Thirteen Teams to Participate in MLB Competitive Balance Draft Lottery

By | July 18, 2012 at 4:13 am | No comments | Off The Field | Tags: , , , , , , , ,

On Wednesday, July 18th, thirteen big league clubs will partake in the league’s first competitive balance draft lottery.

Last winter, the MLB and the MLBPA agreed on a five-year collective bargaining agreement. Heavily focused on competitive balance, this last CBA is the most radical the league has seen in two decades. Beyond over-hauling free agency compensation and arranging a more organized international player market, the agreement included heavy changes to the First-Year Player Draft. Assigning clubs bonus pools for the first ten rounds and adding creative penalties for over-slot spending are the most drastic changes to the system. But the CBA even takes it a step further, implementing a more subtle competitive-balance mechanism, the new draft lottery.

Ten of the poorest franchises, in terms of revenue, and ten clubs operating in the smallest markets will enter in to the new, annual, draft lottery. Because these qualifications will generally overlap– small-market clubs tend to have weaker revenue figures– the pool will consist of thirteen teams this year (not twenty). The lottery’s odds are determined by each team’s winning percentage from the previous season, thus affording the league’s poorest-performers the greatest chance of bringing-home a better pick.

The entrants vie for one of six “extra” picks, slotted between the first and second round of next June’s draft. The teams that don’t win one of the six extra picks will be re-entered in to a second lottery along with any other franchise that receives welfare—ahem— funds via revenue sharing. Teams in the second lottery  have the opportunity to one of six picks between the second and third round.

Teams can trade their picks at any time during the regular season. However, only teams that won the picks can move them (they can only be traded one time).

Here’s the list of teams eligible for tomorrow’s first draft lottery, arranged by winning percentage (odds):

Baltimore Orioles
San Diego Padres
Kansas City Royals
Miami Marlins
Pittsburgh Pirates
Oakland Athletics
Cincinnati Reds
Cleveland Indians
St. Louis Cardinals
Arizona Diamondbacks
Tampa Bay Rays
Milwaukee Brewers

For the past month, up until last Friday’s amateur signing deadline, thirty big league clubs got their first taste of hard-slotting, and the new bonus pool system. The system is too new to judge, but as it appears, it has slightly hampered small-market teams in the short-term by restricting their spending in one of the few areas they can compete. For clubs like the Rays and A’s, spending a few extra million on young players and player development is more palatable than burning heaps of cash on over-priced free agents. In the past few soft-slotted drafts, it’s not as if the Yankees or Mets, or even the Red Sox, have gobbled-up the premium talent and left nothing but bone and gristle for the little guys. The Nationals, building an organization out of the Expos, were able to accumulate Stephen Strasburg, Bryce Harper, Drew Storen and Anthony Rendon with their top-ten picks, and managed to spend less than Albert Pujols spends on his luxury toilet paper. Small-market teams like the Orioles and Pirates, included in this years lottery, raked-in Dylan Bundy, Manny Machado, Jameson Taillon and Gerrit Cole in recent drafts. The Yankees got Cito Culver, and though they struck it rich(er) on Mason Williams, they haven’t been able to pull any of the big names to the bottom of the first round since Andrew Brackman. In the end, he wasn’t even that awesome.

While the new draft system, doesn’t help the little guys much, this new lottery provision at least does some good. Firstly, only poorer teams are included in the lottery–not just teams that lose a lot. Sorry Mets and Cubs, but it’s time for the A’s and D’Backs to be rewarded for their ability to win with less. Secondly, teams can trade these picks, and can move them immediately. Therefore, clubs competing for a playoff spot, like the Pirates, Reds and Orioles, are given more trade deadline ammunition.

Also, clubs that pile up extra picks will have more budget flexibility in the next draft. For a team like the Pirates, (possibly) holding three of the 2012 Draft’s first forty-five picks will force the MLB to fatten up their bonus pool. Then, if they get their hands on another Mark Appel-type, big money guy, they’ll be able to free-up more cash by signing more picks to below-slot deals.

There’s a separate, third lottery for teams that bust their amateur draft bonus allotment. Clubs that exceed their bonus pool by 5-10% forfeit a first-round pick, and those that exceed their allotment by 10-15% forfeit both a first and a second round pick. This third lottery includes any team that doesn’t exceed their bonus pool, and odds are based on a combination of winning percentage and revenue. This time around, this paragraph is moot as no club burnt a pick with excessive bonus spending.

So, thirteen small-market, revenue-poor teams will enter in to the first lottery tomorrow. The Detroit Tigers, a team that receives funds through revenue sharing will also be added to the second lottery. The entrant’s compete for twelve total extra draft picks– six after the first round and six after the second. Each team’s odds of winning  a pick are determined by their winning percentage from the previous season. All of this happens tomorrow afternoon at 1:30 PM ET in New York.


Thirteen Teams to Participate in MLB Competitive Balance Draft Lottery / Baseball News Hound by Ryan Kelley is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives CC BY-NC-ND

About the Author

Ryan Kelley

Founder and Executive Editor of Ryan is a graduate of the George Washington University, with a degree in economics. His acclaimed thesis on Major League Baseball's Labor Market is in the running for an excellence award in economics. A young economist working in Washington D.C., Ryan has extensive experience working in professional baseball. In the past, he's worked in player development, for the United States Olympic Committee and in scouting. Ryan's resume also includes jobs in journalism, social media marketing, government as well in non-profit legal services. However, sports and sportswriting are his two passions, and he strives to incorporate his unconventional career experience and academic expertise in his work at Born and raised in Connecticut, Ryan currently resides in Arlington Virginia, just outside of DC. A former amateur baseball and football player, Ryan loves both sports.

2012 MLB Competitive Balance Draft Lottery Results / Baseball News Hound by Ryan Kelley is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives CC BY-NC-ND