Reimagining the MLB Draft

There are any number of ways the amateur draft can be structured. (via Keith Allison)

The first of Major League Baseball’s amateur drafts was held in 1965. In the 54 years since, it has undergone many changes, large and small; what I am about to propose may be the biggest change yet. But before discussing the details of how I want to change the draft, let’s look at the issue of competitiveness in the current drafting system.

Whenever a new strategy is successful for one team, whether it be Moneyball, bullpenning, the use of an opener, or even tanking, other teams are quick to imitate the trend. The Houston Astros and Chicago Cubs each have won a World Series by losing for multiple years, stockpiling high draft picks, and trading for young talent.

Now, many teams are imitating that strategy and going into a rebuilding cycle, which puts the competitiveness of the game at stake. Seattle general manager Jerry Dipoto recently addressed this issue, saying, “You could argue that you’re going to compete with more clubs to try to get the first pick in the draft than you would to win the World Series.” This is not good for baseball. Having fewer competitive teams has negatively affected the game, with total attendance dropping to its lowest in 15 years last season.

The draft attempts to address competitiveness, to varying degrees of success. In the past, it was draft pick compensation in relation to Type A and Type B free agents. Now it is compensation received when players who reject a qualifying offer sign with another team. These rules tie signing and losing top free agents to draft-pick compensation. Small-market teams receive a supplemental draft pick when they lose a free agent they cannot afford to re-sign. However, this situation now has led to teams hesitating to sign free agents who are tied to losing a draft pick. I think it is time to remove any draft ramifications for signing a free agent. Free agents should not have their future salaries affected by how a team values the loss of a pick in the draft.

To address the problem of competitiveness, I looked at how other draft systems have tried to mitigate this issue. Examining the first MLB draft, as well as the current draft in Japan’s Nippon Professional Baseball (NPB) League, I formulated a new draft system.

In 1965, Kansas City had the first overall pick of the inaugural MLB draft, having had the worst record in the American League. (The AL went first because the Cardinals had won the 1964 World Series.) The draft then alternated from league to league in reverse order of their standings, without regard to winning percentage.

The draft ended, no matter the record, with the World Series champion. This stands in contrast to what we have now, where league and division standings do not matter. The current draft order is just a reverse of team’s records, but MLB should reconsider this.

In Japan, the NPB’s draft begins with every team simultaneously nominating a player. If a player is nominated by only one team, that team is awarded the rights to negotiate a contract with him. However, if a player is picked by multiple teams, that player is considered “contested.” All the teams that nominated the contested player are entered into a random draw, and the winning team is awarded the rights to negotiate with that player. The teams that did not win the negotiating rights to a contested player then draft again until every team has drafted a player.

Because every team has a chance to get any player in the first round, there is less incentive to have a worse record than any other team. After the first round, the NPB draft is similar to the 1965 draft, alternating from league to league. Simultaneous drafting could help MLB with the issue of teams vying for better draft positions.

The goals are to lessen the benefit of a team having a losing record and increase competitiveness within each division. Each division has five teams that are competing for one guaranteed playoff spot. If we consider each first-place team as equally deserving of a spot in the postseason, regardless of its record in comparison to the other divisions, why not do the same for the draft?

If every divisional standing is considered equal among the divisions, we can adopt the NPB’s idea of a simultaneous draft. Rather than both entire leagues drafting at once, though, we will have one team from each division draft together. Teams from each division with equal standings will be combined into brackets. All fifth-place teams of each division will be placed in Bracket No. 1. Then, all the teams that placed fourth in their division will be placed in Bracket No. 2. This will continue, with Brackets No. 1 through No. 5 for each divisional standing and each bracket consisting of six teams.

For the draft’s first three rounds, Bracket No. 1 will be the first bracket to draft. All teams within the bracket will select a player, along with a minimum signing bonus they are willing to pay to that player. This number is just the opening salvo of negotiations; players can receive more than what is offered during the draft, just not less. Just as in the NPB draft, players who are selected by only one team will be drafted by that team and can begin the negotiation process.

But here, the process will diverge from the NPB; when a player is selected by multiple teams, it is not random draw that will decide which team is awarded the contested player. We would use the team with the highest minimum signing bonus attached to its nomination to determine the team that wins the negotiating rights to the contested player. The team(s) that did not have the highest minimum signing bonus attached to a contested player would then make another selection. This process will repeat until all six teams in the bracket have selected a player. Bracket No. 2 will then begin its selection process. The draft will continue in this fashion until each bracket has drafted a player in each of the three rounds.

As in the current draft, there will be values assigned to each pick and bonus pools allotted to each team. But, instead of each pick decreasing in value, the six picks from each bracket will all have the same value. Teams from each bracket will also have equal money for their bonus pools, but Bracket No. 1 will have a larger bonus pool than No. 2 and so on. Having equal total pool money will ensure that, at least in the first round, each team is able to bid for any player without worrying that another team in its bracket has more available money.

A Hardball Times Update
Goodbye for now.

Because a team must bid at least a minimum signing slot bonus for each pick, each team’s bonus pool money will be more than the sum of all of its minimum signing bonuses. It will then be up to each team to divide the remainder of its pool among its draftees. This allows teams to bid higher than the slot value to increase their likelihood of winning the bid for the playerbut at the cost of having less available money for future rounds.

The bid amount is not necessarily what the player will receive, as a player may negotiate for more money. Teams may then want to bid less than their total pool money in case a player does demand more. If teams do spend more than their total pool money, they will be taxed, as they are now, but with no risk of losing future draft picks. If a team now outspends its pool by more than five percent, it loses its first-round pick the following year. The current tax is 75 percent on the overage for up to 10 percent, increasing to 100 percent for anything over 10 percent. Because we can’t have teams in the new draft setting loose one of their bracket picks, the tax will have to be increased enough to deter teams from excessive overspending.

Having three rounds of simultaneous drafting would make the draft more interesting for fans to watch, especially if there is a consensus top pick, as there was in 2018 with Casey Mize. If all six teams in a bracket had the opportunity to try to draft him, each team’s fan base would have hope and an interest in the draft. Another layer of strategy would be established here. If five of the six teams nominated Mize and only one team picked Joey Bart, who was drafted second overall in 2018, that team obviously would be uncontested in its nomination. The four teams that lost out on Mize would have also lost out on Bart when they make their next nominations.

Once the first three rounds have been completed, the draft will proceed with team-by-team selections. Taking note of how both the original MLB draft and the NPB draft alternate leagues pick by pick, we will alternate division by division. The order in which the teams draft will be determined first by bracket, then by games behind their divisional winner.

The fourth round will begin with the teams in Bracket No. 1 getting picks 1-6. The team that is the most games back would get the first pick of the round. The team that is next farthest back within its division will then get the second pick. Once the six teams in Bracket No. 1 have drafted, Bracket No. 2 teams will be assigned to picks 7-12 and draft based on their games behind.

This will continue until Bracket No. 5 with the divisional winners. The draft order for picks 26-30 will be determined by playoff placement, using regular-season records as tiebreakers for the teams that place equally in the postseason. Just as in the 1965 draft, this means the World Series winning team will always be the 30th pick of the fourth round of the draft. After the fourth round, the draft will reverse order and continue alternating draft order for each successive round. For every even numbered round, this means the World Series winning team picks 30th, but in odd numbered rounds it would pick first. The draft would snake like this to further discourage a team from trying to gain a higher draft pick by losing, because in the next round, that higher draft pick is now a lower draft pick.

In the current MLB draft, if a team does not sign a first- or second-round pick, it picks at the same slot plus one in the following year’s draft. If the unsuccessful pick is in the third round, the team’s compensation pick will be between the third and fourth rounds.

In this new draft process, a team that is unable to sign a pick in the first two rounds will no longer be able to receive a compensation pick that is just one slot lower. Because teams are now placed in brackets of six teams, there would not be a way to compensate the team without interfering with the rest of the bracket’s usage of their bonus pool. Therefore, like the current third-round compensation, all compensation picks will be between rounds three and four. This will affect team’s draft choices, as a first-round pick is more valuable than a pick between rounds three and four. Teams will have even more motivation to successfully sign their drafted players.

The qualifying offer compensation would have to be discontinued for the same reason. We cannot have a team lose a pick in the bracket rounds, because that would affect the bonus pools, so teams that sign a free agent will no longer lose a draft pick. This could have the additional benefit of increasing free agent salaries, because teams will not have to forfeit their future to sign a player in the present.

Other effects would trickle down from changing the draft in these ways. Draft pick trading could not be allowed in any way. If teams could trade draft picks, they would have an increased bonus pool with that pick’s value and would be able to offer players more money in the bracket rounds and outbid the other teams.

Also, because each division is only allowed one pick per bracket, we would not have the majority of one division trying to rebuild at the same time. In this year’s draft, the AL Central will have three teams draft in the first five picks. If those teams knew only one of them could possibly draft within the first six picks, and only two of them could draft within the first 12, there would be motivation for at least one of the rebuilding teams to forego a hard reset and instead potentially sign free agents to try to compete.

If there are more teams competing for the services of free agents, salaries may increase based solely on the higher demand. More teams competing for free agents will not only increase salaries but also give free-agent players more teams that have a need for their services. If more teams were trying to be competitive in 2019, would Craig Kimbrel or Dallas Keuchel remain unsigned?

Many have made suggestions how to make baseball more competitive in 2019 and beyond. Scott Boras has said teams that win a certain number of games should be rewarded with more draft pool money. J.J. Cooper of Baseball America has floated the idea of a tank tax, whereby teams that fail to win more than 70 games in back-to-back seasons will be penalized 10 spots in the next draft. While these suggestions may address a symptom of the problems that plague baseball in 2019, we need to fix the problems at their very core. Changing the draft as proposed might be the solution we need.

Jon is a certified personal trainer with Masters of Sport Science degrees in Sports Coaching and Sport Studies emphasizing baseball and sport psychology. Follow him on twitter @welterj3.
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3 years ago

Why not just eliminate the draft?

3 years ago
Reply to  MarkOC

And do what in it’s place? Annual signing limits? First come first serve with NY vs LA in an eternal spending battle while everyone else fights over their scraps?

Spa City
3 years ago
Reply to  ShawnOfSulfur

Free market for unsigned players. But roster limits and salary floor and cap.

Why limit the rights of unsigned amateurs to negotiate with only 1 team?

Pirates Hurdlesmember
3 years ago
Reply to  Spa City

Because there are no limits on what any 1 team can spend. If you limit signing pools or actually have full revenue sharing like the other major sports then you then maybe that could work, but as is you would quickly have 6-8 competitive teams with the highest revenue.

Yehoshua Friedman
3 years ago

Spa City suggested free market with a cap. That would answer your objection.

3 years ago

I think salary floor & cap plus roster limits as suggested would eliminate the need for a draft. Right now a team can go to Venezuela or the Dominican Republic and sign any 16-year old they want, but a kid from the USA has to enter the draft! Make it a truly “open” market where a ballplayer can peddle his services wherever he wants to go.

Yehoshua Friedman
3 years ago

Very interesting, but the word is lose, not loose.

3 years ago

There are so many great ideas out there for how to improve the structure of the game. Unfortunately the CBA is determined by two groups focused on extracting as much money out of each other as possible. The fans don’t have a voice in the room.

random Colorado guy
3 years ago

I don’t see why anything this complicated is needed to fix what is clearly a broken draft system. A far simpler approach that also deters extreme tanking is to do as the NBA did when the lottery system was first instituted, with every non-playoff team having at least a token chance of a high choice (maybe even the highest one, think Shaquille…). Baseball is better suited to a system like that, because of the proportionately larger number of teams that don’t make the playoffs. Use that order for the first round, with compensation picks, etc., at the end of the round; re-shuffle for the second round; and after that, just go with W/L record, since there is obviously less incentive to game the system to get a high third-round pick than a high first-round pick.

Occam’s Razor should apply here.

3 years ago

Here’s the issue. The article should have begun with a detailed description of what it was trying to fix. For example, the proposal ignores the general fans’ desire to have good players stay with the team that drafted them, making it less frequent that an Evan Longoria is forced to bail on the Rays because they simply can’t afford him. Welter doesn’t tell really us what the fundamental problems with the game are that he wants, so it’s hard to tell if his proposal would fix … what? I can’t really evaluate its merit without knowing whether it’s about competitive balance, or balancing salary budgets, or whatever, but if it doesn’t encourage long-term retention of stars, it doesn’t help.

The true solution to the problems that I see is a cap-and-floor system, so that regardless of revenues, all teams are going to have comparable salary budgets and therefore there is far less incentive (A) not to spend and (B) to tank. Since the baseball draft is far, far less of an assurance than the other sports (players are not fully developed when drafted and often don’t pan out), there is less certainty of success with a #1 pick and thus less dependence on grabbing that pick.

Gil Renardmember
3 years ago

Great article and great idea. I don’t think this would increase fan interest though. Us die hards would be even more interested, but the biggest problem MLB faces in this area is that in each draft there are maybe 2-3 players that are “known” to the more casual baseball fan. Harper, Strasburg, Greene, etc. Some years there are none. MLB needs to do a better job shining a spotlight on amateur players. The NFL and NBA don’t need to worry about it because college football/basketball do it for them. Something like an amateur stars game on ESPN (not MLB Network) during All Star week would be a relatively simple way to address it. Or a televised amateur invitational tournament between Christmas and New Years. Something like this would do a service to clubs for scouting purposes as well.