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jmcclain19
10-25-2006, 03:21 PM
Pretty substantial changes to how the baseball draft works have been implemented in the new bargaining agreement.

No more draft and follows are allowed - a total change in compensation for not signing a 1st round pick, and a uniform Aug 15th deadline for picks to be signed. Also added years to when players are to be made available for the Rule V Draft - which take effect immediately.

http://www.baseballamerica.com/today/draft/news/262720.html


New Agreement Includes Draft, Rule 5 Changes

By Alan Schwarz
October 25, 2006

ST. LOUIS -- Overshadowed by more wide-ranging issues and the sheer euphoria of an agreement between Major League Baseball and the Players Association being reached with no rancor or threats of a work stoppage, the structure of the new five-year Collective Bargaining Agreement announced yesterday between labor and management did carry some significant changes to baseball’s amateur draft and player-development pipeline.

Several draft alterations, ranging from a uniform Aug. 15 signing deadline to compensation for unsigned picks, will change how both teams and players experience the process, as well as how much and when money changes hands.

The most notable changes are those that deal with draft-pick compensation--both for teams that fail to sign a high pick as well as those who lose major league free agents in the offseason.

Teams that fail to sign a first-round pick no longer receive an extra pick after the first round as compensation, but instead a virtually identical pick the following year; for example, a team that fails to sign the No. 5 pick one year will receive the No. 6 pick the next, rather than one in the 30s or 40s. The same compensation also now exists for unsigned second-round picks, while a team that fails to sign a third-round pick will receive a sandwich pick between the third and fourth rounds.

The new system should decrease the growth of bonus payments to amateurs, as teams can walk away from negotiations with the reassurance of having a similar pick the next year. (Although that compensation pick, if unsigned, is not subject to compensation, which keeps clubs from using it over and over.) Clubs have for years wanted a system of prescribed, slotted bonuses for every high pick but learned early in the negotiations that the union would not accept it, so instead focused on stronger compensation rules.

"The concern with clubs was to get that club that was drafting as much leverage that they can have, so they can select the best player they possibly can," said former Cubs president Andy MacPhail, a member of ownership’s negotiation team. To the extent that bonus offers will probably either decrease or not grow as quickly because teams can walk away more comfortably, union executive director Donald Fehr said, "It will clearly have an effect. It will clearly not put (players) in the position that they would have been in had slotting been accepted. You have to find compromises."

One other change to the amateur draft is a uniform signing date of Aug. 15 for all players (other than college seniors), replacing the longtime and clumsy deadline of the moment a player literally attends his first four-year college class. In addition to creating some order for all involved--from teams to players to college coaches wanting an earlier idea of their incoming class--this also eliminates the junior-college, draft-and-follow rule in which players who attended two-year schools could sign with their drafting club until one week before the following draft.

Several ideas that have been discussed over the years, such as the trading of draft picks and an either supplemental or combined draft of all players worldwide, were not adopted. Also, the draft will continue to be held in June rather than be moved to July.

"The changes in the draft will help the teams in the bottom of the industry," MLB CEO Bob DuPuy said, "because they’re getting better draft picks."

Some changes have been made to the draft-pick compensation afforded teams which lose major league free agents. Type C free agents have been eliminated, while teams that lose Type B free agents, which had previously received a pick from the signing club, will now get a sandwich pick between the first and second rounds. (This was pursued by the union to remove the disincentive for teams to sign those players.) Those changes go into effect immediately.

The number of players deemed Type A and B has been tweaked as well. Type A free agents, whose former team continues to receive a first- or second-round pick from the signing club as well as an extra pick between the first and second rounds, will be reduced from the 30 percent of players (as determined by a statistical formula) to 20; the Type B band is reduced from 31-50 percent to 21-40.

These changes will take effect next offseason, allowing clubs which lose free agents this winter the same compensation they had always expected. Teams must still offer players salary arbitration to receive draft-pick compensation, though the deadline for that offer was moved up from Dec. 7 to Dec. 1.

The first-year player draft, also known as the Rule 4 draft, was not the only draft process altered by the new CBA. The major league portion of the Rule 5 draft will be affected by giving teams one extra year to protect players from it.

Rather than teams being allowed three years (for players signed at age 19 or older) or four years (for players 18 and younger) before leaving them off the 40-man roster subjects them to the Rule 5 draft, those periods have been lengthened to four and five. Ownership considered this a significant boost in their efforts to operate their minor league systems more effectively.

"It gives the clubs more flexibility with their roster," said MacPhail, who added that the cost to select a player ($50,000) or get him back from the selecting club ($25,000) remain the same.

"Anytime you can give them more tools to operate as efficiently as they possibly can is something we strive to do," he continued. "There are a lot of kids at that stage where you’re just not quite sure whether you want to get that clock ticking--the last thing you want to do is take a talented 22-year-old kid who’s not ready and you develop him for somebody else. Or often you’ll see guys taken out of A-ball who aren’t close but they get plucked out of the Midwest League. You try to let the developing clubs get as much time as they possibly can to make the best decisions they can."

This rule applies to this current offseason, meaning that many minor league players who had expected to either be placed on the 40-man roster or be subject to the Rule 5 draft will have to wait another year. The union did negotiate a higher minimum salary for 40-man roster players optioned to the minor leagues ($60,000 next year), but acknowledged that this was a significant concession to ownership.

"That was one of the major things we had to give up, no question about it--to me it was the worst thing we had to give up," said Diamondbacks infielder Craig Counsell, a player representative to the union negotiating team. "Some players, especially immediately, are going to be hurt by that--this year. But in the end, you have to give up something to get something."

Team Clark
10-25-2006, 03:35 PM
Alot of hard work went into this process. There were far more people involved in the "backroom negoatiations" than that of any other time I haver ever heard. This was truly a "collective" process.

Red Leader
10-25-2006, 03:47 PM
So, if I'm understanding correctly, if in an amateur draft there are only 19 "stud" prospects and then a pretty big drop off, and you draft 20th, you can pick whoever you want, not sign them and get a #21 pick the following year? Same situation in the 2nd round. You draft 20th in the second round. You only like 19 players in the 2nd round, so you draft someone, don't sign them and get the 21st pick the next year.

Now, what if you are the Royals. You have the #2 pick. You draft a Boras client, don't sign him and finish with the worst record in baseball in 2007. You now have the #1 and #3 picks in the draft for 2008.

Hmmmmm.

KronoRed
10-25-2006, 03:48 PM
Punting your first round pick is no longer terrible, someone tell Bowden ;)

Johnny Footstool
10-25-2006, 04:45 PM
So, if I'm understanding correctly, if in an amateur draft there are only 19 "stud" prospects and then a pretty big drop off, and you draft 20th, you can pick whoever you want, not sign them and get a #21 pick the following year? Same situation in the 2nd round. You draft 20th in the second round. You only like 19 players in the 2nd round, so you draft someone, don't sign them and get the 21st pick the next year.

Now, what if you are the Royals. You have the #2 pick. You draft a Boras client, don't sign him and finish with the worst record in baseball in 2007. You now have the #1 and #3 picks in the draft for 2008.

Hmmmmm.

I like it. It allows cheap clubs like the Royals to gain more through the draft without shelling out crazy signing bonuses to unproven kids.

It also allows cheap clubs to re-draft prospects who refused to sign with them the previous year. For instance, some stud HS outfielder gets drafted by a team with the #7 pick, but refuses to sign. The next year, the team gets its regular pick (#10 for the sake of argument) plus the #8 pick as compensation. So they draft the same HS outfielder again (with the #10 pick this time, not with their compensation pick) and tell him he can either sign or go earn $15K playing in the Independent League for a second straight year. No skin off their backs, because they still have a first-round pick and they'll get the #11 pick as compensation next year. Nice.

TOBTTReds
10-25-2006, 05:01 PM
So, if I'm understanding correctly, if in an amateur draft there are only 19 "stud" prospects and then a pretty big drop off, and you draft 20th, you can pick whoever you want, not sign them and get a #21 pick the following year? Same situation in the 2nd round. You draft 20th in the second round. You only like 19 players in the 2nd round, so you draft someone, don't sign them and get the 21st pick the next year.

Now, what if you are the Royals. You have the #2 pick. You draft a Boras client, don't sign him and finish with the worst record in baseball in 2007. You now have the #1 and #3 picks in the draft for 2008.

Hmmmmm.

That's what I thought of too, but can a team like that afford a #1 and #3 pick? That could be $8 mil in bonuses just on your first two picks.

15fan
10-25-2006, 05:34 PM
Teams that fail to sign a first-round pick no longer receive an extra pick after the first round as compensation, but instead a virtually identical pick the following year; for example, a team that fails to sign the No. 5 pick one year will receive the No. 6 pick the next, rather than one in the 30s or 40s. The same compensation also now exists for unsigned second-round picks, while a team that fails to sign a third-round pick will receive a sandwich pick between the third and fourth rounds.

The new system should decrease the growth of bonus payments to amateurs, as teams can walk away from negotiations with the reassurance of having a similar pick the next year. (Although that compensation pick, if unsigned, is not subject to compensation, which keeps clubs from using it over and over.)


Seems to me that the guys who get selected with comp picks are going to end up with a heck of a lot of leverage. I think that a couple years into this, the owners are going to regret this.

I wish they would have modified the rules so that either draft picks could be traded, or that draftees could be traded much earlier than the current 1 year obligation with the drafting/signing team.

Red Leader
10-25-2006, 05:46 PM
I like it. It allows cheap clubs like the Royals to gain more through the draft without shelling out crazy signing bonuses to unproven kids.

It also allows cheap clubs to re-draft prospects who refused to sign with them the previous year. For instance, some stud HS outfielder gets drafted by a team with the #7 pick, but refuses to sign. The next year, the team gets its regular pick (#10 for the sake of argument) plus the #8 pick as compensation. So they draft the same HS outfielder again (with the #10 pick this time, not with their compensation pick) and tell him he can either sign or go earn $15K playing in the Independent League for a second straight year. No skin off their backs, because they still have a first-round pick and they'll get the #11 pick as compensation next year. Nice.

Good find, Johnny. I was just about to type...no they wouldn't get a compensation pick the 2nd year, but I see what you're saying...don't use the comp pick to draft him again, use your regular 1st round pick and then you will get compensation for that the next year.

Why wouldn't all teams do this? Why wouldn't you punt your 1st round pick this year and get 2 next year. Even if you do it in the 2nd round this year. Draft one solid player and one total reach pick with the other first rounder. Worst case, you've got two picks every year. Best case you've got two studs to add to your farm system and only 1 pick the next year...

Mario-Rijo
10-25-2006, 06:58 PM
Originally posted by AvesIce51
That's what I thought of too, but can a team like that afford a #1 and #3 pick? That could be $8 mil in bonuses just on your first two picks.


I wonder how soon it will be before some f.o. (Bowden?) guy decides that he can do that to skirt a year, sign the comparable pick next year and not sign the other 1st rounder until some dollars come flowing in from some expected TV deal or some big salary comes off the books etc. They can't do it to the same guy/pick more than once but they can do it with there other pick year after year.

Johnny Footstool
10-25-2006, 06:59 PM
Why wouldn't all teams do this? Why wouldn't you punt your 1st round pick this year and get 2 next year. Even if you do it in the 2nd round this year. Draft one solid player and one total reach pick with the other first rounder. Worst case, you've got two picks every year. Best case you've got two studs to add to your farm system and only 1 pick the next year...

It might be difficult to punt a 1st rounder if you found a good one. However, it would certainly make sense if you drafted in the lower half of the first round. You could simply make an extremely lowball offer and pocket the draft pick if he turned it down.

Gallen5862
10-25-2006, 07:43 PM
I like the fact that the first 3 rounds in the draft are allowed comp picks for not signing the previous years picks. I also like the fact that players get 1 more year before having to be protected in the Rule V draft. What happens to this years draft and follows? Will they still be allowed to sign before the 2007 draft?

KronoRed
10-25-2006, 10:27 PM
/\
The new agreement doesn't go into effect until next year, so yes they will.

Gallen5862
10-25-2006, 10:38 PM
Thanks Kronored. I was thinking it would still be allowed. It was confusing that somethings start now with new arbitration offer deadline of Dec 1.

IslandRed
10-26-2006, 12:34 PM
Why wouldn't all teams do this? Why wouldn't you punt your 1st round pick this year and get 2 next year. Even if you do it in the 2nd round this year. Draft one solid player and one total reach pick with the other first rounder. Worst case, you've got two picks every year. Best case you've got two studs to add to your farm system and only 1 pick the next year...

Well, for one thing, if all teams didn't sign their first rounder this year, next year's first round would have 60 picks in it. There would be a dilution issue.

One of the things the article doesn't make clear is how the comp picks dovetail with the regular picks. The example is that if #5 doesn't sign its pick, next year it gets #6. I think that probably means the comp pick comes after the #5 regular pick but before the #6 regular pick, not that the team is guaranteed the sixth overall pick for its comp.

Slider
10-28-2006, 03:49 PM
Why wouldn't all teams do this? Why wouldn't you punt your 1st round pick this year and get 2 next year. Even if you do it in the 2nd round this year. Draft one solid player and one total reach pick with the other first rounder. Worst case, you've got two picks every year. Best case you've got two studs to add to your farm system and only 1 pick the next year...

Remember that these negotiations are not in a vacuum. If MLB teams find a way to abuse the rules and punish draftees in an effort to force down signing bonuses...you can bet that will be the focal point for the next CBA.

It gives the teams more leverage...but given all things equal...we really want the best players we can get each year working their way through our system so they can help the Reds on the field or be available to trade for MLB players at positions of need.

It is not in our best long term interest to punt draft choices...but it does protect us better if we make a good faith offer and the kid won't sign...we at least salvage the draft pick.

:cool:

edabbs44
10-30-2006, 12:21 PM
Still doesn't solve the biggest problem...international players. It's like a separate draft for the big markets to spend big time $$$ to get trading chips. The NYY have played this to a tee over the years. How's Jackson Melian doing, btw?

LoganBuck
10-31-2006, 12:41 PM
What kind of compensation may the Reds be in line for, in regards to their free agents?

dfs
10-31-2006, 02:48 PM
Remember that these negotiations are not in a vacuum. If MLB teams find a way to abuse the rules and punish draftees in an effort to force down signing bonuses...you can bet that will be the focal point for the next CBA.

Right and the flip side of that is that technically the draftees (and the minor league guys being hit by the change in ruleV status) are not members of the union. The union seems to have negotiated away a good deal of things that benifited players, but not players who are members of the union.

The only thing the union seemed to get is an increase in the minimum salary for the lowest paid members of the union. That's win/win. The owners get much more control over minor league players that the union doesn't represent and the union can go back to the 10-15 guys making the minimum on each roster and say "look what we did for you."

Lowering the % of free agents that are tied to draft picks will decrease the actual cost of letting a guy go free agency. The owners are trying to flood the free agent market in order to try and drive salary down.

D-Man
11-02-2006, 01:38 PM
Lowering the % of free agents that are tied to draft picks will decrease the actual cost of letting a guy go free agency. The owners are trying to flood the free agent market in order to try and drive salary down.

I think just the opposite will happen--that it will actually help the big-revenue clubs because this lowers the acquisition cost of signing free agents. The low-revenue clubs with talented players close to free agency (I'm thinking Oakland here) seem to be the losers here. They are forced to deal those players at the trading deadline or get less compensation from their departure during the following draft.

I'm skeptical that the draft compensation for lost picks will actually make a difference. Boras and Co. are a wily set of folks that seem to get what they want. Moving up the signing deadline to 15 August might actually give the amateur players more bargaining leverage. I guess we'll see.

The elimination of the draft-and-follow should only hurt those few clubs that have used it effectively (Astros and Yankees come to mind).

I'm definitely disappointed in the Rule 5 changes because that draft has been a great tool to help to make the market for talent more efficient. Good minor league players can get buried in deep systems or get stuck behind veterans on ready-to-compete-now clubs. This measure doesn't help anyone but those major league clubs with deep minor leagues. Bad news for the Reds.

Overall, these changes seem to benefit the big-revenue clubs considerably, could help or hurt the low-revenue clubs, and hurt many talented amateur and minor league players.

[As an aside: why doesn't the players union give up the farm and slot draft picks into fixed bonuses? Seems like that is a pretty big bargaining chip they could cash in on in negotiations, and it doesn't benefit the players union at all.]

IslandRed
11-02-2006, 04:15 PM
I think just the opposite will happen--that it will actually help the big-revenue clubs because this lowers the acquisition cost of signing free agents.

By and large, the high-revenue teams are already signing the players they want and shrugging off the cost. It's the lower tiers that balk at signing a Type A because they don't want to lose the draft pick. And lately, the high-revenue clubs are getting just as many comp picks as they're losing, what with the rent-a-players they trade for and let go. This could work out either way.


This measure doesn't help anyone but those major league clubs with deep minor leagues. Bad news for the Reds.

Good news for the Reds when we get the deep farm system, as we must if we're ever going to have a sustained run instead of the sporadic lucky year. It gives teams that rely on player development one more year to sort through a deep system and separate keepers from expendables. And frankly, being plucked from a team via Rule 5 (at least the major league phase) often hasn't done the player a favor. It gets him out of one organization into another that theoretically values him more, but the typical Rule 5 stash plays little and the lost development year is huge. From now on, a Rule 5 guy will have a year more experience and, at least in theory, be more able to help the club that snags him. That will make teams more willing to go fishing in Rule 5 and more willing to play the Rule 5 guys, and that offsets having to wait an extra year to be eligible.


As an aside: why doesn't the players union give up the farm and slot draft picks into fixed bonuses? Seems like that is a pretty big bargaining chip they could cash in on in negotiations, and it doesn't benefit the players union at all.

I think you're right about that, but I think they held onto that chip because there wasn't anything on the table worth the swap.

dfs
11-03-2006, 10:48 AM
why doesn't the players union give up the farm and slot draft picks into fixed bonuses? Seems like that is a pretty big bargaining chip they could cash in on in negotiations, and it doesn't benefit the players union at all.

I'm fairly sure the reason has to do with the fact that international players bypass the draft. Now...exactly the what or why of it...I don't remember, but that's the root cause.

D-Man
11-03-2006, 11:51 AM
By and large, the high-revenue teams are already signing the players they want and shrugging off the cost. It's the lower tiers that balk at signing a Type A because they don't want to lose the draft pick. And lately, the high-revenue clubs are getting just as many comp picks as they're losing, what with the rent-a-players they trade for and let go. This could work out either way.

You're right, it could work out either way. But on balance, big-revenue clubs tend to be free agent acquirers and small-revenue clubs tend to be free-agent losers. And clubs that have used the free-agent sandwich picks effectively will be the biggest net losers from this agreement.

For what it's worth, Billy Beane is in favor of the new labor deal, and that surprises me a bit because his club stands to be one of the losers from the changes in free agency. I suppose he is in favor because labor peace with a less-than-ideal agreement is better than no labor agreement at all. Labor unrest is particularly expensive to small-revenue clubs. That's my read on his comments, anyway.

http://www.sfgate.com/cgi-bin/article.cgi?f=/chronicle/archive/2006/10/25/SPGO7LVH781.DTL


And frankly, being plucked from a team via Rule 5 (at least the major league phase) often hasn't done the player a favor. It gets him out of one organization into another that theoretically values him more, but the typical Rule 5 stash plays little and the lost development year is huge. From now on, a Rule 5 guy will have a year more experience and, at least in theory, be more able to help the club that snags him. That will make teams more willing to go fishing in Rule 5 and more willing to play the Rule 5 guys, and that offsets having to wait an extra year to be eligible.

I agree that fewer A-ball guys will be plucked, which is a good thing. But on the other hand, more Dan Uggla's may lose a year of opportunity. And that is most certainly a bad thing for nearly everyone involved.

If MLB really wanted to limit those A-ballers that are selected and stashed away, there are better, more precise ways to address the issue. They could have required that players have at least some AA or AAA service time, or allow only certain A-ballers to be drafted (i.e., if they met certain age and/or experience thresholds). There are much better ways to address this problem. This change certainly benefits those teams that want to stash away players to the detriment of player development.

Overall, I think many of the small-revenue clubs will regret most of the changes to this agreement.