Found February 21, 2012 on Pirates Prospects:
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Jim Callis of Baseball America released the bonus pools for the 2012 draft today. The Pittsburgh Pirates will end up with a pool of $6,563,500, which includes their first round pick, valued at $2.9 M. That total doesn’t include any compensation for Derrek Lee, since Lee isn’t expected to sign a major league deal.

When the new Collective Bargaining Agreement was announced, it didn’t look like a good deal for small market teams. The new slotting system was harsh, penalizing teams if they spent more than their bonus pools. If a team exceeded their pool by up to five percent, they would be taxed 75 percent on the overage. If a team went five to ten percent over, they would be taxed 75 percent on the overage and they would also lose a first round pick. Ten to fifteen percent results in a 100 percent tax on the overage and the loss of a first and a second round pick. Fifteen or more percent would result in a 100 percent tax and the loss of two first round picks.

The penalties looked bad for a team like the Pirates, who have spent more on the draft than any other team over the last few years. This off-season illustrates just how bad the new CBA is for a small market team. The Pirates tried signing Edwin Jackson to a three year, $30 M deal. They were turned down by Jackson, who signed a one year deal with the Washington Nationals. The Pirates tried to sign Roy Oswalt, but were turned down. They eventually had to trade for A.J. Burnett, who is coming off of two bad seasons, and was severely over-paid.

Top players aren’t going to come to Pittsburgh willingly. They might eventually be able to get a guy like Jackson, although they’ll need to reach .500 or better to do so. But the draft was an avenue where the Pirates could add potential impact talent, all by spending what amounts to a little bit of extra money in the grand scheme of things. Major League Baseball threw a fit when the Pirates went over-slot to sign Josh Bell for $5 M last year. Bell has the potential to be a .300/30 HR hitter, and that $5 M bonus would secure his rights for at least six major league seasons. Meanwhile, Albert Pujols signed a ten year, $240 M deal with the Los Angeles Angels just four months later, and Major League Baseball didn’t say a thing.

The Pirates would never be able to sign a guy like Bell after he became a star. Their only chance to get a player like that is to pay the price and hope Bell lives up to his expectations. But the new CBA prevented them from ever again adding a Josh Bell in the second round. That’s something that we knew when the CBA was announced, but there was some hope that the Pirates could at least spend on other players. That hope was dashed today with the figures from Callis.

The $6.6 M that the Pirates have to spend is the 16th biggest draft pool in the majors this year. Prior to this year the Pirates were almost a lock to end up in the top five in spending each year. Now they’re capped off in the middle of the pack. The 2012 pools are a bit of an anomaly. They include a lot of compensation picks, most of which will be eliminated in future drafts. The Pirates could also receive extra compensation picks in future drafts due to their market size, which should push them up the spending boards. But that still doesn’t make up for the fact that the Pirates are now capped for their draft spending, and the cap isn’t even that high.

When the CBA was announced, the hope was that the bonus pools would be big enough to support spending. The pools are big at the top. The Houston Astros, owners of the first overall pick and one compensation pick, have just under $11.2 M to spend. But the Pirates have a little more than half of that, and they’re only picking seven spots lower, also with one compensation pick. Take away the $2.9 M from their first round pick and the Pirates have about $3.6 M to spend.

Last year the Pirates spent $8.7 M on bonuses that would count against the draft pool. You could take away the $5 M paid to Josh Bell to get a figure that would keep the team under the 2012 budget. But you still have to spend money on your second round pick. And you have to spend money on the compensation pick the team receives for Ryan Doumit. Odds are that you’re not only eliminating the over-slot deal to Bell, but you’re also eliminating the over-slot deals for Clayton Holmes and maybe even Tyler Glasnow or Jake Burnette.

The first round pick for the Pirates this year has a cap of $2.9 M. The compensation pick is about $1.1 M. That means the first two picks will cost $4 M. The second round pick will probably be around $700 K, and maybe a bit more. Now you’ve got about $1.9 M to spend in rounds 3-10, plus the overage of any deals that exceed $100 K after the tenth round. That figure would have left room for only one over-slot signing based on last year’s pool. Clayton Holmes would have been out of the picture, and the Pirates would be choosing between Glasnow or Burnette.

There are some things the Pirates could try to get around the slot prices. For example, they don’t have to spend up to the cap in the first round. Say they draft college junior Victor Roache and offer him $2 M. Is Roache going to turn that down and re-enter the draft the following year as a college senior with no leverage at all and a slim chance of getting significantly more money?

The Pirates could also draft players in the appropriate spots. Rather than worrying about paying someone like Clayton Holmes a $1.2 M bonus in the ninth round, they could draft him in the compensation round and give him a similar bonus. If Holmes is going to sign for $1.2 M, I don’t think it matters whether he was drafted in the ninth round or the compensation round.

I’d imagine teams will also squeeze college players. I doubt we’re going to see someone like Dan Gamache get a $125 K bonus in the sixth round as a college junior. I think we’ll see situations where the player will be forced to accept a below-slot price due to the lack of leverage they will have the following year as a college senior.

Even with these methods, we’re not going to see a lot of over-slot deals. If the Pirates save $900 K on their first round pick they might be able to add one guy like Holmes in the later rounds. They could draft a guy like Holmes earlier, but they can no longer take a guy like Holmes in the second AND ninth rounds. And even if they go below slot on the college juniors like Dan Gamache, we’re ultimately talking about an amount less than $100 K, which won’t buy much.

The CBA didn’t look good when it was announced, and the draft budget doesn’t make it look any better. The intentions of the slotting system are good. The system is supposed to keep bonuses in check, and make it so that the best players get drafted first and get the most money. The problem is that everything else in baseball is broken. It’s absurd that Major League Baseball would find it acceptable for teams to sign individual players to $200+ M deals, only to overhaul the draft to ensure that the Pirates are capped at $6 M instead of $17 M. The Pirates never had a shot at those $200+ M deals. The only way they could get that type of player was to draft and develop them. Those chances have just been reduced.

Links and Notes

**Kristy Robinson is down in Bradenton covering Spring Training. Check out her blog post from today for updates, and be sure to check back every day for the latest notes.

**A.J. Burnett is ready to start a new chapter in Pittsburgh.

**Charlie Morton is ahead of schedule. There’s been a lot of talk about how Morton might not be ready to start the season. The Pirates don’t really need him to start the year healthy. They don’t need a fifth starter until April 15th. They could use a spot starter on that date, and wouldn’t need a regular fifth starter until April 24th. From the looks of things, Morton will be back before the 24th.

**The rundown of how all of the top draft prospects did this past weekend. It’s way, way, way too early, but Victor Roache wouldn’t look bad as the eighth overall pick.

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