UPDATE: The data within this article has been substantially updated with new data. The article has been adjusted to reflect.

Bud Selig must have woke Tuesday morning with a bit of a hangover. With the 2009 MLB First-Year Player Draft signing deadline completed at one-minute past midnight, the Nationals had Stephen Strasburg under contract – no easy feat when he was represented by Scott Boras. But, beyond getting Strasburg under contract, it is a deal that, while a record, did not so alter the landscape of the draft signing process as to make one say it needs to be blown up. As quoted in today’s edition of The Washington Times (Strasburg deal doesn't break bank for Nats):

"The Nationals didn't upset the apple cart," said Maury Brown, editor of the Business of Sports Network and bizofbaseball.com. "They were really under some pressure. If they had gotten up above $20 million or [Strasburg] somehow went into free agency, it would have created all kinds of turbulence."

But, while that was Strasburg, one aspect of the signing process that seems to have fallen flat is MLB’s recommended slotting system for ranking signing bonuses. As reported by Jim Callis of Baseball America, $160.2 million in signing bonuses were doled out over the first 10 rounds of the draft, “just short of the $161,048,300 teams spent in the same rounds in 2008.” And, the figure could be surpassed if Royals 1st-rounder Aaron Crow or sandwich-rounder Tanner Scheppers of the Rangers are signed just before next year’s draft.

This after Selig said he wanted to see a 10 percent reduction in the bonus amount divvied out to Rule 4 players.

So, you could say that the slotting system failed, but maybe, just slightly (didn't increase, but then Selig didn't get clubs to go the reduction route). That’s true in the overall across the signing process, but when it comes down to signing deadline day, owners and their GMs throw the system aside.

On Monday morning – the final day that players could be signed to contract or go back into next year’s draft pool – there were a total of 29 players between rounds 1 and 5 that had not yet reached deals. They ranged from Strasburg at No. 1 to Damien Magnifico, the Mets 5th rounder and the 164th selection overall.

Of the 37, twelve players did not reach contract. Of the twelve, two (the aforementioned Crow and Scheppers) falls under different signing guidelines – their college eligibility expired and therefore can be signed at any point before the June, 2010 Rule 4 Draft.

The ten players that go currently are back in the draft pool are:

• LeVon Washington
• James Paxson
• Jake Eliopoulos
• Jake Barrett
• Bryan Morgado
• Kenny Diekroeger
• Josh Spence
• Miguel Pena
• Damien Magnifico

To place perspective around where the majority of draft bonuses go, the 25 players that did get deals at the deadline account for 7.79 percent of the 321 selected in the top 10 rounds alone. Those players garnered $56,612,500 in bonuses, or nearly 35.34 percent of the total.

Due to these players most often being the most highly sought in the draft, clubs are hot to get them under contract, while agents are looking to get the most in bonus, or if exceptional players, major league deals (see Ackley and Strasburg as examples).

As mentioned, MLB has created a recommended slotting system for doling out bonuses for the first five rounds; after that, there's a recommended max. This year the recommended max was $150,000.

The slots are not mandatory, nor enforced as that would be deemed collusion and in violation of the collective bargaining agreement. Clubs are informed as to what the recommended bonus money should be paid out based upon where the player is selected in the draft. Clubs are only told of the recommendations for their slots, and are not privy to the recommended slots of the other 29 clubs.

While the slot figures are not published, Jim Callis of Baseball America has examined the system extensively over several seasons and come up with a highly educated set of slot estimates. In looking over the signing bonuses across the first five rounds and comparing them against the projected slots, Callis has over 50 of them exactly on the mark.

The following table shows the players that reached deals on the final signing day for the draft, the estimated slot figure, the percentage above or below the slot, and the dollar figure that exceeded or went under the recommended slot (sorted by largest over estimated slot figure):

Select Read More to see all player bonuses agreed upon on Monday, Aug. 17 at the signing deadline, their estimated recommended slots, and other details.

Source: Baseball America

As expected with Stephen Strasburg’s record setting bonus figure of $7.5 million, he exceeds the estimated recommended slot figure of $4 million by $3.5 million, or 87.5 percent over the recommendation. While over 87 percent is high, it is below the average over estimated slot bonus for those signed on the deadline day at 138.63 percent above slot.

At the top end of the scale is catcher Max Stassi, the A's 4th round pick, and the 123rd overall. Stassi, represented by Legacy Sports Group (Brodie Scoffield), landed a $1.5 million bonus, a staggering $1,263,300 over the estimated slot figure of $236,700. The percentage over the estimated slot figure is 533.71 percent.

At the other end of the spectrum are the Marlins and the bonus given to RHP Bryan Berglund, a second rounder and the 66th selection overall. Berglund accepted a $572,500 bonus, which is $18,100 above the estimated recommended slot. It is the only bonus that did not see a percentage over the estimated recommended slot by double digits (3.26 percent).

Other points of interest:

• Boras Watching – Boras Corp averaged bonuses that exceeded the estimated slot by 96 percent. The high being 2nd rounder LHP Andrew Oliver who was selected 58th overall by the Tigers. Oliver’s $1.495 million bonus was 139.35 percent above the estimated slot figure of $624,600. The low (if you wish to characterize it as such) was for supplemental 1st rounder Kentrail Davis, the 39th overall pick by the Brewers. Davis' $1.2 million bonus was 42.15 percent above the estimated slot of $844,200.
• Blue Jays Way? – The Blue Jays had three players in the top five rounds not under contact as of Monday morning, and by the signing deadline, only chose to sign one. LHP Jake Eliopoulos (2nd round, 68th overall, estimated slot $537,300) and RHP Jake Barrett (3rd round, 99th overall, estimated slot $335,700) did not get deals. However, the Blue Jays did ink 3rd rounder, 104th overall, OF Jake Marisnick to a $1 million bonus, 223 percent above the estimated recommended slot of $309,600. Marisnick is represented by Reynolds Sports Management.
• Useless Deadline Signing Trivia – There were fourteen 1st rounders that had not reached bonus deals as of the Monday morning signing deadline day, three of which (Aaron Crow, Matt Purke, and LeVon Washington) did not get signed..... That was followed by three supplemental 1st roundes, two of which did not get signed (Paxson, Scheppers).... There were eight 2nd rounders, with two not getting signed (Jake Eliopoulos of the Blue Jays and Kenny Diekroeger of the Rays)..... There were four 3rd rounders, with only one (Jake Marisnick of the Blue Jays) getting signed by the deadline..... There were four4th rounders, all of which were signed..... And, four 5th rounders, with RHP Caleb Cotham of the Yankees, and Tyler Blandford of the Mariners receiving bonues..... By position, RHPs (15, with 4 not getting signed), LHPs (9, with 5 not getting signed), OF (5, all signed), SS (3, with one not being signed), C (2, both signed), and 2B (1, LeVon Washington who did not sign)

Final Thoughts: Management vs. Agents, Trading Picks

Based upon the figures, it’s clear that the slotting system is not functioning as intended. That illicits different thoughts, depending on which side of the table you are sitting on. As one well placed club executive said to me yesterday, “The whole drafting system needs tending to in the next round of collective bargaining.” Not everyone agrees.

“Any ‘system’, recommended, or not smells of collusion,” said one agent.

There will, unquestionably, be looks at adjusting the draft process. One adjustment that on the face of it comes with little pain in implementing would be the ability to trade draft positions. This would add excitement as seen in the NBA and NFL. An issue with the concept is that it could setup disparity. Clubs that cannot afford bonuses or major league deals for top picks would trade to the likes of the Yankees, Red Sox, Dodgers… clubs in large markets with high revenue levels.

As one agent, who conceptually opposes a slotting system, but discussed the concept, said today, “If you have hard slots, you remove the need to trade picks. The system would prevent going drastically over, which is the problem for some clubs today.”

The bottom line is, recommended slotting does not function… or, at least it’s not functioning as the Commissioner’s Office intended. Bud, take a couple more aspirins, and feel good about this: the draft process doesn’t come back under pressure for another year.

Special thanks to Jim Callis of Baseball America

Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is contributor to Baseball Prospectus, and is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).

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Comments (3)

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RE: Trading Picks
written by JRock, August 20, 2009

Great article.

Although trading picks may create performance inequality, the current "soft" slotting system also creates inequality. Some players known to have signability issues are pa*sed over by small market teams, and are drafted by larger market teams. This did not appear to occur this year as Toronto, Oakland, Minnesota, Milwaukee, and KC all went over slot.

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written by Adam, August 20, 2009

The whole idea of trading draft picks helping big market teams too much is ridiculous. There are numerous players who slip in the draft because teams deem their contract demands too high. So, instead of having teams simply pa*s over the player, they could trade their pick to a team willing to pay the price and acquire more picks.

Makes sense, doesn't it?

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written by Maury Brown, August 20, 2009

"There are numerous players who slip in the draft because teams deem their contract demands too high."

With "numerous", I'm sure you can list, say, just two?

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