The selling out of the 2020 MLB Draft picks? Sounds like it’s happening Doug Gray March 26, 2020 22 Comments We are going through a “once in one hundred years” health situation around the world right now. We are all, unfortunately, facing a reality where things are scary. Between the idea that there’s a highly contagious virus that is killing people are rates far higher than anything we’ve seen in a long time, or the fact that even if the mortality rate of it is “low”, it can lead to long term health affects if you catch it and do survive, to the economic disaster it’s caused as we’ve shut down many parts of society to try and keep it from spreading – we’re just all in a situation of uncertainty, with plenty of reasons for concern for our futures. When it comes to the minor leagues, there’s plenty of uncertainty, too. Right now, the players are being paid $400 per week while not playing through the end of what would have been spring training on April 8th. There is no concrete solution, though MLB and the MLBPA are working on one, as to how much, and how long the minor leaguers will be paid while their season isn’t happening. But the 2020 Major League Baseball Draft is another animal. And while we still aren’t certain about what’s going to happen there, we got a good idea earlier today. Last week we began to hear rumors that it was possible that baseball would just skip the 2020 draft as a way to save money in a year in which with so many games being missed, and a potential of lower revenues from the games that were played – either due to not being allowed to play in front of fans, or fans simply showing up in much lower numbers for health or economic reasons – the $17-18 million saved by foregoing a draft and international signing period could have been a way to save a real amount of money in one big swoop. But today a report from ESPN has some updates on what’s likely to happen with the draft. Kiley McDaniel, also of ESPN, had some more details in a tweet, too. And it’s drastic. Let’s take a look at the proposal: Limiting it to 10 rounds (but perhaps as few as 5) Signing bonuses paid out as 10% at signing, with 45% coming in July of 2021, then another 45% coming in July of 2022. Maximum bonuses for undrafted players, with a potential for that to be $10,000. That’s just three things, but it leaves a whole lot of questions. First, let’s note that once again, the Major League Baseball Players Association is selling out the rights of people who have no spot at the table. And this time, they are doing so in a way that is flat out disgusting. It was one thing when they set limits on the draft pools last decade. It’s another thing to basically tell an entire draft class that, for the most part, you get probably going to have to take 15% of what you would have gotten last year if you were born at the right time. Let’s really dive in. If you aren’t a college senior, and you aren’t taken in the draft – whether that’s 5 or 10 rounds – why on God’s green Earth would you ever consider signing? Players taken beyond the 10th round could get up to $125,000 before it counted towards a bonus pool, and that happened for a lot of guys. Let’s say that we see a 5-round draft…. that means guys could be going from a situation where the slot money for rounds 6-10, which ranged from $302,000 to $143,000 to $10,000. With the bonus deferrals – in general, I’m not exactly opposed to the uniqueness of this situation. I proposed the idea a little bit earlier this week. But what makes this proposal crazy is how little guys get up front. Between low salaries in the minors – even if it is going up in 2021, and just 10% of your bonus for the next year – it’s going to make it really tough on a lot of guys who do sign. Because of that, guys aren’t going to sign who go undrafted. It’s going to lead to incredibly small draft/signing classes where maybe instead of adding 40-50 players from the draft/undrafted free agent signings in a year, you’re going to see classes that feature 10-15 players. That might save a few guys jobs who would have been released in June when the short season leagues normally would begin because teams do need players. But that also brings us to this, as just brought up by NBC Hardball Talk writer Craig Calcaterra: The reason you do this is (a) to continue your ideologically-driven efforts of reducing draft bonus expenditures; and (b) reduce the number of overall minor leaguers, thereby helping justify your minor league contraction plan. — Craig Calcaterra (@craigcalcaterra) March 26, 2020 I’m not sure they thought it out that far – though nothing would surprise me – but his point makes sense. This is going to lead to, at least in the short term, a much lower level of play in the lowest levels of the minor leagues. Quality players who would have signed in a normal draft are going to be heading to college, or heading back to college. In the long term, there are some real lingering questions. First, is this just the first step towards both sides (MLB and the MLBPA) further restricting and tightening the belt on the draft? It seems that whenever they can, the two sides use the draft and international signing period to cut back on their money and get something for those within the players association. These things, as has been pointed out by many both in recent years, or even in the last few hours since we saw this initial report, just pushes more athletes in high school to other sports. Long term, that’s bad for the game of baseball. But agent Joshua Kusnick put this out there, and it’s going to be interesting to see if it happens: How many college kids end up going to korea and Japan if bonuses shrink? Also whats to stop the clubs from keeping these terms post pandemic. Jesus this is terrible — (((Joshua Kusnick))) (@JoshuaKusnick) March 26, 2020 We haven’t seen it much in the past – but we have seen it recently in a rather high profile prospect. Carter Stewart was the 8th overall pick in the 2018 Major League Baseball draft. The Atlanta Braves selected him, but after seeing his medicals, decided to cut their signing bonus offer to him – down quite a bit from the slot value. Stewart chose to not sign with the Braves. Instead, he signed a six year deal with the Fukuoka Softbank Hawks in Japan for $7,000,000. Now, do I expect to see massive numbers of players taking this route with what’s happening stateside? No, I don’t. It’s not a situation where I would expect any high school player to take. Those guys can go to college and see what happens with the draft in 2021 (if they head to a junior college) or 2023 (if they go to a 4-year college). But could we see some college players head overseas? If the draft is limited to five rounds, yeah, I think we could actually see some guys explore that option. If the draft is ten rounds, perhaps we don’t see it. Still, if you’re facing a situation where someone is willing to give you $5,000,000 today and you can be a free agent in six years (basing this on the Carter Stewart deal), or you can sign for $500,000 today, and then in a year get another $2,250,000, and then a year later get another $2,250,000 – all while also potentially spending far more time in the minor leagues. Perhaps the biggest thing here is this: If you go to Japan or Korea, you get your money up front and you’re going to start that “professional” service time. And that’s important because it means that you could reach true free agency sooner and really cash in if you perform well. There’s some risk, of course, too. You are immediately going to be playing against a higher level of competition than if you sign stateside and are assigned to a rookie-level team or an A-ball team. While the leagues in Korea and Japan aren’t quite MLB level – some players absolutely are. And the ones who aren’t, they are at worst, upper minor league level talents. The jump from high school or college to those levels is massive. There’s no guarantee that are going to be able to perform well enough in those leagues and “cash in” in free agency down the road by coming back to America/Canada/Puerto Rico (those countries are draft eligible). That risk, of course, applies if you sign out of the draft or as an undrafted free agent in affiliated baseball, too. You’ve still got to go out and perform and advance up through the farm system. But you better believe that there are agents out there who are already exploring the idea that perhaps Korea or Japan are better options this year than signing with a Major League Baseball team. Share this:FacebookTwitterRedditPocket 22 Responses Billy March 26, 2020 Is it a given that Korea and Japan will have the money to throw at players? I know the pandemic hasn’t hit them as hard, but with the worldwide economy being hit so hard, I could imagine that some degree of belt-tightening could be in order there too. Doug Gray March 26, 2020 You’re right that at this point, nothing is a given. As we seem to hear every day for the last few weeks – we don’t have many answers, but we’ve got a million questions and a lot of uncertainty. MK March 26, 2020 Billy you have got to be kidding both Koreas have been pounded by the virus. South Korea created the first drive-in testing centers in case you missed the announcement they postponed the Olympics in Japan. Both countries (Japan and S. Korea) have said their economies have been wrecked by the virus so there might not be that much money there either. Billy March 27, 2020 MK, I was speaking more from the perspective of spread and loss of life. Many Asian nations were quick to lock things down and prevent the spread of the virus, and the people willingly adhere to the plan. They’re better equipped to handle this than we are here. My brother is a missionary in Japan in a rural fishing village, and he said that there’s been little impact out where they are. KyWilson1 March 26, 2020 NCAA is also either talking about giving spring sport athletes an extra year of eligibility . Which could also affect the number of college kids available in next years draft. Its a weird time. Seadog March 26, 2020 Yes. High school seniors might get a double “whammy”. No (or short) draft. NCAA allowing seniors to return. On a side note. If MLB does go to a shorter draft—say 10 rounds permanently, how much more valuable does that make your scouting dept. there will be a lot if future All-stars go un-drafted. Norwood Nate March 26, 2020 Disgusted by greedy owners. Ruining baseball. Oldtimer March 26, 2020 MLB functioned before the draft was instituted in 1965. So players might have more flexibility in where they sign. In mid 1950s Brooks Robinson (HS prospect from Arkansas) narrowed his final two choices to Reds and Orioles. At the time, Reds had All-Star 3B Don Hoak (later traded to Pirates in 1959). Orioles had diddly squat. Brooks saw a faster route to MLB with Orioles so he signed there instead of Reds. Doug Gray March 26, 2020 It’s not the lack of a draft, it’s that they want to cap rounds and also tell players “you have to sign for these literal peanuts” that’s the problem. Oldtimer March 27, 2020 They can make do without a draft but there are hurdles to jump over. NBA went from 10 rounds (or even 20 rounds way back in the day) to just 2 rounds. Only 1st round $ is guaranteed. Doug Gray March 28, 2020 The NBA has 15 roster spots to fill. If you want to account for the G-League, they’ve for like 25. Baseball has 325 roster spots. Oldtimer March 28, 2020 Baseball can make do without a draft or a shorter one. If there are MiLB spots open, players can sign anywhere if they are undrafted. At this point, MLB may start in July. I doubt whether there will be much, if any MiLB play this year. No need for 2020 draft, if so. The cost of attending MLB games is very high for many families. It will be an easy cut from the budget. Doug Gray March 28, 2020 Sure, they can. Let it be like pre-1965 when there was no draft. But don’t also tell guys that they can’t negotiate their pay, then. Redsvol March 26, 2020 I guess I’m the rare one that sees the MLB point of view. They will be drafting players with much less information (no 2020 season) to gauge them by. The top players will still get paid (5 rounds) – just with pay being deferred. The players beyond round 5 will definitely get hosed. However, most of those players rarely make it past double A and pay will be rising for them – eventually. Draft has too many rounds anyway. BK March 26, 2020 Another way to look at this is MLB will continue hiring players even while revenue is practically nonexistent with no certainty of when revenue will return or to what level revenue will return to. Many businesses facing similar circumstances are firing/laying off or have stopped hiring. RojoBenjy March 27, 2020 Any chance that MLB gets a fan backlash and they stop coming to the parks in protest? It’s not a good look when billionaires look to take advantage of teenagers using the excuse of a pandemic. Scott C March 27, 2020 It certainly is not a good look. It is however consistent in how MLB owners have acted throughout history going all the way back at least to the Black Sox scandal. The players that threw the game were treated as virtual slaves by Comiskey and yet when everything washed out they lost their means to even have the opportunity of a paycheck through playing baseball. For far to long they have been protected from any form of retaliation. And unfortunately, those players that have made the Big time forget about their brothers still toiling in the minor leagues or those trying to latch on. So it is not only the owners today, it is the millionaire players who are protecting their own. SultanofSwaff March 27, 2020 This is MLB’s opening salvo in their effort to downsize the infrastructure (costs) associated with producing major league players. Opposite of what’s happening with basketball (one and done college players, G league), with this take it or leave it approach to bonuses, MLB appears to be shifting development costs onto college programs as players have no better economic choice. Krozley March 27, 2020 The non-drafted bonus limit seems to be $20K. Last year, the Reds signed 11 players for less than that, 2 others at $25K, and 6 undrafted free agents (guessing those were less than $20K bonuses). So that is 17-19 players on top of how many ever players are drafted in the 5-10 rounds that would project to join the organization. I would think given the limited amount of rounds, the strategy of drafting low-bonus seniors earlier than their talent warrants will not be utilized, but teams instead will draft the best player they can get and sign at that slot in each round. So, given their extra pick, they could draft 6-11 players, sign 17-19 undrafted players, thus adding 23-30 players to the organization. Last year the number was 35, so a 10 round draft wouldn’t really be a huge drop in players, potentially. AirborneJayJay March 27, 2020 Calcaterra was spot on. This is going to be used as a way to reduce draft rounds and $$$, and to help with the contraction of minor league teams. Does anyone now see a season going forward with the rookie leagues? All of the short season leagues will be closer to the cusp of elimination. RojoBenjy March 27, 2020 Here’s to the mainstreaming of college baseball games. If this goes through, I’ll be tempted to only focus on that and leave MLB. I said tempted, mind you… Simon Cowell March 28, 2020 How much many is a team like Cincinnati going to lose? As I’ve said before the owners take all the risk. No revenue from games, No revenue from TV, and merchandise sales are at an all-time low. The players are still making money thanks to a strong MLB players union but the fans get nothing and the ownership is making nothing. Good thing MLB teams aren’t sold like stocks otherwise their value would be in free fall. The least MLB could do is play the games without any fans and let us watch on TV and the internet.