Trading Draft Picks

by FishHead on Jan 3, 2008 12:45 AM EST

The trading of draft picks in major league baseball is an interesting topic that I was thinking about today. Of course it would spice up the draft and be another trading chip for playoff contendors to ship and rebuilding teams to gain. My wuestion is, what is the value of a "future" draft pick. For example, lets say it is June 20, 2008. The 2008 draft is over and the Giants find themselves out of playoff contention. Could Noah Lowry fetch a first round pick? second round pick? Of course with arbitration this could not happen because some teams may not have a first round pick.

But what would be the value of a first round pick? On a top 100 prospect list, where would you draw the line and say instead of this prospect, I want the first round pick? Instead of prospect number 45 I want the first round pick.

Of course this topic is to generate discussion, I was just wondering what everyones thoughts were on this topic.

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Value would be hard to determine....

It would be hard to determine value unless you havea top 3 or so pick. Unlike most sports. there are very few true "can't miss" guys in the draft. That would make it very hard to get any value unless it was allowed as indraft only trades....

Batting practice tomorrow you be there....I have Pop, everyday

by laxtonto on Jan 3, 2008 12:30 AM EST reply actions

Draft Pick Value

Nate Silver had a couple of articles over at BP that attempted to value draft picks. What he came up with is a first rounder is worth between $3MM and $12MM depending on slot. Here is the link;

http://www.baseballprospectus.com/article.php?articleid=4368

by rwperu34 on Jan 3, 2008 2:32 AM EST up reply actions

Trading

I think there should be trading of draft picks allowed in baseball, although I shudder to think what Brian Sabean might do with THAT.

I think you would have to have some limitations on it so you don't end up with a Cleveland Cavaliers type situation. Probably limited to trading only draft picks for the year in which the trade occurs. For example, at any time after the 2007 draft, you could trade picks from the 2008 draft, but not 2009 draft picks.

by DrBGiantsfan on Jan 3, 2008 12:44 AM EST reply actions

All depends on how strong the draft class is.

You would think they would be trading MLB players for the picks in most cases but I'd say around 20-30 range is realistic range would be worth a gamble. Some sites have Price in the top 10 but I think for in most cases you would be trading a guy that is probably at A+ or above for someone who might start at A ball if you are lucky. So maybe closer to 50 would be safe.

by jfish26101 on Jan 3, 2008 12:46 AM EST reply actions

Some teams

Would probably end up trading their 1st rounder every year. Realistically, why wouldn't you if you were getting a guy who was worth giving one up for? The reason baseball execs don't like the draft (not that they don't like it, but it's a strike against it, if you will) is because of the risk involved. Trading away the pick eleminates the risk of making a poor choice.

by ajake57 on Jan 3, 2008 1:26 AM EST reply actions

Before That is Resolved

MLB needs to put in penalties for teams who exceed the draft slot maximums. Maybe make it like a luxury tax, where if the team spends $6M on a $2M slotted pick, they are taxed on the $4M they went over. And something severe too, say a 50% tax. So that $4M over would then quickly turn to $6M.

Although, I am partially stuck here, because I do feel the kids should get as much as they possibly can. I do, however, dislike that teams can retool so quickly because they are a rich team that presumably is already a big spender...

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by bheikoop on Jan 3, 2008 1:53 AM EST reply actions

Slots

MLB should do away with the slotting system completely and/or teams shoud realize that they could pay their draft picks double and still show a long term profit. As for the small market teams, they could easily take some of their revenue sharing money and invest it in the draft and would do much better than just putting the money in their pocket. Put another way, the Arizona Diamondbacks and Cleveland Indians say hello.

by rwperu34 on Jan 3, 2008 2:35 AM EST up reply actions

Indians and DBacks PLUS

I know for certain that the Indians have always made their picks based on signability and cost. A team should not have to take a lesser player, simply because they can not afford him, or are worried about their ability to sign. They should be able to take the best available that fits their system, NOT the player that is affordable.

As for profit and revenue, its kind of a double edged sword. I mean, how can you tell a team with a payroll in the $40M range that an 18 year old kid is worth $8M? Certainly that team could take money out of their profits and sign the kid for $8M, but where does it stop? Sooner or later that team will be operating without profit. And lets remember, baseball IS a business, but unlike other business', they need the bottom just as much as they need the top.

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by bheikoop on Jan 3, 2008 9:00 AM EST up reply actions

They need to close that loophole

I would probably suggest some type of fixed slotting similar to the NBA. Those draft picks will continually being devalued until that happens because what's the point in trading for a pick when some rich team can go above slot and pick the guy I really wanted?

by parrot11 on Jan 3, 2008 7:07 AM EST up reply actions

The slotting system

is already illegal collusion in violation of Federal Antitrust laws; if they start enforcing the slots, there would be a sure lawsuit against them by the Player's Union. Currently, nobody has the motivation to risk shaking things up because it's not really enforced, but there's no doubt in my mind that it's illegal. Also, it has nothing to do with the so-called antitrust exemption (which allows MLB to have a monopoly, but does not allow the teams to collude against the players).

Vogt early, Vogt often.

by Brickhaus on Jan 3, 2008 8:28 AM EST up reply actions

Illegal?

How come every other league has slots and rookie maximums? I'm not sure its actually 'illegal' to have a system in place that tells teams how much or little they can spend on players. To me, it would be like putting a salary cap on the draft - again, something that is not illegal.

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by bheikoop on Jan 3, 2008 8:54 AM EST up reply actions

Because

they've negotiated slotting with the player's unions.

Vogt early, Vogt often.

by Brickhaus on Jan 3, 2008 9:23 AM EST up reply actions

Illegal, I'm not so sure

I believe that the draft prospects are not in any way part of the MLBPA at the time of the draft. So that would probably change things. And if this practice were illegal (and it's being done in other pro sports too), I would think that the MLBPA would have no hesitation fighting for it if only for the sake of fighting.

I think the best thing for baseball to do is to elimnate free agent compensation. That would eliminate the union's say on the structure of the draft and allow the draft to be about talent and not money.

by parrot11 on Jan 3, 2008 9:21 AM EST up reply actions

Two reasons no

On the first point: the reason it's allowed in other leagues is because it's been collectively bargained with the unions. Yes, most minor leaguers wouldn't be covered by the union, but some draftees are signed to major league deals right off the bat, so the union would have standing.

On the second point: If they take one step further, I'm sure they will; however, antitrust is one of the most expensive types of lawsuits to initiate, and unlike most other employment-type suits, the union would need to hire expensive third-party counsel rather than being able to keep it in-house. As rich as the players are, the union still needs to stick to a budget, and it would be dumb for Donald Fehr to shoot his wad on something that isn't really hurting the players. Second, there's no damages without the slotting being enforced, so there are no actionable damages until it's enforced (or at least damages would be much more difficult to prove). Currently there are holes in the case, making it not worth spending the money to litigate, but if the league does start to enforce the slotting system, the union could scream bloody murder and have a pretty close to airtight case.

Also, once again, unless the union somehow agrees that the draft isn't within their purview (they never will, and I doubt the league will sue them to get a ruling to the contrary), the league can't change anything about it without union approval (and that would include getting rid of comp picks). I'm sure the union would agree to that, but if they think it would weaken the union, then they wouldn't agree on principle.

Vogt early, Vogt often.

by Brickhaus on Jan 3, 2008 9:32 AM EST up reply actions

I think your wrong here

Until they are signed draft picks have nothing to do with the Union. The only reason the MLBPA has any say on the draft is because of draft pick compensation. Since the draft is tied to free agents, the players association gets a say on changes in the draft

by Kanst42 on Jan 3, 2008 10:59 AM EST up reply actions

BUT

if you say how much they can sign for (i.e. if you enforce the slotting), it may limit the rights of union members (once they've signed, if they sign to a MLB deal, they're union members, and if it limits the amount a union member can make, then it has to be negotiated with the union).

Vogt early, Vogt often.

by Brickhaus on Jan 3, 2008 11:03 AM EST up reply actions

monopoly?

Doesnt matter if it is illegal or not because MLB is classsified as an acception ot e Sherman anti trust act

Batting practice tomorrow you be there....I have Pop, everyday

by laxtonto on Jan 3, 2008 11:45 AM EST up reply actions

Trading picks

I honestly think MLB should allow this. At the very least, it would allow teams to get value out of having a high pick. For example, the top 3 players of this year's draft, on a consensus basis, were Price, Weiters and Porcello. If trading was allowed, the Royals, not wanting to spend enough to get Weiters or Porcello, could have traded down (for ease of the example let's just say to the Orioles) for something of value (a C+ minor leaguer or a lower-round draft pick) to get the #5 pick, still pick Moustakas, and get the value of their #2 pick, not to even mention that they then only need to pay Moustakas like a #5 pick instead of like a #2 pick.

Basically, MLB prohibiting the trading of picks has created a huge market inefficiency, and I can't see any good reason why that inefficiency should continue to exist.

Vogt early, Vogt often.

by Brickhaus on Jan 3, 2008 8:39 AM EST reply actions

I agree

The only thing I feel needs to be added is some time of restraint. I think the easiest is only allowing the trading of the current years pick.

Also I think deals like yours are more likely. I highly doubt a mlb player would be traded for a draft pick very often if at all. Its more likely it would be draft day deals involving mostly draft picks and low level prospects

by Kanst42 on Jan 3, 2008 11:05 AM EST up reply actions

+1

trading draft picks would pretty much solve the problem of rich teams getting the guys they want late in the draft. they'd at least have to make the most competitive offer to the team with the high pick that doesn't want to pay.

by jpahk on Jan 3, 2008 2:02 PM EST up reply actions