Thursday, April 10, 2008

A Future Boras Bonus Baby

On Tuesday, Jason at IIATMS noted how Boras and the big revenue teams are taking advantage of the draft's more or less voluntary slotting system -- and the small revenue team's self-defeating adherence to it -- by paying top-of-round prices for bottom-of-round picks:

The Tigers were able to nab uber-prospect Rick Porcello late in last year's draft by paying him like he was the #1 pick. So long as there is no mandatory slotting system (Union would NEVER agree to this) and no penalty for ignoring the "guidelines" suggested by MLB, the wealthier teams will continue to make a mockery of the draft. I think this is a great strategy for these teams.

The truth is, any team can do this, but few do. The cost to overpay for talent before it really blossoms is much less than trying to pay for it once it does. Also true is the fact that "can't miss" prospects do miss sometimes. But for teams like Pittsburgh and Kansas City and Florida and Tampa Bay, it might make fiscal sense to spend a bit more early than choose a lesser player to save some money. Given the amount of money these smaller market teams are receiving from Revenue Sharing and Luxury Tax payments, this seems an area to be investing those payments.
Today, USA Today profiles Eric Hosmer, the very player that Pittsburgh, Kansas City, Florida, and Tampa Bay should snag in the event they have the good sense to listen to Jason's advice:

Hosmer's hitting became prodigious — his home runs are hits — and scouts noticed. The Boras Corp. noticed, too. Boras representatives approached the Hosmers between Eric's sophomore and junior years. The Hosmers knew Boras' reputation. They listened to what the reps had to say.

"There were concerns," Mike says. "We addressed those when they made their presentation. Their presentation was jaw-dropping. Their guidance and support has been amazing."

Says Eric: "Half the other people we listened to spent most of their time telling us why we shouldn't go with the Boras Corp. What impressed us the most is that they are behind my decision either way."

The Hosmers haven't reached a decision on Eric's future. College or signing with a MLB team are possibilities. "We're going to meet with the Boras Corp. a week before the draft, and we will discuss what Eric's value on the market is," Mike says. The Boras Corp. can offer advice but advice only. Hosmer retains his amateur status as long as he doesn't accept money or sign a contract.

The family reads the Internet. Message-board posters write that Hosmer will fall in the draft because he, in conjunction with Boras, will ask for big dollars.
You can pretty much bank on Hosmer signing with Boras. For all of his recent bad press, Boras' presentation is impressive, and he can offer players the best of both worlds: big money and a place in a rich, winning organization by virtue of the scare tactic he has unleashed on those high-pick teams too stupid to take advantage of the system as it is currently constructed.

Ultimately, baseball will have to deal with its broken draft. Until then (a) all's fair in love and war; and (b) Eric Hosmer will likely be playing for the Gulf Coast Yankees this summer.


Dre said...

Slot system is truly a joke, but the DBacks say Thank You for landing Drew, Scherzer, and Parker at picks well below their talent level.

Jason said...

hey, that's me. Glad you liked the slotting article. It's been a joke for a while, only getting worse.

Will be interesting to see how the Pirates treat the slotting now that their CEO (Coonelly) used to be the slotting czar.

Peter said...

The slotting pressure from the commissioner's office is a freaking joke. You'll rarely find me cheering on the MLBPA, but I hope they rake the owners over the coals for this crap sooner rather than later.

Anonymous said...

I think enough teams are on to this that if this guy is really that good, he won't fall all the way to the Yanks. Sure, he might not end up the #1 pick, but there are other teams who are willing to deal with Boras and pay over slot. See the Orioles last year with Matt Weiters and Jake Arrieta.

Pete Toms said...

This is a great subject.

MLB is acutely aware that the Rule IV draft isn't working. Selig's "slot recommendations" ( what happened to the PA's sabre rattling over collusion? ) are largely ignored and the new signing deadline and future compensatory picks for teams not signing their picks did not have the desired effect of lowering costs.

MLB knows the draft is inflationary and it is one of the primary reasons that more and more amateur talent is being recruited from outside the US. Selig has appointed Schuerholz to review the draft and recommend changes ( whatever that means )

Some small markets have decided that they are better off competing against big markets in the draft as opposed to in the ever shrinking FA market. This quote from Jim Callis, post last year's Rule IV draft.

"The Yankees aggressively signed players in last year's draft, and did so again, spending $7,432,500 in the first 10 rounds. But the Orioles ($7,672,500) and Nationals ($7,619,300) outspent them there, and the Tigers ($7,305,000), Devil Rays ($7,172,000) and Giants ($7,027,000) came close."

I think some big, fundamental changes are on the horizon. Tom Werner and Andrew Zimbalist have both been recently quoted as stating that MLB spends $20 million per club ( $600 million industry wide ), per season on player development ( salaries, draft bonuses, minor league salaries etc. )

I think this is why Selig has been so active on the Rule IV front and will continue to be.

And yes ( this whole diatribe is messily stated ) as it currently exists the draft doesn't serve the purpose of the shittiest teams acquiring the best amateur talent ( unless they go " over slot " )

I think trading of draft picks would help a lot but Mr. Callis ( and I respect his opinion ) disagrees with me.

Jason said...

Pete, you bring up a good point about the inability to trade draft picks. Frankly, I can't understand why they won't change this rule. Let the picks become another form of currency with which to negotiate and covet.

The Japanese posting system and the ability for non-US born players to circumnavigate the draft furthers the disparity. The Dice K situation is a perfect example. what happens when Yu Darvish is posted? And what about Salcedo? He's going to get alot with nothing to limit or restrict teams.

Voros McCracken said...

"Selig's "slot recommendations" ( what happened to the PA's sabre rattling over collusion? )"

Because these players are not part of the union, they are not covered under the CBA. And because Baseball still has its anti-trust exemption, anti-trust laws don't come into play either.