The Impact of Baseball's New CBA on the Mets: The Draft Cap

Yesterday Chris broke down some of the finer points of the new CBA, namely Free Agency and how it affects the Mets. Today we'll take a look at another aspect of the new agreement -- perhaps the most controversial and oft-discussed aspect -- the drastically changed June draft. And how it will affect the Mets going forward.

Changes

So it's not completely different...it still takes place in June. Otherwise, yeah it's pretty different. First off, let's get the easy stuff out of the way:

• It's not 50 rounds anymore, it's 40.
• The signing deadline is now mid-July instead of August 15th. Easy call as this cuts out the dead space between draft and actual negotiations allowing everyone, even the staunchest holdouts, the opportunity to get their feet wet without waiting an entire winter.
• No more MLB draft "support program" aka over-slot muzzle. It's a bit complicated but in short, clubs can now announce larger deals as they happen instead of pretending they all take place just before the deadline.
• An additional year of protection is added for failure to sign picks. Before, if a club failed to sign the fifth overall pick, they got no. six the next year. If they failed to sign a second time, they're SOL. Now, that club would get another -- third -- selection the following year. Anything after that and once again, they're SOL.
• Drafted players are now only eligible to receive minor league deals.
• There is now a new round following the sandwich round that is made up solely of picks forfeited by other clubs. In the interest of brevity we'll give that topic it's own discussion later in this series.
• This one I'm calling the Dickey Corollary and it has two parts: First, if a drafted player fails a physical -- say he's missing his UCL -- and the club offers him less than 40% of what's slotted for his pick, he becomes a free agent. Part II: There will likely be a pre-draft medical 'combine' theoretically allowing all teams access to medical records for the top x amount of players, which should drastically limit the incidences of the aforementioned buyer's (drafter's?) remorse.
  

That brings us to the heavy stuff, namely the new Draft Cap.

MLB has, for better or worse, created a spending cap like you'd see in the other major sports; except they've just decided to implement it under the surface, at the draft level. The old idea of a draft "slotting" system is no longer just suggested, it is now more or less a mandatory draft spending limit.

Each team is awarded an 'aggregate signing bonus pool' for the first ten rounds. Teams don't necessarily have to stick to slot for each individual pick anymore, but the cumulative top-ten figure must fall below the budgeted number. Any bonus outside of the top ten but over $100K will also count against the pool.

Early reports set those pools anywhere between $4.5 and $11.5 million, depending on how many picks a club has and where those picks fall. So basically last year's crappy clubs will be on the high end of the spectrum and vice versa. The total pool throughout the entire league will hover around $185 million. That figure was collectively bargained and will be adjusted annually according to league revenues each season.

And yes, this cap has teeth.

No longer is there just a stern letter and some implicit bad tidings awaiting those slot-busting freespenders. Instead teams that hand out more than their pre-determined aggregate pool face heavy taxation on the overage and the loss of draft picks:

• A 0-5% overage on the 'aggregate signing bonus pool' would result in a 75% tax
  
• A 5-10% overage would result in a 75% tax AND the loss of a first-round pick
  
• A 10-15% overage would result in a 100% tax, the loss of a first-rounder AND a second-rounder
• A 15%+ overage would result in a 100% tax and the loss of two first-rounders -- reaching forward two seasons if necessary

For the record, all draft tax collected will be redistributed to teams under MLB's revenue-sharing plan. Any draft picks forfeited will be awarded in a lottery weighted by a club's winning percentage and revenues the previous year (those picks will represent the new round I mentioned earlier). However, any team that goes over its draft pool is ineligible to receive that tax cash or any forfeited draft picks.

Impact on the Mets

Well our one and only draft in recent memory characterized by lavish spending and subsequent high-ceiling players was fun while it lasted huh?

Last season -- after their record-setting $6.4 million draft -- the Mets would have been one of 20 teams that fell into that last penalty bucket, bumping their draft price tag up to nearly $13 million while also forfeiting first round picks in 2012 and potentially 2013.

However, despite that fact it remains to be seen whether or not this new format will hurt the Mets draft chances or actually help them going forward. Keep in mind, up until last season the Mets have historically been very conservative spenders, making this new structure mostly moot if not indirectly beneficial. What's more, few teams have been more liberal with their signing bonuses than the Phillies over the past decade, making them a prime target for the new system.

And this doesn't necessarily mean a return to the low spending, low ceiling days of the Minaya era either. Many analysts foresee relatively similar levels of dollars and talent for those first ten rounds. It's the mid-round talent that we can likely say goodbye to. This means aggressive late round picks like 2011's 15th rounder Phillip Evans, weighing in at $650,000 -- the largest figure outside of the first two rounds in Mets history -- or 16th rounder Bradley Marquez, who crushed slot expectations with his $350,000 bonus, would likely not exist. But that is true for every team, not just the Mets.

In full, the system is annoying in that the June draft is probably the most effective way to build a team long-term and this basically places a restrictor plate on that effectiveness. However, it is not without its merits. By resisting the urge to completely and utterly break the bank early on -- see Pittsburgh giving $5 million to their '11 second rounder or any recent draft by the Nats -- there should still be space for the adept GM to maneuver his way into a strong draft. What's more, there is even the potential for the crafty GM to accumulate extra picks come draft day.

In many ways, this system does in fact reward the fiscally-prudent General Manager who keeps an eye on the future. Did somebody say Sandy Alderson...?