ogc thoughts
Looks like the MLB is catching on to what I've been saying for 15 years now: the odds of prospects making the majors is very low, even from the early rounds. My latest study showed these aggregated odds for finding a good player, over the first 50 years of the draft:
- pick 01: 49%
- pick 02-03: 27%
- pick 04-06: 20%
- pick 07-14: 16%
- pick 15-23: 11%
- pick 24-76: 5.2%
- pick 77-140: 2.1%
- pick 141-200: 1.3%
Looks like I made a good decision by stretching my data gathering from the first 100 picks to the first 200 picks, which places the draft some where in the 7th round, as now I can see the whole draft with my stats.
Costly to Find Good Baseball Players
Five rounds gets us to 150 picks plus supplemental picks given teams, and that puts us into that last bucket, where the odds of finding a good player is 1.3% or roughly one every 77 picks. At an average $375,000 signing bonus, the overall cost to the MLB in finding one good player in the 5th round is $29M. So recasting the odds above into costs of finding a good player, I get these rough costs for finding a good player, by pick:
- pick 01: $17M
- pick 02-03: $28M
- pick 04-06: $32M
- pick 07-14: $30M
- pick 15-23: $31M
- pick 24-76: $35M (roughly, I averaged the bonus of slot 24 and 76)
- pick 77-140: $29M (again, roughly)
Looks like the cost is pretty clearly roughly about $30-32M to find each good player, because when a fan says, the draft is great, our team found Mike Trout and only paid like $2M bonus for him (I'm guessing, he was the 25th pick, and apparently the Giants were sniffing around him, but clearly not enough, as they selected Zach Wheeler; that was a good threesome, Wheeler, then Minor, then Leake), that fan ignores the total overall cost to MLB baseball to find that good (great in this case) player.
MiLB Contraction
This is why I warned people on social media about what the MLB might do given the plight of minor league players. It is a real crime that MLB pays minor leaguers so little, it is not even a livable wage. So I applaud ex-Giants farm hand Garrett Broshius class action lawsuit against the MLB for paying players less than the minimum wage.
But I knew what any business would do if labor costs were to rise: they would find ways to reduce labor costs, and since there is no way to automate this asset (ballplayers), the business would then find ways to reduce the need for labor. And that's why they got rid of a whole level of minor league baseball, and I would not be surprised if they find other ways to remove costs, like building a new minor league structure based on the AFL model where teams contribute players to the same team, and have them compete like that.
And that's why they chose to reduce the draft to only 5 rounds, even though they had reach agreement with the players union to be able to hold a draft of 10 rounds, as well. Cutting out those 5 rounds saved each team roughly $1M each, I'm guessing (Round six starts at low $300K's, I think 10th ended around $100K, for average $200K rounds 6 to 10). I figured this was a matter of time once I realized that what the NBA did by reducing their draft just to 2 rounds would be doable in the MLB because my original draft study found that even by the third round, the odds of finding a good player is very low.
Between the two - eliminating Short Season A and cutting the draft - the savings will be used to pay the remaining minor leaguers more, as well as invest in helping them more, with coaching, equipment, and other amenities. Even in the minors, the rich (top round draft picks who got the million dollar bonuses) gets richer, and the poor gets kicked out.
Just the Beginning
And I believe this is just the first salvo that the MLB is doing. I believe that they will be contracting another level at some point, in order to save more money: just think of how many players who are considered organizational players on every minor league team. And I would not be surprised if they decide to do an AFL type league all season long, maybe to replace AA, Sabean often says that many of the top prospects get extended looks against top competition there, but slides through AAA quickly. I think AAA will become a holding place for replacement level veterans and borderline AAAA prospects, much like it is now, except that more and more top prospects will bypass AAA to the majors.
On top of that, I expect the MLB draft to be cut down further at some point. As you can above, once you get past the second round (roughly 65-70 picks), the odds soon drops to 2.1% and by the 5th round, drops to 1.3%. Dropping the 5th round would save around $11.3M across the MLB (average $375K per team). Dropping the 4th round would save around $15.0M across the MLB (average $500K per team). Dropping the third round would save around $21.5M (average $717K per team). They can save another $375K to $1.6M with these moves.
And the players union don't really care, as they have shown zero concern for minor leaguers. Each level feels like they earned, no, are entitled to what they got, and that high level of lack of empathy goes all the way up to the Hall of Famers, who easily denies other worthy veterans who should be in the Hall of Fame, and year after year, the veteran's committee ignores the right choices (like Bobby Bonds and especially Will Clark) while allowing cronyism to seep in, like when Harold Baines, who should be in the Hall of the Good, got voted in.
Minor League Baseball and the MLB draft will be totally different permanently, going forward, it looks to me, and it could get even worse. As a prospect hound, I love the discoveries like Sergio Romo and Matt Duffy, who were drafted way in the back of the draft. With the reduced draft, guys won't be getting such chances any more. I see the abandoned minor league cities, like Salem-Keizer, joining new independent baseball leagues that will probably pop up in the wake of these closures, but the odds of these players making the majors will be even greater against them, because they'll be playing against lesser competition, while getting lesser training, and lesser support.
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