Abolish The Draft

After watching Stephen Strasburg break a record for the largest bonus signed through the draft, it’s not a big surprise that Bud Selig is talking tough on mandatory slotting and saying that he’s going to be “very aggressive” in trying to implement a worldwide draft in the next round of CBA negotiations. The commissioner has continually seen the draft as a place to reduce labor costs for the owners, and the MLBPA is more agreeable to bargaining away the rights of non-union members than making concessions that effect players already in the union.

However, I think there’s a better way than a worldwide draft. So, since the commissioner is looking for options other than the current system, here’s my proposal for how to overhaul the acquisition of amateur talent.

This year, teams spent about $160 million on signing their draft picks, pretty much the same as last year. Baseball as a whole spends a little less than $50 million signing international free agents every summer as well, so the current output of bonus money for those two pools of player is around $200 million per season. The revenue sharing agreement currently in place, which transfers money from big market teams to small market teams, shifts more than that around each year.

My proposal would take $200 million from the revenue sharing pool and redistribute it for the purpose of creating budgets for yearly amateur talent acquisition. The draft is eliminated all together, and instead, a worldwide unsigned player auction would be held each summer. College kids, high school kids, international kids – all of them would be eligible for open bidding, where agents could negotiate the best deal they could get for their client with any team that is interested.

Each team would be capped at spending no more than allotted through the revenue sharing pool, which would be based on a two year moving average of their ranking in winning percentage. So, for example, the $200 million could be split up like this.

Average Win% over last two years, descending order.

Teams 1-5: $2 million each
Teams 6-10: $3 million each
Teams 11-15: $5 million each
Teams 16-20: $8 million each
Teams 21-25: $10 million each
Teams 26-30: $12 million each

The top tier teams who have been winning recently would receive small sums of money that would essentially take them out of the running for the premium talents. Given that the teams that finished in the bottom half would likely be willing to bid ~60-70% of their budgets on the top guys available, the Strasburgs of the world would probably command bonuses in the $7 or $8 million range, which the winning teams would not be able to match.

By giving each team a player acquisition budget, you also open up new strategies for teams to pursue. Like the international crop a lot more than the American kids? You could sign practically everyone you want with $10 or $12 million and skip the domestic players entirely. Want to load up on the best kids from your home state? Sign them all if you want. Think your team needs an infusion of pitching immediately? Bid on college arms and college arms only.

Teams would have flexibility to pursue the types of players they wanted, which would allow for more efficient team building strategies. The system would still funnel the best players to the teams that needed help the most, while also simultaneously ensuring that a massive part of the revenue sharing money did not go into the pockets of the owners.

It would be good for the players, giving them a choice over which organization to join and letting market forces dictate their bonus money. It would be good for the owners, giving the system a fixed cost that they’ve been pursuing for years. It would be good for the front offices, allowing for more options than currently available in shaping the strategies of how players are brought into the organization. And it would be good for the fans – every single team could theoretically have a shot at signing their local star talent, encouraging enthusiasm in high school and college ball that doesn’t currently exist.

If the two-prong goals of the draft are to put a ceiling on amateur talent costs and redistribute the talent to teams that need it, this would accomplish both goals as effectively as mandatory slotting without the whole Scott-Boras-Suing-Us-Every-Year thing as he looks for reasons to blow up the draft. There would have to be details to be worked out, of course (how are major league contracts handled? Can teams roll money over from one year to the next? What do you with Japanese players?), but I think the overall structure could work really well.

Abolish the draft, set budgets for teams to sign players via a pool of money pulled from revenue sharing, and open the bidding for any player not under contract to a professional team each summer. It’s a total 180 from the direction that Selig is headed, but I think it would work.

Dave is the Managing Editor of FanGraphs.

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Andy S
14 years ago

I don’t think it’s right to punish teams for performing well. Something like this would reward teams like the Astros year after year for poor drafting, farm management, and in-team performance, while depriving a team like the Rays who have won by drafting very wisely of money.

14 years ago
Reply to  Andy S

Doesn’t the current system already “punish” teams that perform well? And I may be mistaken on this, but didn’t the Rays get a bunch of higher draft picks because they were crappy for so long?

Andy S
14 years ago
Reply to  Richard

Right, but this is much more extreme. The current method allows well performing teams to still build for the future, but gives “crappier” teams an edge. What Dave Cameron is suggesting would pretty much remove front-end teams from the draft altogether (i.e. would only allow them to get much later picks).

Additionally, if the players know about this, it’s an excuse for front-end teams to lowball talent.

14 years ago
Reply to  Andy S

Yeah, I don’t understand what you’re saying. This system is just like the draft except it gives everyone a little more flexibility. The real question would be how much is allotted to each team based on where they finish. I’m not a big fan of having a step function where team 25 gets $10 mil and 26 gets $12 mil.

It’s a good starter for discussion. The MLB could be a bit more competitiveness, but the sport and playoff design are the major determinants (NBA is much less because winning teams win higher %s/lower variance, NFL much more because of one and done playoff/small sample size).