Blue Jays: New Draft + New MiLB = New Paradigm?

Might the idea of a reduced MLB first-year player draft be integrated with a reduced MiLB to give a new (and better) minor league paradigm?

Commissioner Manfred is reported to have announced a 5-round first-year player draft for 2020.  The draft would use the same slot values as 2019 for those first 5 rounds.  Any player not chosen in those first five rounds would effectively become a free agent, able to sign with the team of his choice, but subject to a signing bonus cap of $20,000.

There has been considerable debate about the merits of a 5-round draft.  Defenders point to other professional sports, who have significantly fewer draft rounds than MB’s historical 40 rounds.  The NBA has 2 rounds, and the NHL and NFL both have 7.  And all of those sports allow teams to sign undrafted players.  Opponents of reducing the draft point to the substantial number of excellent players taken in later rounds and note how, without a draft and with capped signing bonuses, certain teams might be at a recruiting advantage.

A second change proposed by MLB is to reduce the number of official farm teams to four for each MLB team, or a total of 120 (from the current 160).  Again, opinion is divided, with some believing that four farm teams are sufficient and others believing the additional MiLB teams are necessary, particularly for players with unusual circumstances.

It is entirely possible that the five-round draft will be limited to 2020, and that nothing will come of the proposed MiLB reduction.  But (for the sake of the argument!)  suppose that MLB does permanently reduce both the number of draft rounds and the number of MiLB teams.  What then?

Toronto Blue Jays

Fun with numbers

In 2019, with a full 40-round draft, teams spent $317 million on signing bonuses.  It is projected that in 2020, with 5 rounds, total spending (based on slot values) would be $236 million, or roughly $2.7 million less per team.  Assume that teams spend a portion of that savings on $20k players, so the net saving is in the $2 million range per average team.

Minor league ballplayers have traditionally been <ahem> “poorly paid”, with single-A players ($6,000/yr) and double-A players ($9,350) making salaries below the national poverty level.  MLB has announced increases of between 38% and 72% starting in 2021 (thank you, Blue Jays!)  but MiLB players will still struggle to meet their higher-than-average nutritional and other needs as professional athletes.

What if teams were “encouraged” to redirect a portion of the draft bonus savings – say, half – into further increases in MiLB salaries?

With four MiLB teams and 25-man rosters, an MLB team will have roughly 100 MiLB players in their system.  Half of the average $2m savings would be $1m, which would equate to $10,000 per MiLB player.

So suppose MLB left the draft at 5 rounds permanently, with some cap ($20k?  $50k?) on signing bonuses for undrafted players.  BUT, though a combination of the proposed 2021 MiLB increases and the extra $10k, MLB established a minimum MiLB salary of (say) $20,000 in single-A and $25,000 in double-A and triple-A (note that some AAA players will be playing on MLB contracts, which will be higher).

So the player who might have signed in the 11th round for $100,000 might now be signing for $20k … but he would be earning a decent wage for his entire MiLB career.  Not quite as good, but at least there would be some compensation.  And the Adley Rutschmans of the world would still get paid, and paid well.

The bottom line

There are many young players who are not top-5-round material and who are faced with the decision of whether to proceed with a baseball career or pursue other (educational or work) goals.  In many cases, I suspect that the current signing bonuses ($100-200k is a *lot* of money to many young players and their families) play a disproportionate role in their decision making.  Is it entirely a bad thing for that financial variable to be reduced, forcing the kids to make their decision more on a realistic assessment of their chances and on their love of the game?