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Wave of the Future
June 07, 2010
Once, baseball's draft was a secretive exercise, conducted by phone and followed by few. Now it's a star-powered event (hello, Bryce Harper) with millions of dollars at stake—and the smartest way to build a successful franchise
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June 07, 2010

Wave Of The Future

Once, baseball's draft was a secretive exercise, conducted by phone and followed by few. Now it's a star-powered event (hello, Bryce Harper) with millions of dollars at stake—and the smartest way to build a successful franchise

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One day early in 2009, Nationals owner Ted Lerner, then 83, enthralled agent Scott Boras with stories from his life that made for an oral history of 20th-century America. He spun yarns about growing up in the Great Depression as the son of immigrants; about the shock of Dec. 7, 1941, the day Pearl Harbor was bombed, from the perspective of a sophomore at Roosevelt High in Washington, D.C.; and about a gym teacher he had at Roosevelt by the name of Red Auerbach, who would go on to considerably greater fame as the coach of the Celtics.

Boras responded by giving the real estate tycoon a history lecture of his own, though his was a story still in the making—the kind of baseball history you can hear coming, like the rumble and roar of a freight train. "Mr. Lerner," the agent said, "there is a thing called a 50-year player—a player so extraordinary that he comes along once every 50 years. This year there is a 50-year pitcher and next year there is a 50-year player. And they both may be available to you."

By virtue of being the worst team in baseball in 2008 (102 losses) and in '09 (103), the Nationals earned the first choices in both the 2009 and '10 Rule 4 first-year player drafts. They picked a good time to be lousy. After selecting San Diego State righthander Stephen Strasburg (page 66) last year, Washington is expected to use its No. 1 pick next week on 17-year-old College of Southern Nevada catcher Bryce Harper (SI, June 8, 2009). Each is considered far and away the best talent available in his respective draft. (Each also happens to be a Boras client.) And thanks in part to Strasburg and Harper, the most-hyped players in the 45-year history of the selection process, baseball finally has something akin to what the NFL and NBA have long had: a draft worth your attention.

True, almost all the players taken during the 50-round marathon in Secaucus, N.J., from June 7 to 9 will lack the name recognition of their football and basketball counterparts, most will be years from making a major league impact, and some will choose not to sign and will reenter the draft. But the proceedings have come a long way since 1965. For many years the major league draft was conducted as a secret conference call among industry insiders; in the early years selections were not even announced for weeks. Now it is a quintessential 21st-century American enterprise: a made-for-TV event (the first round will be seen live) with marquee names and millions of dollars to be won. Think of it as Dancing with the Stars in spikes instead of spiked heels.

Like the other drafts, MLB's is tailor-made to this Age of Information. (Want to know the best high school players available in 2012? The data is already out there.) It also has become so integral to the business of the sport that it figures to be the most contentious issue between owners and players when they negotiate a collective-bargaining agreement to replace the existing one, which expires after the 2011 season. Owners want a fixed-cost draft setup similar to the "slotting" system in the NBA, in which draftee salary ranges are predetermined according to order of selection. The union is averse to any change that restricts a free market.

For now the market is very free—and very lucrative. Last year, for instance, the Nationals gave Strasburg a signing package worth $15.1 million, an increase of 45% over the record held by pitcher Mark Prior, who signed with the Cubs out of Southern Cal for $10.5 million in 2001. Without throwing a professional pitch, Strasburg, 21, who has been tearing up the minor leagues and could be in the Washington rotation as soon as next week, was guaranteed more money than San Francisco's Tim Lincecum, a Cy Young Award winner, had earned so far in his pro career.

Despite the rising costs of signing high picks, more and more franchises are realizing that the draft has become the most cost-efficient way to build a contender. That means that larger-market teams are putting more effort—and money—into the draft than ever before. "The media attention is directly tied to the fact that there's a greater understanding of the importance of young players," Indians general manager Mark Shapiro says. "And the draft is clearly the single greatest option to infuse [an organization with] young talent at one time. The big markets began to emphasize young talent. And frankly, the media goes where the Yankees, Red Sox, Dodgers and Mets go."

High-payroll teams once could count on adding young talent when six-year major leaguers hit free agency and became too expensive for small-market clubs. But on the heels of a stadium construction boom and the enhanced revenue-sharing system that grew out of the 2002 collective-bargaining agreement, small-market teams have been doling out contract extensions to their best young players to keep them away from free agency until their early 30s. As free agents have grown older and costlier, teams such as the Yankees and the Red Sox have responded to the less efficient free-agent market by throwing their financial weight into the amateur market, including international and draft-eligible players. To compound the demand for young talent, older players have become less valued by the industry because of testing for the amphetamines that once energized tired bodies and performance-enhancing drugs that helped prolong careers. Also, advances in statistical analysis have brought about a better understanding of how players' performances decline as they age.

Boston, for instance, embarked on a more aggressive draft strategy beginning in 2006, when it started dangling first-round money at later-round draft picks. (Often those players sank in the draft because they were "signability" risks: low-budget teams with early picks knew they couldn't meet the players' salary demands.) From 2006 to '09, the Red Sox handed out bonuses between $500,000 and $2 million to nine players taken in the third round or later. (The Yankees also signed nine in that price range in that span.) On one Class A team alone this year, Boston has five players who signed for at least half a million dollars.

Since 2007, MLB has tried to curb any such big-market advantage in the draft by installing a "recommended" but unenforceable slotting system—the commissioner's office suggests guidelines for signing bonuses based on draft position. But many teams have ignored the recommended bonuses when they've wanted a player. In 2007, for example, Rick Porcello, the best high school pitcher available, fell to the Tigers with the 27th pick largely because he was considered unsignable by small-market teams. Detroit gave him $3.6 million, the fourth-highest bonus of that draft, or nearly $2.5 more than the recommended offer. "When people refer to the draft being broken," Mariners G.M. Jack Zduriencik says, "it's because the whole design of the draft should be that the best players go to the worst clubs. That's in essence why you have a draft."

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