Jeff Luhnow has taken the new slotting system of the draft and taken a strategy that most never expected. The MLB Draft slotting system ideally was supposed to turn signing picks into something much like the NBA and NFL where the deal could be finalized by a 4-year-old with a box of crayons. However, the bargaining power of MLB draft picks is unparalleled in professional sports. NBA players have no REAL alternatives to the money they can make in the NBA and NFL players have absolutely no other league to offer their services to, in a serious way that is.
Baseball players don’t HAVE to sign when they are drafted whether it be because they have years left in college to use up, whether they haven’t even began college yet or whether they hold that amount of the signing pool of the team hostage in order to get what they want from the team. General Manager Jeff Luhnow will not be taken hostage by such problems.
In 2012, where this whole story starts, the Houston Astros held the #1 overall selection and there were a number of players considered to be a possible top pick. While defendable, the Astros went a bit off the beaten path and took a high school shortstop in Carlos Correa because he was willing to sign BELOW slot value ($7,200,000) at $4,800,000. In doing that, Luhnow opened up a lot of money to spend on players that most teams viewed as “unsignable” based on their draft position and that positions slot value.
One player in 2012 that was viewed as a high risk pick that was likely unsignable was none other than 2013 #1 pick Mark Appel. Being represented by Scott Boras makes it almost a sure thing there will be a holdout if you are a top pick. Not to mention that minds around baseball weren’t sure he was a legitimate #1 starter type talent. These factors accounted for Appel falling from a possible top selection all the way to the Pittsburgh Pirates at #8 overall, with a slot value of $2,900,000. Much to low for a top of the draft talent, in his agent’s eyes, who mysteriously fell down the draft. Boras held bargaining power because Appel could return to Stanford for his senior season and exercised that power when Appel and Boras turned down the Pirates above slot offer of $3,800,000. Some have said that had that offer been on the table from the start then Appel likely would have signed, but instead it was offered too late and Appel had his heart set on returning to college. Honestly, to me that sounds wishful at best and Boras would have exercised his bargaining power just the same if the starting number was $3.8 instead of $2.9. Unless the offer was up near top the draft slot, likely $4.2 – $6.2 million, then Boras will always do his thing…negotiating.
Nevertheless, the gamble by Boras and Appel worked. Appel was now the nearly consensus of a list of 3 realistic players vying for the top spot in 3B Kris Bryant, SP Jonathan Gray or Mark Appel. Leading up to the draft, many thought that the Astros would take Gray and sign him below slot similar to the strategy employed by Luhnow in 2012. When draft day 2013 rolled around, the Astros surprised many and picked Mark Appel. No one thought it was a bad decision, but it seemed to be one that didn’t fit the strategy…until Mark Appel signed…rather quickly.
The agreement was formed on June 15th and represented the highest signing bonus ever for a college senior. That fact right there is likely why, despite holding out last season for a number almost $1,000,000 more than the slot value, Appel decided to sign for below slot. The deal was for a bonus of $6,350,000 and was roughly $1,400,000 (about) below the value of the #1 slot.
Why did Appel agree to a below slot value and why didn’t Boras do what Boras does? There has been word that Appel wanted to sign with the Astros and everyone knew that if he got past #1, the Chicago Cubs were going to take him at #2 (with a max value of $6,708,400). There is no guarantee that the Cubs would have given him full slot value, but if there is one little talked about truth in baseball, it is that negotiations go on long before the draft for players to sign. Appel and his camp likely knew exactly what the starting point was for the Cubs and likely used that number in their negotiations with the Astros. When they agreed to a below slot number it indicates one of two things; 1, Appel was completely against signing with the Chicago Cubs; or 2, the Cubs were starting their negotiations at a number that likely would not have resulted in a full slot value selection. (I won’t even get into the reason that Boras surely knows about…the tax situation in Illinois vs. the tax situation in Texas)
As much of a bulldog as Boras is, Appel held very little bargaining power, which is no surprise and easily explain why the $6.35 million bonus was the highest for a college senior in draft history. They have no bargaining power and, let’s be honest, players don’t usually stay in college till their seniors when they have a chance to go at the top of the draft. The words “we WILL make you the highest paid college senior in the history of the MLB draft” were likely uttered in negotiations and gave Appel the respect he felt was missing in his selection and negotiations from 2012.
No matter how you slice it, the Astros likely took the best man, and got him for less than the best position player, who is still unsigned by the Chicago Cubs currently. I applaud Jeff Luhnow & Co. for their draft strategies the past few years and they have the look of a budding farm system. Appel gambled and won while still representing a value for the team that drafted him…the rare win-win.