Sunday, August 17, 2008

Fixing the Draft

David Pinto at Baseball Musings has a thought provoking post on how to fix the MLB draft. The crux of his plan is a ranking system for prospects and then teams, based on their finish the previous season, are allowed to negotiate with tiers of players based on those rankings. It's an intriguing idea, but I have a few reservations.

For example, based on the rankings submitted to MLB, Joey Smith is ranked as the fifth best player available. Players one through four are widely agreed to be the best of the draft class and sign with teams one through four. Team five isn't especially enamored with Joey Smith, instead preferring Michael Jones, who is ranked as the seventh best prospect. Team Five signs Michael Jones instead. Now, as Pinto writes, one of the pluses of his proposal is that "players can't fall that far through the draft. The five best players sign with the five worst teams or [they] are out of a job for three years. The World Champions would not have access to the best 25 players in the draft." How is it fair to either Joey Smith or Team Five to have this rule in place? Either Smith doesn't get to sign--at all--or Team Five is forced to accept a player that they deem a lesser prospect. Would teams one through five have another shot at signing Joey Smith in Round 2?

While difficult in football or basketball, ranking prospects in baseball is an especially dicey proposition. Teams often can't agree which position a player should play (see: Markakis, Nick), much less where that player should go in the draft. Different organizations value high school and college players and pitching and position players differently. Using the example above, even the top five or ten players can be viewed differently by a small group of teams. After you move past the first 25 or 50 players, it's quite possible that a team will not have an opportunity to negotiate with a player that they would take in a draft scenario. For instance, assuming I'm reading Pinto's proposal correctly, team fifteen would be precluded from negotiating with prospect number 86, even if under a draft scenario, they would have used the 75th pick on this player.

While I definitely agree with Pinto that the draft isn't really accomplishing what it was intended to do, I'm not sure his proposal is the way to fix it. So what could be done? A few suggestions...
  • Allow teams to trade draft picks. If the Kansas City Royals are picking third but know that they don't value the consensus top three prospects as highly as the teams picking slightly lower, why should the Royals be forced to forego the extra value that the market assigns to their third pick? Shouldn't the Washington Nationals have the opportunity to trade the 9th pick in the draft and a 4th round choice to the Royals for the right to pick third? The Nationals would get their man and the Royals would get theirs plus a bonus selection.
  • Make all players in the world free agents and allot a "bonus cap" to teams--benchmarked for salary inflation and tied to the league-wide revenues--and allow each team to spend its cap however it sees fit. Perhaps a team would rather sign the top two prospects for 90% of their budget than sign five top-100 prospects or fifteen top-200 prospects for the same dollar amount. A premium would be placed on an organization's ability to identify talent and would create numerous opportunities for management to creatively allocate its bonus budget. However, given the issues with the bonus skimming scandals in Latin America, this system is probably not palatable.

Whatever the ultimate solution, it will require a great deal of creative thinking on the part of Major League Baseball, something which is all too often in short supply. But thanks to David Pinto for getting the discussion started.


David said...

Having one of the top five teams not interested in a player would cause that player to sign for less if he really wants to play. Remember, my plan uses the draft list from the first five drafting teams to create the top five, so there's going to be interest their in all five players. I suppose we could modify things so that if a players is available to less than 15 teams, he will fall to the next 10 teams if one of the top 5 or 10 teams doesn't sign him.

I'm also not opposed to trading or selling draft picks.

The Oriole Way said...

I'm not necessarily saying that one of the top five teams are not interested, just that they value another player more highly. In this scenario, if teams one through four quickly sign prospects one through four, player five can either choose to accept whatever offer team five gives or not sign this draft cycle. Team five doesn't really face a penalty since it could still negotiate with ten other players.

Any solution to the draft needs to offer players more choice and allow for a more efficient distribution of talent. Allowing players to drop to the next tier of teams if they haven't signed and had an opportunity to negotiate with 15 teams might accomplish this. As long as the gap in talent is wide enough between tier 1 and tier 4, teams will have tremendous incentive to offer enough money to sign the player out of the higher tier as that player drops.

I think the biggest issue, though, is the difficulty in ranking prospects. Compare the Baseball America pre-draft rankings to Keith Law's and there are wide discrepancies. Artificially limiting the talent pool available to each team in each round creates an incentive for teams to cut back on scouting expenses and instead rely on the collective wisdom of the other 29 teams. It would also give management recourse to say "Well, we signed the best available player, don't blame us that he's not any good." I agree that the best solution is free agency for everyone, but that is unfortunately not going to happen.