New draft bonus rules make it tougher for small-market teams to compete with the 1 percent

When the new rules governing the draft leaked out as the ink dried on baseball's latest collective-bargaining agreement, general managers across the industry let out simultaneous shrieks of terror. The last way to combat the monetary titans was gone, ripped away by a sport that seemed determined to widen the chasm between rich and poor. Baseball was rewarding the 1 percent. Again.

It's impossible to know whether this is true or just the bellyaching of GMs whose safety net was snipped by the rules. Granted, copy-catting already had taken away the novelty of exorbitant draft spending. Once a market inefficiency worth exploiting, stockpiling compensatory draft choices and buying high school players out of college commitments with well-above-suggested bonuses in later rounds had become something of an industry standard.

Still, the radical changes – namely a bonus "pool" MLB hopes will nudge talent toward teams that finished with the worst records the previous season – ushers in the newest attempt to distribute amateurs equitably. From the Minnesota Twins and their $12.4 million in available bonus money to the Los Angeles Angels and their $1.6 million, MLB has given each team a set amount of money to spend based on the number of picks it owns in the first 10 rounds. Should a team exceed its limit, harsh taxes and potential future draft-pick forfeiture await.

Gone are the days of teams dropping $16.4 million, like the Pittsburgh Pirates did last year, or doubling down on a great season by using postseason profit to restock the farm system. While it gives the teams toward the top of the draft the freedom to be creative with its pool money – the Houston Astros, picking No. 1 overall, could cut a deal under the first pick's $7.2 million slot and use the remainder later in the draft, for example – a number of executives aren't sure any team will volunteer to play guinea pig in this first year.

One GM of a small-market team, in fact, argued in favor of the rules, even though the sentiment is that they're designed to neuter his ability to even the playing field by overspending in the draft.

"I actually think it's OK," he said. "The rules give teams more flexibility. All of the teams understand where they are. If you win, you're at the bottom. If you lose, you get more. It really hurts the players."

That remains to be seen, of course, as agents have spent months preparing for such warfare. The GM thinks that more than ever, between the money cap and a July 13 signing deadline, teams will call players before the draft, ask if they'd sign for a certain number and, if they say no, pick someone else. Without an endless supply of money available, dropping even a dozen picks could conceivably wreck a player's bonus plans. Thus an incentive to agree to an at-slot bonus higher in the draft. Furthermore, a fair and equitable redistribution of talent, which MLB said was the impetus behind the new rules.

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Granted, this presupposes that one's idea of fair and equitable has more to do with immediate success than it does long-term viability. Baseball operates in an interesting realm in professional sports, where the draft is more a long-term investment – and crapshoot – than something to plug holes and help immediately. If baseball truly aspires to develop the sort of parity on which the NFL prides itself, it could distribute talent as well as it does money.

As it stands, baseball's solution to the imbalance the draft causes for successful small-market teams is called the Competitive Balance Lottery. It will take place July 16 and offer six picks for the 2013 draft after the first round ends and six more following the second round – all of which are tradeable. In theory it's a good concept. Its deficiencies keep it from being anything more than a glorified food stamp for the poor.

"It's a band-aid," one GM from a high-revenue team admitted.

It's tough to take something claiming competitive balance altogether seriously when it includes a team that, according to Forbes, finished with the fifth-highest revenues in baseball last year. Because the St. Louis Cardinals play in one of the 10 smallest markets in baseball, they're included in the lottery. Nobody would mistake the Cardinals for a small-market team – even when they don't win the World Series, they're among the top 10 in annual revenues – but they've got a better chance this year of winning a draft pick than impoverished Tampa Bay, which parlayed superb drafting into a roster that teems with talent.

To keep that pipeline flowing necessitates good scouting, though the ability to spend money didn't hurt. The Rays and their ilk can't do it in free agency without turning their books crimson, and that's where the industry is wondering how the new rules will play out: toward the bottom, where the draft-and-develop philosophy has become the antidote to the sport's anti-competitive nature.

Between the draft cap and the restrictions on international free agency, baseball is practically encouraging the most insane thing in the sport – the free market every offseason – to get even crazier. If that seems counterintuitive, it's because it is. In New York, the mayor wants to make it such that you can't buy a Coke larger than 16 ounces. In baseball, the league has made it such that a team can't spend more than $3.2 million this year on international free agents.

(And, yes, it's actually $3.2 million, not the announced $2.9 million. According to the CBA, six bonuses up to $50,000 will not count against the international pool. Which means if teams push the rule to the limit, they'll get $2.9 million, plus $300,000.)

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It's these rules that are going to drive the price of Jorge Soler, the 20-year-old Cuban outfielder whose free agency finally is upon baseball after months of holdups, well past $20 million. And it's why the Texas Rangers are fighting so hard for the approval of their $4.5 million deal with Jairo Beras, who all of baseball believed was 16 and ineligible to sign but the Rangers claim is 17. Soler should sign within a few weeks. The Beras decision, according to sources, should come within that time period as well.

All of this likely will be moot when MLB implements an international draft in 2014. While the league didn't reach provisions before a Friday deadline that would have allowed it to happen in 2013, a worldwide draft is almost a certainty barring geopolitical strife – i.e. Hugo Chavez being Hugo Chavez – preventing a country's inclusion.

By then, we'll have a better idea whether this new system is a hole-laden mess or a raging success. Not a sense of the whole thing, though. That will come half a decade from now, when all the talent from the 2012 draft is developed and lets us know just how much money dictated an advantage.

For now, they'll do what they do, the big and small, the 1 percent and 99 percent, pools large and minuscule: They'll pick a piece of coal, try to squeeze it into a diamond and hope this new world is as exploitable as the old.

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