Wednesday, July 18, 2007
DRAFT DODGER
Unless it is posturing or Texas and others are being offered insulting trade proposals like Craig Hansen for Eric Gagne, the talk about sellers collecting draft picks instead of making a deal is borderline ridiculous. A top 100 draft pick is valuable, but any minor leaguer that has progressed like the average top selection is a better asset.
The minor leaguer has less risk because they are closer to the Show and have already signed. The pro also brings a better return on investment since the drafting organization has paid, at least some if not all, of his signing bonus. There is very little financial risk and all reward for getting a Jed Lowrie/B prospect for Eric Gagne.
Selling your blue chip stock (Gagne) for a mid-cap (Lowrie) is a better investment than putting your cash in two startups (draft picks). Over the past ten years (post-expansion), the best year selections between 16 and 30 (the highest a compensation award) have done was in 2002. Swisher, Hamels, Loney, Guthrie, Francoeur, Blanton, and Cain have become at least regular major leaguers, but this group only has a success rate slightly better than 45%.
In most cases, it appears a $1.5 million investment in two players has a success rate (becoming a major league regular) of around 50%. Those are good odds at a casino, but running a baseball team should not be a form of entertainment.
***
If your club is rebuilding, a wise allocation of resources would be to take a Lowrie and then invest the $1.5 million in the international market instead of in the draft, especially if you are a large market team like Texas.
“The international market is more economically efficient," said Vince Gennaro, a consultant to numerous major league teams and the author of "Diamonds and Dollars," a book about the economics of baseball. "This is the place where the high revenue teams can leverage their economic advantage."
***
BTW, the Sox better win at least seven out of eleven during this home stand!
Unless it is posturing or Texas and others are being offered insulting trade proposals like Craig Hansen for Eric Gagne, the talk about sellers collecting draft picks instead of making a deal is borderline ridiculous. A top 100 draft pick is valuable, but any minor leaguer that has progressed like the average top selection is a better asset.
The minor leaguer has less risk because they are closer to the Show and have already signed. The pro also brings a better return on investment since the drafting organization has paid, at least some if not all, of his signing bonus. There is very little financial risk and all reward for getting a Jed Lowrie/B prospect for Eric Gagne.
Selling your blue chip stock (Gagne) for a mid-cap (Lowrie) is a better investment than putting your cash in two startups (draft picks). Over the past ten years (post-expansion), the best year selections between 16 and 30 (the highest a compensation award) have done was in 2002. Swisher, Hamels, Loney, Guthrie, Francoeur, Blanton, and Cain have become at least regular major leaguers, but this group only has a success rate slightly better than 45%.
In most cases, it appears a $1.5 million investment in two players has a success rate (becoming a major league regular) of around 50%. Those are good odds at a casino, but running a baseball team should not be a form of entertainment.
***
If your club is rebuilding, a wise allocation of resources would be to take a Lowrie and then invest the $1.5 million in the international market instead of in the draft, especially if you are a large market team like Texas.
“The international market is more economically efficient," said Vince Gennaro, a consultant to numerous major league teams and the author of "Diamonds and Dollars," a book about the economics of baseball. "This is the place where the high revenue teams can leverage their economic advantage."
***
BTW, the Sox better win at least seven out of eleven during this home stand!
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