Stephen Drew, Kendrys Morales and the Inflation of First Round Picks

Stephen Drew
The Major League Baseball Rule-4 Draft begins on June 5. With it comes a lot of commotion, as teams restock their farm systems with fresh talent. This year, the date of the first year player draft brings additional intrigue. Free agents Stephen Drew and Kendrys Morales are currently looking for work, but the draft pick compensation attached to signing them has caused the market to wane. With that requirement set to expire once the draft begins, Drew and Morales could be back on the field shortly.

Compensation pick rules were altered prior to the 2012 draft, during the last collective bargaining process. Now any free agent who was offered a qualifying offer, but declined it, has draft pick compensation attached. If, for example, the Oakland Athletics signed Drew tomorrow, the Boston Red Sox would get the Athletics first round draft pick as compensation for losing a free agent. The top 10 picks in the draft are protected, as are any picks teams have from not signing draft picks the year before. If Morales signed with the Chicago Cubs this week, the Cubs would not lose the fourth pick in the draft. Rather, they would give up a second rounder as compensation, while the Seattle Mariners would gain a pick at the end of the first round for losing their player.

In two years of this process, every player given the qualifying offer declined it. It takes a very long time for baseball players to reach free agency, and most want a long term deal. While the qualifying offer will always be a hefty amount of money–the average of the top 125 contracts in baseball was $14.1 million this past winter–long term deals are safer bets for more money in the end.

One of the reasons teams are being so stingy about giving up their draft picks to sign a player, when in the past it was not much of an issue, is the enhanced value picks were given in the last collective bargaining agreement. Draft pick contracts are still technically uncapped, but there are now several measures in place to drive their costs down. One is the slotting system, which assigns a value to each draft slot, with lower round picks being less expensive than top five choices. A team’s draft pool money is comprised of the sum of their slotted pick values, otherwise they are subject to a luxury tax or draft pick penalties, depending on how far over pool the team goes. All money spent on a team’s top ten picks, plus any contracts over $100,000 in the other rounds, count towards the draft pool.

The fact that first round pick prices are down is only one reason teams are hugging their picks so tightly. Perhaps more significant is the fact that once a pick is lost in compensation, so is that pool money. When the Atlanta Braves signed BJ Upton during the 2012-2013 off-season, they gave their first round pick to the Tampa Bay Rays. The Rays also gained $1.75 million towards their draft pool, which they could spend on any of their draft picks. This is all besides the fact that as MLB contracts get more expensive, it becomes even more imperative to acquire good young talent to be able to manage a viable payroll.

Both Drew and Morales should have numerous suitors for their services once they lose their baggage. This should only intensify by June, once teams are clearer on whether or not they can contend, and the nexus of need and available cash is reached. For Drew, the most obvious landing place is with the New York Mets. They need a shortstop as much as anyone in baseball, and need more offense as well. Another possibility is Oakland, one of Drew’s former teams, who could move Jed Lowrie over to second base and could use another bat to push Eric Sogard back to the utility role he is better suited for. The Detroit Tigers, who had a lot of talks with Drew in the spring, are also in need of a shortstop.

Morales will come with a better price tag than Drew, and so he might find himself with even more offers. First baseman who can hit for an .800 OPS are not the rarest commodity, but finding one mid-season without having to part with prospects or players will make the lefty a valuable commodity. The Los Angeles Angels could perhaps be looking for a reunion with Morales, especially if Raul Ibanez continues to struggle as a left-handed bat. Other potential bidders could be the Blue Jays, if they hang around the race, or the Mets, if they wish to undergo the Lucas Duda outfield experience one more time.

With Drew and Morales both represented by Scott Boras, it was a sure thing that teams would be in for a tough negotiation. While it is easy to say now that the players may have been better served by taking the qualifying offer, no one could have predicted how this would all play out. Since the players are free to negotiate with any team, solid rumors may pop up soon and contracts handed out shortly after the draft. Expect them both to be scooped up very quickly once their compensation requirements evaporate.

Commentary by Brian Moore
Guardian Liberty Voice Sports Writer covering New York Baseball

Baseball Reference
Baseball Reference

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