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Wednesday, November 01, 2006

More on the CBA and the draft

A few days ago I wrote up an initial recap/comments about the new collective bargaining agreement between the owners and players. There was one section that left my a bit confused: what the effects were of the changes to the draft. Fortunately, today Kevin Goldstein published a very good article explaining these changes and their ramifications. I'll summarize and comment on some of the changes here.

There are two substantial changes to the draft rules:
  • The signing deadline for all non-college seniors has been moved up from just prior to the following year's draft to the August 15th immediately following the June draft.
  • Teams are now compensated if they do not sign a player. If it's a first- or second-round pick, teams receive the identical pick the following year. Third-round picks also get a compensation pick between the third and fourth rounds. So, for example, if the Reds had not signed 1st-round pick Drew Stubbs this year, they would receive the 8th overall pick in the '07 draft under these new rules.
The first item has two primary effects. First, long holdouts are now a thing of the past. If a team and its drafted player can't come to an agreement by August 15th, the player returns to the draft pool. While we may still see players go unsigned, this prevents the extraordinarily long holdouts that have frustrated teams and fans alike over the past few years. This takes one negotiating tactic off the table for high school and non-senior college players, so it might result in lower bonuses being paid out. At least that's the hope. I like this change, as it changes negotiations from potentially a long battle to an immediate decision to be made. And that should help teams focus more on player development and scouting, rather than negotiations with its prospects.

The first item also has the substantial effect of eliminating the draft-and-follow procedure. In the past system, lower picks were often for risky players. Teams could draft them and would hold exclusive rights to that player for an entire year, giving them the opportunity to decide whether or not they wish to sign them. Those players wouldn't even be permitted to speak with any other teams during that time. Eliminating this practice effectively means that teams will need to be pretty certain they wish to sign a player when they draft them. That seems to me to be much fairer deal for the players, and probably allows teams to be a bit more streamlined in their draft activities. But it also may mean that we'll have more mistake signings than in previous years, and we may end up missing out on more of the high-risk, high-reward players that previously would be under our control.

Nevertheless, the item that seems to have the biggest impact in these changes is one that I hadn't seen reported in previous articles: compensation for unsigned draftees in the first three rounds. This is huge. In the past, if a team didn't sign a player in the first few rounds, that represented a major missed opportunity. Now, teams are insulated from that loss, because they have the equivalent opportunity to sign a player at the same draft position the following year. This takes a major card out of the hands of the players, and I expect it will absolutely reduce signing bonuses because teams now have a very solid plan B should a player be hard to sign. So from the perspective, it's a very good deal. Teams will still try to sign their draftees, but failing that task is now far less damaging than it used to be.

The major drawback of the new compensation rule, however, is that it does open the opportunity for abuse. Should there be a particularly weak draft year, or should a team be a bit strapped for money (see the JimBo's 2001 selection of Jeremy Sowers), they can draft a (very unfortunate), not sign him, and know that they'll receive the exact same pick the following year. Meanwhile, that player effectively loses a year from his career. While most sources that Goldstein cited seemed to think it won't happen, as teams are generally under a crunch to get immediate returns from their first three picks, I think it is bound to happen now and then unless some effort is made to police this potential abuse of the system.

Nevertheless, I still like both of these changes a great deal, as they should reduce signing bonuses and help teams get their players signed and playing ball. And, from the perspective of a baseball franchise or its fans, that's the whole point of the draft.