First Round Compensation (Part One)

After reading Buster Olney’s column yesterday morning, I had a brief conversation with Jonah Keri about draft slotting and compensation. I half-heartedly threw out the suggestion that perhaps compensation should be altered so that players have to spend a certain amount of time with their last team to qualify for compensation; the thought being that those compensatory matters only exist to help teams replace exiting homegrown talent. I think I threw out a number along the lines of 60% of their plate appearances or innings should come with the team benefiting.

The ramifications of such a move would alter the trade value of those players while also raising the value of the draft picks as the supply dwindled. Curious, I decided to look into just how much time most of the players are spending with the teams being rewarded with draft picks. Beginning with the 2000 draft and ending with the 2010 draft, I went through and noted each player who returned a first round draft pick and/or first round supplemental draft pick. I did not – and this is important to note – include players who returned picks later than that; meaning I focused on Type-A free agents.

From there, I took each of the teams that these players returned draft picks for and figured out the percentage of the player’s career plate appearances or innings pitched (to that point in the player’s career) came with the compensated team. That explanation might be a bit confusing, so let me write through a real life example.

Take the 2007 draft. Carlos Lee brought in two first round picks for the Texas Rangers. Lee had racked up a total of 260 plate appearances with the Rangers the season before out of 5,029 plate appearances for his career. Two sixty divided by 5,029 is roughly 5% of Lee’s total plate appearances through 2006, and yet, the Rangers are the ones who landed those picks.

Now, obviously, it’s not that simple. The Rangers did give up talent in order to secure Lee’s rights and significant talent at that, but the point is: if the compensation rules are designed to replenish teams losing homegrown talent, then examples like this one prove that it doesn’t work. At least, if these examples are in the vast majority, which is what we’ll examine later today.