Five-Round MLB Draft a Shortsighted, Pound-Foolish Move
While many have moved on to a potential renegotiated deal between the players and owners to get the season underway, MLB’s decision to stage a five-round amateur draft shouldn’t get lost in the shuffle. On Friday, Jeff Passan and Kiley McDaniel broke the news that this year’s June draft will last just five rounds. The news wasn’t a total surprise given that when the players and owners negotiated back in March, the sides agreed that the draft would be at least five rounds, but would be considerably shortened. However, given the relatively low present and future cost of having even five more rounds, it’s something of a surprise that the owners refused to put down the half a million dollars per team in 2020, with a quarter million dollars more in bonuses payable in 2021 and 2022.
The agreement in March specified that the draft would stick to 2019 slot amounts, saving owners a little over $8 million from what was in the CBA. In addition, teams would have to pay just $100,000 of player’s bonuses now, with the rest of the payments split between 2021 and 2022. In 2020, that means owners will spend around $15 million in signing bonuses, a $300 million reduction from a year ago. Coupled with the delayed international signing date, the owners are seeing $400 million in 2020 savings, with roughly $80 million of those savings permanent. Last year, teams spent $50 million more than their allotted amount on bonuses for players after the 10th round, which won’t happen this year. There’s also $30 million allotted for rounds six through 10, which also won’t happen this year. According to Passan, that decision didn’t sit well with front offices:
There remains a significant divide within the team side on the draft. A majority of front offices were pushing for a longer draft, recognizing the value reaped even in later rounds can be immense. Pushback to keep the draft as short as possible from some owners was strong.
— Jeff Passan (@JeffPassan) May 8, 2020
Given the $100,000 limit on bonuses to be paid this year, owners opted not to spend half a million per team right now and $1 million spread over the next three years to prevent 150 talented amateurs from turning pro. Teams can sign players after the draft, but undrafted free agents are limited to $20,000 bonuses. The types of players drafted before the 10th round are not the types who agree to $20,000 bonuses unless teams are shifting around money to give other players larger bonuses. The players who would have received decent bonuses in these rounds are now going to stay in school for another year or in the case of high school players, go to college or junior college in the hopes of being drafted in future years. There’s an argument to be made that all of these players will eventually get drafted, so it doesn’t make much of a difference for teams. That argument is not strong. Read the rest of this entry »

