FanPost

The Risk of Drafting Lucas Giolito

In a recent chat on Perfect Game's web site, Jerry Ford wrote:

At this point anything is a possibility with Giolito. I wouldn't be surprised if he becomes the first player drafted where the club pays the heavy penalty. We are talking about the best pitcher in the draft and he had a sore arm. That sore arm might just work out perfectly for some organization.

There is a lot in that paragraph. The heavy penalty. Best pitcher in the draft. Sore arm.

more after the jump

The 2012 Major League Baseball Draft will be different than previous drafts. The recently adopted CBA changed the rules. Teams now have a budget. Exceeding that budget carries penalties. Not just money. Draft picks. Here are the new rules:

III. RESERVE SYSTEM INCLUDING PLAYERS

e. Rule 4 Draft

1. The draft will continue to be conducted in June, but the signing deadline will be moved

to a date between July 12 and July 18 depending on the date of the All-Star Game.

2. Drafted players may only sign Minor League contracts.

3. Signing Bonus Pools

A. Each Club will be assigned an aggregate Signing Bonus Pool prior to each draft.

For the purpose of calculating the Signing Bonus Pools, each pick in the first 10

rounds of the draft has been assigned a value. (These values will grow each year

with the rate of growth of industry revenue.) A Club’s Signing Bonus Pool equals

the sum of the values of that Club’s selections in the first 10 rounds of the draft.

Players selected after the 10th round do not count against a Club’s Signing

Bonus Pool if they receive bonuses up to $100,000. Any amounts paid in excess

of $100,000 will count against the Pool.

B. Clubs that exceed their Signing Bonus Pools will be subject to penalties as

follows:

Excess of Pool Penalty (Tax on Overage/Draft Picks)

• 0-5% 75% tax on overage

• 5-10% 75% tax on overage and loss of 1st round pick

• 10-15% 100% tax on overage and loss of 1st and 2nd round picks

• 15%+ 100% tax on overage and loss of 1st round picks in next two drafts

4. Proceeds generated by the tax will be distributed to payee Clubs under the Revenue Sharing

Plan that do not exceed their Signing Bonus Pools. Draft picks that are forfeited by Clubs will

be awarded to other Clubs through a lottery in which a Club’s odds of winning will be based

on its prior season’s winning percentage and its prior season’s revenue. Only Clubs that do

not exceed their Signing Bonus Pools are eligible for the lottery.

5. Competitive Balance Lottery

A. For the first time, Clubs with the lowest revenues and in the smallest markets will

have an opportunity to obtain additional draft picks through a lottery.

B. The ten Clubs with the lowest revenues, and the ten Clubs in the smallest

markets, will be entered into a lottery for the six draft selections immediately

following the completion of the first round of the draft. A Club’s odds of winning

the lottery will be based on its prior season’s winning percentage.

C. The eligible Clubs that did not receive one of the six selections after the first

round, and all other payee Clubs under the Revenue Sharing Plan, will be

entered into a second lottery for the six picks immediately following the

completion of the second round of the draft. A Club’s odds of winning the

lottery will be based on its prior season’s winning percentage.

D. Picks awarded in the Competitive Balance Lottery may be assigned by a Club,

subject to certain restrictions.

E. Top 200 prospects will be subject to a pre-draft drug test and will participate in a

pre-draft medical program.

Here are the first twelve draft picks, from a list of the top 338 picks that was published by Baseball America:

Pick Team Budgeted amount
1 Astros $7,200,000
2 Twins $6,200,000
3 Mariners $5,200,000
4 Orioles $4,200,000
5 Royals $3,500,000
6 Cubs $3,250,000
7 Padres $3,000,000
8 Pirates $2,900,000
9 Marlins $2,800,000
10 Rockies $2,700,000
11 Athletics $2,625,000
12 Mets $2,550,000

Baseball America also published teams' budgets for the 2012 Rule 4 draft. Here is the Mets':

$7,151,400
1.12 $2,550,000
1s.35 $1,467,400
2.71 $723,600
2.75 $680,400
3.107 $445,400
4.140 $323,900
5.170 $242,600
6.200 $181,700
7.230 $146,600
8.260 $136,900
9.290 $127,900
10.320 $125,000

So there is a lot going on here. The days of blowing $15 million on the draft by some teams may be over. It's not just the money. Now it's also lost draft picks.

Something happened this past March to Lucas Giolito, the high school prospect that Jerry Ford called "the best pitcher in the draft." Giolito sprained his ulnar collateral ligament (ULC) in his throwing elbow. If the ULC is damaged, surgery is often required -Tommy John surgery. Giolito did not need surgery, but he was shut down and missed the rest of the season.

This presents teams with a dilema. Giolito, committed to UCLA, comes from an affluent family and can afford to delay his entrance into professional baseball. He may be more of an injury risk than most prospects. Giolito may want a signing bonus in excess of $5 million. Is he worth selecting early, when other highly regarded prospects are available without the uncertainty? Is Giolito worth selecting later on at a potentially steep cost to that team?

Let's look at three scenarios that assume that Giolito wants a $5 million signing bonus, and that he is available to the Mets with the 1.12 pick.

Scenario #1 — Offer Giolito slot and hope that he doesn't laugh
The Mets select the best available player with every pick, and that includes Giolito at 1.12. He is offered $2,550,000. The offer is declined. The offer is increased to $2,907,570, the most that can be offered of everyone else signs for slot without losing a pick. Giolito just might accept. More likely he again declines, and attends UCLA. The Mets get no one with the 1.12 pick, but do get a second first-round pick in the 2013 draft, which is supposed to be deeper.

Scenario #2 — Get the ace, gut the rest of the draft
Giolito is selected, but a strong effort is made to avoid losing draft picks. The Mets can go 5% over budget, which is $7,508,970 total. $2,092,430 needs to be trimmed. Random prospects are called and asked, "if we draft you at ___, will you sign for $100,000?" Joe Schmoe agrees, and is drafted at 1s.35, freeing up $1,367,400. John Doe, who also agrees, is drafted at 2.71 freeing up $623,600. $101,430 to go. The Mets go after a better prospect, a college senior who projects to be drafted at, or after the 3rd round. Juan Epstein agrees to sign for $500,000, and he is selected at 2.75. The Mets get Giolito. The next two picks never get above A ball. All in all, a mediocre draft, aside from the Giolito.

Scenario #3 — FUUUUUUUUUUUUUUU Bud Selig
Giolito is selected, and the Mets then proceed to draft the best available player with each remaining pick. Every draftee is signed at slot, except for Giolito who is signed for $5 million. The Mets spend $9,601,400 before penalties. Now add the $2,450,000 tax. And the Mets lose their 2013 and 2014 first round draft picks. But the Mets get Giolito, a pitcher with the potential to win multiple Cy Young awards — if he stays healthy.

This FanPost was contributed by a member of the community and was not subject to any vetting or approval process. It does not necessarily reflect the opinions, reasoning skills, or attention to grammar and usage rules held by the editors of this site.

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