Draft : : Story
Monday, January 16, 2012

2012 Draft Overview

Allan Simpson        
Photo: Stanford

New Constraints on Signing Bonuses Puts New Spin on This Year’s Process

Record spending on signing bonuses in recent drafts, particularly 2011, prompted baseball’s power brokers to undertake the most sweeping changes in 46 years to the game’s primary talent procurement process as part of a new Collective Bargaining Agreement between owners and players. The modifications, ratified in November 2011, go into effect with this year’s draft.

There may not be a hard cap on individual draft slots, as owners initially pushed for, but stricter, enforceable measures were implemented that will limit the total amount that teams can now spend on players signed in both the domestic and international markets. If teams exceed the imposed limits, they will be subject to a significant tax and even a loss of premium draft picks.

Despite the best efforts of the commissioner’s office to limit runaway growth, signing bonuses rose for the fifth year in a row in 2011. Collectively, teams spent more than $228 million on signing bonuses for players subject to the draft in 2011, including roughly $192 million on players taken in the first 10 rounds. The overall amount shattered the previous record of $195,782,000, set a year earlier.

The new CBA mandates that teams cannot spend more than $185,153,500 on bonuses to players in the first 10 rounds in 2012, a slight reduction from the amount spent a year ago. Each team has been allotted a fixed upper limit, depending on its position in the draft rotation.

Sweeping changes are also in the works to limit the amounts that teams can spend on the international market. For 2012, each club has been assigned the same upper limit, $2.9 million, but that figure will change in succeeding years as Major League Baseball moves towards the implementation of a full-blown international draft, possibly by as early as 2013 or 2014.

The Houston Astros will have first pick in this year’s draft, and it’s open to question whether there is a headline player in this year’s talent pool that might warrant a $7.2 million signing bonus—the amount that has been earmarked for the initial selection through the new CBA.

At the outset of the 2012 season, it is generally agreed that the top three prospects available are two college players, Stanford righthander Mark Appel and Arizona State shortstop Deven Marrero, and California prep righthander Lucas Giolito. But none is a lock at this point to go No. 1, much like righthander Stephen Strasburg was in 2009 and Bryce Harper a year later.

As part of the new draft rules, the Astros will have $11,489,400 to spend on all their picks in the first 10 rounds, including $7.2 million on the first selection. That’s in contrast to 2011, when the Pittsburgh Pirates paid out a record signing bonus of $8 million to sign No. 1 overall pick Gerrit Cole. Additionally, the Pirates spent a record $17,005,700 to sign all their draft selections, more than $5 million more than the previous mark.

The Astros are not required to spend the full allotment of $7.2 million on this year’s top pick. The new rules provide that they could elect to spend under slot on the No. 1 selection and utilize the difference on some of their draft picks in later rounds without being penalized.

However, if the Astros, or any team, elects to spend more than their allotted amount in the first 10 rounds, they will be penalized with a tax or loss of future draft picks. A team overspending by up to five percent of its allotment will be subject to a penalty of 75 percent of the amount by which it exceeds the threshold. If it spends upwards of 15 percent more, it would stand to be punished with a 100 percent tax on the overage and the loss of first-round picks in each of the succeeding two drafts.

The new, restrictive draft measures were enacted to curb continuing runaway inflation on signing bonuses and better assure that the best prospects end up with the weakest teams, restoring the original premise of the draft.

As the team with the poorest record in 2011, the Astros have been granted the most money to sign their 2012 draft picks. Each succeeding team will have progressively less to spend on both their first-round pick and all picks cumulatively through the first 10 rounds. The 30
th and last team in the draft order, in this case the Philadelphia Phillies, have been earmarked $1.6 million for their first-round selection and a total of $4,471,800 through the first 10 rounds.

There could be numerous upward or downward adjustments to the allotted bonus amounts each team is assigned in the first 10 rounds, depending on several facvtors, including free-agent compensation and the inability of a team to sign a pick in those rounds.

Additionally, a team may spend up to $100,000 on a player drafted after the 10
th round or signed as a non-drafted free agent without being penalized. But if it signs a player for more than $100,000, the excess will be applied against the team’s allotment in the first 10 rounds. For instance, if a team signs a 14th-round pick to a bonus of $500,000, the additional $400,000 will apply to the team’s signing bonus pool.

Numerous other changes to the draft will go into effect this year, including a reduction in the number of rounds from 50 to 40 and a new, mid-July signing deadline. In the case of 2012, that deadline will be July 13.

This draft itself is set this year for June 4-5 and many big-league clubs are currently in the process of gearing up for the process with pre-draft organization meetings to sift through the talent in this year’s pool.

Beyond the Big Three of Appel, Giolito and Marrero, one of the more interesting sideshows of this year’s draft will be the potential run on players from a talent-laden Stanford team. Led by Appel, that school has three potential first-rounders this year and two or three more players that are candidates to go in the top 3-5 rounds. Over the next three drafts, the Cardinal has the potential for 7-8 first-round picks.

At 6-foot-6 and 210 pounds, with a fastball that has approached 100 mph, Appel is a near-lock to be one of the first 2-3 picks in the 2012 draft, providing he can pitch for Stanford as a junior like he often did last summer in stints with USA Baseball’s college national team and in the Cape Cod League.

His arm was electric, at times, with a fastball that was consistently at 97-98 mph, along with two above-average secondary pitches in his slider and changeup. He mixed all three pitches effectively when he was on his game, and was able to work each to all parts of the strike zone efficiently with an extremely easy arm action.

In 110 innings as a sophomore for Stanford in 2011, Appel allowed 114 hits while walking 29 and striking out 86. The result was a modest 6-7, 3.02 record, but Appel should become more of a dominant pitcher as he refines his raw stuff, especially his changeup.

Marrero is a superior prospect in all phases of his game, but the one area where he truly stands out is on defense. He is in a league of his own as a college shortstop and scouts say he is ready-made to play defensively in the big leagues.

While his ability to play shortstop has never been questioned, the 6-foot-1, 170-pound Marrero continues to open eyes with his bat. He hit .322-0-14 last summer for USA Baseball’s college national team and led that squad in hits, doubles, RBIs and stolen bases. In contrast to his summer showing at the plate, Marrero hit a modest .315-2-20 with the new BBCOR bats during his sophomore year at Arizona State, and scouts may have already come to the conclusion that he is one of those players who is a better hitter with wood.

In the 46-year history of the baseball draft, a high-school righthander has never been taken with the first overall pick. That could all change this year as the 6-foot-6, 230-pound Giolito is not only the No. 1 prep prospect on most draft boards, but the No. 1 prospect overall on many.

Giolito has a big, strapping, athletic frame in his favor, but also an easy delivery and wide array of pitches that he can throw for strikes with confidence. His best offering is a sinking fastball that is consistently in the mid-90s, but he also has two superior breaking pitches—a mid-80s slider and high-70s curveball—and can be overpowering with the downward angle he generates from a high release point.

Led by Appel, Giolito and Marrero, Perfect Game is unveiling its list this week of the Top 500 Prospects in this year’s draft class. We begin today with Prospects 1-100, and will break out a new group of 100 each day.

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