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That said, let's begin.
The Cubs came into the 2014 June Amateur draft with the fourth overall pick. Early in the spring, it looked like that was going to be an enviable position as there seemed to be four elite pitching talents projected to go at the top of the draft. However, that idea “popped” along with Jeff Hoffman’s elbow ligament. At the end of the spring the Cubs were faced with a field that had three elite pitching prospects and a group of about fifteen players in the next tier that could be ranked in just about any order. This caused the Cubs to require a more strategic approach than seemed would be necessary earlier in the spring.
To tell the story correctly, though, requires a review of how baseball has changed the draft in recent years. If you are a fellow fanatic and are familiar with the changes, feel free to skip the next couple paragraphs.
Prior to the changes to the draft in 2012, MLB teams could spend any amount they wanted in the draft. There were recommended “slots”, or dollar values, associated with each position in the draft. But teams were free to pay any amount they wanted for any draft pick. This led to a number of advisors (In one of the most ridiculous distinctions in sports, amateur players are not allowed to sign an agent, but they can have advisors that receive a commission) attempting to manipulate which teams would sign their players by floating varying bonus requirements to different teams. It also led to teams like Theo’s Red Sox letting players and their advisors know that if they could avoid being drafted until later rounds that the team was willing to give seven figure bonuses in rounds where the “slot” figure was much lower. This allowed them to draft high-talent amateurs later in the draft than where they should.
The collective bargaining agreement between MLB and the players union prior to the 2012 draft dramatically curbed the ability of teams and players/agents to game the system (or abuse it, depending on your point of view). A spending cap was implemented that is based on the summation of the “slot” figures associated with the draft picks for each team. If the team spends more than 5% over this amount they lose their first round draft pick in the following year. The penalties get even stiffer for further overages. Also, if a team does not sign a pick, they lose that slot amount from their bonus pool.
For the most part these changes have had their desired effect. It is much more difficult to pay players above slot later in the draft because most players drafted early require the entire bonus to get signed. There have still been some exceptions to this and teams have found certain ways to maximize their ability to pay later draft picks large bonus amounts above the MLB recommended value. What the Cubs did in the draft this year was to get very good players in the first two rounds while optimizing the flexibility they would have for picking and signing highly ranked players that were considered difficult to sign going in to the draft.
So how did they do it?
Once the team found itself likely to have the top three talents off the board, it had to evaluate the next group of players in the draft. Industry consensus was that there were 10-15 players in this tier that were essentially interchangeable. Some had higher upside and lower floors, some were better bets but were limited in other ways, some had higher injury risks associated with them. But in the end, they all graded out about equally in the minds of most observers.
In spite of the plethora of options in the second tier of the draft, a sort of expectation developed about which players from this tier would be drafted in what order. This creates an anticipation in the minds of prospects and their advisors about how much money it will take to get them to sign. If a player expects to fall no later than the 5th or 6th pick, he will not agree in advance of the draft to sign for the money a 10th pick would normally receive. So each of the options out there not only had to be graded on their abilities as a player, but also on how much money it would take to get them to sign with the club.
For the Cubs, this became a perfect chance to get a player they really liked and also save money to allocate to later picks in the draft. It started with a player in Schwarber who may struggle to find a position defensively. That created the expectation that he would end up drafted in the middle of the first round even though he was the best hitter in the college ranks this year. But the Cubs prized the rare left-handed power and mature approach at the plate that he provides. This gave the team an inefficiency it could exploit. By getting Schwarber to agree to a deal nearly $1.5M below the recommended slot value at #4 in the draft, they created a pool of funds to spend on other players.
The key here is that they must have known before the draft what it would take to get him signed. This is what led to the rest of the approach to the draft. The Cubs proceeded to accumulate more savings with their next two picks in the draft. By picking a college senior (albeit the #1 senior in the draft), the team has significant leverage to pay Stinnett well under the value associated with his spot in the draft, as well. His only other option would be to play independent baseball for a year and then reenter the draft next June. This move has yet to work out for any player attempting it. The Cubs also saved a bit by taking a player they liked in the third round that was willing to sign for $100K less than the recommended value of their 3rd round selection.
With this war chest built up in advance of day two in the draft (and at the very beginning of it), they were able to select a string of very highly rated but difficult to sign players in the remaining rounds of the draft. They targeted very high upside pitching throughout the second day (rounds 3-10) and have said that they expect to get all those players signed.
In addition, they were able to pick many more of players that were ranked among the top 200 prospects in the draft (players that should have been picked in the first five rounds or so) on the third day of the draft. Some of these may simply be fall back options in case they cannot sign the players from day two. But I believe the team built up enough savings from their approach to day one that they will be able to sign several of those players, as well.
All in all, the Cubs did a fantastic job of maximizing the value of their position in the draft given the circumstances of how things played out. They were able to get the player they wanted and position themselves to get the largest crop of good prospects possible.
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