Free market value: A discussion
by Conjunction on Aug 17, 2010 1:37 PM EDT
in 2011 NFL Draft
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PrintMajor League Baseball made an interesting ruling this morning pertaining to Texas A &M pitcher Barret Loux. A little backstory before we get to the talking points...
The Arizona Diamondbacks drafted Loux sixth overall in the June amateur draft, a surprising move as most pundits tagged him as a late first rounder. A madly excited Loux reported to the team's doctors for a physical, likely dreaming of a payday in the $2-2.5M range. It was revealed, though that Loux failed the physical---the doctors found issues with both his shoulder and elbow. This heralded ensuing speculation in the following weeks that Arizona's front office knew about the issues all along, purposely picking the pitcher to avoid signing the first round pick---and receiving the seventh pick in next year's (far better thought of) draft as compensation.
This was obviously a huge blow to Loux. There was speculation the D-Backs would offer him a severely reduced contract--and more rampant rumors that he wouldn't be extended an offer at all. Loux's agent threatened to sue the team, the league and anybody else in the vicinity.
The signing deadline passed last night-- and with it came the news that the Commisioner's office declared Loux could become a free agent on September 1st. This, to me, seems like the most logical compromise for both sides. Why? Because draft picks are almost invariably bargains (in theory). Young players spend their early years bound to one team and severely cost controlled. If Stephen Strasburg had been a free agent, he'd have fetched far more than the 15 million bonus received from the Nationals after being drafted #1 overall in last year's draft. Given the chance to negotiate with all 30 teams, Loux will fetch far more than he would have from the apprehensive Diamondbacks--and may even get more money than his draft slot would have called for.
The same theories don't completely apply to the NFL draft, where the pay scale for top draft picks has ballooned out of control in recent years. But the draft still holds tremendous value in that picks generally remain good values.
My question is this: If an open bidding process were put in place, what do you think the price range would be to sign top five prospects? Late first rounders? Mid-second rounders?
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Apples and Oranges, IMO.
For every player like Strausberg who comes in a year after being drafted, plenty of other top picks in baseball kick around the minors for 3 or 4 years before becoming a consistent part of their major league clubs, if at all.
Compare that to football where if a 1st or 2nd round pick isn’t starting, or making a major contribution, by the end of their rookie year then you already start hearing the “Bust” label being thrown out.
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by Jonathan Loesche on Aug 17, 2010 2:10 PM EDT reply actions
Sure
but the fact is, the money isn’t in the same stratosphere. Let’s put it this way; The #3 pick in this year’s draft, Manny Machado, is quite a good prospect. He got a 5.1 million dollar signing bonus. During his years in the minors, he will earn next to nothing. It will probably take him 3 to 4 years to make it to the big leagues if he’s a successful prospect. Once he does, he’ll spend his first 3 years making what’s essentially the major-league minimum. He’ll then go through 3 years of arbitration meant to pay him less than he’s worth. If he’s a truly excellent player, he’ll make 18 million dollars during those three years.
He’ll have made about 24 million for 6 years of very high level production. The chance that he can contribute on that level is far preferable to paying a proven player with similar abilities 80 million dollars for that timespan.
Sure, baseball prospects present a lesser chance of actualizing talent into production and have little short-term value. But the cost invested is far, far lower.
"By MLB.TV, we can see J. Hamilton's homer, M. Young's clutch, and N. Feliz's explosive. All about Rangers things can be our interest"
--South Korean Rangers fan
Your math is off a bit -- your point is actually stronger than you make it
You say it comes down to $24M over 6 years — $4M/year. But it’s actually less than that.
You have to think of it this way:
3-4 years making virtually nothing in the minors
3 years making the major league minimum
3 years of arbitration
So that’s 9-10 years over which he’ll have made $24M — less than $3M per year. And even if the guy turns out to be a total bust, he’s not going to set your franchise back 3-5 years.
Contrast that with JaMarcus Russell. I don’t know how much money he actually collected, but he spent three years with the Raiders and had $32M guaranteed in his rookie contract — over $10M per year — and the only reason he didn’t set the Raiders back 3-5 years was because Al Davis had already done that himself.
Sure
but during those first 3 years he’s not contributing to the big league team.
"By MLB.TV, we can see J. Hamilton's homer, M. Young's clutch, and N. Feliz's explosive. All about Rangers things can be our interest"
--South Korean Rangers fan
Plus
in baseball, you’ve got guys coming out of high school (Bryce Harper?) and prospects that don’t come out of the US who hit the big leagues much younger than NFL players. Also, the value of a single player is higher in baseball at some positions than even quarterbacks in the NFL. A legitimate TORP or ace is the most valuable, important, crucial, insert adjective here position in all of sports, hands down, and come in very quickly in terms of development.
Meanwhile, a guy like Drew Brees, who proved last year he is a phenomenal quarterback, didn’t achieve that status in terms of being accepted by the fans and the traditional media as such until last season. Matt Schaub had a phenomenal season stats-wise, and still isn’t held as high as others. And guys like Matt Ryan and Joe Flacco still have to build on their productive rookie seasons to prove their legitimacy in the long run. In baseball, whether it’s Tim Lincecum, Felix Hernandez, Zach Greinke, etc., you don’t have to win championships or put up mind blowing numbers to get the cash. It’s more or less what Loesche said above: the leash is shorter in the NFL because you can always replace your bust with someone more useful and turn the team around (Jamarcus Russell > Jason Campbell, for example). In baseball, you just don’t come across legit #1 pitchers very often. Just my op.
You don't seem to want to accept the fact you're dealing with an expert in guerrilla warfare, with a man who's the best, with guns, with knives, with his bare hands. A man who's been trained to ignore pain, ignore weather, to live off the land, to eat things that would make a billy goat puke. In *St. Louis* his job was to dispose of enemy personnel. To kill! Period! Win by attrition. Well, *Steven Jackson* was the best.
I"d argue that
For one things, pitchers are in general unstable. You can’t count on them to sustain production. Take Greinke, for example…last year he pitched 229 innings with a FIP of 2.33, which made him a 9.4 Win pitcher in terms of Wins Above Replacement. That’s an absoultely huge number which easily led the league last year.
This time around, his FIP has fallen to 3.39—-still phenomenal, still ace-worthy. But nowhere near what he put up last year. He’s at 3.7 WAR right now and will probably end the year between 4.5 and 5. 5 out of 162. That makes him a phenomenal player but nowhere near a great QB. QBs change an entire offense game in and game out. Greinke can easily alter the course of a game, but he’s only able to affect one in every five.
Give me Peyton Manning on a football team over Pedro on my baseball team anyday.
"By MLB.TV, we can see J. Hamilton's homer, M. Young's clutch, and N. Feliz's explosive. All about Rangers things can be our interest"
--South Korean Rangers fan
by Conjunction on Aug 17, 2010 10:06 PM EDT up reply actions
I would agree
To say an ace is more valuable to a club than an elite QB is to a squad makes absolutely zero sense to me. A elite QB can help you in every game you play
IMO
Advanced NFL Stats wrote a fantastic piece last year explaining why the top NFL draft picks get such big deals
it applies in a lot of other areas too (top FAs big deals, why the top couple players at a position are paid tons while average players can be had for relatively cheap).
http://www.advancednflstats.com/2009/04/draft-picks-bricklayers-or-gladiators.html
Choke/Clutch is the fetishization of the small sample size.
"People who think they know everything are a great annoyance to those of us who do." -Isaac Asimov
Yep
and there’s something to that. I’m not a proponent of killing top draftees’ gravy train, though I do believe it should be spread out a bit more throughout the draft. The structure is too top-heavy right now.
"By MLB.TV, we can see J. Hamilton's homer, M. Young's clutch, and N. Feliz's explosive. All about Rangers things can be our interest"
--South Korean Rangers fan
by Conjunction on Aug 17, 2010 10:08 PM EDT up reply actions
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