The Business of Baseball: Breaking Down the Pirates' Failure to Sign Mark Appel

Zachary D. RymerMLB Lead WriterJuly 13, 2012

Photo Credit: Jake Roth of US Presswire via The Baltimore Sun
Photo Credit: Jake Roth of US Presswire via The Baltimore Sun

The Pittsburgh Pirates found themselves staring a no-brainer pick right in the face when Stanford righty hurler Mark Appel fell to them in the No. 8 spot in this year's MLB First-Year Player Draft. There were rumblings that Appel was going to go No. 1 overall in the draft, yet there he was for the Pirates' taking.

The Pirates made the obvious choice and selected Appel. Immediately, their fans started drooling over a future starting rotation that would feature Appel and fellow high first-round draft picks Jameson Taillon and Gerrit Cole.

It never was going to be that easy.

It was clear right away that Appel wasn't about to go to Pittsburgh willingly. Here's what he said in a statement issued through the Pirates shortly after he was drafted, via the Pittsburgh Post-Gazette:

I'm currently concentrating on winning a national championship and finishing my academic endeavors at Stanford. I will address the possibility of a professional career in due time.

Though the statement claimed that Appel was more interested in continuing his college career than he was in signing a Major League Baseball contract, it wasn't hard to read between the lines. The statement reeked of a leverage play, the words of which were most likely taken directly from the mouth of Appel's "adviser," Scott Boras.

Yes, that Scott Boras. The very same uber-powerful agent who is renowned for his ability to squeeze every last penny out of MLB clubs.

In the end, Boras did not squeeze a single penny out of the Pirates on Appel's behalf. Friday brought the deadline for teams to sign their draft picks, and Appel and the Pirates were unable to agree to a deal.

The team announced the bad news via Twitter:

#Pirates & RHP Mark Appel did not come to terms before the 5pm ET deadline. The team will receive the 9th overall pick in next year’s draft

— Pittsburgh Pirates (@Pirates) July 13, 2012

Baseball fans who had been paying attention to the rumor mill should have seen this coming. In fact, it was just a few hours before the deadline passed that Jon Heyman of reported that Pittsburgh's offer of $3.8 million wasn't going to be enough to get the job done.

It turns out Heyman was right. Appel will return to school for one more season, and the Pirates will hope that the No. 9 overall pick in next year's draft yields a player with both talent and more signability.

And this is why there are no real losers in this situation.

Pirates general manager Neal Huntington admitted in a statement (via that drafting Appel was a "calculated risk." He knew what he was getting into when he gave the go-ahead to select Appel.

What Huntington and the rest of the Pirates brass knew was that they were getting a player who had a legit argument to be paid like a No. 1 overall pick, and they knew full well that they were going to be doing business with a representative in Boras who was going to demand that kind of money without backing down.

The Pirates also knew that they only had so much money to work with. Baseball's new collective bargaining agreement created a new bonus pool system for all teams to adhere to with their top draft picks, and the Pirates' bonus pool wasn't particularly deep.

Per Baseball America, the Pirates only had $6,563,500 to spend on 11 draft picks taken through the first 10 rounds. To put this in perspective, the Minnesota Twins had over $12 million to spend on 13 picks. The Houston Astros had over $11 million to spend on 11 different picks.

To put the Pirates' $6.5-million bonus pool in further perspective, that's the kind of money they paid to each of their last two top draft picks alone. They signed Taillon for $6.5 million in 2010, and they gave Cole an $8 million signing bonus last season.

Such big bonuses for amateur players used to be par for the course, no matter where they were drafted. Major League Baseball dreamed up the bonus pool system as a means to curb the big spending. In theory, restricting each team's ability to spend on draft picks will lead to greater competitive balance.

It's worth repeating that this is "in theory." It will take a few years before anyone knows whether or not MLB's best-laid plans have had the desired effect.

The Pirates could have offered Appel more than the $3.8 million bonus they were offering him, but not without breaking the barriers of their bonus pool. Per Heyman's report, they had already spent $2.7 on other draft picks, leaving just the $3.8 million for Appel.

Had they offered him more, they would have exceeded their bonus pool allotment and thus would have been subject to MLB's system of penalties for teams that do so. Signing Appel for more than $3.8 million would have led to a monetary tax and possibly a forfeiture of draft picks as well.

The Pirates obviously didn't want to worry themselves with these penalties, and they had every excuse to hold their ground, since they knew that they were lucky to have a chance to draft Appel in the first place. They decided to take a whack at drafting and signing him, knowing the whole time that they would get the No. 9 overall pick in the 2013 draft if they failed to do so.

For his part, Appel went into the draft hoping to go a lot higher than No. 8. Ideally, he would have gone No. 1 overall to the Astros, which would have netted him a big payday.

The Astros ended up taking 17-year-old shortstop Carlos Correa instead. They ultimately gave him a $4.8 million bonus. The Astros were therefore able to sign Correa for considerably less than the $7.2 million figure that was suggested for the No. 1 overall pick.

You can clearly see how much money Appel lost out on in falling all the way to No. 8 in the draft. A million dollars or a couple million dollars isn't much to a big-name free agent in his prime, but that's a lot of money for an amateur player who has yet to throw a pitch in the big leagues. Some draft picks never even make it to The Show, so it's in their interest to get as much money as possible while they can.

You could therefore argue that Appel should have taken the Pirates' offer, and you wouldn't be wrong. But as far as he's concerned, another year at Stanford can only help. He can spend that time honing his craft and further convincing MLB clubs that he deserves to be the No. 1 overall pick in the 2013 draft.

So by returning to school, he stands to earn a pay raise of a few million dollars over what the Pirates were offering. 

Appel is obviously banking on the idea of having a stronger season in 2013 than he did this past season, in which he went 10-2 with a 2.56 ERA as a junior. He's also banking on not getting hurt at any point in the next year, and that's where he should be crossing his fingers. He's big and he's durable, but no pitcher is invincible.

If things go according to plan for Appel, he'll go No. 1 or within the first five picks in 2013 and will be paid accordingly. If things don't go according to plan, there will still be a chance of him being taken high in the draft and ultimately ending up with a bonus similar to the one the Pirates were offering him this season.

The Pirates would have loved to have signed Appel, but they knew what the risks were when they decided to draft him. Appel would have loved to have gotten more money from the Pirates, but not settling could work out for him in the long run.

The failure of the two sides to come to an agreement is not ideal, but it's not the end of the world for either the Pirates or Appel.

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