New Era of Draft Contracts Impact Expectations, Player Development

Strasburg set the contract record for a draft pick, no matter what way you slice it, but it’s the overall trend that raises more concern. Strasburg could very well become the A-Rod of this generation of draft picks, or the Brien Taylor, either way he is one player. For a minute, let’s set aside the argument on the implementation of baseball’s slotting system, and if it should enforce a system similar to the NBA. With draftees controlling the leverage, more and more top picks are earning major league contracts for mid-range free agent dollars.

Given the reverse draft order, the worst teams, usually with a correlating low payroll, wind up selecting the players demanding these major-league contracts. Thus, the same teams who have cut back free agent spending and cut payroll through trades now must spend some potential free-agent money on draft picks who will not immediately contribute, historically not contribute the next two seasons, and may never earn what they are paid. Further, these contracts leave the bad teams handcuffed come next off-season. The draft has essentially become another free agent spending period. Washington signed two Top 10 players, each of whom will earn enough to make the top ten on their current payroll. The Padres traded Jake Peavy to reduce payroll below $30mm, then committed a significant percentage of the current payroll to an unproven draft pick.

Low payroll teams inevitably need any big money players they have to perform. Inserting draft picks among the highest paid players on the roster, not dissimilar from how the NFL works, incentivizes MLB teams to push recent draftees to the majors ASAP. The NFL overcomes that problem because every first-round pick makes the roster and gets a crack at playing almost immediately. If baseball intends to continue pumping this level of money into the draft, teams will by virtue push players toward an NFL model – demanding immediate contributions. The once systematic MLB development system will get turned on its head, as top draft picks are rushed to the majors in months, not years, and arrive with marketing programs, ticket packages, and media hoopla attached to their names.

My question, which requires additional research I have yet to do, is if these contracts have a marked effect on how fast players reach the majors, and how many reach the majors. Are teams short-circuiting their development, taking a ready-or-not, we need you to earn that money now, approach? Further, what are the long-term effects of rushing players to the majors, a study that may require years of data on long-term career trajectory before we can answer. It’s not the Evan Longoria’s or David Price’s or A-Rod’s, all player’s that lit up the minor leagues and earned a call-up that deserve attention, it’s the players that don’t perform in the minors yet teams must call-up because of the salary. What comes of those players, and how do teams handle them given the percent of team budgets they now invest at the top of the draft?

I’m in favor of a slotting system, more stringent negotiation timeframe, international draft, and trading picks all because it makes having a high draft pick a benefit rather than a concern. Until then, we see the impact on team budgets, but how that will affect player development remains an interesting question.

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