Friday, May 31, 2013
The impact of trading draft picks
By Jim Bowden
Could teams unearth another Clay Buchholz with their competitive balance picks?
For the first time in the history of Major League Baseball’s amateur draft, teams own the ability to trade draft picks.
They are the draft picks resulting from the Competitive Balance Lottery, which took place last July. In other sports you can trade any draft pick, but in MLB's draft only the competitive balance picks can be traded. It's a new wrinkle that will shake up the draft a little bit.
A little background first: As part of the most recent collective bargaining agreement, the 10 teams with the lowest revenue and the 10 smallest market clubs were placed in a lottery to win one of 12 competitive balance picks. The odds of winning the picks were based on the teams’ winning percentage the prior season. There are two sets of picks -- six after the first round (competitive balance round A) and six after the second round (competitive balance round B). How the lottery shook out is listed in the chart to the right.
Yes, teams can trade picks, but there are restrictions:
1. Only the right to pick can be traded; a team cannot draft a player and then trade him to another team.
2. A team cannot trade picks from other rounds for a competitive balance pick.
3. Picks can be traded only once.
The Marlins also swapped picks with the Detroit Tigers in the trade deadline deal that sent pitcher Anibal Sanchez and second baseman Omar Infante to the Tigers for catcher Rob Brantly and pitching prospect Jacob Turner. The Tigers also received the Marlins’ pick at No. 39, while the Marlins acquired the No. 73 pick.
How to determine “value”
The value of these competitive balance draft picks can be viewed threefold -- actual value, trade value and financial value.
Actual value: The best way to determine the actual value of these picks is to analyze from past drafts which players were selected from Nos. 34-39, as well as the players who were still available. I went back and looked back at all the players available within those parameters in the drafts from 2005 to 2011.
Those are some of the best players who were available in the 34-39 range over that seven-year span, but only a couple could be considered perennial All-Stars. So your chances of getting an elite guy are low. In fact, according to fellow Insider Dan Szymborski, picks 34-39 produce an average of just 3.7 WAR through the first nine years of their careers. But if a team has scouted well and gets lucky, it could end up with an impact player.
Trade value: In terms of trade value, we look to the trades that already have been made to get an idea of the present market.
Take for example the Marlins/Pirates trade. A 4-A player such as Hernandez and a fringe prospect such as Kaminska bore little importance, so the Marlins-Pirates deal essentially boiled down to trading Gaby Sanchez for the No. 35 pick. The Pirates got a platoon first baseman in exchange for the chance of getting a pitcher or an everyday player. Was there value in that deal? If so, for whom?
Is trading a platoon player like Gaby Sanchez worth an additional shot at picking a quality major leaguer?
Well, the Pirates got a platoon major leaguer, but the Marlins now have an extra chance of drafting an even better player. However, the risk is if that player doesn’t pan out, the team has squandered a valuable opportunity and did not get a major league player in return. But if Miami trusts its farm system, does its scouting due diligence and takes the right player, it could win this deal.
Bottom line, I viewed it as a low-risk deal for the Marlins with a chance to hit a home run. You easily can get a player similar to Sanchez in free agency. The deal also established the trade value of picks within that range to be in the vicinity of a fourth outfielder or fifth infielder, backup catcher or third setup reliever. Trade a platoon player for the chance to select a future quality big leaguer? I would make that trade any day of the week.
The Tigers-Marlins deal, on the other hand, is difficult to break down because Anibal Sanchez was an impending free agent who had no plans to re-sign with the Marlins. So they had to move him and their leverage was compromised. On the surface it certainly appears Tigers president Dave Dombrowski could consider this deal a win by acquiring a pick that offered the chance of replacing Turner or Brantly in addition to the acquisitions of Infante and Sanchez, who ended up remaining with Detroit when he signed as a free agent.
Financial value: The financial value of picks No. 34-39 is approximately $1.3 million to $1.5 million depending on the pick. It is the slot value MLB and the Players Association agreed upon for that group of picks, which applies to each team's overall draft spending budget.
The second group of six picks (see chart to the right) comes immediately after the second round and apply to picks Nos. 69-73. Again, based on the 2005-2011 drafts, it’s possible to land in this range an impact starter like Justin Masterson; a back-of-the-rotation starter like Kevin Slowey; a future All-Star shortstop like Andrelton Simmons; or a quality reliever like Bryan Shaw.
According to Szymborski's numbers, picks 69-73 produced an average of 1.6 WAR through the first nine years of their careers, which means the trade value is significantly lower. Frankly, these picks are unlikely to be traded unless it involves a team’s marginal prospect who is coveted or valued more by another team. Or teams could switch places like in the Anibal Sanchez deal. So the trade value of picks Nos. 69-73 is a midlevel prospect.
The financial value of picks Nos. 69-73 is between $700,000 and $750,000 depending on the pick in accordance with the financial slot value agreed to by MLB and the union.
Yes, baseball finally can trade draft picks. However, because of the restrictions on who and what can be traded, there will be very little movement and rarely will impact moves be made.
Perhaps if the draft were held closer to the trade deadline, there might be more movement of picks because teams might be tempted to involve the picks during feverish deadline-pressured negotiations. Of course, this could all be a precursor to all picks being allowed to be traded, but that would have to be agreed upon in the CBA. I think it will eventually happen, and that could really spice things up.
There always is the chance you could trip over a Stanton or a Kimbrel with one of these picks, but the industry has sort of set the trade market, and it’s a player the caliber of Gaby Sanchez. Not that exciting, but again, if the doors open up to allow all picks to be traded, watch out.