2021 MLB Draft: Estimating Draft Pools
Given the MLB draft situation, where there is a cap on the amount teams can spend on amateur talent, knowing the amount a team has to work with can be beneficial when it comes to publicly analyzing the draft. With an overage in bonus space between 0-5 percent, a team pays a 75 percent tax on the cap, with no team going beyond the five percent where teams are penalized future draft picks. A team should discount those future picks, however given that prospects take a length of time and the attrition rate of prospects, those picks are valuable (between 5-10 percent overage, the loss is a first and second round pick plus 100 percent tax on the overage).
We do know the 2021 draft will be in reverse order and in which order the supplemental picks will go, along with the 2021 draft slot values being frozen from the 2019 draft for the 2020 and 2021 drafts. Additionally, there are penalties for signing players with a qualifying offer attached (this is where teams should heavily discount the picks) and teams losing a free agent with a qualifying offer gain a pick. The four players who have qualifying offers attached are:
- Trevor Bauer (SP): The Reds will gain a pick between the first round and supplemental round if Bauer signs over $50 million but a pick after the second supplemental round before round three if he signs for less than $50 million. Bauer has stated a desire to sign only one year deals, however his agent, Rachel Luba, has said they are open to all types of deals. ESPN’s Kiley McDaniel predicted a one year deal worth $31 million, but given Luba’s comments, I’m projecting more of a deal worth $50 million. As a result, the Reds gain a pick after the first round. While the Mets might be seen as front runners for the 2020 National League CY Young, the Los Angeles Angels have always been willing to spend money and currently look as if they need to add starting pitching. The Angels didn’t go over the Competitive Balance Tax and will lose a second round pick and $500,000 in international bonus pool space.
- DJ LeMahieu (2B): The Yankees gain a pick after the fourth round if LeMahieu signs elsewhere. Bryan Hoch, the Yankees writer for MLB.com, quoted Yankees first baseman Luke Voit saying, “If I was a gambling man, I’d want to put money on DJ coming back.” SNY’s Andy Martino, earlier in the offseason, mentioned how the Yankees focus is all in the second baseman. The Yankees, under this assumption, do not gain a pick nor does a team gain a pick with LeMahieu remaining in the Bronx.
- JT Realmuto (C): The Phillies traded Sixto Sanchez for Realmuto, and despite Bryce Harper’s pleas, Realmuto likely won’t remain in Philadelphia, and this comes with the club needing a catcher and Realmuto being the best available. The Mets are a logical landing spot, but seem to be targeting James McCann, and thus don’t seem to be entering the sweepstakes for Realmuto. The Washington Nationals could use a catcher, as noted by Thomas Harrigan of MLB.com, and for a team that routinely runs one of the leagues highest payrolls, they currently project at only $150 million. In this scenario, the Phillies gain a pick after the Competitive Balance B round and the Nationals lose a second round pick as they didn’t exceed the $208 million Competitive Balance Tax (their pre COVID-19 reduced payroll) and $500,000 in international bonus space.
- George Springer (CF): After being a Houston Astro since being drafted with the 11th overall pick out of UConn, Springer appears to be heading to the Big Apple. Buster Olney, of ESPN, is apparently ready to “bet the family farm” that the New York Mets sign Springer. The Astros gain a pick after the fourth round and while close, the Mets didn’t exceed the Competitive Balance Tax threshold nor receive revenue sharing. They lose a second round pick (and $500,000 in international bonus space); if the Mets were to sign Bauer and Springer, they would lose a second and third round pick. There will actually be two tables, one in which the Mets sign Springer and Bauer and one only Springer as it seems that the outfielder is top priority.
Given our assumptions, here is the first look at how much each team has with their estimated bonus pool space, the five percent over, and the total amount owed given a 75 percent tax:
The Pirates, Tigers, and Rangers have the three highest estimated bonus pools with the Orioles and Red Sox rounding out the top five. In the 2020 MLB Draft, the Tigers and Orioles drafted six players with a Future Value of at least a 35+, with the Tigers adding $62 million in value to the farm and the Orioles $45 million.
The Pirates currently have the fourth best farm system per FanGraphs and utilizing Branch-and-Bound algorithm to aggregate rankings, looked to be in the 11-13 range at the start of 2020. Ben Cherington and the Pirates new front office added the fourth most value last year at the draft and will only more with the likely trades of Joe Musgrove and Adam Frazier, along with a likely Steven Brault trade. They will have around $15 million to spend in the draft to continue building for what looks to be their next competitive window starting in 2023.
The Tigers rebuild seems to be coming along and with pick number three and two picks inside numbers 30-40, the club will be able to add additional talent for the future while Casey Mize (RHP), Tarik Skubal (LHP), and Isaac Paredes (3B) continue to develop at the Major League level. Spencer Torkelson (1B) and Matt Manning (RHP) should be soon, and with financial might, the Tigers might begin their reign over the American League Central here again soon.
The Rangers hired Chris Young as General Manager and he swung a deal for Dane Dunning (RHP) and Avery Weems (LHP) from the White Sox for Lance Lynn. Texas has had struggles developing talent in recent years and have a middling farm. Dealing Lynn and having a projected top five 2021 draft bonus pool is important for the club. The Reds, after having their first winning season since 2013 have already traded away Raisel Iglesias and are listening to offers on Sonny Gray. The club has a below average farm system with a team ready to win now, so Bauer signing for more than $50 million is a way for the Reds to boost their farm and still compete at the Major League level.
Since being hired on November 16, 2018, Orioles General Manager Mike Elias has improved the Orioles Farm System. Using FanGraphs’ The Board, the Orioles went from $97 million at the start of 2018 to $252.5 million after the 2020 draft. This has moved the club from the 23rd best farm system to the 13th best post draft. FanGraphs currently has the Orioles with the tenth best farm system. Having an estimated top five pool will only allow Elias to continue adding to the farm.
The teams at the top of the draft have a chance to add talent and three of the five are already ahead in their rebuild with maintaining a developing farm system. The Rangers are looking to start their rebuild and begin building their farm while the Reds can compete in 2021 while trying to develop their farm system.
One last chart. If the Mets sign both George Springer and Trevor Bauer, we get the following:
The order remains roughly the same but the Angels do gain an extra $1.65 million, roughly the value of their second round pick. The above draft pools are just a rough estimate and we will get official pools once the four free agents sign. Fans of the Pirates and Tigers should know that their teams will have about $15 million to spend (the five percent where the only penalty is a 75 percent tax on the overage). Mike Elias will also have plenty to spend to continue shaping the Orioles into his vision. The Rangers and Reds can continue to build up a farm system. These estimates are dependent on the assumptions listed above but are likely close to the pools that will be announced.