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Pre-draft, Stanford right-hander Mark Appel was almost universally regarded as a top-three overall talent. Some analysts even predicted the Astros would make him the 2012 Draft’s number-one pick. No dice. Now, over a month later, Appel heads back to Stanford to finish out his college career.
On the big day, Appel ended up falling to the Pirates at the number-eight slot. At first, it seemed like a blessing for the Bucs, an up-and-coming team with a future heavily reliant on their farm system’s tremendous pitching depth. For a moment, Appel looked like a great fit for a club that already boasts four of the top young arms in the game– James McDonald, Gerrit Cole, Jameson Taillon and Luis Heredia, and plenty of other gifted throwers. But then it set in. Under Major League Baseball’s new hard-slotting system, the Pirates would have to pull a rabbit out of their hats— or bandanas… or whatever. Appel is a blue-chip guy, coming out of Stanford, advised by the biggest ball-busting agent in the business.
The eighth slot alloted just $2.9 million for the Pirates to sign the top college pitcher in the nation. Sure, Trevor Bauer made do with $3.25 million from the D’Backs last year, but Appel made it abundantly clear he wasn’t giving Pittsburgh any sort of discount. The club’s GM, Neal Huntington, made an honest effort to reel-in the star right-hander. Signing many of the club’s first ten picks to below-slot deals, he managed to loosen the team’s budget enough to put a very competitive $3.8 million offer on the table. Signing Appel at $3.8 million, Pittsburgh would pay a 75% percent luxury tax, and would miss forfeiting a draft pick next summer by a hair. The club’s offer would put them 5% over their bonus pool allotment, if they pushed it a tick higher, the MLB would fine them with a 100% luxury tax and they would lose their first-round pick next season. If they pressed further, and were over 10% above their bonus pool, they would loose both their first and second round picks.
Screwed by the system.
Since 2003, among college pitchers, only Gerrit Cole ($8 million) and Danny Hultzen ($6.5 million) have commanded more lucrative signing bonuses. If he accepted the $3.8 million deal from Pittsburgh, Appel would’ve been the richest college pitcher selected outside of the first three picks since the Indians signed Jeremy Guthrie– a Stanford alumnus– for $4 million a decade ago. Appel essentially scoffed at Pittsburgh’s offer. He’s 6’6″, and he can throw a 98 MPH fastball and a knee-buckling slider for strikes consistently. Most important, his agent is the infamous Scott Boras. Remaining largely quiet since draft day, Appel thanked the Pirates for their offer once the signing deadline passed, and announced he would return to Stanford to complete his degree.
Because Appel turned them down, the MLB will give the Pirates the 9th overall pick in next summer’s draft as compensation. Huntington understood the risk he was taking when he selected the star hurler, and will happily take three of the top 45 picks next time around.
In 2008, the Washington Nationals dealt with a similar situation. After drafting Aaron Crow with the ninth overall pick, then GM Jim Bowden couldn’t come to a contract agreement with Crow’s camp. Advised by the Hendricks brothers, the hard-throwing Missouri right-hander initially demanded between $8-10 million from the Nats. The day of the signing deadline, Bowden put $3.3 million on the table, but Crow and company refused to take anything less than a $4 million bonus. He couldn’t return to school, he had already graduated from M.U. that Spring. So, Crow took his game to the Indy Leagues for a season before re-entering the draft. He went to the Royals the next summer, a few picks lower in the 12th spot, and eventually signed for $3 million ($1.5 million signing bonus).
Crow wasted a year in the Indy Leagues, and ended up losing a decent chunk of change. The Nationals came out on top, and took Drew Storen– now their closer– with the compensation pick they received from Bud Selig. The 2009 draft was more talent-heavy than the ’08 class, and Washington walked away with Stephen Strasburg (1st overall) and Storen, two pitchers already playing a lead role in the organization’s emergence as a playoff contender.
So, the Pirates will be just fine. Mark Appel and Scott Boras aren’t so lucky. For Mark, it will be tough to beat $3.8 million dollars and job security. For Scott, it will be tough to beat 10% of his client’s signing bonus (after taxes). Stanford Cardinal manager Mark Marques doesn’t exactly baby Appel’s arm. Appel tossed five complete games, and went at least seven innings in fourteen of sixteen starts last season, often running pitch counts in the 130-140 range. As a modern, hard-throwing pitcher, he faces at least a 10% chance of catastrophic injury, and a significantly higher probability that he’ll lose velocity or overall effectiveness.
Passing up $3.8 million and a pro baseball contract for a better deal in the future is an absolutely ballsy gamble for someone in Appel’s line of work. His fellow 2012 draftee, Yankees first-round pick Ty Hensley had his signing bonus reduced by $400K (25%) after a team doctor reported “shoulder abnormalities.“ Not even an injury– abnormalities. The fact that Hensley’s shoulder looked a little funny on the good Doc’s MRI allowed the Yankees to lop-off a quarter of the kid’s signing bonus. By the way, he was a high school pitcher and a two-sport recruit with more negotiating leverage than Appel has. Hensley readily accepted the pay cut.
Try to imagine how much Appel’s bonus would shrink if he had to go under the knife for elbow reconstructive surgery. Today, one in seven professional pitchers has suffered through at least one Tommy John surgery. About 8/10 arms return to their pre-surgery ability (eventually) following the procedure, but there’s a lengthy 18 1/2 month rehabilitation period on average. With a blown-out elbow, it’s hard to believe he’d garner anything more than half of the $3.8 million offer he turned down from the Pirates. That’s not even close to the worst case scenario though. For a young pitcher, any even semi-serious shoulder ailment could forfeit millions of dollars in future earnings. For a blue chip prospect like Appel, it could mean hundreds of millions in lost income.
Appel shoulders a heavy workload at Stanford, and he is therefore prime candidate for a rotator cuff or labrum tear. Unlike Tommy John surgery, only 40% of those that undergo shoulder surgery return to their pre-procedure level of performance. Even pitchers with less-severe shoulder injuries, who don’t need to go under the knife, still miss-out on the big bucks. Two years ago, the shoulder of sixth overall draft pick Barrett Loux scared the D’Backs enough to pull their $2 million dollar offer off the table all together. The team cut him loose, and he became a free agent per the MLB’s rules. He eventually signed a modest $312K deal with the Rangers. That’s almost $1.7 million down the drain. If that sounds like a tough break, consider this– Loux was actually relatively lucky for a guy with a labrum tear. His ailment didn’t even warrant surgery, and he’s posted a spectacular 20-6 record with a 3.71 ERA and 202 strikeouts through 196 career professional innings. Feel bad for the kid that does go under the knife, and loses even more than 84% of his signing bonus.
No doubt, pitching is a dangerous job. Even off the field, one mistake, one slip-up– or even just some bad luck– can completely ruin (sometimes hundreds of) millions in future earnings for a pro pitcher. On the field, Mark Prior’s manager overworked his shoulder for a couple of seasons and poof! One of the game’s best young pitchers saw hundreds of millions of dollars of salary vanish before his eyes. Accidents happen off the field too. Brien Taylor, drafted by the Yankees number-one overall in 1991, was the game’s best pitching prospect when he tore his labrum in an offseason bar fight. In the 324 innings pre-career-ruining injury, Taylor put together a sparkling 3.02 ERA and struck out 337 batters. Following a lengthy, two-year recovery, he returned to the mound. A shell of his former ace self, he managed just 111 more professional innings before retiring, totalling an ugly 11.25 ERA.
Yeah, but Appel’s agent is Scott Boras. The guy knows what he’s doing, right? Well yeah, but that doesn’t mean he’s always right. Matt Harrington, Baseball America’s 2000 High School Player of the Year was drafted five times, and turned-down each of the offers extended his way. After passing on a $5.3 million contract offer from the Rockies out of high school, he sobered-up for a moment and fired his agent, Tommy Tanzer. He hired Scott Boras to take over for Tanzer, hoping his new advisor could help him forget about his brilliant decision and show him the money (again).
Instead of enrolling in college, Harrington decided to pitch in the Independent Leagues for a season before re-entering the draft in 2001. Though he didn’t put up good numbers with the Fort Worth Cats, his previous accomplishments still attracted big money. The Padres drafted him 58th overall and offered him a $1.25 million four-year contract, including a $300,000 signing bonus. The same kid who felt insulted by the Rockies’ $5.3 million proposition a year earlier, Harrington wasn’t enthralled with the Padres’ much more modest offer. He declined to sign with San Diego, and once again returned to the Indy Leagues and an $800 a month paycheck. To make a long story short, shoulder surgery ruined his 97 MPH fastball and he didn’t end up signing with an (affiliated) pro team until 2006 when he inked a minor league deal with the Cubs. He never threw a pitch for the organization though, and decided to hang it up all together the following season. He now works at Costco.
Lets not get too bleak. After all, the odds are with Appel to stay healthy this season, and he is a darn good pitcher. But, as far as his next contract offer goes, the truth is, it will be very difficult to match the one he just turned down. Injuries aside, even if Appel does manage to stay healthy and he somehow does get drafted at a higher slot, he won’t be armed with the leverage of returning to college to negotiate with anymore. He could use the Independent-League route just as James Paxton or Aaron Crow did, but frankly, that’s proved to be a huge gamble. After watching Paxton, Crow and Scheppers go that direction recently, clubs have also become more accustomed to it, and won’t be too afraid to play hardball.
Finally, how much more could Appel really make? Lets say he improves his overall game enough to make teams forget his arm is a year older and that he was a pain in the butt to negotiate with. Let’s say he hears his name called first next June. The MLB’s new slotting restrictions will keep him from reeling-in significantly more than the Pirates offered him anyway. Carlos Correa, a five-tool high-school shortstop earned $4.8 million as the top pick this June, the smallest signing bonus for a number-one overall selection since Luke Hochevar in 2006 ($3.5 million). If Appel were to beat the odds and attract a similar dollar amount to Correa’s $4.8 mill, he would’ve risked a lot (at least $3.8 million and a pro contract) for a 26% pay raise. However, adding the value of $3.8 million, a pro contract, starting a pro career a year earlier and working with a professional player development team all together, the raise isn’t even that good.
In the end, Appel is an extraordinarily talented young pitcher. He hasn’t peaked yet, and because he began his starting pitching career later than most top prospects, there’s a chance that the best has yet to come. He’s entitled to finish his Stanford Cardinal career, and turning down the Pirates offer doesn’t say anything negative about his character. However, using a purely money-focused analysis, he seemingly made an extremely risky/ballsy decision. Considering the (still increasing) rate of catastrophic injury for young pitchers, the odds aren’t in favor of Appel attracting a better offer next time around. The MLB isn’t softening its slotting system anytime soon, and even if he does improve his stock, his signing bonus will be capped close to the $3.8 million he left on the table on Friday. He’ll be negotiating without the leverage of re-entering the draft a fourth time. As it seems right now, the risk outweighs the possible reward.
