Pirates making adjustments with new major-league draft rules
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BRADENTON, Fla. — The Pirates' spending spree in the past four drafts did not happen by accident.
The front office knew the economics of the draft would be altered significantly by a new collective bargaining agreement. So, armed with high picks, the team spent freely to sign as many prospects as possible before the rules changed.
This year, the situation is different. Under the revamped CBA, teams are assigned an aggregate signing bonus pool. Any team that exceeds its amount will be taxed and could be forced to forfeit a first-round pick.
This year, the Pirates will have $6,563,500 to spend on picks made in the first 10 rounds. In 2011, the Pirates spent $16.4 million on those selections.
"We saw this coming years ago," team president Frank Coonelly said. "We pushed money up to make sure we'd be taking advantage of opportunities we had last year and the year before."
In the past four years, the Pirates spent $48 million — the most in baseball — to sign their picks. Last year, they doled out more than $17 million, including a team-record $8 million bonus to top pick Gerrit Cole and $5 million to second-rounder Josh Bell.
Team owner Bob Nutting approved adding several million dollars to the draft budget last year when the Pirates saw they had a chance to lure Bell, a blue-chip high school slugger, away from his commitment to the University of Texas. It took first-round money to sign him, and the Pirates also went above the recommended slot amounts on several other players in lower rounds the past few years.
That's not going to happen anymore.
"We all knew (a change) was coming, but we didn't know what," Cole said. "I got out at the right time, for sure."
Under the new system, each pick in the first 10 rounds is assigned a dollar value. Going over that figure by up to 5 percent results in a 75 percent tax on the overage. The penalties escalate from there, ultimately reaching a 100 percent tax and the loss of two first-round picks for an overage of more than 15 percent.
"What's interesting is, if you don't sign, say, your sixth-round pick, you lose the money," general manager Neal Huntington said. "It's not like you can choose not to sign your sixth-round pick and spend the money somewhere else. It will be interesting to see how things play out."
For picks made after the first 10 rounds, the assigned value is $125,000. Anything over that counts against a team's pool money.
Including the pool money allowed for rounds 11 and beyond, the Pirates will have about $9 million to spend this year. That's much less than the club has spent in recent years, and the Pirates insist the "extra" money will be poured back into the team.
"It goes everywhere — into the major-league payroll, into the major-league team operations, into the development staff, into the additional coaches and scouts," Coonelly said. "According to the budget I have, which was approved by Bob, it's all spent."
When the Pirates were notified of their pool amount for this year's draft, they were able to reallocate dollars to finance the A.J. Burnett trade. The process requires flexibility and constant adaptation. The formula to determine a team's pool amount includes its draft position — which is directly tied to where it finishes in the standings, so the dollar figure can change from year to year.
This is the final draft with compensation picks for teams that lost Type A and B free agents. The Pirates will get an extra $1 million toward their pool if Derrek Lee, who's still a free agent and could retire, signs a major-league deal with another club.
"We know how we're going to attack it, and we'll have some contingency plans to adjust on the fly," Huntington said. "It's definitely different, but the players should line up by ability and not by bonus demands anymore."
By the numbers
The top 10 draft bonus pools for 2012, in millions, and where the Pirates rank:
Team: Bonus pool
1. Twins: $12.36
2. Astros: $11.17
3. Padres: $9.90
4. Cardinals: $9.13
5. Blue Jays: $8.83
6. Athletics: $8.46
7. Mariners: $8.22
8. Cubs: $7.93
9. Mets: $7.15
10. Red Sox: $6.88
16. Pirates: $6.56
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