WSJ article on MLB draft (Porcello)

[edabbs44]

The $10 Million Arm
The Detroit Tigers paid a record price for high-school pitcher Rick Porcello. Now he is making baseball rethink the way teams acquire talent.
By MATTHEW FUTTERMAN
May 30, 2008; Page W1

Last June, the Detroit Tigers made an enormous gamble. They used their first pick in baseball's amateur draft to choose Rick Porcello, an 18-year-old kid from suburban New Jersey. Then, to the shock of many in baseball, they offered him a $10 million contract -- a draft record for a high-school pitcher.

Major League Baseball's draft, which starts next week, is a famously treacherous enterprise where teams throw millions of dollars at a few dozen players in the hopes that one or two of them will someday make the big club. Betting top dollar on a right-handed high-school pitcher -- the most unpredictable breed of ballplayer -- is the equivalent of doubling down on a long shot.

One year later, Mr. Porcello is off to such a promising start in the minor leagues that the Tigers' investment might actually pay off. But even if he doesn't become a star, Mr. Porcello may long be remembered for another reason -- as the walking symbol of a baseball draft system some say is hopelessly broken.

"Rick Porcello is a problem," says Rob Manfred, baseball's executive vice president for labor relations.

Like any pitching prospect, Mr. Porcello is no sure thing. Injury is the most common killer of precocious talent, followed by a lack of toughness or a destruction of confidence. But so far this season Mr. Porcello, who is pitching for the Lakeland Flying Tigers, a team on the lower rungs of the Tigers' minor-league system, is proving to be the kind of player teams dream about.

He can throw five pitches, including two separate fastballs -- a 97-mile-per-hour version that seems to defy the laws of physics by rising on its way to the plate, and another, thrown with a different grip, that dives down to the corner of the strike zone toward a right-handed batter's thighs. He has a change-up that, while thrown with the same calm, fluid motion as his fastball, wreaks havoc on a hitter's timing by crossing the plate as much as 20 mph slower.

At an imposing 6 feet 5 inches tall, Mr. Porcello looms over hitters on the mound and strides so far during his pitching motion that hitters say the ball appears to be falling directly down from the sky -- and seems to be halfway to home plate by the time it leaves his fingers. "All you can see is the top half of the ball," said Joe Coleman, Mr. Porcello's pitching coach. "Try hitting that."

This season, pitching against players with college and pro experience, Mr. Porcello has an excellent 2.48 earned-run average -- the sixth-lowest in the Class A Florida State League (no other first-year pitcher cracked the top 20). Even more impressive is his 1.14 ratio of walks and hits to innings pitched, which is fourth among pitchers with at least 58 innings. Mr. Coleman says Mr. Porcello is a rare combination of supreme talent (he compared him to a young Mark Fidrych, a Tigers phenom from the '70s) and a level of composure more typical in veterans. Andy Barkett, the Flying Tigers' manager, says Mr. Porcello's maturity level is "way beyond" that of New York Yankees star Alex Rodriguez at the same age. "This kid's got it," he said.

Any outsider looking at the 2006 baseball-draft results might be shocked to see that 26 players were taken before the Tigers chose Mr. Porcello. But this wasn't a case of one team outsmarting the others.

In football and basketball, a player's draft position dictates how much he will be paid by the team that picks him. In baseball, there are only guidelines. The suggested bonus for the 27th pick last season was $1.7 million but Mr. Porcello was free to ask the Tigers for whatever he wanted. Under this system, teams with smaller budgets often pass on the best prospects because they know they will have trouble offering them enough money.

The result, critics say, is that rather than creating parity by giving the teams with the worst records the first crack at the best players, the draft has become another tool for wealthy teams to hoard the top talents. The Tigers weren't the only team that thought Mr. Porcello might be a great player -- he was widely considered by scouts to be the second-best amateur in the country. They were just the first team with the means, and the nerve, to make the bet.

"It's not that we didn't like him, sure we did," said Grady Fuson, director of scouting for the San Diego Padres. "It's just that we didn't know if he was going to be worth the money."

One Major League general manager, who asked not to be named, said the size of Mr. Porcello's contract, and his performance so far, has increased talk within baseball about changing the draft system. Jack Zduriencik, who oversees amateur scouting for the Milwaukee Brewers, said there are two sets of teams at the draft now -- those that can pick any player they want because they know they have enough money to sign them and those that keep to a modest budget. Last year, the small-market Brewers spent $3.2 million on singing bonuses for players taken in the first 10 rounds -- less than the Tigers paid Mr. Porcello.

When the owners and the Major League Baseball Players Association meet for their next round of collective bargaining, Mr. Manfred, baseball's chief labor lawyer, says he plans to ask for a fundamental change to the compensation system for drafted players -- a scale that limits how much drafted players can make depending on where they are picked.

While he believes the problem is bigger than any one player, Mr. Manfred said Mr. Porcello's case demonstrates the extent of the problem. "It's hard enough [for a team] to know who the second-best player in the country is," he said. "To then have to factor in whether you can afford to sign him just makes it that much more difficult." Greg Bouris, a union spokesman, said the players rejected a mandatory cap on draft compensation in the last bargaining round but expect to revisit the issue.

A top athlete who grew up playing basketball and attended Seton Hall Prep in West Orange, N.J., Mr. Porcello is an unassuming kid from the suburbs who talks to his mother on the phone every day. Even in the Florida State League, where about 800 fans show up to watch his games, he wears his stirrups high and pitches with an almost robotic calm. "I'm no different than any other guy in the locker room," he said. "I'm honored and blessed to be pitching anywhere in professional baseball."

In the fifth inning of a recent game against the Palm Beach Cardinals, Mr. Porcello settled in to face Donovan Solano, a second baseman with a .308 batting average. The pitcher wasn't having his best night -- in fact, it was his worst outing so far this year. He had allowed four runs, including a 390-foot home run off a curveball that didn't curve.

Most young pitchers, faced with an outing like this, will toss their glove and knock over a water cooler. But with Mr. Solano at the plate, Mr. Porcello rocked back and threw a diving 92-mph fastball that the batter missed by a foot. Next came a curveball that grabbed the corner of the plate. With two strikes, Mr. Porcello turned to the next pitch in his repertoire -- his devastating change-up. It fooled Mr. Solano so badly he nearly fell over backwards.

After inducing a double play, Mr. Porcello sauntered off the field without so much as a pumped fist. "There's been days when I don't have my best stuff and I just battle," Mr. Porcello said before boarding the team bus the next morning. "You never really know what you have until you're out there."

In the best case, Mr. Porcello will follow the path of Josh Beckett, the Boston Red Sox ace who was chosen with the second pick of the 1999 draft out of Spring High School in Spring, Texas. Mr. Beckett has won the World Series with the Marlins and the Red Sox.

Or maybe he ends up being Colt Griffin. In 2001, the Kansas City Royals chose Mr. Griffin, a high-school pitcher from Marshall, Texas, with the ninth pick and gave him a $2.4 million signing bonus -- largely because his pitches had reportedly touched 100 mph. His problem was an inability to throw strikes. Mr. Griffin's five-year minor-league career included 82 wild pitches, 278 walks, 44 batters hit and shoulder surgery.

"Just because you spend the most money on the players you draft doesn't mean you get the most Major League stars," Mr. Fuson said.

Write to Matthew Futterman at matthew.futterman@wsj.com

http://online.wsj.com/article/SB121210529338231091.html

[EddieMilner]

I still can't believe MLB can't force kids to declare for the MLB draft and forfeit their amateur status. What would y'all do to fix the MLB draft?

[M2]

Here's the thing I don't get. Other sports without a government granted monopoly slot and/or cap their draft pick bonuses. Why can't MLB do it? It would stop this business of highly regarded players dropping down to successful big market buyers.

And don't blame the Players Association on this one. Players know that scouting budgets eat into the pool of money that could be paid to major leaguers. They'd be completely fine with a system where kids don't get mega paydays until they earn it in the bigs. This is a case of smaller market teams letting big market clubs run roughshod over them.

[Outshined_One]

Man, that article was not very well-written. A lot of it read like a puff piece and some parts of it were flat-out wrong (see: rising fastball).

Here are a few problems with overhauling the draft process...

-Players can easily choose not to sign and instead continue their education. A high school senior who is drafted in the tenth round who wants first round money can instead go to college and get drafted after three years. Alternatively, that same student could choose to go to junior college and be eligible to be drafted even sooner. A college junior can refuse to sign and play his senior season. A college senior can refuse to sign and go play independent ball.

In all of these scenarios, if you were to implement a capped structure to the draft, you would see a significant dropoff of talent over a stretch of a few years since everyone with any amount of talent would try getting drafted in the years before this structure is implemented.

-How would you structure such a cap on bonus demands? While it is relatively easy to implement something like that when you have a short draft, the MLB Draft goes on for about 50 rounds. How would you set up the salary structure so that players who would normally receive one amount under the old guidelines wouldn't get paid less under the new cap?

-What sort of penalties would be in place for teams who violate the rules? If you just levy fines, I'm sure a number of teams would have no problem over-paying for the Jered Weavers and Rick Porcellos of the world.

-How would teams who are notoriously cheap feel about this? Oftentimes, you will see certain teams draft guys who have no problem being paid below slot just because the team wants to save a couple of bucks. If you have a team with a drafting budget of $2.5m and the new cap rules would require that team to increase the budget to $4m, something tells me you will see a lot of resistance on their parts.

-How will you deal with teams that pick up a bunch of free agents and don't have a pick until, say, the 3rd round? I think this system would be rather unfair to those teams, given that they supposedly would have extra money in their draft budget.

-Honestly, I have a hard time feeling sorry for teams who spend a ton of money on a draft pick who flops. If these guys produce as advertised, they are worth the money they receive. If they do not, these teams willingly took the risk of throwing millions of dollars at these guys. The teams also have plenty of terms in the contracts favorable to themselves if the player flames out (see: insurance), so it's not like they're being unwillingly manipulated into bad positions.

The bottom line for me is this. One of the critical things that writer failed to address is the fact that teams which throw around bonus money like it's nothing do not tend to make up the top farm systems year in, year out. It's not that the converse is true, but it is worth noting that teams like the Cubs and Yankees do not have particularly good farm systems because they spend this money.

What allows teams to have great farm systems is scouting and coaching. If you throw money around at the draft like a drunk in Vegas, but have a shoddy system of scouting and coaching in place, your money will effectively be wasted. However, if you have a relatively modest drafting budget, but your team has terrific scouts and coaches, you will not only find a number of talented players, but you will also have a system in place that can ensure those players will make it to the majors and succeed.

The bonus demands are seemingly ridiculous, but if teams want to pay those players accordingly, then I have no problem with teams meeting those demands. This isn't causing a competitive imbalance.

[IslandRed]

I still can't believe MLB can't force kids to declare for the MLB draft and forfeit their amateur status. What would y'all do to fix the MLB draft?

As a rule, I don't think MLB clubs have a problem with the current draft setup *except* for the lack of some sort of slotting/cap.

For what it's worth, MLB is not the arbiter of amateur status, and the NCAA has different rules for different sports. College baseball already has a hard enough time not losing kids to the pros; I think they'd happily modify the rules so any player who hadn't actually signed a contract or with an agent could continue to play in college.

Anyway, most of the recent high-profile cases haven't been using college ball as their leverage. They just head for the independent leagues and say they'll go back into the draft the following year.

[M2]

In all of these scenarios, if you were to implement a capped structure to the draft, you would see a significant dropoff of talent over a stretch of a few years since everyone with any amount of talent would try getting drafted in the years before this structure is implemented.

Why wait years? Agree to it and implement it immediately.

How would you structure such a cap on bonus demands? While it is relatively easy to implement something like that when you have a short draft, the MLB Draft goes on for about 50 rounds. How would you set up the salary structure so that players who would normally receive one amount under the old guidelines wouldn't get paid less under the new cap?

The league already has slot guidelines. The structure is pretty much in place.

What sort of penalties would be in place for teams who violate the rules? If you just levy fines, I'm sure a number of teams would have no problem over-paying for the Jered Weavers and Rick Porcellos of the world.

There would be no "violate the rules." You'd have a maximum you could pay for that slot and the league wouldn't approve anything more than that.

You're kind of missing the point, which is that the motivation of the Weavers and Porcellos should be to get drafted as high as possible to maximize their earnings haul, not to chase away suitors who'd pay them well in the hopes of finding one willing to pay an outrageous sum.

How would teams who are notoriously cheap feel about this? Oftentimes, you will see certain teams draft guys who have no problem being paid below slot just because the team wants to save a couple of bucks. If you have a team with a drafting budget of $2.5m and the new cap rules would require that team to increase the budget to $4m, something tells me you will see a lot of resistance on their parts.

That has been the resistance, teams unwilling to help themselves. The Yankees and Red Sox for sure aren't going to push this.

How will you deal with teams that pick up a bunch of free agents and don't have a pick until, say, the 3rd round? I think this system would be rather unfair to those teams, given that they supposedly would have extra money in their draft budget.

Tough luck. They'll just have to find another way to spend the money.

Honestly, I have a hard time feeling sorry for teams who spend a ton of money on a draft pick who flops. If these guys produce as advertised, they are worth the money they receive. If they do not, these teams willingly took the risk of throwing millions of dollars at these guys. The teams also have plenty of terms in the contracts favorable to themselves if the player flames out (see: insurance), so it's not like they're being unwillingly manipulated into bad positions.

I don't shed any tears for teams that flush money down the drain, but that's far different from prospects willfully pricing out certain teams so they can land at a bigger market franchise. The entire point of the draft is that the neediest teams get first crack at the best talents. That goes down the toilet when the best talents find a way to skirt around the neediest teams.

[bucksfan2]

As a rule, I don't think MLB clubs have a problem with the current draft setup *except* for the lack of some sort of slotting/cap.

For what it's worth, MLB is not the arbiter of amateur status, and the NCAA has different rules for different sports. College baseball already has a hard enough time not losing kids to the pros; I think they'd happily modify the rules so any player who hadn't actually signed a contract or with an agent could continue to play in college.

Anyway, most of the recent high-profile cases haven't been using college ball as their leverage. They just head for the independent leagues and say they'll go back into the draft the following year.

IIRC the independent leagues lost some leverage because of the date that a drafted player has to sign with the drafted team.

I think the article, while not written very well in a baseball way, tries to bring to light the problem with the draft. Porcello was a huge gamble for 10M. Even though he has pitched well he will continue to be a huge gamble until he steps onto the MLB field. The problem with the current system is that very few teams were in the ballpark to draft Porcello. If a team in the top 5 had Porcello rated as their top remaining player it is a shame that they are unable to take him due to the contract needs. When a player signs with Boras how many teams does that eliminate from drafting said player? Does it help the worst teams rebuild when the player they want they can not draft because of signaibility issues?

IMO the MLB Union is at a catch 22 with the draft. Most players were there at one point and they don't want to take money away from potential players. At the same time since there isn't a world wide draft the players drafted are at a disadvantage to the foreign born players because a foreigner can sign for whatever he wants. If MLB did institute a slot value this would in return benefit current MLB players because that would free up more money for them to make.

[IslandRed]

IIRC the independent leagues lost some leverage because of the date that a drafted player has to sign with the drafted team.

I don't know that it affected the independent leagues any. If the player chooses not to sign by August 15, he still needs something to do until the next June if he's not going to play college ball.

But yeah, some sort of enforced system is necessary. Boras can't ask for what a team isn't allowed to give him.

As for the MLBPA, I don't think they have a philosophical problem with capping money given to draft picks. But the presumption that the money will end up in veteran players' pockets (as opposed to the owners' pockets) isn't one they will make just on faith, the historical dealings between owners and players being what they've been.

[dougdirt]

There are rumors that Scott Boras floated a 15 million dollar bonus for Pedro Alvarez. That kind of stuff right there is enough, baseball really needs to step in and make slotting mandatory. A player gets X amount of money for being the A/B/C draft pick. If they don't like it, they don't sign and hope for better the next time.

[Outshined_One]

I don't shed any tears for teams that flush money down the drain, but that's far different from prospects willfully pricing out certain teams so they can land at a bigger market franchise. The entire point of the draft is that the neediest teams get first crack at the best talents. That goes down the toilet when the best talents find a way to skirt around the neediest teams.

That's the thing; they're not skirting around the neediest teams. I don't feel sorry for teams like the Pirates and the Astros who consistently decide to nickel and dime the draft. If they want to take the best guys, they should pony up the money rather than pinch pennies. Drafting a guy because you can pay him $20,000 less than slot is a head-scratcher. It's also not as if these teams are unable to sign certain guys because they don't want to play somewhere. These teams don't draft and sign certain guys because the guys they end up drafting are cheap.

I also don't think the players are attempting to pull an Eli Manning and landing in a bigger market franchise. The biggest spenders in the past in the draft have included mid-market teams like the Arizona Diamondbacks, Baltimore Orioles, Tampa Rays, and the Detroit Tigers. Heck, Luke Hochevar turned down a generous offer from the Dodgers and ended up getting a slightly better contract from the Kansas City Royals the next year. Moreover, certain big market teams like the New York Mets (in the past few years) and Boston Red Sox have been notorious for not offering huge multi-million dollar bonuses to their draftees. I think the more likely scenario is that these players are trying to get the best contract rather than the best market.

Frankly, if teams are willing to pay them, what's wrong with that? Why should the draftees suffer because of the incompetence of certain teams?

[M2]

That's the thing; they're not skirting around the neediest teams. I don't feel sorry for teams like the Pirates and the Astros who consistently decide to nickel and dime the draft. If they want to take the best guys, they should pony up the money rather than pinch pennies.

There's a difference between need and will. The Pirates and Astros need that talent even if they've lacked the will to go and get it. Also, let's be realistic. The big market clubs are always going to be able to pay more. Teams from NYC, L.A., Chicago and Boston have a cash elevator that go far higher than other franchises.

Frankly, if teams are willing to pay them, what's wrong with that? Why should the draftees suffer because of the incompetence of certain teams?

It depends on your view of the draft. If you think it's an open market affair where teams and prospects should be able to play a leverage game, then the current system is fine. If you think it should be designed to let the weaker clubs in the game rise or fall on competence or incompetence rather than on their market strength, then the system needs fixing.

Even with a draft cap teams will still be able to blow gobs of money on bad picks and top picks will still be getting ridiculous sums of money based on speculation. None of that will change. What would change though is players no longer would drop because they think they can find a higher bid lower in the draft. It would make the draft about talent estimation and not investment strategy, and I'm for that.

[Highlifeman21]

I thought that article was actually one of the better ones from the WSJ about baseball. WSJ knows their audience, and the article focused on the economies of scale within MLB.

The rich continue to get richer, if they can plunk down huge coin and gamble on a prospect that falls into their lap b/c the teams drafting at the top either A, can't afford to plunk down some serious coin for the same prospect, B, need more of a "sure thing" prospect (yeah, like they grow on trees), or C, the prospect makes it known that they'll want some serious coin if they are drafted by a losing franchise.

Think about it this way...

If you're a top prospect, and if you had the ability to make it known that if you're drafted in the top 10 you wanna break the bank b/c you don't want to play for a losing franchise, which in turn would increase your chances to go lower in the 1st round so you went to a better team, would you do so?

It then becomes a question of how mercenary is the prospect?

Do you take the serious coin by being drafted by the crappy team, or do you scare the crappy teams into not drafting you b/c you'll want serious coin, and then get drafted by a better team and then get whatever coin you can get?

[Outshined_One]

I think I need to clarify some of my points and also extrapolate a few things I said earlier...

It's one thing if you think it's wrong that 18 year old kids are getting paid millions and millions of dollars, putting in a mandatory slotting system would solve that problem in a hurry. I'd argue that those guys deserve the contracts they get, but I wouldn't argue about the slotting system being the solution to that problem.

However, when it comes to arranging a system that levels the playing field, I question whether implementing a slotting system would accomplish that objective effectively.

Let's say baseball just decides to set a ceiling or set a ceiling and a floor for each pick (i.e. "You can pay no more than $70,000 for this pick, but no less than $50,000"). Those teams which historically don't pay very much for their draft picks would likely not increase their budgets in response to this. It is likely they would not change their current draft philosophies or draft budgets. If they consistently sign guys who will sign for less than slot, they will not move away from that. When those teams sign guys for less than slot, those teams will most assuredly not draft the best player available. I don't think a slotting system like that would solve any current competitive imbalance issues.

So, what if, instead of a slotting range, MLB implements an exact requirement (i.e. "You must pay $70,000 for this pick; no more, no less")? I think this creates another problem with competitive balance. Let's say a team picking in the top ten with this slotting system traditionally has a draft budget of $2,000,000. However, the required bonus for their first pick is $2,000,000. Either that team sticks to its budget and only signs one player or that team has to make cuts elsewhere in order to sign a number of its other draft picks. Those cuts could come from coaching, scouting, free agent acquisition, or any number of other areas that would hurt the team's performance in one way or another. If those cuts are made to scouting, that team will not select and sign the best players they should be getting. If those cuts are made to the later picks, that team will not be increasing its pool of players who could potentially contribute to the majors since they would be signing fewer players. If those cuts are made to the team at the major league level, that team will be less competitive.

The other problems I would like to point out have to do with the critical differences between MLB draftees and their counterparts in the NBA and NFL. For one, MLB draftees have a lot more options. High school students can go to college, juniors in college can stay another year, etc. Moreover, while it would be an outright disaster if an NFL team had a draft where only two of its draftees ever played in-game and both were bench players, it is not necessarily the end of the world if an MLB team has a draft where none of its draftees ever reach the majors. I think a slotting system would only exacerbate the incentives for either side to walk away, since the aforementioned teams with budget problems would rather keeps their costs low. Moreover, while the players would still have their safety net, there no longer is any incentive with a slotting system for the players to sign since they won't be able to sign for a larger amount of money.

Also, unlike the NFL and the NBA, it is enormously rare to see a draftee make the major leagues within a year of being drafted. The MLB draft also goes roughly 50 rounds. The potential number of draftees in a given year is mind-boggling, considering they include colleges, junior colleges, US high schools, Canadian high schools, and Puerto Rican high schools. You can't just watch all their games on television; you have to send tons of people across the US, Canada, and Puerto Rico to effectively scout these guys.

Any slotting system you put in place would eliminate the signing demands of those players, yes. However, I have a hard time believing a slotting system would provide the proper incentives to alleviate competitive imbalance issues. The teams who already have limited budgets would have to cut back in ways that would negatively affect their ability to be competitive, perhaps through scouting and minor league development.

It may be possible to implement a system which would easily fit into everyone's budget and reduce those issues, but the draftees (and their agents) would be up in arms because they wouldn't be getting paid what they are worth.

[dougdirt]

There is no team that has a draft budget set at 2 million dollars. Even for a team picking in the middle to late 1st round, thats barely enough to cover your first two picks.... much less the next 30 that you will probably sign.

[M2]

I'm all for an exact slot number. You get drafted in slot X and you get Y bonus. You know what your budget is going in and players would covet being taken as high as possible. The point should be that teams are taking what they think are the best talents, not the best talents they can afford (or think they can afford).