SBD/July 19, 2012/Leagues and Governing Bodies

MLB Teams' Spending On Draftees Drops 11% In First Year Under New CBA Restrictions

Orioles selected P Kevin Gausman with the fourth overall pick in the '12 draft
Spending by teams in MLB's amateur draft "dropped by 11 percent in the first year of restrictions imposed by the new labor contract," according to Ronald Blum of the AP. MLB figures indicated that teams allocated $207.8M to draft picks, down from $233.6M last year "though still the second-highest annual total." The decline in the first round "was even more pronounced," a 17% drop from $89.5M to $74.3M this year. Just 10 teams "exceeded their signing bonus pool, incurring a total luxury tax" of $1.6M. But no team "reached the second level of the tax, which would cause a club to forfeit its next first-round draft pick." MLB Exec VP/Economics & League Affairs Rob Manfred said, "We think that the system performed well in its initial year. It accomplished the goal, in our view, which was to allow the weakest teams with the best opportunities to get the best talent." The decline in spending "was the first since a fall" from $158.9M in '06 to $154.5M in '07 (AP, 7/18).

IN PURSUIT OF PARITY: MLB.com's Jonathan Mayo noted the Royals were the "biggest winner in the first Competitive Balance Lottery," held yesterday at MLB Network Studios. The Royals received the "first pick in the official drawing," meaning that the team, as it stands now, "will get [an] additional pick in the 2013 First-Year Player Draft at No. 32 overall." The Pirates received the "second of six 'Round A' picks, with the D-backs getting the third." The Orioles, Reds and Marlins "round out Round A." Reps from many of the contending teams "were on hand to watch the drawing and the results were announced on the Network." The original 13 teams "entered into the lottery were a combination of the 10 lowest revenue clubs and 10 lowest market teams." The Tigers were added to "Round B because they were the lone team not in the original group that receives revenue sharing money" (MLB.com, 7/18). Rays President Matt Silverman, after "losing out on a 'trifling' extra draft pick" in the competitive balance lottery, said that significant "change is needed to the game's overall economic structure." Silverman said, "We've been involved in baseball for seven years, long enough to see two new basic agreements get ratified. From Day 1, we have advocated for meaningful change, especially when it comes to addressing the dramatic imbalances in our game. Meaningful change has not occurred. It must go well beyond a trifling draft pick that a team in our position may or, as (Wednesday) showed, may not be fortunate enough to receive." In Tampa, Marc Topkin notes the competitive balance lottery "was added as part of the new labor agreement to provide an additional pick in next year's draft to small-market and low-revenue teams." But the Rays, "despite being both, missed out, while less needy teams" got extra picks (TAMPA BAY TIMES, 7/19).

NOT WILD ABOUT IT: ESPN.com's Buster Olney noted MLB has "worked to bolster the integrity of the division races and reward teams for prevailing through the grind of 162 games." But in doing that, the league "may have diminished the perceived value of a wild-card berth to the degree that some teams won't extend themselves in pursuit of that carrot." The trade market this year "has been surprisingly stagnant, general managers report, and the perception of some of them is that the reduced value of a wild-card berth is partly to blame for that" (ESPN.com, 7/17).
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