A Possible Loophole in the New Draft System

By Guest
Updated: June 28, 2012

This article was written by Eugene Tierney.

Some people were scratching their heads on Tuesday as day 2 of the MLB draft progressed. There were some big name high school kids that weren’t take early on and there were quite a few teams making questionable picks. The Cardinals were one team and I was getting extremely frustrated.

Then something unexpected happened, and the reason for it is pretty simple.

As I noted over the weekend about the changes for the draft, there is a bonus pool that teams have been assigned for their picks. What I didn’t mention was if a player drafted in the first 10 rounds does not sign, the team loses the assigned slot value for that pick and their bonus pool is decreased.

Also, picks made after the 10th round are assigned a recommended bonus of $100,000; anything over that amount comes out of the bonus pool. If they don’t sign a player picked after the 10th round, they don’t lose a thing.

In the 11th round, the Astros select Hunter Virant, a lefty from Camarillo HS in CA, with their first pick of the round. Virant was a late first round talent that dropped due to signability. The Cardinals followed suite 21 picks later and selected Trey Williams of Valencia HS in CA; Williams was expected to go late in the supplemental round.

These picks, followed by a few others, surprised a lot of people; then the reasoning leaked out.

These picks, if not signed, do not subtract from the bonus pool. To off-set the above slot deals, both teams took a couple of college seniors in the first 10 rounds (3 for the Cardinals and 2 for the Astros).

College seniors have little leverage; they can’t go back to school and many teams wouldn’t spend a draft pick on them the following year. This tends to allow teams to sign them to deals that are below what a similar player who has college eligibility remaining would get.

It’s also worth noting that the Blue Jays drafted college seniors from round 4 through 10, after taking some big name high school players; in fact, they have a few guys from the first 3 rounds that will want above slot money to sign.

I haven’t been able to confirm this, but I’ve heard that the minimum a player can sign for is 40% below the recommended slot value. How does it help teams by taking seniors?

Round	Player	Team	Bonus	40%	Savings
1	James Ramsey	Cardinals	$1,775,000	$710,000	$1,065,000
7	Kyle Barraclough	Cardinals	$143,300	$57,320	$85,980
10	Jacob Wilson	Cardinals	$125,000	$50,000	$75,000
Total Savings					$1,225,980
7	Preston Tucker	Astros	$151,400	$60,560	$90,840
10	Joseph Bircher	Astros	$125,000	$50,000	$75,000
Total Savings					$165,840
4	Tucker Donahue	Blue Jays	$308,700	$123,480	$185,220
5	Brad Delatte	Blue Jays	$231,100	$92,440	$138,660
6	Eric Phillips	Blue Jays	$173,200	$69,280	$103,920
7	Ian Parmley	Blue Jays	$145,000	$58,000	$87,000
8	Harrison Frawley	Blue Jays	$135,400	$54,160	$81,240
9	Jordan Leyland	Blue Jays	$126,400	$50,560	$75,840
10	Alex Azor	Blue Jays	$125,000	$50,000	$75,000
Total Savings					$746,880

This plan of attack would work best for the Cardinals, except I don’t see Ramsey signing for under $1MM, let alone a little over $700k. If this were to work, the Cardinals could afford one of Williams and Max Foody.

The Astros have much less, but almost $165k would be a good starting point. I would normally think they would need that additional cash to sign Lance McCullers Jr, but it’s reported that the team will be signing first overall pick Carlos Correa for $4-5MM; the slot for #1 is $7.2MM. Virant will be a hard sign; he’ll want just under what McCullers gets.

The Blue Jays save quite a bit, but I doubt it’s enough to get all of their guys signed. 3rd round pick Anthony Alford has said he probably won’t sign so he can play college football. They should be able to sign first rounder D.J. Davis below slot, but have to pay up for supplemental pick Matt Smoral.

The benefit for the Cardinal and Astros is they won’t lose the bonus money if they don’t sign their post-10th round high school picks, where the Blue Jays would have to lower their bonus pool if they can’t get a deal worked out with their guys in the first 3 rounds.

Other teams have picked up on this too, so we’ll see how it plays out in the end and if the commissioner’s office tries to re-work the draft again.