drew contracts introduced into other players' negotiations in 1998 was the major league contract that allowed payments to be spread over several years. The formerly rare major league deal became more commonplace in the succeeding years.
A year later, the bonus record fell again as the No. 1 overall pick, North Carolina high school outfielder Josh Hamilton, got a $3.96 million bonus. The second and third picks, righthander Josh Beckett and catcher Eric Munson, were awarded major league deals that guaranteed them almost $14 million. Overall, bonuses to first-round picks took another leap forward.
Another bonus spike set the wheels in motion for the latest measures to curtail bonus payments, with discussions about possible fundamental changes in the draft.
“It's definitely an issue that needs to be addressed," Alderson said on the eve of the 2000 season. "There are a number of ways the draft is no longer serving its original purpose. We're not redistributing the talent the way it was intended.
“Bonuses are skyrocketing and the better players are dropping to the richer, more successful clubs. Even major league players are beginning to wonder if the money that is going to amateur players is being distributed the right way."
Alderson’s concerns led to the practice of slotting, which seems to have had the desired effect as signing bonuses have returned to pre-2000 levels. In 2003 alone, first-round bonuses dropped 16.2 percent.
“Major league baseball has put a tremendous amount of pressure on its clubs to conform,” a major league executive said. “They’ve been threatened with punitive action and most clubs haven’t been willing to challenge Major League Baseball on it. You’ll pay a price if you do—if not now then later.”
Several clubs have been taken behind the woodshed for not conforming to MLB’s new bonus guidelines—notably the Dodgers, before Frank McCourt assumed ownership of the club in 2004, and the Devil Rays.
As always, though, there are ways to circumvent the process. If a team waits to sign a draft pick until after most other players have signed—and makes clear its intention with Major League Baseball—it usually can pay a higher price. The Cubs did that last year when they signed their top pick, Notre Dame righthander Grant Johnson, late in the summer for $1.26 million—easily the largest bonus paid to a second-rounder in 2004.
“So long as you don’t impact another team’s pick,” an American League scouting director said, “the commissioner’s office usually won’t have as much of a problem.”
Exceptions also are made for two-sport athletes. The Mariners gave University of Washington football recruit Matt Tuiasosopo, their top pick and a third-rounder in 2004, a bonus of $2.29 million.
In 2003, the Dodgers spent $1 million on 40th-rounder Andy LaRoche, convincing Coonelly that LaRoche would become a first-round pick the following year, based on his summer league performance. But the exceptions are few.
“It’s unlikely that we’ll ever see formal slotting become part of the collective bargaining agreement, as it is in football and basketball,” the AL scouting director said. “The union prefers a free, unencumbered economic system everywhere. And I think our de facto slotting system is actually working.”
Smith, one of the game’s most respected minds and a one-time candidate to be commissioner, said he isn’t so sure that slotting works—or that the draft itself is serving its purpose after 40 years.
“The problem with slotting is it presumes that all situations are the same,” Smith says. “They’re not. There can be a significant difference between a high school, three-sport star with leverage and a typical college junior.”
Smith believes the present system cost the Astros a chance to sign Texas high school outfielder Drew Stubbs, their third-round pick in 2003. Astros baseball officials knew it would take more than slot money to sign Stubbs, but MLB contacted owner Drayton McLane and discouraged him from spending more. The Astros acquiesced and Stubbs, who projects as a top pick in 2006, went unsigned.
Smith says he prefers the free market, with building opportunities and relationships between scouts and prospects made paramount. “It would put scouts back into a situation where they do more than just point radar guns and stopwatches at players,” he says.
He would prefer a return to the first-year draft rule that was in effect from 1959-64, with modifications.
“The Red Sox and Yankees and some of the big market clubs would still dominate the signings, but there would be a limit on how many players even they could sign if you coupled it with a first-year player draft, where everyone would be eligible for selection if they’re not on a 40-man roster," he says. “It would be self-enforcing. If you sign a ‘can’t-miss’ player, you would need to make room on your 40-man roster for him. If you don’t, he’d be available to someone else. To be effective, you’d have to allow a player that was drafted to be sent to the minor leagues following year, but I honestly feel it’s the best way to level the playing field.”
And the minute it was enacted, teams would be working on ways to skirt the rules and outspend their competition. It's been baseball's way with bonuses for more than 50 years, and amateur players will continue to be the beneficiaries.