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Weekend Column – Draft Spending

During my draft previews, I always spend a full paragraph talking about how a team has spent on the draft over the course of their recent history. I really feel this is important, as it shows their commitment to building from within. Obviously, there are times when a team feels a player they’ve drafted isn’t worth their demands, and they’ll let that player go unsigned. The Astros were plenty guilty of that before their current regime, and the Mets have been guilty of that plenty, too. There’s plenty of sense in that. However, I really want to point out how cheap it is to draft and develop rather than to spend at the top.

In 2009, the Mets spent almost $150 million in Major League payroll. Their four-year average Major League payroll for the years 2006 to 2009 was just over $125 million. Let’s compare that to their draft budgeting. I’m limiting the quick study to four years, because that’s the amount of time that general manager Omar Minaya and scouting director Rudy Terrasas have been teamed up. For more on the Mets’ drafting, check out their draft preview. Getting back to the comparison, the Mets spent amounts of $2.5, 3.8, 6.5, and 3.1 million on their 2006 to 2009 drafts for an average annual average of $3.975 million.

This is crude math, and it’s overly simplistic, but if you simply add the two amounts of Major League payroll and draft spending, then find out the percentages, you’ll find that the Mets spend about 3 percent on draft spending and 97 percent on Major League payroll. How in the world can that equate to long-term success? The Yankees spent an almost identical percentage of their total amount spent in the last five years, even with an average payroll 59 percent higher.

The unfortunate truth is that draft spending almost always means successful drafting strategy. Going cheap almost never works out in terms of the volume you get out of the draft. Here’s a quick look at which teams have spent the most and least average amount on the draft under their current scouting directors, looking only at the most recent five years for scouting directors with more experience than that. New scouting directors for the 2010 draft and scouting directors with only a single draft under their belt are excluded for better accuracy.

Top Five
1. Pittsburgh Pirates – Greg Smith, $9.35 million
2. San Francisco Giants – John Barr, $7.7 million
3. Boston Red Sox – Jason McLeod, $7.44 million
4. Tampa Bay Rays – R.J. Harrison, $6.875 million
5. Baltimore Orioles – Joe Jordan, $6.64 million

Bottom Five
1. Los Angeles Angels – Eddie Bane, $3.74 million
2. New York Mets – Rudy Terrasas, $3.975 million
3. Los Angeles Dodgers – Tim Hallgren, $4 million
4. Philadelphia Phillies – Marti Wolever, $4.14 million
5. Chicago White Sox – Doug Laumann, $4.45 million

Of the top five spenders, only Boston qualifies as a truly big market club. Looking at the bottom five, every single club spent at least $96 million in payroll for 2009, with the first four having spent over the $100 million threshold.

What does this tell us? It tells me that teams have not caught on to the Boston model. During the five years that Jason McLeod has been scouting director for Theo Epstein, the Red Sox have won an average of 93 games, though they’ve won 95 or 96 in four of those five seasons. That’s not the amazing part. The amazing part is that they still have one of the top farm systems in all of baseball. It’s top ten by most standards that anyone can go by. They’ve also been able to reduce their Major League payroll by $10 million or more per season for the last three years. Are teams not getting this?

The fact that draft spending correlates so easily to a strong arm is not hard to figure out. However, it seems that many so-called big-market teams haven’t connected draft spending to their long-term success. If you can outspend other clubs on the open market for free agents, why can’t you outspend them in a system that still allows soft slotting? If I’m the Mets, I give up $3 million on my Major League payroll every year without blinking if I can move that directly to drafting budgeting. Spending that much extra would put them in the top five. That’s all it takes, $3 million easily-generated dollars every year for a team with a huge following and new stadium.

Building the new wave of success for the future relies heavily on draft budgeting as the Red Sox have proven. The Yankees are in their own little world, but they soon might feel the crunch of a steadily declining system and average draft spending that has been less than Boston, Baltimore, and Tampa Bay, with Toronto’s new front office putting a much larger emphasis on scouting, too. You can’t spend your way into winning at the Major League level for extended periods of time if you’re spending that money on payroll. However, you can spend your way into winning if you spend it on the draft. Tampa Bay proved that when all their top picks, which they shelled out big money for, started coming along for them at the Major League level.

My prediction for who is next in terms of success bought through draft spending: Pittsburgh. It might be a number of years away, but watch out if Neal Huntington and Greg Smith continue their success from the 2008 and 2009 drafts.

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February 13, 2010 - Posted by | Weekend Column

1 Comment »

  1. Your points are generally solid, if somewhat misleading. While I’m not a fan of the Mets’ system, it bears mentioning that they are among the most aggressive teams in baseball when it comes to pursuit of high-end talent in the International sector. A quick scan of Kevin Goldstein’s just-released Mets top-11 shows 4 Latin American signees, in addition to each player listed at 12-15 coming from Latin America.
    Also, until their series of trades over the past 12 months, teh Phillies were largely lauded as having a great system.

    Comment by campbellandwales | February 13, 2010 | Reply


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