When Stanford right-hander Mark Appel began his free-fall from the top spot to the eighth-overall selection due to signability concerns, many pointed to the new draft rules agreed upon in the most recent Collective Bargaining Agreement as the culprit.
The new draft rules call for each pick in the first ten rounds to have a monetary value. The draft budget for each team is the combined value of their respective draft picks in the first ten rounds. By now, most following the draft are aware that penalties exist for exceeding the draft budget — first a tax, then the loss of future draft picks. The catch is, though, that any unsigned pick in the first ten rounds costs that team the corresponding budget money allotted to that specific pick, and any bonus greater than $100,000 after the tenth round still counts toward the overall draft budget.
Thus, Mark Appel fell to the number eight slot held by the Pittsburgh Pirates because teams felt the Stanford pitcher would demand too much of their budget, and the worst scenario for any team would be that the two sides failed to come to an agreement. Little would happen to Appel. He would simply return to Stanford for his senior year and return for the 2013 Draft. Though for the major league team, they would not only throw away a first-round pick, but also forfeit a huge portion of their draft budget, which would handcuff their options in remaining rounds.
Despite the uncertainty surrounding the new rules, the vast majority of the players taken in the first round aligned with the best available talent. Even Florida State senior James Ramsey, who was drafted by the St. Louis Cardinals with the 23rd pick and largely seen as the biggest reach of the first round, was ranked as the 51st-best player available by Baseball America. That’s one slot higher than high school outfielder Lewis Brinson, who went six picks later to the Texas Rangers.
So, in some ways, the new draft rules worked as designed. Signing bonuses should be reduced due to the strict adherence to the overall draft budgets, and talent largely fell where it should in the first few rounds. No player floated out a Josh Bell type bonus demand like last year and dramatically fell to a team willing to meet his demands.
Perhaps more accurately, the new draft rules worked until the later rounds, especially rounds nine through eleven. That is when the true effect of the new budgets became realized. As J.J. Cooper of Baseball America wrote on Tuesday evening:
[T]eams had to know how to stretch their dollars, but just as importantly, how to make absolutely sure they would sign all of their picks in the first 10 rounds. So while talent was important, finding cheaper players after the first few rounds became even more important. And no draft commodity is cheaper than the college senior.
College seniors have no leverage in the negotiation process with teams. No option to return to school looms ominously over contract talks, generally allowing teams to sign college seniors for signing bonuses that fall under the recommended slot value. That money saved can then be allocated to other draft picks, allowing the organization to go over slot, if necessary.
Because of this, a huge influx of college seniors were drafted from rounds seven through ten, much more than in the previous year.
As you can see, the number of college seniors drafted per round after the fifth round in the 2011 Draft remained roughly consistent. Anywhere between four and seven seniors were drafted in rounds six through thirteen.
Compare that with the 2012 Draft, however, and we see a massive jump in college seniors drafted in rounds seven through ten. A whopping twenty-one college seniors were drafted in the tenth round, clearly as a calculated move to save money for other rounds because only one college senior was drafted in the eleventh round — the first round in which a team can fail to sign a player and not have it affect their individual draft budget.
The issue with the massive influx of signable college seniors being drafted in rounds seven through ten is that the ultimate goal of drafting players in the order of talent, not signability, gets thrown out the window.
For example, the Los Angeles Dodgers drafted second baseman Zach Babitt, a college senior from Academy Of the Arts University in San Francisco, California. By all accounts, the 22-year-old seems to be a pleasant young man, but Babitt is not a tenth-round talent. He should not be drafted thirteen slots ahead of prep left-hander Hunter Virant. Babitt is a 5-foot-7 infielder, who played for a 6-44 Division II team and hit one home run in 99 collegiate games. Virant, on the other hand, ranked as the 53rd-best player available in the entire draft.
Virant was the first player drafted in the eleventh round. Teams shied away from drafting him in the first ten rounds because the industry considers the high schooler a difficult sign, and no one was willing to risk a portion of their draft budget. Virant symbolized a run on high school talent after the tenth round.
After just three high school players went in the tenth round, twelve high school players were drafted in both the eleventh and twelfth rounds. Teams felt far more comfortable drafting many of these players after they were no longer risks to their budget, signifying yet again the later rounds became much more about signability than talent.
Much like we saw earlier, the 2011 Draft saw more stability between rounds. From round six to round fifteen, anywhere between seven and eleven high school players went per round. We did not see any major peaks and valleys, as we saw on Tuesday.
The new draft rules were lauded as a way to curb draft spending and to ensure draftees came off the board in the order of talent, not signability. With the premium placed on cheap, signable college seniors in rounds seven through ten — some of them college seniors who would have normally gone in rounds thirty through forty — we see that now, more than ever, the draft has become just as much about signability as it is talent.
J.P. Breen is a graduate student at the University of Chicago. For analysis on the Brewers and fantasy baseball, you can follow him on Twitter (@JP_Breen).