MLB Draft: How the Next Collective Bargaining Agreement Could Crash the Draft

Matt TruebloodSenior Analyst IJuly 16, 2011

The future of draft signings might be much less amicable than Bryce Harper's.
The future of draft signings might be much less amicable than Bryce Harper's.Greg Fiume/Getty Images

Picture a baseball prodigy. Maybe it's the next Bryce Harper; maybe it's the next Stephen Strasburg. He's young, nervous, fidgeting with his tie and sweating slightly under the heat of bright television camera lights.

He glances to his right, at his agent, who shoots him a reassuring smile. He looks to his left, at the general manager who just made him a top-50 pick in MLB's First-Year Player Draft. No reassurance there. The media fall quiet, and the circus begins. Above them all, a judge reads the case and docket number aloud and gavels the court into session.

Not your ideal scenario? Tough luck. With the expiration of the current Collective Bargaining Agreement between Major League Baseball and the players union looming at the end of this season, many who know baseball believe one critical issue will be, as a politician might put it, "draft reform."

Frustrated by years of having their slot recommendations ignored and having to scramble each August to keep draft bonuses secret and under control, MLB's owners and top executives apparently plan to insist upon a hard slotting system that sets a ceiling for each drafted player's signing bonus based upon his draft position. Think NFL rookie wage scale.

Their twin objectives are to remove whatever variables, other than talent, might determine draft order, and to lower the cost of acquiring amateur ballplayers. Bud Selig, the owners' commissioner, believes both changes would improve competitive balance and save the league money.

He is, as ever, wrong.

For one thing, amateur talent acquisition is unfailingly efficient in comparison with free agency at the big-league level. Small-market losers like Pittsburgh and Kansas City have used the present draft structure to build strong farm systems by spending more in the draft and the international market than most other clubs.

Without the right to create an advantage through shifting resource allocation to a less risky, less expensive vehicle, those teams would be in huge trouble. Another delusion is the notion that baseball needs to cut costs substantially in this arena.

Consider: the average MLB team spends less than $10 million annually on draft bonuses, usually nabbing.some 35 players along the way. If even one or two of those picks becomes a star, the draft is a steal. If three or four of them hit their ceilings, the team who wins that lottery will be set up to compete consistently for years.

Think big signing bonuses for draftees are inefficient? Ask the Chicago Cubs about Carlos Marmol's three-year, $20-million contract.
Think big signing bonuses for draftees are inefficient? Ask the Chicago Cubs about Carlos Marmol's three-year, $20-million contract.David Banks/Getty Images

Meanwhile, a hard slotting system could well save the league money—but at the cost of losing many athletes with the ability to play other sports that offer them better college scholarships. If the league really needs financial reform, they might try creating a more lucid free-agent market in which relievers no longer receive multiple-year commitments.

Lest those are not sufficiently alarming to the league, though, there is one other reason a hard slotting system would be a disastrous turn, this time for the league's bean-counters themselves: It might well spell the end of the draft altogether.

Savvy baseball fans know well the history of baseball's tenuous history outside the boundaries of United States antitrust labor laws. Countless times over the past 60 years, the game's head honchos have been called to the halls of Congress to testify about the importance of their exemption. Each time, there have been handshakes, winks, nods and general turning of blind eyes.

When the rules of the game have been challenged in courtrooms and binding government-supervised mediation, though, the results have been very different. A labor mediator named Peter Seitz threw open the floodgates of free agency. A Supreme Court injunction ended the 1994 strike. Ultimately, the players have the law on their side, and everyone knows it.

Still, the players' union has generally had the good sense not to challenge baseball's exemption itself, or to press on some of the hotter issues over which they could easily win in court, because the long-term fiscal health of the owners helps the members of the union, too.

But until they are drafted and sign their first rookie contract, players are not union members, and are relatively immune to union pressures. Those players have a different set of incentives before them than to curry favor with owners or help them make enough money to keep the game in good standing over the next two decades.

A college baseball scholarship covers, at most, two thirds of the cost of attending school. A player who cannot get an academic scholarship to pair with his athletic one, and who has no other sport in which he is good enough to ascend beyond high school, has nowhere to turn but the draft.

Let's say Scott Boras advises him. Say Boras recognizes the kid's elite talent, and knows MLB's new slotting system will not pay him nearly what he's worth, not nearly what he could earn without the cap in place, and certainly not what he could earn as a free agent. For Boras, after all, free agency has always been something of a goal unto itself. He tried to get J.D. Drew declared a free agent when Drew was drafted in 1998, and on a much more specious premise than this one.

At Boras' urging, the kid goes to court. The draft is an unfair constraint on his right to auction his services, the player argues, and the slot system only exacerbates the problem. This is a clear violation of labor law, of the free-market principles our business world uses as pillars. The player demands free agency, and when the judge grants it, the game is up. The precedent is set.

If baseball manages to maintain even its current system of arbitration, team control and gradual free agency, it will be a minor miracle. The draft will be over. The hounds will be loose.

Unproven talents will sign for little more than they have in the past, but now the Yankees and Red Sox and Mets and Cubs will gobble them all up. One hundred players will sign for what currently rates as top-50 money every season. Sixteen-year-old kids will be eligible to sign, and the game will begin to churn out a generation of washed-out busts who never even got a high-school diploma.

Of course, that's a peculiarly apocalyptic view. The more likely scenario is that the game would simply, and steadily, lose players with elite athletic tools to top football and basketball programs, and that a game already struggling to hold the attention of most African-Americans under age 50 would lose that demographic entirely.

Bud Selig, understandably, does not do well when pressed to think like a young black man. Less understandably, he retains enormous, unwieldy influence over the thinking of the owners and the process of labor negotiations. Selig needs to enlist the help of young, brilliant minds around him, and reconsider his position on the draft. Otherwise, he had better prepare to stand and look a judge in the eye, three years from now, as the judge evokes Ronald Reagan:

"Mr. Selig, tear down this wall!"