MLB Draft: Top 100 College Seniors

New CBA Puts Unintended
Spotlight on College Seniors

In response to an alarming rise in signing bonuses to untested amateur players and reckless spending on the part of some of its clubs, Major League Baseball enacted the most sweeping changes to its first-year player draft in 2012 of any draft in its 47-year history.

The strict new measures appeared to have their desired effect as there was a seven percent dip in bonus payments overall from 2011, when a record $228 million in bonuses was shelled out.

Provisions in a new Collective Bargaining Agreement, authored prior to the 2012 draft, established parameters on the amounts clubs could spend on all their draft picks, with teams threatened with fines or the loss of premium draft picks if they didn’t toe the line. Every club was in compliance.

The new slotting system assigned a specific bonus value to every draft pick in the top 10 rounds, which provided clubs a fixed upper limit they could spend on all their selections in that range—with the actual bonus-pool amount dependent on where they selected and the number of players they had to draft. The aggregate value of all picks in the first 10 rounds this year has been at $202 million—an increase of 8.2 percent from 2012, despite 22 fewer draft picks in this draft.

The Houston Astros will pick first overall for the second year in a row, and have been allotted roughly $7.8 million to spend on the No. 1 selection—up from $7.2 million in 2012. Additionally, the Astros will have $11,698,800 to spend on all their picks in the first 10 rounds, most of any club.

By contrast, the Washington Nationals, who will pick 30th and last in each round and also forfeited their first-round selection as a result of signing righthander Rafael Soriano as a free agent prior to the 2013 season, have only $2,737,200 in their allotted bonus pool.

Per terms of the CBA, teams have the latitude to spread their draft pool value among picks in the first 10 rounds in any way they choose, so long as they remain under their total allotment. At the same time, a team forfeits its assigned value for any draft pick in the first 10 rounds if it fails to sign one those selections.

Should a team exceed its assigned upper limit by up to five percent, it is subject to a punitive tax of 75 percent of the overage. The penalty becomes more excessive, and even includes the loss of future draft picks, depending on how flagrant the overage is.

From an actual assigned value of $7,790,400 for the first selection and $6,708,400 for the second pick this year, the designated amount for each draft pick drops off to $1,812,400 for the 27th and last pick in the first round, and all the way to $135,300 for the last 17 picks in the 10th round.

A year ago, in the first draft under the restrictive format, teams frequently overspent their allotted amount on select individual draft picks but managed to stay within their overall allotment by drafting college seniors in record number in the first 10 rounds.

With little or no leverage because their future college options have been exhausted, college seniors can typically be signed for nominal bonuses, often significantly below market below, which freed up clubs, under the new draft system, to apply the savings to other, more-expensive picks in the top 10 rounds.

A record 62 college seniors were drafted in the first 10 rounds a year ago—compared to just 23 in 2011, and 19 in 2010. In the 10th round alone, 20 college seniors were taken (by contrast, there were none chosen in the 11th round), with every player receiving a bonus ranging from a token $1,000 to $40,000—significantly below the assigned bonus slots of at least $125,000.

No team may have exploited the new draft rules, relating to bonus pool value, more than the Toronto Blue Jays, who had an abundance of early-round picks last year and spent at least $750,000 on each of their first seven selections. That included a $2 million bonus to Ohio prep lefthander Matt Smoral, a potential top 10 talent overall before he missed most of the 2012 season with a knee injury. Smoral was taken with the 50^th overall pick, which had an assigned value of $1 million.

Under normal circumstances, the Blue Jays would have had almost no chance to sign Smoral and two other premium picks for bonuses well above their slot amounts, and stay within their allotment of $8,830,000. But by drafting six college seniors and a fourth-year junior from Rounds 4-10, and subsequently signing each to bonuses ranging from as little as $1,000 to $5,000, they managed to skirt the rule and not be subject to a penalty.

A similar strategy is expected to be followed by a handful of clubs again this year, particularly those with multiple early-round picks. A devalued bonus, however, is not expected to apply to the marquee college senior in this year’s draft class, Stanford righthander Mark Appel, who may have been a victim of the new draft rules that went into effect in 2012.

Appel was a leading candidate to go first overall to the Astros a year ago, but was passed over in favor of Puerto Rican shortstop Carlos Correa, who was signed for $4.8 million—a full $2.4 million below the slot amount for the first pick. Appel ended up sliding all the way to eighth, where he was selected by the Pittsburgh Pirates. The allotted bonus for that spot ($2.909 million) was less than half what it was for the first pick, and though the Pirates made a sincere effort to sign Appel for a bonus in excess of that figure, they refused to go above $3.8 million because it would have put them in a penalty position.

Appel simply elected to pass on all offers from the Pirates, returned to Stanford for his senior year and may get the last laugh if he is drafted by Houston this year. He is again on the Astros short list of candidates to go No. 1, and realistically is the only college senior with a shot to go in the first round—and possibly even the first 2-3 rounds.

Georgia Tech outfielder Brandon Thomas (Pirates, 4th round) and Connecticut second baseman L.J. Mazzilli (Twins, 9th round) were the only other college players drafted in the top 10 rounds a year ago who went unsigned, and they should be among the premium college seniors in this year’s draft.