I would prefer to see the Cubs select Appel. He is the safer of the two picks, should reach the Majors quickly, and has very little leverage as a college senior. Gray has the higher ceiling with triple-digit heat, but Appel's floor is likely that of a third starter. He just makes too much sense for the Cubs right now. Regardless, either player immediately becomes the Cubs top pitching prospect and realistically a top five pitcher in the organization as a whole.
Beyond simply developing a preference for Gray or Appel, the MLB draft presents a slew of interesting topics for consideration. Here are a few of them:
1. Draft Bonus Pools
In an effort to curb runaway spending on the draft by wealthier teams, MLB's most recent collective bargaining agreement (CBA) provides new bonus pools with stiff penalties for teams that exceed those pools. The pool only applies to a team's picks in the top ten rounds of the draft unless a team spends greater than $100K on a pick in the 11th or later round, at which point the excess of that player's bonus beyond $100K is applied to the team's pool. The bonuses are calculated by draft slot, although the actual player's bonus need not match the MLB-designed amount.
By way of example, the slot value for the sixth overall selection in the 2012 draft was $3.25M. The Cubs chose Albert Almora with that pick and ended up paying him a $3.9M bonus; however, because the club signed the vast majority of their other picks in the first ten rounds for below slot value, they exceeded their $8.307M pool by just $373.8K. This trend was followed by most teams, selecting college seniors in the latter half of the first ten rounds and giving them bonus of only a few thousand dollars. Because the Cubs overspent their pool by 4.5%, they paid a 75% tax on the overage. Penalties beyond the 5% excess immediately become much more severe. The list of possible penalties:
0% < amount < 5%: 75% tax on overage
5% < amount < 10%: 75% tax on overage AND loss of next year's 1st round pick
10% < amount < 15%: 100% tax on overage AND loss of next year's 1st AND 2nd round picks
15% < amount: 100% tax on overage AND loss of next two 1st round picks
The penalties prefer two violations: that by less than 5% and that by greater than 15%. The most valuable asset in the draft is the picks, the opportunity to acquire players without competing with the other 29 teams. Players, agents, and the teams are all keenly aware of this, although no team has ventured beyond the 5% overage as of yet. The incentive to blow past the 15% mark presents itself very clearly and could apply to the Cubs as early as next year or, more likely, in 2015. I have not seen any sports writers discuss this approach, so allow me to be the first.
Every year before 2012, teams would take later round fliers on excellent players who seemed unlikely to sign with a professional team out of high school due to a solid college commitment. The Yankees, Red Sox, and even Tigers were masters of blowing past slot recommendations for picks, perhaps best exemplified by Tigers RHP Rick Porcello. Porcello fell all the way to #27 overall in 2007 due to his extreme bonus demands and solid commitment to North Carolina. The recommended bonus for the 27th pick was $1.17M. The Tigers blew the bank, guaranteeing Porcello $7M on a Major League deal that included a $3.5M bonus. Notwithstanding their rushing him to the majors and stunting his growth, the Tigers spent a paltry sum to get 150 starts out of Porcello in advance of his 25th birthday. The Cubs rarely took advantage of this approach, although they finally did with North Carolina commitment RHP Dillon Maples in 2011, awarding him a $2.5M bonus as a 14th round pick, the same amount slotted for the 5th overall pick that year. The value here is obvious: a premium talent acquired at the extremely low cost of a 14th round pick and $2.5M. To a team with revenue of $258M that year, signing Maples was a no-brainer. The new rules have attempted to make this tougher.
Hopefully the 2015 Cubs have the look of a perennial contender with premier talents like RF Jorge Soler, SS Javier Baez, CF Albert Almora, and SP Pierce Johnson settling into contributing roles to complement prime stars 1B Anthony Rizzo, SS Starlin Castro, and SP Jeff Samardzija. With a perfect storm of young talent arriving in 2015, the Cubs could be looking at a relatively high draft spot in June 2015 despite the fact that the team would be pushing for a playoff spot with a young core. If that occurs, they can take a riskier approach to the draft. If there is a talent such as Maples - or ideally a handful of like-situated talents - the Cubs could take the approach of loading up on way-over-slot players. Because the penalties stop escalating at 15% excess - that is, the penalty for 15% over slot is the same as 200% over - the Cubs could seek the absolute best talent in every round and determine to sign that player regardless of cost. If it takes $3M or so to sign potential first round picks away from strong college commitments, why not do that 10 times in the same draft? The total cost would be huge: roughly $40M spent on the total draft class and the loss of first round picks in 2016 and 2017. However, if the team is good, those picks are much less valuable as late first round choices and the total reward is absurd with 10 new premium prospects that would normally require 10 first round picks to acquire. The problem with this approach is obvious: you must go all-in as failure to sign any of the picks represents a completely wasted selection. It would require a perfect storm, one that could very well occur for the 2015 Cubs: a strong, young core with the look of a perennial contender, a secure front office, and an owner willing to spend huge sums of money.
2. Signability
Until a team pursues such an aggressive draft, signability will remain a huge concern, especially of the top choice. If a team signs less highly rated college players in rounds 2-10 for well-below slot deals but then fails to use that excess to sign the top choice, they do get that top pick again in the next year's draft but they also lose the chance to select betters players in rounds 2-10 of the current year's draft, a devastating blow.
For the 2013 Cubs, signability mostly means that of Appel. There are a pair of factors that should keep his price more reasonable and a trio of factors that should keep it sky high. First, Appel is a college senior. If he fails to sign again this year, his only real alternative is a year of Independent League ball before re-reentering the draft in 2014. At some point he has to start his career. That plays into the second factor: because he is overwhelmingly likely to be chosen in the top two, he will likely sign for a bonus of north of $7M. He just isn't going to do much better than that as a draftee. The Cubs have some nice leverage here.
However, three factors will push Appel's price up. First and most important, he is represented by Scott Boras. Every agent wants to get the best deal for their player; Boras will get every penny for Appel. Boras does his job better than any other agent, something that doesn't bother me given the limited earning period for professional athletes and the insane wealth of MLB team owners. Second, Appel is the best player in this draft. While Gray may have a higher ceiling - and that is debatable - it isn't much higher and Appel has more consistently plowed through the collegiate and international opposition. Finally, Appel made the bold decision to return to Stanford for his senior year after being a top-ten pick, so he likely wants to show the baseball world that his decision was worth it. A $3M increase in his draft bonus will do that (although I'd argue that the strongest bet on his talent would have been signing for less last year, thus presumably moving him one year closer to MLB free agency and tacking an extra year of MLB salary onto the end of his career...but I digress).
A few factors beyond those addressed already impact signability from the team's perspective, one of which is unique to college seniors like Appel. First, teams receive compensation in the form of a like-situated selection in the next year's draft when they fail to sign a player chosen in the first three rounds of the draft. For example, the Pirates have the 9th choice in this year's draft as compensation for Appel spurning their 2012 offer. Second, teams lose the slot value from their bonus pool when they fail to sign a player selected with that slot. For example, Cubs' entire bonus pool in 2013 is $10,556,500. The #2 overall pick has a bonus of $6,708,400 while their second round pick is $1,361,900. If they fail to sign their second round pick, they cannot assign $1,361,900 to other players; they lose that money completely, reducing their bonus pool to $9,194,600. Drafting a player who the team plans not to sign has no benefit. Finally, MLB moved up the signing deadline for high school and collegiate junior players to July 15. However, that deadline does not apply to college seniors who must sign before one week prior to the 2014 draft. As such, Appel is likely to wait until all of the Cubs other picks have signed and then demand at least the entire bonus pool plus 5%. If the nine picks other than Appel have signed for a total of $3.2M, Appel would make the following offer:
$11,084,325 (total pool + 5%) - $3.2M (amount spent) - $1 (to keep Cubs below 5% overage) = $7,884,324.
Given that the recommended bonus for the top overall pick is $7,790,400, Appel would have an almost impossible time turning down that amount.
One quick final note. Generally football fans want their teams to draft the "best player available" regardless of that player's position. In the baseball draft, given the extreme gap between draft day and the draftees Major League debut, this argument gets pushed to the extreme. I'm often frustrated by the argument in football, but it pushes me over the edge in baseball. It is absurd to always take BPA. For example, if the top player on a team's draft board is a catcher when their selection comes up in every round of the draft, should they select 40 catchers? Of course not. Teams should always determine the relative value of a pick, even in baseball. Teams can almost always choose pitchers and they can almost always select up-the-middle position players. But with Anthony Rizzo signed for the next nine years and Dan Vogelbach a top-five position player prospect, should the Cubs take Colin Moran - a likely long-term first baseman - if they like him 1% more than Mark Appel? No way.
With all of that out of the way, enjoy the draft and dreams of 2016!
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