A Little Spending Primer

by Roberto on Feb 20, 2012 2:02 PM EST

It might be useful to put the Pirates' 2012 draft spending in some perspective, as it's hard to keep track of what other teams have spent in the past. Here's a look at what teams spending in the 8th, 45th, 69th, and 98th slots spent last year. (Right now, that's where the Pirates are scheduled to pick.) The bottom line is that under the CBA the Pirates could make a competitive offer to a draftee and still be able to offer players chosen in rounds 4 through 10 an average of $324, 883. What you can't do in this environment is pull a Josh Bell or go overslot often.

The fact that the 2012 compensation system is ridiculous, should get fixed for 2013.

Pick	Team	Player	Position	School	Bonus
8	Indians	Francisco Lindor	SS	HS	$2,900,000
9	Cubs	Javier Baez	SS	HS	$2,625,000
10	Padres	Cory Spangenberg	2B	JC	$1,863,000
11	Astros	George Springer	OF	Connecticut	$2,525,000
			First Round Average =		$2,478,250
45	Rockies	Trevor Story	SS	HS	$915,000
46	Blue Jays	Joe Musgrove	RHP	HS	$500,000
47	White Sox	Keenyn Walker	OF	JC	$795,000
			First Round Supplemental Average =		$736,667
69	Astros	Adrian Houser	RHP	HS	$530,100
70	Brewers	Jorge Lopez	RHP	HS	$690,000
71	Mets	Cory Mazzoni	RHP	North Carolina State	$437,500
72	Marlins	Adam Conley	LHP	Washington State	$625,000
			Second Round Average =		$570,650
98	Cubs	Zeke DeVoss	OF	Miami	$500,000
99	Astros	Jack Armstrong Jr.	RHP	Vanderbilt	$750,000
100	Brewers	Drew Gagnon	RHP	Long Beach State	$340,000
101	Mets	Logan Verrett	RHP	Baylor	$425,000
			Third Round Average =		$503,750
			Total Through Third Round =		$4,289,317
			Amount Available for Rounds 4-10 =		$2,274,183

This is a FanPost and does not necessarily reflect the views of the managing editor (Charlie) or SB Nation. FanPosts are written by Bucs Dugout readers.

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Clearly, Bud’s friends must be protected from the evil moneybags in Pittsburgh, Cleveland, Houston, etc.

I’m still a little (OK, very) confused. If the Bucs’ 8th and 45th picks cost $3.8 to $4.0 million and their total allowable spending (per Charlie’s post on the main page) is around $6.6 million, how does that help them improve their ability to acquire talent compared to the high-revenue teams?

You can buy professional talent on the “open” market. The Pirates can’t compete there; their revenue base and owners’ wallets are too small. Top-ranked free agents reportedly don’t want to play here. The one area where The Bucs were apparently willing and able to outspend their competition for talent has been foreclosed. What are their options for strengthening their competitive position?

Lino Donoso

by Lino Donoso on Feb 21, 2012 8:19 AM EST reply actions

Most of the high revenue teams can spend even less.

The Yankees, with 11 picks (like the Bucs), can spend $4,192,200. They spent $4,202,500 on their top 10 picks last year. The Phillies, with 12 picks, can spend $4,916,900. They spent $3,855,300 on their top 10 picks last year. In contrast, the Cardinals , with 14 picks, can spend $9,131,100. The Angels, with 8 picks, can spend $1,645,700. The big issue this year is that the FA compensation system rewards people who lost players they really weren’t willing to pay, like the Pirates and the Cardinals.

Viva Clemente!

by Roberto on Feb 21, 2012 6:03 PM EST up reply actions

This might not exactly be to your or Lino’s point, but I am more concerned with the per pick cap than the total cap. The fact that the Bucs are limited to $2.9 in the first round and I’m not sure in the second will reduce the impact of the player that they can take. They can’t take a large sum of the total and put it on a second round player that may have slipped due to signability.

by pskell02 on Feb 21, 2012 11:28 PM EST up reply actions

Not quite

The limit is the total pool, not the amount for a particular slot (though the pool gets smaller, the later that you pick). You could spend $4 million on your first rounder, but you’d have to low-ball (and sign) subsequent players. Remember, every team picking after the Pirates will have a smaller amount per draftee to spend, so there almost certainly will be downward pressure on bonuses.

Viva Clemente!

by Roberto on Feb 22, 2012 1:19 PM EST up reply actions

Maybe I misunderstand the draft rules

But I thought that each pick would essentially have a cap (slot). Meaning that their second round slot might only be $1M, 3rd $500k, 4th $300k, etc. My understanding is that those picks will be taxed if they exceed those limits. The leftover money from the 10 round pool could then be used in the next 30 rounds for larger bonuses.

So if they sign a bunch of guys for under slot bonuses, they could get a lottery ticket type guy for well above the $100k for later round guys.

Let me know if I have this wrong. I’m still all sorts of confused by this new CBA agreement.

by pskell02 on Feb 22, 2012 6:20 PM EST up reply actions

What did Bubba Starling get last year? What is that slot worth this year?

by Kev S on Feb 21, 2012 12:28 PM EST reply actions

$7,500,000

But we won’t be picking 5th.

Viva Clemente!

by Roberto on Feb 21, 2012 5:49 PM EST reply actions

The Royals pick 5th again.

They’ll be allowed $6,101,500 for 10 picks. They spent over $11 million on their first 10 picks last year.

Viva Clemente!

by Roberto on Feb 21, 2012 6:04 PM EST up reply actions

I think I understand your primary points, as follows:

1. The new draft spending limitations may not be as bad for the Pirates as they first appear, since our drafting slots are significantly lower than they were in the last draft.

2. No teams will be able to go significantly over slot without severe penalties.

However, it seems to me that the primary objections (from a Pirate perspective) still stand, namely:

1. The Pirates’ old primary strategy for adding talent to the system (at a faster rate than competitors) is no longer viable.

2. The new CBA is aimed at saving money for MLB, but does nothing to improve competitive balance.

by magnumo on Feb 22, 2012 11:31 AM EST reply actions

actually...

the new CBA is to force the “small market” teams to pony up money for Free Agents. this makes the large market teams happier while making the players association ecstatic.

by white angus on Feb 22, 2012 12:58 PM EST up reply actions

Disagree

While that may be a hoped-for consequence which contributed toward the union agreeing, the motivation from MLB’s perspective clearly was to save money on draft expenditures across-the-board and to limit future escalation.

by magnumo on Feb 22, 2012 1:08 PM EST up reply actions

I think you're both right

Small-market teams will be induced (forced) to spend more money on free agents; draft spending will be capped and future escalation limited. Everybody wins except teams like The Bucs.

Lino Donoso

by Lino Donoso on Feb 22, 2012 6:27 PM EST up reply actions

i agree with ya Magnumo. i think its part of it.

by white angus on Feb 23, 2012 12:30 PM EST up reply actions

Three reasons to think the new CBA might improve competitive balance

1. International pools, starting next year. Unless the Pirates win more games than the Yankees, the Pirates will have a bigger international pool.
2. The competitive balance pool, which starts next year, gives teams with poor records extra picks.
3. The increased attractiveness of Free Agents that white angus mentions.

Viva Clemente!

by Roberto on Feb 22, 2012 1:16 PM EST up reply actions

I think I understand those points, as well. A few thoughts in reply.....

- I was not precise enough in my previous response, which I intended to be aimed specifically at the amateur draft part of the CBA (as your O.P. seemed to be). My objection #2 SHOULD have read: “The draft spending limits in the new CBA are aimed at saving money for MLB, rather than improving competitive balance.”

- I agree with your points 1 and 2, although I submit that the Pirates old strategy of being willing to out-spend the big boys (in the draft and international player markets under the old CBA) had more potential for faster talent acquisition….. until and unless the big boys started spending similar or greater amounts (which they may have done eventually). Hence, I continue to believe that the primary motivation of MLB was to save money on both draft spending AND international free agent spending….. rather than to improve competitive balance.

- The competitive balance pool provides a VERY SMALL move in the right direction, but one additional draft pick per year (if a team wins the lottery every year) promises only a very small and slow change.

- As far as “increased attractiveness of Free Agents” goes, I don’t see that point at all. Small market franchises may have a FEW extra millions to spend on free agents (due to having their spending on amateur talent curtailed)….. but the big boys will have the same few extra millions. Hence, I expect little or no effect on the major league free agent market. Large market teams will retain their huge revenue and financial resource advantages. The additional few million available to small market teams will not close the gap at all (since large market teams will gain similar financial advantage)….. and the existing revenue gap is likely to widen with time (seems almost inevitable unless/until MLB makes substantive changes to the system. Bottom line: Small market teams will not be any more competitive for free agents than they have been in the past.

by magnumo on Feb 22, 2012 2:17 PM EST up reply actions

agreed about the free agents

And another point (if I understand the CBA right, which I may not) is that the new guidelines make it easier for the more successful teams to sign free agents. Previously there were more type A free agents, who would cost you your first round pick if you picked 16-30 and your second round pick if you picked 1-15.

Now many of those free agents won’t cost you a pick, so the higher draft pick penalty for the more successful teams doesn’t apply. (I guess it does make those free agents more attractive to teams that depend on the draft; under the new CBA the Pirates could’ve made a run at Ramon Hernandez.) But the free agents that are still type A basically have to go to teams that draft at the end. The penalty, as I understand it, is that another team gets your draft pick and you draft at the end of the round. If you had the best record, this is almost no penalty, since you’d be drafting at the end of the round anyway. But if you were drafting earlier in the round it’s absolutely devastating.

In fact, it’s far worse than the consequences under the old CBA. Under the old CBA, you might have lost the #50 pick and kept the #8 pick; under the new CBA you might keep the #42 pick (because there will be fewer sandwich round picks) and get busted down to the #33 pick in the first round, or something like that. But the #8 pick is much more valuable than the #33 and #42 pick put together.

Bottom line, unless I’ve got the CBA wrong, bad teams aren’t signing top free agents.

Not actually affiliated with whygavs.

by WHYG Zane Smith on Feb 22, 2012 4:25 PM EST up reply actions

If my understanding

of your understanding is correct and your understanding of the new CBA is correct, the new CBA sucks quite a bit for Pirates fans.

by MDBuc on Feb 22, 2012 8:29 PM EST up reply actions

I understand that to be the case

Not actually affiliated with whygavs.

by WHYG Zane Smith on Feb 22, 2012 9:16 PM EST up reply actions

Competitive balance?

“We don’t need no stink in’ competitive balance”

—our friend Bud

Lino Donoso

by Lino Donoso on Feb 22, 2012 6:32 PM EST up reply actions

Semi OT

Why does it matter that D. Lee is retiring? We’re still losing a B level player for nothing, why don’t we get a comp pick?

by Mr. E on Feb 22, 2012 3:32 PM EST reply actions

Good question

Lino Donoso

by Lino Donoso on Feb 22, 2012 6:33 PM EST up reply actions

I think this could be too easily abused

A guy’s retiring, some team convinces him to sign a 10-day contract for a little extra cash at the end of his career, solely to reap the draft pick. Isn’t that something the new CBA was supposed to address?

by SuperBaes on Feb 24, 2012 8:39 AM EST up reply actions

Well it sorta does, because they pretty much have to be an A level player from now on since you have to offer them a top 100 or whatever salary. So I don’t think anyone is paying $12m for 1 comp pick. Not many guys retire when they are still that good either.

"What up no wings"

by Mr. E on Feb 24, 2012 2:59 PM EST up reply actions

I was wondering about that: how often do guys retire when they’re still legitimately effective MLB players? Furthermore, how many of these guys are coincidentally at the end of contracts? I don’t disagree with you; I just wonder if MLB is afraid that would open a can of worms (or the more likely scenerio that no one thought about it when negotiating the CBA).

by SuperBaes on Feb 24, 2012 3:32 PM EST up reply actions

It was screwed from the beginning

It should have been like the NFL where you only gain comp picks for NET loss, not like in MLB where you can sign a stud 1B, elite closer, good C, then lose Octavio Dotel and still gain a pick.

"What up no wings"

by Mr. E on Feb 24, 2012 4:06 PM EST up reply actions