Wednesday, August 15, 2007

Baseball Prospectus copying our stuff?

The College Baseball Blog has recognized that there are striking resemblances between a post by Rany Jazayerli of Baseball Prospectus and our great site. We wrote an article on the upcoming Draft deadline in the early morning hours of August 14th and had a brief mention about Matt Porcello. Baseball Prospectus posted an article about this same topic today at 10:33 am.

Here is our full post on the draft

Teams that do not sign a top 2 Round pick will receive a comparable pick in the 2008 draft. If you fail to sign the 7th overall pick, you would receive pick 7A in 2008. For example, if Tampa fails to ink David Price and if Tampa finished last in the standings again, they would receive the first overall pick and then receive pick 1A (functionally, the second overall pick). This provides significant leverage by improving the team's BATNA (Best Alternative To a Negotiated Agreement). A draftee is in the same spot as before, but it's a little easier for the team to stick to slot guidelines knowing they would be forfeiting a whole lot less.

Everything must be done by midnight Wednesday. That means not just an agreement in principal. A signed agreement won't even cut it unless the player has passed his physical. It's hard to tell if a physical can be performed before a contract is signed, because all draft rules aren't public, but which unsigned stars go in for a doctor's visit tomorrow or Wednesday morning can probably be an indicator as to who's close to closing their deal.
Here is our post on Matt Porcello which we got from the Detroit Free Press

The Tigers are on the brink of announcing they have signed No. 1 draft pick Rick Porcello to a four-year major league contract with a guaranteed value of $7.285 million, according to multiple officials with knowledge of the negotiations.

The deal is the richest given to a high school player by the team that drafted him, and could increase in value if he attains certain roster bonuses.Porcello, a 6-foot-5 18-year-old right-hander from New Jersey, was considered one of the most talented players in the June draft, but slid to the Tigers at No. 27 overall because teams were concerned about his high price tag. He was expected to ask for a guarantee between $6.5 million and $8 million, and, it appears, that is exactly what happened. This signing hurts the North Carolina program as he was one of their top recruits for the 2008 season.

Baseball Prospectus full post

At this point, if Major League Baseball had enforced their slotting recommendations by threatening violators with being exiled to Siberia, I think Scott Boras would be coming to the podium today to announce that the Detroit Tigers had agreed to move their franchise to Novosibirsk.

In theory, as a result of the changes in the draft process this year, teams ought to have considerably more leverage than they have in the past. In theory. The creation of a firm August 15th deadline eliminates the ability of draftees to drag out the negotiations (by attending Junior College or playing in the independent leagues) until just a week before the following draft. More importantly, the new rules which gives teams that do not sign their first rounders a compensation pick in virtually the same slot next year, gives teams a considerably more palatable option than in the past, when they would only get a compensation pick at the end of the supplemental round.

There is a principle in negotiations known as BATNA – short for Best Alternative To a Negotiated Agreement. Basically, this refers to your fallback plan in case a negotiation breaks down. In previous years, the BATNA for a team negotiating with its first-round pick would be the compensation pick at the end of the supplemental round the following year. As the BATNA would typically be a lesser player than the first round pick, a team’s leverage was not very high. If the alternative to signing, say, Brien Taylor was to get the 50th overall pick the following year…well, that’s why the Yankees ponied up the big bucks to sign him.

The change in compensation rules for this year dramatically improves the BATNA for teams. If the Devil Rays don’t sign David Price, they get the #2 overall pick next year. Given that Price would be back in the draft himself, you could make the argument that the Devil Rays’ BATNA is equivalent in value to Price. They can play hardball with him, knowing that if he doesn’t sign, they can replace him with equal value next year. The same goes with the Royals, who if they don’t sign #2 overall pick Mike Moustakas will have the #3 or #4 (if Price also doesn’t sign) pick next year; and the Cubs, who will have the #4, #5, or #6 pick next year if Josh Vitters doesn’t sign.

But here’s the catch, and here’s why Scott Boras is such a brilliant negotiator: the value of the BATNA drops the deeper into the draft you go. If a top talent like, say, Rick Porcello – a consensus Top-5 draft pick on talent alone – were to drop deep into the first round, the BATNA of whichever team drafted him would not be a comparable player. Meanwhile, no matter where Porcello is drafted, his BATNA – to go to college – doesn’t change at all.

The Detroit Tigers could not resist when Porcello fell to them with the 27th overall pick. And with the deadline approaching, they apparently could not resist giving Porcello almost everything he was asking for. And for good reason: the Tigers’ BATNA was pick 27A next season, and the odds that a player of Porcello’s caliber will fall that deep into the draft again are slim to none. The Tigers don’t appear likely to be drafting at the top of their first round on their own accord anytime soon, so from their standpoint, this might be their last opportunity to nab a premier player in the draft for a very long time.

This is classic game theory: a rule change that should give teams more leverage in general – because they have a better BATNA than before – gives a specific team in a specific circumstance (a team that drafts a top talent late in the first round) less leverage specifically. And we know it only takes one outlier to drive up values for the market as a whole. For proof, just look at Scott Boras’ work every winter.

The irony is that, had Porcello been drafted by the Royals or the Cubs or some other team at the top of the draft, he would have been less likely to get the $7-million-plus contract he was asking for, because those teams would have had a better BATNA; they would have been compensated with a higher draft pick in 2008 if they had failed to come to terms, and so they could have held firm with a lesser offer. In other words, the farther Porcello fell in the draft, the more money he was likely to earn. And by announcing to teams ahead of the draft that Porcello really wanted to go to college and would only sign for Josh Beckett money (inflation-adjusted), Boras helped his client fall deep into the draft. Which was exactly what he wanted.

Also note that Porcello hasn’t officially come to terms yet, but that didn’t keep the baseball world from learning the news that Porcello was getting a record-breaking contract. With a little more than 24 hours until the deadline, news of Porcello’s signing only increased the pressure on teams at the top of the draft to sign their players, while increasing those players’ market value. Two of those players, Moustakas and Vitters Matt Wieters, are Boras clients.

It’s Scott Boras’ world. And we’re all just living in it.

It looks to me that Rany Jazayerli checked out my blog yesterday and took the information he found on this site and used it in his article without giving any credit to The College Baseball Blog. Our writer NYDore points out that the term BATNA comes from Law School which makes this post by Baseball Prospectus really suspicious. I thought our loyal readers would like to know that we are providing great information to our readers by using our contacts around the College Baseball world and if we get information from somewhere else we at least tell our readers.

1 comment:

Anonymous said...

That is so gay. Nice work on your end though. Do you think you could write some funny stuff about basketball so I can steal that? Thanks, I appreciate it.