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This question applies to Major League Baseball, where teams have an "allowance" on which they can spend for players in various slots.

In the first round, the Pittsburgh Pirates surprised many people, when the selected high school short stop, Cole Tucker, with the 24th overall pick when at least some would say that Michael Chavis (26th overall) was better at that spot.

As I (and others) suspected, Tucker was signed for $1.8 million, $125,000 less than the slot "allowance." Most of this difference was used to sign pitcher Mitch Keller with an above slot bonus in the second round.

Why would a team "skimp" on the first round in order to use the money in the second round? Aren't most of the impact players in the first round, meaning that you get the "biggest bang for the buck" there? And if the Pirates wanted Keller so badly, why not just draft him in the first round (Tucker was a relative unknown who might have lasted into the second round)?

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2 Answers 2

It is hard to speak for a team, know what their strategy is going into a draft.

In my opinion the Pirates didn't like certain players in the spot they were picking as much as other teams/scouts may have projected there. For one reason or another they decided that they could save money by drafting another player and paying him below his slotted value. Saving this money may allow them to save money for later rounds, as well as sign undrafted free agents.

Here is a story about the Minnesota Twins landing a undrafted player with a lot of potential.

No matter where you are picked in the draft, it is tough to make it to the MLB club. Story

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Drafting has changed dramatically with the new collective bargaining agreement. There are really great reasons to pick under slot players early in the draft.

First, a bit on how the draft slotting system works. Each draft position in the first ten rounds has a dollar value assigned. The first pick in the draft is worth a certain dollar amount, the last pick in the tenth round is worth significantly less money.

The dollar values for the picks a team controls are summed together to form a teams "bonus pool". They can use this money to sign all of the players they draft. If you exceed this pool you must pay penalties. The first 10% is just monetary penalties, if you spend more than 10% you start forfeiting future draft picks (which also means less bonus pool money in the following years). There is a great primer here on draft slots and the penalties.

Any player a team drafts after the tenth round may be signed for up to $100k without counting against their bonus pool. However, any amount they spend over 100k does count against their pool from the first 10 rounds.

Here's the thing. The first four or so draft slots are huge, significantly larger than the other draft slots. So if a team drafts a player in one of those slots who they know will sign for less money, they get to save a ton of money to be able to draft high risk players in the later rounds and offer them larger bonuses than other teams would be able to.

This is important for several reasons:

  • First, if a player is a highschool graduate, a large bonus may lure them away from their college commitment (or if they are a junior, it may entice them to leave school early).
  • It allows you to draft hard to sign players in the first ten rounds, earlier than other teams. There is an emerging strategy to draft hard to sign players after the start of the 10th round, so that you get the free 100k, and so that if you fail to sign the player, the money for the slot is not lost (As it would be if you drafted them in rounds 1-9).

Basically, if you draft under slot early, it allows you to get more better talent by drafting guys over slot late.

Brett Taylor, who covers the Cubs on his blog Bleacher Nation, has written several articles on the Cubs' use of this draft strategy. Here's his article about the Cubs' top pick in 2014, a significantly underslot signing that allowed the Cubs to have one of the years best drafts.

To address the specific case you mention. It's probably two things. First the talent falls of pretty hard after about the first ten picks every year. So most likely they had a few guys at that level who they liked, and everything else being equal, you take the guy you can sign for less money (so you can sign another good player later).

The other factor is that the draft can be a real crapshoot. Sure you want to get the sure thing superstars, but there might only be 5 of those in a given draft. So you stock up on highish level guys. There might not be a lot of seperation between three or four guys one of whom might sign below slot. You pick the guy who will sign low.

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