Teams Will Adjust To New Draft Rules

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A year after one of the deepest draft classes ever—and definitely the most expensive—teams must adjust to less talent and new rules designed to curb spending.

The 2011 crop featured seven players with No. 1 overall pick-caliber talent. Gerrit Cole, Danny Hultzen, Trevor Bauer, Dylan Bundy, Bubba Starling, Anthony Rendon and Archie Bradley went in the first seven selections and signed for a combined $52.2 million in bonuses and major league salaries.

Beyond Cole and Co., last year's draft featured unusual depth and balance. There was plenty of college and high school talent, plenty of hitters and pitchers. Forty-six other players received seven-figure bonuses, and clubs combined to spend $236 million, obliterating the previous draft record of $202 million set a year earlier.

It's unlikely that the industry will match either of those figures in 2012. Even without the rule modifications, the talent available just isn't in the same class.
"If you were going to go back the last 10 years and grade crops, this one might be a C or a C+," a National League scouting director said. "The college class is really down. Last year, we had umpteen Friday-night starters to look at, and there certainly are no Coles or Bauers in this year's draft. The strength is high school bats."

With the college and high school seasons set to begin, five players had separated themselves from the rest of the pack: Stanford righthander Mark Appel, Harvard-Westlake High (Studio City, Calif.) righty Lucas Giolito, Appling County High (Baxley, Ga.) outfielder Byron Buxton, Arizona State shortstop Deven Marrero and Florida catcher Mike Zunino. Beyond them, the college and high school groups diverge.

1. Astros
2. Twins
3. Mariners
4. Orioles
5. Royals
6. Cubs
7. Padres
8. Pirates
9. Marlins
10. Rockies
11. Athletics
12. Mets
13. White Sox
14. Reds
15. Indians
16. Nationals
17. Blue Jays
18. Dodgers
19. Cardinals (from Angels as compensation for free agent Albert Pujols)
20. Giants
21. Braves
22. Blue Jays (for failure to sign 2011 first-rounder Tyler Beede)
23. Cardinals
24. Red Sox
25. Rays
26. Diamondbacks
27. Brewers (from Tigers as compensation for free agent Prince Fielder)
28. Brewers
29. Rangers
30. Yankees
31. Red Sox (from Phillies as compensation for free agent Jonathan Papelbon)

Because major league teams have aggressively signed prep talent in recent years, the college talent falls off quickly after Appel, Marrero and Zunino. Scouts bemoan the lack of well-rounded position players and starting pitchers with long track records of success.

On the high school side, there's plenty to like after Giolito and Buxton. Nineteen of the 33 first-rounders in 2011 came from colleges in 2011, a ratio that could reverse itself on June 4.

"The high school crop is deep," an American League scouting director said. "You could probably name 10 high school arms who could go in the first round, and it's the same thing with the position players."

Harsh Penalties For Overspending

The changes to the draft rules from a year ago are even more drastic than the gap in talent. Rising draft spending had displeased the commissioner's office for years, but all it could do to stem the tide was try to cajole teams into heeding its informal slotting system.

Since 2000, MLB had recommended specific bonuses for every pick in the first five rounds and a maximum for every choice afterward. Last year, the commissioner's office coerced clubs into waiting until the day of the Aug. 15 signing deadline to make above-slot offers to most first-round picks and several college juniors. Those efforts did little to stop teams from splurging, as they recognized that the draft is a much more cost-effective way to acquire talent than signing international amateurs or major league free agents.

As part of the CBA agreed upon in November, teams now face more much than political pressure if they exceed an aggregate signing bonus pool assigned to them for the first 10 rounds. Each pick in the first 10 rounds has a predetermined value, from $7.2 million for the No. 1 choice to $125,000 for pick No. 300 and any subsequent selections.

The Astros, who hold the top selection, will have a pool of roughly $11.2 million (the exact number has yet to be determined because three free agents who would require draft-pick compensation remained unsigned entering February). The Twins, who gained two choices for the loss of free agent Michael Cuddyer, will have the most to spend at $12.4 million. The Angels, who gave up their first two picks to sign free agents Albert Pujols and C.J. Wilson, bring up the rear at $1.7 million.

The values for the picks in the first 10 rounds total $190 million, a nearly 50 percent increase over the $133 million sum of MLB's unilaterally determined slots in those rounds a year ago. Clubs spent $192 million on bonuses (and another $8 million on salaries in major league contracts) on players in the first 10 rounds in 2011.

A team that surpasses its bonus pool by 0-5 percent must pay a 75 percent tax on the overage. That's getting off lightly compared to the penalties for 5-10 percent (a 75 percent tax and the loss of a first-round pick), 10-15 percent (a 100 percent tax and the loss of first- and second-rounders) and 15 percent or more (a 100 percent tax and the loss of two first-rounders).

Will High Schoolers Still Sign?

The industry consensus is that no club will want to give up a draft choice and that there's no obvious loophole to exploit. Teams can't just shift money around as they please, because if they fail to sign a draftee, the value of his pick comes out of their bonus pool. Big league contracts no longer are an option for draftees. All players after the 10th round are subject to a $100,000 maximum, with any money over that amount counting against the bonus pool.

Of the 53 draft millionaires from 2011, 30 received more than what their pick value would have been this year, as did an additional 55 players in the top 10 rounds. Seventy-nine players after round 10 signed for bonuses in excess of $100,000.
It won't be known for certain until July 13—the signing deadline has been moved up a month—how much the limitations will restrict clubs from signing players. After the changes were announced, the initial reaction from club officials and agents was that prominent high school prospects would be more likely to attend college than they had been previously.

Ten weeks later, scouting directors contacted by Baseball America weren't nearly as pessimistic. The AL director doesn't anticipate that significantly fewer top prepsters will turn pro.

"Everyone slams the door and says all the high school kids are going to college," the AL scouting director said. "I'm still confident. The guys who want to play pro ball will sign. Will they take less money? I still believe we'll get the same type of players but pay them less. At the end of the day, they want us if they want to play Major League Baseball."

A second NL scouting director agrees, to a point. He believes it will take a year for clubs, agents and players to adjust to a new reality.

"I think it's going to take us a couple or three years to get there," the second NL director said. "This group this June isn't sure what's going to happen yet. Some of these high school kids this year are going to be difficult after the first couple of rounds. We'll have to see how it unfolds."