Forfeiting MLB draft picks has pros, cons
As teams begin full-squad workouts in spring training, significant free agents such as Kendrys Morales, Stephen Drew, Ervin Santana and Nelson Cruz remain unemployed. They are absent not solely because of asking price but in large part due to the qualifying offers they received. A qualifying offer mandates a team signing such a free agent surrender its first-round draft pick if it is outside the top-10 selections.
With the rising cost of free agency, young, cost-controllable players have become more valued over the last decade, and so have the draft picks that produce them.
Still, some believe teams are overvaluing draft selections, with quality free agents still available in mid-February as evidence. Or are teams simply acting rationally in not wanting to part with their top chances at acquiring young talent?
A study of the 1987-2006 first rounds by MLB Network found 19.2 percent of players selected outside of the top 10 produced six or more wins above replacement in their careers.
The Pirates have the 25th pick in the 2014 draft. From 1990-2009, the 25th pick has produced three All-Stars — Matt Cain, Mike MacDougal and Mike Trout — but 12 of the 20 players selected 25th overall have logged fewer than 150 innings or 500 at-bats at the major league level.
Agent Scott Boras represents Morales and Drew and has grown frustrated with teams protecting draft picks.
“There is a huge failure to evaluate the success ratio that comes with the draft,” Boras said. “Signing (Kendrys) Morales for lesser years is a far more valuable than keeping a draft pick. It's a better decision.”
While the hit rate in the draft is low, the cost of forfeiting a pick can be enormous. Consider recent drafts: White Sox ace Chris Sale was the 13th pick in 2010, Marlins phenom Jose Fernandez was selected at No. 14 in 2011 and the Cardinals found Michael Wacha 19th in 2012.
ESPN analyst Dan Szymborski calculated Morales' total value to a club, when including the cost of surrendering a first-round pick, is less than $1 million per season.
Pirates general manager Neal Huntington said at the winter meetings it was unlikely the Pirates would forfeit a draft pick.
“While we certainly understand there is a difference in valuation between picks at the top of the first round and at the bottom of the first round, the draft has been and will remain a crucial piece in the talent acquisition process for a majority of clubs,” Huntington wrote in a text message. “We recognize that there will come a point in time in the future where we feel good enough about the situation and there is enough projected impact on our club that we are willing to forfeit a draft pick to sign a free agent.
“Our evaluation of the quality of the player is the driving factor in determining a potential fit and willingness to commit significant years and dollars and forfeit a draft pick.”
Boras' advice to small-market clubs: Don't evaluate draft picks in a vacuum.
“Unless your strategy has a component and design for a window of winning that is very different than your standard development design,” Boras said, “then most likely, you're not going to optimize that window.”
Boras also noted the qualifying offer was in part created to promote parity, but in the two years of its existence, 11 of the 22 qualifying offers have been extended by the Yankees and Red Sox.