DRAFT NOTEBOOK
By Allan Simpson
July 12, 2007

Clubs Adhering to Rollback on Bonuses

It’s apparent that Major League Baseball meant business when it sent a directive to its clubs three days before this year’s draft, instructing them that it wanted signing bonuses in the early rounds rolled back 10 percent from 2006.

Through July 10, a total of 65 of the top 100 selections had signed—and 31, nearly half, had signed for bonuses that were precisely 10 per cent less than the corresponding slots a year ago. Moreover, only two of the 65 had agreed to contracts for bonuses that were equal to or greater than the amounts for the same  slots in 2006, but in both cases the players signed for 2007 slot money.

It’s all part of Major League Baseball’s continuing efforts to slash bonuses that began in 2001, when the average bonus for first-round picks was a record $2.154 million. The average bonus this year for the 13 first-rounders who have signed is $1.437 million—a 33 percent drop in six years and a dip of 26 percent from a year ago.

From MLB’s standpoint, that’s the good news. The reality of it is, however, that 17 first-rounders remain unsigned and the first-round average will almost certainly climb as those players do come to terms. Among those that remain unsigned are the first five picks in the draft, led by lefthander David Price, the No. 1 overall selection. “Negotiations are ongoing,” is all Tampa Bay scouting director R.J. Harrison would comment on Price’s situation.

The stagnant pace in which first-rounders are signing ranks as the slowest in draft history and could lead to a volatile five weeks before all draft picks must be signed. A new Aug. 15 signing deadline was incorporated with this year’s draft and it is expected to come squarely into play—not only for unsigned first-round picks, but for a number of later selections that could be given the equivalent of first-round or significantly above-slot money.

“It’s apparent with the large number of unsigned first-round picks that agents are not buying into the 10 percent rollback,” an American League scouting director said. “I don’t think there’s any question that a number of premium players will be signed above slot in the next two or three weeks, but no team wants to be the first to make the move. I think you’ll see a lot of deals getting done after Aug. 1—right after the major league trading deadline when the general managers have a chance to get more involved.”

While a vast majority of big league clubs have adhered to MLB’s directive on signing bonuses to date and will continue to do so, the de-facto slotting system instituted by the commissioner’s office to curb bonus inflation is voluntary on the part of clubs. Teams that vary from the recommendation, though, face the threat of a rebuke by the commissioner’s office—or stand to be sanctioned or penalized in an unspecified manner. As a result, most clubs have toed the line on bonuses.

But not everyone has complied in the past—or is expected to do so again this year. The teams that deviated the most from MLB’s slot recommendations a year ago were the Yankees and Red Sox, and to a lesser degree the Tigers. Those same teams are primed again to ignore any efforts to reign in bonuses, and sources say both the Yankees and Red Sox have already agreed to terms with a number of players on over-slot bonuses—but won’t announce any signings until another team breaks rank or the new signing deadline adds a sense of urgency.

Among the parties paying particularly close attention to the proceedings is the Major League Players Association, which is adamantly opposed to any system that caps signing bonuses. It sent out its own directive on June 12 advising certified agents to report instances where clubs have artificially deflated bonuses.

“A number of agents have related to the Association statements from club negotiators to the effect that signing bonuses for drafted players have now been capped at the slots recommended by the commissioner’s office,” the directive said. “According to these agents, club officials have stated that the union, in the last round of collective bargaining, agreed to a regime in which clubs cannot vary from the commissioner’s office recommendations. This is categorically false.

“The clubs, in collective bargaining, proposed a cap on all entry-level signings, including mandatory slotting for all drafted players. The union rejected that proposal. None of the changes agreed to in collective bargaining alter this fundamental principle: each club is free to make its own decisions regarding the signing of drafted players. The Basic Agreement prohibits the commissioner’s office from attempting to prevent a club from paying a drafted player a bonus in excess of the commissioner’s office’s recommendations for that player’s draft position. The Association will challenge any effort by the clubs to unilaterally change the rules governing the amateur draft. Please forward to us any evidence that suggests slot recommendations are mandatory, or that a club has been threatened in some fashion if it signs a player above the recommended slot amounts.”

While clubs have adhered to the wishes of the commissioner’s office to date, all that is expected to change as the draft’s signing phase heats up. Agent Scott Boras is representing 12 premium prospects in this draft, and only one (Matt LaPorta, the seventh overall pick) has signed so far. Boras has never bought into the notion of slotted bonuses and is expected to stick to his guns—even as a new signing deadline approaches.

He has counted on clubs caving at the 11^th hour in the past, but another significant change in the draft rules that was adopted this year gives a club more leverage should it fail to sign its first-round pick. A team will receive the corresponding first-round pick in the next year’s draft as compensation. Boras ’ unsigned first-rounders include shortstop Mike Moustakas (Royals, second overall), catcher Matt Wieters (Orioles, fifth), and righthanders Rick Porcello (Tigers, 27^th) and Andrew Brackman (Yankees, 30^th).

Yankees, Red Sox Laying in the Weeds

The Yankees have “officially” signed only four of their first 10 picks, but industry insiders say they believe most, if not all, of their unsigned selections have deals in place that won’t be announced until August—or at least until after the first above-slot deal becomes official and takes some of the attention away from the Yankees.

Among some of the above-slot deals the Yankees have reportedly made are million-dollar commitments to Texas third baseman Bradley Suttle, their fourth-round pick, and Louisiana high school shortstop Carmen Angelini, their 10^th-round selection. Georgia high school catcher Chase Weems, their sixth-rounder, and Texas high school outfielder Taylor Grote, their eighth-rounder, are also said to be in line for deals that would more than double what MLB has recommended for those slots.

“The Yankees just don’t care what the commissioner’s office says,” a rival scouting director said. “They’ll do what they think is best for their club.”

A year ago, the Yankees spent nearly $7 million in signing bonuses and doled out several above-slot bonuses, including $1 million to righthander Dellin Betances, a record for an eighth-rounder.

There are rumblings that the Red Sox also have a number of deals in place, including a $750,000 bonus with Florida high school catcher Yasmani Grandal, their 27^th-round pick. The Red Sox took more speculation picks (potential early-round selections that fell because of signability reasons) than any other team in the draft by a considerable margin, and were expected to make a serious run at several of the selections.

Almost every player the Red Sox drafted that remains unsigned through 28 rounds was projected to go higher in the draft than he was taken; accordingly, the players would be in line to command bonuses significantly above slot if they were to sign.

Among the more prominent high school selections the Red Sox drafted are Texas righthander Will Middlebrooks (fifth round), North Carolina outfielder David Mailman (seventh), Virginia righthander Justin Grimm (13^th), Alabama righthander Austin Bailey (16^th), Texas lefthander Drake Britton (23^rd), Colorado outfielder Matt Presley (24^th) and Missouri righthander Nick Tepesch (28^th). In addition, the Red Sox took a flier on the University of Kentucky ’s oft-injured righthander Scott Green in the 15^th round amidst speculation that Green has a chance to become a first-rounder in 2008 with another year in college.

Like the Yankees, the Red Sox went considerably over slot in 2006 to sign several mid-round selections, including $825,000 to secure 18^th-rounder Lars Anderson.

The Tigers are also willing to risk the wrath of the commissioner’s office, according to sources, to reel in Porcello and several later-round selections, including Illinois high school righthander Casey Crosby, their fifth-round pick. Detroit , which has paid above slot to sign its last three first-round picks, reportedly has a $750,000 deal in the works with Crosby . But that amount would be almost nothing compared to the deal they’ll have to strike to get Porcello, deemed the most unsignable first-rounder in this year’s draft, under contract.

The 6-foot-7 Porcello, a New Jersey prep righthander, was projected to be the second pick in the draft but fell to 27^th overall when teams were scared off by his excessive bonus demands: reportedly a package deal worth more than $9 million.

Other potential signings that will be certain to draw a lot of scrutiny include the top two prospects from New England: Connecticut high school righthander Matt Harvey, a third-round pick of the Angels who has committed to North Carolina ; and Massachusetts prep lefty Jack McGeary.

McGeary was said to be unsignable before the draft if he didn’t receive significant first-round money and he slipped to the fifth round, where he was drafted by the Nationals. Sources say that the Nationals are prepared to pay McGeary a bonus between $2 million and $2.5 million, while making concessions that would allow him to attend school at Stanford for at least two quarters a year initially while also playing minor league baseball.

Judgment Still Reserved on Rule Changes

A sampling of scouting directors contacted by PG Crosschecker indicates that there is still a lot of uncertainty how the new signing deadline will play out, but the initial impression is that not all are in favor of the change.

“I think we’ll see a feeding frenzy in the last day or two before the deadline as teams try to make a final run at some of their picks,” one said. “Overall, I’m not sure if it’s a good idea because we have so much more work to do following our unsigned picks. It has effectively extended the scouting season another two months.

“Frankly, I’d be more in favor of a July 15 deadline, rather than a month later—if only for the reason it would really benefit the colleges. There are a lot of colleges holding scholarships open on high school players and even college juniors who are drafted, and they don’t have a fair chance to find someone else in time to utilize their full scholarship allotment if one of the players they were counting on suddenly signs at the last minute.”

Jays, Giants at Opposite Ends

While player signings in the first round are occurring at the slowest rate in draft history, with only 13 of 30 under contract a full five weeks after the draft was conducted, players are signing at a faster clip in the next few rounds. Only eight among a draft-record 34 sandwich picks are not signed, and there are also eight unsigned picks in both second and third rounds.

The teams that have done the best job signing their selections are:

--the Blue Jays, who have signed 21 of their first 22 picks, including all five first-round and supplemental first-round selections.

--the Brewers, who have signed their first nine picks and 18 of 19. Milwaukee didn’t have a second-round selection this year but more than made up for that shortfall by signing three prominent draft-and-follows from the 2006 draft.

--the Mets, who have signed 10 of their first 11 selections and 26 of their initial 29.

--the Padres, who have signed all eight of their selections in the first two rounds.

Among the teams that have struggled most to get their draft picks in the fold—officially, at least—are:

--the Giants, who have signed none of their trio of first-round picks.

--the Marlins, who have agreed to terms with none of their first three selections.

--the Red Sox, who have yet to sign four of their top seven and 10 of their first 18 picks. However, Boston could make a significant splash by the time everything is all said and done because of the preponderance of premium picks it has under its control.

--the Rangers, who have signed only one of their top five picks and four of their first 11.