How the Cubs are Dealing with the Post-CBA Draft World

How the Cubs are Dealing with the Post-CBA Draft World

The Astros have a messy situation with Brady Aiken. With the window to sign the first overall pick closing, the situation has gotten ugly with agent, I mean advisor, Casey Close accusing the Astros of negotiating in bad faith.

The Astros certainly have had a bad couple of months in terms of their public relations, perhaps finally stealing the limelight the Mariners enjoyed(?) this offseason. It is impossible for us as outsiders to know who is truly wrong in this circumstance, but it's easy to place the blame on the draft structure established by the current CBA.

The Astros aren't likely to pocket whatever savings they might get from Aiken, if he does sign, but rather to invest it into more players as the Cubs have done in the previous drafts. Here is a good breakdown of the math involved in the Astros situation.

The reason this has taken on such importance is that teams are unwilling to suffer the draconian penalties for overspending in the draft. At 105% to budget, teams forfeit their highest draft pick the followin season. There is no top 10 protection for this either. That is the reason that no team has gone over that limit since this system went into place. This is also in stark contrast to the international amateur market.

The Cubs and Rangers blew past their respective bonus pools, each accruing the maximum penalty. The Yankees and Red Sox this season are going even further. The last estimate available for the Yankees had them spending over $15 million on international amateurs on a bonus pool of just over $2 million.

The Cubs have gone up to that 105% limit in each of their drafts, and I was curious to see if that was a strategy that a majority of teams are using at this point. The data is incomplete as of yet, so I focused on the first two post-CBA drafts. Here is a chart organized by percentage of available money spent showing the Cubs ranked at the top.

Draft Spending 2012-2013

But percentage of spending is just one way to look at the data. The other aspect is total money spent on bonuses, and by that measure the Cubs drift down the rankings slightly.

Draft Spending Totals 2012-2013
This last chart illustrates some important points. A common criticism with this front office is that this isn't the way the championship teams in Boston were built. This is a true statement but it neglects an important point. The way that Boston was built does not exist anymore.

The way the front office operated in Boston was to hoard draft picks. As an example the Red Sox picked six times in the first round in 2005. This avenue of talent acquisition simply doesn't exist as compensation picks are rarer and hard slotting prevents spending to make up for lack of picks. And Boston, with a good year and a poor year prior to these drafts, had $6 million fewer dollars to spend than the Cubs.

The other thing this chart drives home is the advantage of tanking. The Cubs had the ability to spend the third most dollars in baseball, and currently the most ever counting this year (the Astros will very likely jump ahead substantially if they sign Aiken and/or Nix). Compare the Cubs to a team that has decided to be just mediocre in the Mets.

The difference again is $6 million in available money to spend. Or, take it another step and look at a team that many people wanted the Cubs to emulate: the Angels. The Angels have signed big-name free agents in each offseason, which has cost the team draft picks. This has resulted in the Angels having $16 million less than the Cubs to spend in the three post-CBA drafts than the Cubs.

The effects of the CBA are still being processed, but teams are taking a variety of approaches to the draft. Teams like the Cubs, Cardinals and Dodgers are spending up to the limit before losing a draft pick.

All teams except the Angels have spent within 5% of their bonus slots in the two drafts prior to this year, and it will be interesting to see if the numbers begin to diverge more once the final totals for this year are in. The early indications are not much as the Cubs still lead the pack at highest percent of bonus pool money spent on the amateur draft.

@dabynsky

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Filed under: Minor League News

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  • I mentioned on Rice Cube that one has to be not only a lawyer but a nuclear physicist to figure this stuff out (besides being a CPA).

    Maybe what wasn't said before (and certainly not with respect to Rondon) was the 105% number, since apparently all the Sox signings were over slot. Is the explanation "not over slot by more than 5%?"

    And, as you implied, regular draft picks now can't be traded.

    What baseball certainly needs, though, is some disincentive to tanking. At least in the NBA, the 1.7% shot continually playing out means that the worst team can come in 4th. But is there any point to tonight's Cubs-DBacks game other than seeing who wins the draft race?

    I also can't figure out paying millions in bonuses to someone being assigned to the minor leagues, but maybe that's the compensation for most of a decade of control. NFL is a bit simpler--once they capped rookie salaries, the agents came back with "give us a 4 year guaranteed contract." Now the top draft picks know what they are going to get.

  • I think there's a secondary effect to having all that money to spend, and that is that the strategy the Cubs/Astros/Others have taken simply isn't possible for teams with smaller pools to pursue the "unsignable" kids. If two teams save 30% of their 1st pick allotment (not easy) to go after tougher signs, the 2014 Astros will have $2.376mil to spread around, while the 2014 Cardinals will have only $553k to spread around. The differences scale pretty quickly after that, too, leaving the teams with larger pools significantly more money to go after multiple tough signs.

    A fun tertiary effect of that is that the "advisors" to tough signs will know there's a certain amount of cap space available for the tough signs, and will tell the teams with little money to not draft their kid (or float them a number they can't match).

    So you've got two ways in which tanking is the ONLY WAY to stockpile talent through this method. Unless you're the Cardinals or Detroit and are handed a bunch of free "compensation round" picks based on their market size.

    #FireSelig
    #FckTheOwners

  • Fascinating piece. The extra benefit of tanking noted was a revelation. Plus when you consider the Cubs taking Kyle Schwarber with their 4th pick this year and paying him $1.5M below the slot amount, this freed up a nice additional amount of money to overslot with later picks. Time will tell if the 2014 draft goes down as a great one for the Cubs. They certainly had the extra financial advantage. And is there any doubt Theo/Jed wants at least one more tug from this jug by getting as high a pick in next year's draft?

  • I totally understand logically this was the way to "play the game". But as a fan it has been hard to watch the last 3 years. Things look alot better right now though. Maybe Jed and Theo had to save me from myself in this case.

  • Updates on your first paragraph and disincentive to tanking: the Astros did not sign their #1 pick (CBS Sports). And they had the #1 pick for 3 years. Nonetheless, they continued to work on getting the #1 pick for a fourth year Friday and Saturday.

  • In reply to jack:

    Eh the Astros are the counter to Jesse Rogers piece that tanking automatically results in better farm system or that it was easy to collect the minor league talent the Cubs have in less than three years. The Astros have had a huge advantage in terms of amount to spend in the draft the past three years. Them squandering that opportunity (so far) does not change that it is a massive advantage.

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