Sources: Execs split on changes to draft

BY Ken Rosenthal • November 15, 2011

Changes to baseball's amateur draft are coming, and some teams already are unhappy about the limits on spending that will take effect under the sport's new collective-bargaining agreement.

The CBA is not yet complete, but some general managers already are aware of new rules that will penalize clubs for exceeding a certain threshold in spending for each draft class.

While commissioner Bud Selig and the clubs pushed for the new restrictions, executives are not unanimous in their desire to see such changes implemented, major-league sources say.

The changes, one executive said, “are incredibly short-sighted and will hurt many clubs.”

Another executive, speaking on condition of anonymity, said teams should maintain “the right to choose their course” – and if spending heavily on draft picks is their preference, they should be allowed to pursue that strategy.

Under the CBA, teams will be permitted to spend as much as they would like on individual picks, but will be penalized in progressive fashion if the total for their entire draft class exceeds a certain threshold.

A team that exceeds the threshold by a small amount will pay a tax, sources say. A team that exceeds the threshold by a larger amount also will lose a first-round pick. After that, additional penalties will apply.

In theory, the restrictions should benefit the low-revenue clubs, preventing high-revenue clubs from splurging on amateur talent by exceeding the commissioner’s slot recommendations in the lower rounds.

The Pirates, however, are an example of a club that has invested heavily on the draft in an effort to hasten their rebuilding process. The team spent $17 million on its 2011 draft, according to Baseball America — a major-league record.

The Cubs, meanwhile, are an example of a high-revenue team that might find the new rules frustrating. The team hired new general manager Theo Epstein in part because of his success with the draft when he was GM of the Red Sox.

One exec said the new rules would create “unintended consequences” that go even beyond the increased difficulty that clubs would face in trying to accelerate their rebuilding programs.

“More of the industry’s revenues will be funneled to major-league payroll,” the exec said. “If teams can’t spend on amateur talent, won’t that effectively inflate major-league salaries since that is the primary – or only – other avenue to get talent?”

Teams spent a total of $236.1 million on the draft in '11, an increase from $201.8 million in '10, according to Baseball America. Selig originally sought "hard slotting" — predetermined bonus amounts — in the CBA. The union resisted, and the coming changes amount to a compromise.