The Five-Round Draft is the MLBPA’s Latest Failure

Last year, Jeff McNeil hit .318/.384/.531 (143 wRC+) and posted nearly 5 fWAR. Fellow utilityman Ben Zobrist wrapped up the last year of his Cubs contract, putting a potential bow on a fourteen-year career in which he hit .266/.357/.426 (116 wRC+) and accrued better than 44 fWAR. The White Sox opening day second baseman will be rookie Danny Mendick, who has hit 31 home runs in his last two minor league seasons. There’s a burgeoning star, a veteran at the end of the line, and a promising rookie. They don’t seem to have much in common with Albert Pujols or Anthony Rizzo, except this: they’re all big leaguers taken after the fifth round in the MLB draft.

None of those players, as it turns out, would have been part of the upcoming 2020 draft.

Major League Baseball will cut its 2020 draft to five rounds, as owners looking to save costs in the wake of the coronavirus pandemic pushed for fewer rounds over the objection of front-office officials, sources told ESPN.

The plan, which has been relayed to scouting directors, will allow teams to sign an unlimited number of undrafted players for $20,000. The draft is expected to begin June 10.

An agreement between MLB and the MLB Players Association in March allowed the league to reduce the draft from its typical 40 rounds to as few as five. The agreement allows teams to delay signing bonuses, with a maximum of $100,000 to be paid within 30 days of a player signing, 50% of the remainder due July 1, 2021, and the leftover due July 1, 2022.

On the surface, you might ask why this is bad. Aren’t Zobrist and McNeil and Mendick outliers? Well...actually, no. NBC Sports noted that “[o]f the 1,046 active MLB players who entered the league through the draft, 483 were taken after the fifth round. That’s a whopping 46%.” And despite protestations by the league that $20,000 is ample compensation for players taken after the fifth round, it’s actually not. For example, here is the draft slot value for sixth-round players in 2019:

Sixth Round

168) Orioles: $301,600

169) Royals: $299,000

170) White Sox: $296,400

171) Marlins: $293,800

172) Tigers: $291,400

173) Padres: $289,000

174) Reds: $286,500

175) Rangers: $284,200

176) Giants: $281,800

177) Blue Jays: $279,500

178) Mets: $277,100

179) Twins: $274,800

180) Phillies: $272,500

181) Angels: $270,300

182) D-backs: $268,200

183) Nationals: $266,000

184) Pirates: $263,700

185) Cardinals: $261,600

186) Mariners: $259,400

187) Braves: $257,400

188) Rays: $255,300

189) Rockies: $253,300

190) Indians: $251,100

191) Dodgers: $249,000

192) Cubs: $247,000

193) Brewers: $244,900

194) A’s: $243,000

195) Yankees: $241,000

196) Astros: $239,000

197) Red Sox: $237,000

In fact, the slot value of pick 317 at the end of the tenth round of the 2019 draft was $142,200, seven times more than the $20,000 that player would now be offered. The MLBPA, in other words, agreed to a pay cut of up to 90% for as much as half of its future membership. Given the still-absurdly low pay in the minor leagues, a difference of $100,000 or more in signing bonus may well be the determining factor in whether a person decides to turn pro or pursue different opportunities. In short, the draft is now set up to disincentivize kids to play baseball. That...seems bad.

And why did baseball do this? Two reasons: money and bargaining power. Let’s start with money.

A five-round draft would save teams $29.58 million in bonuses when compared to a 10-round draft (assuming every team spent the entirety of their bonus pool). Those savings will not really accrue until 2021 and 2022, as the new draft rules include universal bonus deferments for all but $100,000 of signing bonuses for all draftees.

A million dollars per team. That’s it. For billion-dollar enterprises, that difference constitutes less than a thousandth of their net worth - that’s 0.1%. For comparison’s sake, this is roughly the equivalent of a family with a net worth of fifty thousand dollars deciding not to spend $49. The difference, though, is that family might have a better use for that fifty bucks. The team is just lining ownerships’ pockets. AGAIN.

Then there’s power.

The players rejected the owners’ proposal of a 10-round draft (with severe spending restrictions in rounds 6 through 10, and among undrafted players), so it sounds like the league simply decided to go with the most extreme version they were permitted under the interim agreement this year. ESPN previously reported that a five-round draft was expected, and now, here you go.

In other words, the Players’ Association miscalculated. It’s an old axiom in legal negotiations that you should never agree to something unless you’re prepared to give up the maximum the other party can possibly take under that language. As soon as the ink was dry on the March 26 agreement, a five-round draft was essentially a foregone conclusion.

The MLBPA should have accepted the ten-round proposal - or, even better, not made the March 26 deal to begin with. For the union, the idea behind that agreement was ostensibly to lock in player salaries, but as I’ve written before the league gave itself an escape route. Predictably, a few days ago the league indicated that it intended to use that “economic feasibility” language to demand further pay cuts by the players. And despite the union’s response that this would lead to “war,” it’s clear why the league is calling the union’s bluff. The league has seen the union bargain away its future in exchange for vague promises for the present, and then bargain away many of those promises too.

Maybe the union does stand firm here. But it’s sitting in a mess largely of its own creation. The union made an agreement that didn’t clearly define the promises and commitments of the league, and in exchange gave away its future. Between this and Scott Boras openly lobbying for the beginning of play before a vaccine is ready, I have to wonder who is actually supporting players right now - because it’s not at all clear that anyone is.

Sheryl Ring is a litigation attorney and Legal Director at Open Communities, a non-profit legal aid agency in the Chicago suburbs. You can reach her on twitter at @Ring_Sheryl. The opinions expressed here are solely the author’s. This post is intended for informational purposes only and is not intended as legal advice.