The End of the Draft

The baseball draft is half a century old this year. And maybe it’s time for it to go.

The draft has become an overly complicated machine, jammed with additions of moving parts, that is increasingly grinding innocent ballplayers between its gears. Trying to serve several purposes at once, it manages to be insufficient in some areas and redundant in others. It is, to use old-fashioned computer lingo, a kludge, and baseball would be better off writing itself some new code.

I have an idea for what that new system should be. Before I set it forth, I’ll sketch out how we reached the methods of recruiting new baseball talent we have today. Those thoroughly familiar with them may skip the coming section, but it’s not really that painful, and I do link to another THT writer’s work.

Where We Are Today

The recruitment of new players into the major leagues has evolved immensely since the beginning. Early on, somebody on or representing your team—the profession of scout didn’t really exist yet—would see fellows playing on a minor-league or college or even high-school team, decide they were good enough, and either buy up their contracts if they were pros or sign them to contracts if they were amateurs. The “scout” was often the manager taking advantage of a day off on the schedule or a trusted veteran player too banged up to play that day.

That ad hoc system developed into one with hired scouts, such as the fabled Dick Kinsella and Paul Krichell. Their recommendations sent many a player to the bigs—and it had to be right to the bigs, because farm systems did not exist, yet. Branch Rickey’s first great baseball innovation made it possible to gain control of many more players without choking the parent team with undeveloped rookies. The role of scouts, with many more slots open for players, flourished.

Eventually, bidding wars for prospects erupted, driving signing bonuses ever higher. Organized baseball tried to control this with the “bonus baby” rules, restricting teams’ abilities to control a player signed for a huge bonus. This was done both to limit labor costs and to keep rich teams from snapping up all the best prospects.

For an overview of this era, Steve Treder’s “Cash in the Cradle” article at THT is well recommended. To touch the main point here, evasions of both the dollar limit and the rostering rules were widely suspected. The rules were changed frequently, until finally the system was scrapped in favor of the amateur free agent draft in 1965.

The draft system has picked up accretions over the years, such as the compensatory round for teams that lost certain players to free agency in the preceding offseason and the more recent “competitive balance” round. Also, several years ago a “slotting” system was instituted by which draft picks were accorded dollar values. Teams had to keep total bonuses within the sum of their slot values, with compounding penalties for overspending the limits. Also, failure to sign a specific pick forfeited the slot value of that pick.

This last rule brought serious consequences in last year’s draft. The Houston Astros chose pitcher Brady Aiken with the first pick in the draft and were ready to pay him a $6.5 million bonus. After his physical, though, Houston greatly cut its offer due to worry over the UCL in his pitching arm. Aiken would not take the lowball offers, even when they rose to $5 million.

This not only cost the Astros Aiken, but two later-round picks also went unsigned because the lost slot value took away Houston’s flexibility to pay them over-slot bonuses. The Astros absorbed dreadful press over the incident, only slightly alleviated when Aiken’s UCL blew out and he had to have Tommy John surgery. The draft setup itself came in for rather less criticism.

The draft covers only the United States (plus its territories) and Canada, though even today that blankets the broad majority of players entering the pro ranks. Most of the rest, primarily from the Caribbean, are acquired as international signings. This used to be open season but has recently come under financial restrictions of its own.

Teams are given bonus pools based, like the draft, on reverse order of winning percentage. This money comes mainly in “slot values,” a leftover from a plan to institute an international draft that didn’t pan out. (The specific slot values can be traded, but only in the slot denominations.) The bonus money may be spent in whatever amounts the teams want. Soft caps on going over pool values bring heavy taxes on the overage and bans on spending over $300,000 on any one player in future signing periods.

For Japan and Korea, there is the posting system. Pre-free agency players can offer themselves to MLB if their teams allow it. MLB clubs then bid for the right to negotiate with that player, the winning bid acting as a transfer fee paid to the original team (if that team accept it). If the winning club can’t come to terms, the posting fee is refunded, and the player stays where he is. With Nippon Pro Baseball, there is now a maximum posting fee of $20 million. No limit exists with South Korea because their players haven’t been in such demand, but after the success of Jung-ho Kang ($5 million posting fee), we might soon see MLB negotiating a ceiling with the Korea Baseball Organization.

Where We Could Go

The system—no, systems—in place today have grown overly complex. The main draft, as the Aiken incident shows, can penalize some players for problems between other draftees and the drafting team. The three pipelines to MLB have been created without thought to making them work together, not to mention individually. It’s time they were re-created so they did.

The prime component of all three entry methods is money. The First Year draft has its slot values and spending caps. So do international signings despite not being a draft. The posting systems are all about compensating other major professional teams monetarily for the loss of a valuable player. Any reformed system needs to acknowledge the primacy of money in its functions.

What I propose is the abolition of the First Year draft and the gathering of all signings (except from posting nations) under a single umbrella. Each of the 30 teams will be assigned a pool of money, higher for the less successful teams in the previous season, as the caps are today. Over the following 12 months, they will spend from that pool to give bonuses to all the new players they sign: high school and college, domestic and international.

Choosing a start/end date for the pool poses a problem. The beginning of July would match the current cutoff for international signings and give a decent cushion after the close of the high school and college baseball seasons. The trouble is that pool sizes would be determined by finishing order the previous October. With a July start, it would be nine months before the season’s results began to affect signings and 21 months until it stopped. The lag time is too long and distorting.

It instead probably should be a calendar-year pool, which at least will be easy for fans to remember. This would leave a six-month gap to bridge when changing systems. MLB could calculate pro rata shares of the preceding draft and international pools. They could then either use those values as a discrete pool for those six months only or let them carry over into the first year of the new system.

The current signing pool caps are soft, with a rising scale of punishments as a team goes further over the maximum. I lean toward a hard cap, though it’s less a necessity for the plan than a personal preference. Soft caps are a bit pusillanimous, like drawing a line in the sand, then backing up and drawing another, and another. Sometimes a league needs to commit.

This could produce a hitch with Cuban players. Teams have blown through the international soft caps to sign high-profile Cubans, accepting restrictions to their signings in subsequent years to grab talents like Yoenis Cespedes and Yasiel Puig. Harden the caps, and you imperil those big contracts. A significant bump in the level of the new hard cap could accommodate teams gunning for Cuban talent, giving them room if they accept signing fewer American and Caribbean prospects as the price.

Even without a Cuban adjustment, the size of pool values will be higher than the sum of today’s domestic and international caps. Today’s domestic draft pool covers just the first 10 rounds plus high bonuses over $100,000 for later picks, meaning there is more spending happening than is covered by the caps. Instead of losing or gaining draft picks for signing or surrendering free agents, teams will lose or gain additional money to their pools. The competitive balance round likewise can be converted to additional pool money.

Players signed to baseball academy leagues in the Dominican Republic and Venezuela also would fall under the umbrella. These leagues exist to give young Latin American players a chance to develop without the complications of culture shock from playing in the U.S. (and Canada). Since all 30 teams have involvement in these leagues, there’s no real advantage for any team to gain. The cap probably will be nudged a bit higher to accommodate these players.

There will be no individual caps. Teams may spend as much on a single player as they wish, subject to the limits of their pools, which won’t be diminished by the failure to sign a prospect. There will be no more warped results where not spending on one player leaves a team with less to spend on another.

Of course, the occasional prospect will be stuck when a suitor spends so much on others there’s no longer enough room under the cap to sign him. He will have to content himself with whatever deal he can get from the other 29 teams in the league.

I considered bringing the posting system into this grand scheme, but on reflection I have declined because it doesn’t really fit. The North American and Latin American prospects are entering the pool of pro baseball players. Those being posted already have been pros for years. Their case is much closer to free agency than to initial signing, and the two shouldn’t be mingled.

Pluses and Minuses

The system I’ve proposed would have a number of beneficial effects, and to be honest would raise a few problems, as well. Naturally enough, I will look at the pros first.

1. Simplification
Systems made and maintained by humans tend toward added complexity. That complexity brings friction and waste and easily can slide into diminishing returns. MLB tried to get too complexly smart with its latest draft system, and the Aiken debacle was one result. The next CBA could see an altered system with added complexity, trying to fix the previous iteration but producing more opportunities for unintended consequences and unfair results.

Better, I think, to decide what core effects you are trying to produce with the current system and strip it down to the leanest design that will give you those effects. We don’t need both a draft and a restriction of bonuses to get the competitive results MLB is seeking. Just the latter will do, so just the latter should be used. My preference for a hard cap over escalating penalties fits in this category, as well.

2. More flexibility for teams
With today’s system, baseball teams can spend so much signing new players in North America, and so much internationally, and that’s it. The spending ratio this produces may not be the ideal one. Perhaps teams would be better off putting more money into American players, or maybe they’d be better off concentrating on the Caribbean.

I don’t claim to know what ratio is right, and I don’t have to. With the internal barriers taken down, the teams can make those calculations for themselves, going hard one way or the other, or taking a middle course. May the smartest front offices profit from their decisions. Would we sabermetricians want it any other way?

3. Greater autonomy for prospects
This easily could be the strongest selling point of the system to a skeptical public. For the last half century, drafted players could take it or leave it: sign with the team that drafted them or go do something else with their lives. For high-schoolers, “something else” includes college ball, giving them some negotiating leverage, but their options still are narrow.

With the draft ended, their options expand. Teams can bid openly, and competitively, for their services. Competition will push their bonuses up (subject to the countervailing weight of the caps, so don’t expect runaway inflation). Prospects will have choices, which will even include not signing for the biggest number. A kid who has always dreamed of playing for his favorite team will have far better than a one-in-30 chance of putting himself on the road to attaining his wish.

Giving greater freedom to kids as they jockey to enter the pro ranks would be excellent PR for baseball. There’s been recent grumbling (and lawsuits) over the terrible pay in the low minors, from a sense that players at this level are being exploited. The best way to alter perceptions is to change the underlying reality, and my draft-less system does that.

4. Reviving the art of scouting
It’s not that scouting itself has been eclipsed in the draft era, but the full competitive aspect has. You’re not hustling down America’s back roads to sign some obscure natural before others track him down, you’re fighting to move your prospect up a line or two on your team’s draft board. International scouting still has some of that hustle, though, and maybe North America should get it back.

It won’t be the same as the 1950s, of course. In an age of smartphone videos and YouTube, no phenom will stay any enterprising scout’s secret. But there still will be rich rewards for the discerning eye and the ability to form a bond of trust with some fresh kid with a future. Also, with the level of competition kicked up, teams will want more eyes, meaning more jobs for lifers who live and breathe baseball. Strengthening this unseen pillar of baseball is no bad thing.

There could, though, be a couple bad things that come with abolition of the draft.

1. Dodging the cap
Hinging the whole system upon money could tempt some front offices into a spot of fraud here and there. Some quiet money under the table to a hot prospect, to supplement the above-board bonus he’s getting, could make it easier to get great players while squeezing in under the cap. The last thing baseball needs is a lot of people doing something dirty while the league turns a blind, or at least bleary, eye.

Granted, it isn’t as if today’s system is immune to such worries. There is incentive now to use secret payments to skirt the caps. Hopefully the reason we haven’t heard of any teams doing this is because they fear the consequences, not because they’re too slick to get caught. My system, though, would make the incentive clearer, and MLB would need to show strong oversight to keep some struggling GM from taking a chance.

2. Losing Draft Day
MLB in the last few years has been trying to turn its draft into a promotional extravaganza similar to those of the NFL and NBA. Get rid of the draft, and you’ve given away that goal, making all that work a waste. Maybe this is a problem, but I don’t think so, because I believe MLB is chasing something here it can not catch.

The NFL and NBA drafts have an immediate impact, which brings an immediate interest to watching them, the MLB draft can not have. Other sports’ new players will be expected to turn a team’s fortunes the very next season. In baseball, the timetable for a draftee’s arrival and impact is measured in years, not months. Brandon Finnegan’s leap from the College World Series in June 2014 to the World Series in October of the same year was a great storyline, but largely because a player reaching the majors during the year he is drafted is so uncommon. (And kudos if any commentator said drafting Finnegan would boost Kansas City’s playoff run, but I don’t believe anyone was thinking that way.)

Additionally, the draft’s timing undermines MLB’s promotional goals. The NFL draft comes in April, deep in the offseason, giving a jolt of passion when it’s flagging most. The NBA holds its draft soon after the Finals but still when there’s no other basketball news. Baseball’s draft comes smack in June, fighting with its own slate of games for publicity. Without a huge disruptive change in the draft’s timing, MLB cannot get the promotional benefit from it that other sports do.

Cancelling draft day thus costs far less in utilitarian terms than MLB may fear. The greatest cost from leaving the field might come from sports reporters and commentators painting the move as a retreat from competing with the NFL and NBA, an admission of failure. This leads to the final negative, and probably the hardest to refute.

3. Public perception
Doing away with the draft could bring a firestorm of criticism upon MLB’s head. The headlines and hot takes (facts optional) are easy to imagine. Baseball’s dumping its only guarantor of fairness, so the rich are getting richer, and the players are getting used! It’s an act of desperation, more proof baseball is dying! They’re doing something differently from the other sports, so it must be wrong!

This last line of thinking irks me. Baseball does not have to be like every other sport, any more than other sports have to be like each other, or like baseball. It should not be afraid to be unique, especially as a good part of its appeal comes from its image as a unique part of American culture. The question should be, “Does it work for baseball?” I believe it would.

It’s still necessary to persuade the public that it’s a good, or at least not an evil that should turn them from the game. My method would be forthrightly stating what baseball is trying to accomplish with the new system. Harp on the first three positives* I listed, especially the third. Cutting red tape should resonate with the average fan, broader options for teams might, but greater freedom for new players would be the greatest tool in placating critics.

* The flourishing of scouts is, literally, inside baseball. Don’t complicate things making that case.

Perhaps I’m anticipating more trouble than there would be. I’ll live with that. Better to be prepared for woes that don’t come than to be blindsided and fumble for a response. Besides, I’m trying to be fair in balancing the positives of my not-so-modest proposal.

Conclusion

Do I think baseball will adopt this system or something close to it? Perspective check: I’m one man with no real fame or influence writing at a baseball site. The chances I could push baseball into a reform like this are about the same as a single game having three triple plays, one of them unassisted.

But to give credit where it’s due, Commissioner Rob Manfred might just be the person to make such a leap. In his short tenure in office, he’s shown on several occasions he is open to radical ideas in baseball. He isn’t always embracing them—note the very short kerfuffle over a possible ban of defensive overshifts—but he will give them a hearing. And if the media and Internet don’t rise up in horror as in the overshift matter, he may give them serious thought.

The draft, and international signings, deserve that serious thought. My further opinion is that such serious thought will bring the conclusion that they deserve a better system than they have. Once that is decided, many things are possible. Even something as wild as an obscure baseball writer thinking up the new signing system before the Commissioner of Baseball does.

Or even something as wild as a THT Comments section coming up with the new signing system. Because I don’t imagine I’m going to be the last word here.

References and Resources

• Baseball-Reference’s Bullpen
• Baseball America and MLB Trade Rumors
• Craig Robinson, Flip Flop Fly Ball, to double-check MLB nationality ratios