Major League Baseball is currently in the process of negotiating a new Collective Bargaining Agreement with the Player’s Union.

There are several things that will come out of this agreement – the Houston Astros will move to the American League West for the 2013 season, and two additional Wild Card teams will be added (possibly for this upcoming season).  Not announced yet, but anticipated, are changes to the draft structure.

One possible change involves hard draft slotting; MLB will dictate how much money each player gets, based on the order in which they were drafted.  So, rather than negotiating for a large deal like Stephen Strasburg received when he was drafted first overall in 2009, that spot (and the others) would have a pre-determined monetary amount.

The other change discussed involves free agent compensation as it pertains to the draft.  As it stands now, a team can receive draft picks if one of their “rated” free agents signs with a different team.  Players are rated type “A” free agent, (the top 20 percent at their position, determined by the Elias Bureau) or type “B” free agent (the top 21 to 40 percent at their position).  Everyone else would be unranked and would not result in compensation.  Type A players net their former team two draft picks, (typically a first round pick, and either a second round or sandwich round pick), while type B would just net their former team a sandwich pick.

The proposed changes in the Collective Bargaining Agreement would affect the type B free agents; it’s rumored that teams would no longer receive compensation for type B players, starting as soon as this off-season.

How will these changes affect the Indians?

With the elimination of the type B status, I doubt it will harm or help the Indians in the long run.  They typically seem to trade away anyone that isn’t nailed down as they approach free agency, and a B level player probably doesn’t bring much return anyway.

The hard draft slotting is a different story, and a bit more unclear.  It’s tough to determine the long term results; will players be more hesitant to sign out of high school, or early in their college careers?  Would they rather wait until they can be taken earlier in the draft, with a much higher dollar amount?  On the SweetSpot, David Schoenfield joked that it’s only a matter of time before Scott Boras started to establish residency in the Dominican Republic for his young American players. (Since foreign players are not subject to the draft).

As it stands now, there are “suggested” dollar amounts tied to each draft slot, but teams aren’t really penalized for going over slot to sign a player.  However, there is a great deal of pressure from MLB headquarters if a team wants to go well over the suggested figure.

Take Tim Lincecum, for example.  Did you know that the Indians actually drafted Lincecum in the 42nd round of the 2005 draft?  Lincecum wanted $1 million and the Indians offered $700,000 – well above the suggested figure for someone drafted in the 42nd round.  Frank Coonelly, at the time in charge of limiting the slot payments for MLB (and now the president of the Pittsburgh Pirates) was supposedly livid at the Indians’ inflated offer.  Lincecum instead opted to go back into the draft for the 2006 season, where he was taken 10th overall by San Francisco.  (Ironically, the Pirates have spent a great deal on the draft in the past few years, under the leadership of Coonelly).

To be fair, if hard slotting was in place, Lincecum still probably wouldn’t have signed with the Indians in 2005.  Perhaps he never would’ve gone into the draft in the first place, or teams would’ve steered clear out of fear that he would reject their offer and they’d basically waste a pick.

Which brings me to the one way that this may actually help the Indians in a slight way.  Small market teams are often notorious for letting big name draftees slide down the draft order to teams like the Yankees and the Red Sox.  The reason is that they fear they will not have enough money to sign them, or that the player will decide to hold out and wait until next year’s draft; a small market team wouldn’t want to waste a first round pick.  This may mean that teams like the Indians don’t let star players slide down the order, they go ahead and grab them earlier in the first round.

Overall, I think the biggest benefit for small market teams like the Indians would be to include foreign players in the draft as well.  That way you don’t have to compete with teams like the Yankees and Red Sox, who can spend almost unlimited funds on Latin American scouting and signings.

Tomorrow I’m going to look at the Indians’ first round picks of the past 10 years.  Many of these picks were complete busts, and current star players were drafted after the Indians’ failed choices.  Was this just bad drafting and scouting on their part, or was this due to financial concerns?




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