I want to love the new MLB draft salary system. It makes sense to me. Each team gets a pot of money based on the slotted value of their draft picks. The team can use however much money they want on whomever they draft, but they have a finite cash amount to play with. The system allows for some freedom and creativity, but makes the draft more of a draft again, instead of a contest to see who is most willing to sink a ton of money into it. Hopefully, signability is no longer a buzz term come draft time.
The early returns give me cautious optimism.
Most scouts felt this year's draft lacked elite talent, and whether that turns out to be true or not, that assessment impacts signability. A perceived lack of elite talent meant that this year's draft had fewer players that would demand huge signing bonuses to sign, even if the old draft system was still in place (which essentially was no system, just delays on announcing signings over the recommended slot value). I don't think there were many players in this draft class that would be real test cases for the new system.
There were three first-rounders that came down to today's deadline - Kevin Gausman, Mark Appel, and Lucas Giolito. I will get to them in a minute, particularly Giolito and Appel. First, let's talk about the vast majority of players.
Two of the greatest perks of the new system were that 1) the signing deadline moved up to mid-July from mid-August and 2) signings could formally be announced immediately, even if they were over the recommended slot amount. The changes made signings go way, way faster. Jim Callis pointed out on Twitter that only 5 of the top 60 picks were unsigned heading into deadline day, and 17 in the first 10 rounds. Those numbers are down from 34 and 98, respectively, last season.
Quite simply, this means that amateurs get faster starts on their pro careers with the new system. Signing in mid-July instead of mid-August makes a huge difference. It cuts the layoffs many of these players have from competitive games in half, meaning it should take less time for them to get back in playing shape. On top of that, the earlier signing deadline comes with a month and a half left in the minor league season, instead of just a few weeks. All in all, we could see many more prospects get their feet wet in the pros by the end of the season they are drafted in. It will be hard to measure the impact of this for a few seasons, but we could see players making it to the Major Leagues a bit quicker in the new system. That's good for players, and good for teams.
So, the new system seems to be a win-win for a majority of teams and prospects. What about those talented guys with signability issues though?
Personally, I think that the new system will call most players' bluffs. Sure, a prospect will turn down $4 million when they are pretty sure they can get $6 million; but how many of those same players will really turn down $4 million when that is as much as they can get? Maybe there is more money to be made elsewhere, but how many players won't sign the best offer they can get from their dream job? Especially when the offer has six zeroes attached before you hit the decimal point?
I think we saw this with Lucas Giolito, a supposedly difficult player to sign that agreed to a $2.925 million bonus, $800K above slot value. Yes, the Nationals went well over slot for Giolito, but he was talked about as the potential top pick in the whole draft at one point. There is no doubt in my mind he would have signed for more money last year. However, at the end of today, the Nationals offered Giolito everything they could and he decided that was enough.
On the flip side, Mark Appel did not sign with the Pirates. He reportedly spurned a $3.8 million offer, and opted to finish out his career at Stanford. Many will undoubtedly point to Appel as proof that the new system is flawed, but I am not so sure.
From Appel's standpoint, his decision to stay in school is a financial gamble (although, really, how much of a gamble is it since he will now finish earning a degree from Stanford?) It is reasonable to suppose that next year's draft will have more competition at the top than this year's, just because the top seemed relatively thin this year. A 22-year-old Mark Appel probably has a bit less luster than a 21-year-old Appel too, and the 22-year-old version definitely has less bargaining leverage. He won't be able to go back to school like he was able to do this season. Appel could fall in the draft just because he's older and the pool might be deeper next year. I also doubt a team will be as willing to go over slot for him. If Appel makes less money next year than he would have this year, others might see the gamble they are taking and be more apt to sign.
From the Pirates standpoint, how big of a deal is it that they lost out on Appel? They already have Jameson Taillon and Gerrit Cole in the system. Appel would have been great to add, but now Pittsburgh gets a top-10 pick in next year's draft, and next year might be a better draft year than this one anyway. The added high draft pick will also give the Pirates a bigger pool of money to play with in next year's draft, which gives them some financial freedom for creativity they would not have had otherwise. I believe that Pittsburgh would have preferred to sign Appel, but this was not an all-or-nothing proposition. There are some attractive consequences for Pittsburgh with what happened.
The new draft system works beautifully as long as prospects do not have another place they can go and earn more money. Maybe that place pops up at some point, but for now, I like what I see. I'm sure scouts will grumble because money is an object, but I can live with that. Some players won't sign, but some players didn't sign in the old system too.
The reality is that premium prospects and the MLB Draft have a unique relationship with each other. Both are highly valuable to each other, and neither is all that valuable without each other. Call it the Derek Jeter effect: nobody but the Yankees would pay $16 million for the 2012 version of Derek Jeter, so in theory he is overpaid.* However, how can the Yankees not afford to pay Jeter $16 million to keep him in New York, and in essence, preserve everything that embodies Derek Jeter? There is a certain value that Jeter has with the Yankees which he would not have anywhere else. The Yankees are in a bad bargaining position because there is this sense that they have to keep Jeter at all costs. On the flip side, Jeter has to realize that he can only get so much money elsewhere, and take whatever extra he can get from the Yankees.
*For the record, Derek Jeter is overpaid. This is a crummy analogy, but I hope you get the point I'm trying to make here.
So it is with top MLB draft picks too. How many players are willing to walk away from millions of dollars to do their dream job? How many teams are willing to say "do we really need to sign this guy?" These two sides need each other, and they will find a way to unite much more often than not in virtually any system. The question is who gets who, and the previous system rewarded teams with money more than lofty draft positions. It is best if players go in order of how talented scouts think they are. Otherwise why does draft order even matter?
Signability is dead as we know it, and as long as Major League Baseball uses a draft to disperse amateur talent, I hope signability becomes largely irrelevant.