The Impact of Baseball's New CBA on the Mets: The Draft Lottery(s)

"Mookie wake up, apparently we can trade for draft picks now."

If you haven't been paying attention, all this week Chris and I have been analyzing baseball's new Collective Bargaining Agreement and it's impact on the Mets. On Monday, Chris got the ball rolling with a discussion on free agency compensation, followed by a look at the new landscape of the league i.e. Realignment and the Playoffs while I delved (dolve?) into the minor league side of things with a look at the new draft cap.

Today I'll take that draft discussion one step further with a look at one of the more novel products of the new CBA, the idea of a draft lottery -- and the ensuing craziness.

Changes

You just want the short version you say? Ok well there will now be two draft lotteries that both give select fortunate (aka skint) teams the opportunity to net additional picks for the June draft. Now you want all of the grisly details you say? Oh all right...

The first lottery is known as the Competitive Balance Lottery, which takes previous attempts at equity like Revenue Sharing and the Luxury Tax to the next level. Teams on the lower end of the revenue spectrum -- there, that sounds nicer than skint -- will now be eligible to earn one of 12 additional draft picks that will take place during the June draft, following the first and second rounds.

Specifically, the bottom ten teams in terms of revenue as well as the ten smallest-market teams will be eligible for this lottery, with weighting based on those teams' winning percentages in the previous season. Next season, there will be 13 teams eligible (obviously those two buckets have some overlap): Diamondbacks, Orioles, Indians, Royals, A's, Pirates, Padres, Rays, Reds, Rockies, Marlins, Brewers and Cardinals.

Now the lottery itself won't take place until after the June draft, with the picks earned counting towards the 2013 draft. The top six finishers -- who we can only assume will be determined by the revered ping-pong ball method -- will get an additional pick following the first round (including the sandwich round).

But here's the twist, there's actually another demi-lottery that includes the losers from the first go as well as any other team that receives revenue sharing. Once again, the result is six picks, this time following the second round. So I guess technically the Competitive Balance Lottery is actually two lotteries in one.

Even bigger twist: These draft picks can be traded.

Everyone and their mother asked for it, baseball gave it to us. The first tradeable draft picks, which is kind of a huge deal as it may act as a stepping stone for more pick-trading in the future. Even if it doesn't the immediate result is a more liquid, more free-flowing marketplace, which is always a good thing. But for now it's just these 12 picks and of course there are pretty significant restrictions:

  • Picks can only be traded by the team that won them, meaning they can only be traded once.
  • Picks can only be traded during the regular season; no offseason deals -- though waiting and trading next regular season is allowed.
  • When picks are traded, they lose 50% of their associated cap value; in other words they have a lot more value for the team that originally won them than anyone else. This is the hammer that really disincentives the less-advantaged teams from giving up these picks.

Lottery #2...ish

As I mentioned previously, there is a second -- or third I guess? -- entirely separate lottery for draft picks. This one is the result of the draft spending cap and it's affiliated penalties. Namely, the ones where teams lose future draft picks by spending more than their allotted pool.

Basically, anyone who spends over 5% of their draft pool is going to lose at least a draft pick; depending on how much over 5% will determine how many and which picks (click here if you want a more detailed breakdown of those penalties). Those picks then go into a lottery and any team that did NOT go over their draft budget is eligible. This time weighting is based not only on last season's winning percentage, but also on team revenues. The bummer here is that to my knowledge these picks are not tradeable.

Impact on the Mets

Probably not as much of an impact than most of those aforementioned "less-advantaged" teams. It's unlikely that the Mets ever fall into either of those bottom ten in revenue or market size buckets to be eligible for the Competitive Balance Lottery. Nor will they receive revenue sharing anytime in the foreseeable future, so that first draft is completely out.

The second, forfeited picks draft is more of a possibility, but on both sides. On the one end, as we all know too well the Mets have a recent history of playing the good soldier and capitulating to MLB's slotting suggestions. Which would mean that by doing so again and staying under draft budget the Mets would become eligible for more picks.

On the other end, when making an assumption about the future the most relevant history is always the most recent history and in last year's draft Sandy & Co. clearly showed a propensity for over-slot spending. While we all praised the exercise for bringing comparatively more high-end talent into the organization, a repeat effort could very easily cost the Mets draft picks -- very valuable, high-round draft picks. So basically that lottery one will almost definitely affect the Mets, but it's anyone's guess at this point how.

Now the ability to trade for draft picks -- from the Competitive Balance Lottery -- is something that's also in play for the Mets, but that's true for every team in baseball. And again, those picks are a lot less valuable for the teams trading for them. If anything, they're made much more interesting to me by their likely ability to grease the tracks for in-season trades, making deadline season that much more heated. Once again, freer market, invisible hand, all that good stuff.

I will say that it's clear that some teams value draft picks more than others. Or to be more accurate I suppose I should say that some General Managers value draft picks more than others. And the Mets happen to employ just such a GM, who seems to be on the "more value" side of that little equation. So it's certainly foreseeable that Sandy can and will be one of the first names at the table when these picks begin changing hands -- and more draft picks is always a good thing.

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Stay tuned for our next thrilling segment where I'll break down the changes in the International Free Agent market and -- you guessed it -- how they'll affect the Mets.

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