SOUTH HILLS – With a number of significant free agents attached to draft-pick compensation remaining unsigned as we’ve entered full-squad workouts, we wonder are teams overvaluing late first-round draft picks? That’s what we explored in today’s story.
Scott Boras has brought his campaign against over-valuing draft pick to the Tribune-Review. Said Boras of teams being unwilling to part with late first-round or second-round picks for QO’d free agents:
“There is a huge failure to evaluate the success ratio that comes with the draft. Signing (Kendrys) Morales for lesser years is a far more valuable than keeping a draft pick. It’s a better decision,” Boras said. ”The failure rate is completely ingnored by teams. These teams have done things that are statistically off the map.”
Is Boras right or is he just selling a client?
We’ve previously mentioned the MLB Network study of the 1987-2006 drafts that found just 19.2 percent of players selected outside the top 10 went on to produce 6+ WAR in their careers. (Not exactly a high benchmark to cross and still a low success rate).
In today’s paper I studied the 25th overall pick in the draft from 1990-2009 where the Pirates were selecting in the 2014 draft until the Orioles signed Ubaldo Jiminez and surrendered their 17th overall pick. (Assuming Jiminez passes his physical this week, the Pirates will now select 24th overall).
Of the 20 players selected at 25th overall from 1990-2009, 12 failed to record at least 150 innings pitched or 500 at bats in the big leagues. Only three - Matt Cain, Mike Trout and Mike MacDougal - became All-Stars, though Matt Garza has also been a productive player. The other four had long careers of below-average production.
Boras is right that the success rate is low.
In the right situation, for the right player, coughing up the pick makes sense. The Orioles sense their window of opportunity is now with Matt Wieters and Chris Davis approaching free agency. You given up a pick if you can sign a superstar like Robinson Cano. But teams are right to value their best chance to select a cost-controlled star in a era of rising costs in free agency. Teams don’t want to miss on the next Cain or Trout. And Chris Sale, Jose Fernandez and Michael Wacha were each drafted outside the top 10 of the 2010-12 drafts.
This is really about opportunity cost.
The pick lost to sign Morales or Drew is not likely develop into a quality major leaguer but the opportunity cost of signing Morales is the chance the pick becomes one of the game’s most valuable assets.
I think a general rule is this: teams will give up the pick for a proven star. But if you’re weighing baseball’s middle class and even upper-middle class of free agents (like Morales and Drew) that’s a tougher sell. Then surrendering the pick only makes sense if the dollars and years are heavily discounted. Morales might make sense to the Pirates at a Loney-like price. Also, the other consideration clubs likely believe they can beat the historical success rates. (The Cardinals have a right to believe this, I’m not sure about everyone else).
Huntington said it was unlikely the club would give up its first-round pick at the winter meeting and in speaking with him earlier this week that still appears to be his position, though he indicated that will change at some point in the future.
Huntington: “We recognize that there will come a point in time in the future where we feel good enough about the situation and there is enough projected impact on our club that we are willing to forfeit a draft pick to sign a free agent.”
The other interesting thing is of the 22 qualifying offers made is 11 have come from the Yankees and Red Sox and 17 have come from large-market clubs. This has not been a tool utilized much by small-market clubs (See. Burnett, A.J.). I think players will be fighting the OQ in the next negotiation and perhaps some small market owners will be pushing for its elimination as well. It has essentially become a way for the large-market clubs to gain draft picks. That was not the intent of the QO.
MORE FROM BORAS …
Boras on not evaluating picks in a vacuum:
“Unless your strategy has a component and design for a window of winning that is very different than your standard development design,” Boras said, “then most likely, you’re not going to optimize that window.”
Boras on the Pirates’ future TV talks:
“For television revenues and local media rights it’s worth millions if you’re carrying a winning team into a rights contract. It’s just good business to focus on that window.”
Why is Boras being so public in these negotiations? Maybe he’s trying to speak directly to, or pressure, ownership:
“Milwaukee last year said ‘We’re not giving up our pick.’ The owner stepped in. Singed (Kyle) Lohse. The Cleveland owner stepped in and signed (Michael) Bourn. They both got discount in years. Bourn got a market contract. Instead of a five-year deal got a four-year deal. Cleveland was in the playoffs. They took advantage eof a talented player who was out there. You can argue (Cleveland) didn’t have to give up their first-round pick.”
Boras is not a fan of evaluating drafts by WAR:
“I read this article some gentlemen wrote about the WAR of a player in a draft vs. signing Stephen Drew for example. … What he did was he added the WAR of those draft picks. He added the WAR they accumulated over nine years. That averages out to like 0.7 WAR. That is like a utility player. Would you rather have Stephen Drew for four, five years or (Skip) Schumaker for six. I laugh.”