Tagged: Business Theory

Draft Rules Need To Change

With the 2007draft now complete, the results are in; the new draft and follow rules and signing
deadlines have had an effect. I won’t go on here, but would like to mention the Rick Porcello pick. The 18-year-old was easily the best high school
pitcher in the country; possibly the best in upward of 10 years. But he fell to
27th overall to the Tigers, who seem willing to meet his agent’s
demands for what some believe is an eight-figure signing bonus.

 

First – Good
on the Tigers. Ignoring the slotting issue for a moment, Detroit has not sat on their laurels or played
the disassembling game the Marlins have made famous; taking apart a championship
team twice in the past 10 years, pocketing the playoff revenue then looking for
sharing funds in the subsequent season. The Dave Dombrowski led organization has
taken the money from their 2006 season and reinvested it back into winning
another. With this pick they’re showing a willingness to invest beyond just this
season. And why shouldn’t they? The team has a storied history and Detroit and area does not fall under the auspice of small market. They should bring the fans to their new-ish facilities,
and they should be willing to compete annually.

 

Having a Porcello
fall to the American League Champion defeats the purpose of the draft ranking,
and goes against the steadfast philosophy of the rules that prevent the trade
of draft picks. It’s time to revisit this as it’s become obscene in combination
with the pressures MLB puts on the clubs to remain within their guidelines of
what a drafted player should receive as a bonus. I’ll use a revisionist look
into recent history to make this point.

  

In 2004 the top player in the country
was shortstop Stephen Drew out of Florida State. The Padres
had the first overall pick in that year, but Drew, a Scott Boras client, was
going to be a difficult sign. So the organization went the safe route attempting
to comply with the MLB prescribed signing guidelines, making a surprise choice
in another shortstop, home grown high-schooler Matt Bush. A sign-able pick, he
received a $3.15 million bonus, and Drew slid to the Diamondbacks at No. 15,
who got into a complicated arrangement, giving Drew $4 million as a bonus with up
to $5.5 through a five-year contract period. For the sake of this argument, we’ll
say they paid $6 million more, with the notion the sum is approximately nine
percent of their (and the Padres) current salary costs. And how did it play out?

 

Drew is currently
a major leaguer  –called up in 2006 —
being paid a base salary of $750,000, the amortized contract amount already covered
in the six-million tag; a star of the future. And Bush, who lost the home grown
spin potential when he instantly ran afoul of the law, has posted a .221/.291/.276
from Rookie ball through low Single-A, his bat and defense so dismal the Padres
are attempting to convert him into a pitcher. A 21-year-old newfound pitching prospect
with a 90 mph fastball? A potential middle reliever in a few years. The end analysis
shows the Padres have lost three million dollars, in a first overall selection,
strictly due to their willingness to comply with major league baseball, and not
spend nine percent of their salary budget; the Diamondbacks have a bargain on
their hands for a few years.

 
It’s nowhere
near as simple or clear-cut, the trials and failures go back and forth as the years
wear on. The one certainty is the Padres did a poor job. But they lost because
they couldn’t trade the pick and get something of value, instead choosing to
take a hit that many, myself included, predicted. The trade rules have to
change, and again it’s not all black and white.

 
If
baseball is America’s pastime, then the occupation is
the maintenance of the capitalist system. Any move to allow draft pick trades,
would have to be carefully configured with concise legislation. Baseball does
not want to have Scott Boras and co. have any more effect on the draft than
they already do. The ability to manipulate the market is Boras’ job and he does it well. At
present high school draft picks have leverage with college commitments, college
picks have leverage if they have NCAA eligibility left. Some argue that’s
already too much power. But at present the small market teams are not getting
anything in the first round for their draft ranking, choosing the player they
can sign, leaving the best talent to those teams whose financial circumstances make
them better situated and with more juice to ignore the MLB guidelines.

 

Something has give. The have-nots cannot
continue to watch both the Hot Stove League and the draft process from the
sidelines.

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Prospect Lists II – Fantasy Factor

Inspired by my only commenter thus far, I’d like to discuss a couple quasi-theories of mine surrounding "Fantasy Factor," my phrase to describe a basic principle which possibly has already been discussed to death while I slept, and may have a better moniker I’ve not been made aware of.

The Fantasy Factor’s basic premise is the sport and business of baseball, as well as the peripherals including the media, are being moved by the fantasy industry; originally shunned as freaks and geeks, but now being recognized as both knowledgeable and a formidable consumer demographic. Anyone who knows me is aware I projected this at the beginning of the decade, so the fact I write on it now should come with minimal shock value. The evidence is being discussed and is visible everywhere, and there’s even been surprising information and admissions coming from the baseball organizations the past couple of years.

With fantasy evolving into the deeper, keeper-style and dynasty leagues, the industry has awoke to the minor leagues and prospects. And given fantasy is driven by "The List," is it too much of a stretch to believe the enormous popularity of the Top Prospect 100 list is a result, and has been for some time? If you believe this in combination with mine and Boyd Nation’s thoughts on list compilation theory from the previous Blog entry, then those who publish under those guidelines are churning in a giant, watery circle of media spin and popularity, born of the same people who are about to push the handle and flush, as the Fantasy Factor moves this segment of the industry. Fantasy professionals are all about the reality of results, and that is their popularity.

Looking forward I envision the lists will remain, and in fact, become more plentiful, adding different forms and criteria for a better overall package. The sharper mind will take over the minor league analysis from some, but Baseball America – whose best work currently is the Top-30 on each team – will not be crushed by the glacial-paced Fantasy Factor, and will simply change modus operandi to produce more result-oriented lists.

There are still many under-explored facets of prospecting that will come under scrutiny. Between the seasons of 2004 and 2005, months prior to some personal events that stalled what should have been a decent analytical year for me, I determined the second base position –- one whose attrition rate is very high — had been terribly forecasted for years, and the upcoming season was dreary as scarcity of talent and change of position was an issue. So I changed my normal method and concentrated my efforts on organizations and those succeeding in the upper-minors, valuing results over scouting indicators. At the end I came up with the usual suspects for the upcoming, Rickie Weeks, Chris Burke, and Josh Barfield (who I’ll discuss under this auspice in an upcoming blog), but came upon a few others who I overvalued more than anybody else: Ryan Rayburn, Wily Aybar, Robinson Cano and Jorge Cantu. Raburn might have made me look bad had it not been for the success of the latter two, and the end result in my humble opinion, turned a negative position problem into a positive for those that followed the work. The original article was published on Roto Wire and picked up by Yahoo!, but I doubt it’s kicking around there anymore and can only be found at the link above if you have a subscription.

This is but one example of the many changes I project will come to fruition as the Fantasy Factor migrates into the minor league parks.

Dan Quon