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Orioles Draft Spending


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#1 Mackus

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Posted 03 August 2021 - 09:57 AM

The new rules went into place in 2012. The MLB draft tracker has everyone's bonuses back through 2017, making it fairly easy to tabulate.  Here is a breakdown of the Orioles spending.

 

 

2021 - $11.8293M pool - spent $11.6697M - under by $159.6k - 5% overage of $591k: all unspent

2020 - $13.8943M pool - spent $13.6800M - under by $214.3k - 5% overage of $695k: all unspent

2019 - $13.8213M pool - spent $13.6546M - under by $166.7k - 5% overage of $691k: all unspent

2018 - $8.7544M pool - spent $8.821M - OVER by $66.6k - 5% overage of $438k: $66.6 spent + $49.9k tax

2017 - $6.4370M pool - spent $5.9243M - under by $512.7k - 5% overage of $322k unspent

 

 

I think we have been giving them too much credit in terms of spending everything they can on the draft.  They have not.  No teams go over the 5% limit after which future draft picks are taken away, but teams spend over their pools up to that 5% mark frequently.  Don't have up-to-date numbers, but one article I read prior to 2020 draft said that teams have gone over their pool 49 times (in 8 prior years under the system) including 21 of 30 teams going over in 2019.  The penalty for going 0-5% over is a 75% tax on the overage.  So basically if you hit your 5% over mark of $600-700k you pay an additional $450-525k to do so.  All it costs is a little cash.

 

So the past 5 drafts the Orioles had $54.74M in bonus pool.  They spent $53.80M (including a small overage tax in 2018).  That makes it feel like they're spending nearly all they are allowed, but they are not.  They could've given out an extra 5% in bonuses ($2.737M) by paying those bonuses plus a 5% tax ($2.05M).  They're cheaping out by about a million bucks a year.

 

I don't know how much this matters, but being able to sign one more mid-round overslot guy like Mayo or  Baumler or Willems every year seems like it could be a big deal.  The Orioles are simply deciding not to sign a guy like that to add to the organization because they think the extra million it would cost is not worth it.

 

 


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#2 Old Man

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Posted 03 August 2021 - 09:59 AM

But, on the other hand

 

Spending in 2017 was almost 6 million spent.

Spending in 2021 was almost 12 million, and 13 million spent the two years before.

 

Are they spending 100% no, but they are spending.

 

Are they spending well, too early to tell on that one.



#3 Mackus

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Posted 03 August 2021 - 10:04 AM

The years the pool is higher is because they have higher picks (or occasionally an extra comp pick).  Those years are going to correlate pretty highly to having a low MLB payroll.  So while yes, they have spent more recently, they are still not spending everything they could and it also coincides with years that they are not spending very much on the MLB team.


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#4 makoman

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Posted 03 August 2021 - 10:27 AM

This is annoying. In a vacuum it isn't that bad--if they went over once, and the other 29 teams went over 48 times, they are below average but not all that far off as the average is less than twice. Some teams probably went over several times so one time is probably a pretty normal number.

 

The problem is really that the team was probably last internationally, so merely being below average to normal in the draft isn't good enough. They should have been overly aggressive in the draft to make up for the anti-international philosophy. An extra Mayo every year would certainly have helped and there's really no reason not to other than cheapness.

 

I wonder what the deal was with 2019. 28 times across baseball in seven years, then 21 times in one year?



#5 Mike B

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Posted 03 August 2021 - 11:28 AM

They are getting the guys they picked signed.  I really don't have an issue, with them saving a little money as long as they are getting the players into the system.  Every business looks to save cash where they can, and the Orioles are certainly no different, but they have signed every pick the last 2 years so I do not have an issue.  


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#6 Mackus

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Posted 03 August 2021 - 11:35 AM

They are getting the guys they picked signed.  I really don't have an issue, with them saving a little money as long as they are getting the players into the system.  Every business looks to save cash where they can, and the Orioles are certainly no different, but they have signed every pick the last 2 years so I do not have an issue.  

 

How far does this go?  If they were going underslot by 10% every pick (or 10% under the total allowable), would you feel the same way?



#7 Mike B

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Posted 03 August 2021 - 12:09 PM

How far does this go?  If they were going underslot by 10% every pick (or 10% under the total allowable), would you feel the same way?

I would hope they are taking the players they really believe in, so if that is the case, then I am fine with them saving a few $$$.  

 

If they are taking players, aimed at saving money, then that is a problem.


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#8 Mackus

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Posted 03 August 2021 - 12:23 PM

I would hope they are taking the players they really believe in, so if that is the case, then I am fine with them saving a few $$$.  

 

If they are taking players, aimed at saving money, then that is a problem.

 

The under/over slot part of this makes it difficult to believe that they simply think the guy they took each round is the best option currently available (like you do in NFL draft, for example).  That's not really how the MLB draft works because some guys won't sign for the slot bonus allocated to that pick, so you either need to not draft them even if you think they're the best guy available or agree to pay them more which means you need to go underslot elsewhere rather than take the best available guy at that point.  If it was rigidly slotted and there wasn't this game going on, then  guys like Gunnar Henderson wouldn't have made it to the 2nd round, for example. 

 

You have to have a strategy that is based around your bonus pool allocation, what you think each player will take to sign, and your evaluations of each guy.

 

Whatever that strategy might be, I think you'd have more margin for error and more ability to increase the talent level throughout your organization if you spend every dollar possible instead of only ~90% of what you could be spending like the Orioles have done recently.  We're only talking a few hundred thousand, so that cuts both ways as probably not making a huge difference for your organization but it also isn't a huge expense at all for your budget.  When teams like Miami are maxing out at 105% of their pool (plus the 3.75% tax), it makes it pretty frustrating to me that the Orioles consistently spending 98% of their pool.  How much better can you make your organization for that extra expense?  I don't know.  But why not find out?



#9 makoman

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Posted 03 August 2021 - 12:59 PM

I'm sure they absolutely believe in their top picks. But you take who you believe in while at the same time knowing the constraints of your budget.

 

Maybe they loved Conor Pavolony in the 7th round at $325k. But St. Louis and Atlanta each spent a million on HS pitchers later that round. Maybe if they knew they had another million to burn they do something like that, but they knew they couldn't afford it. Maybe they spend $1.25M on a HS pitcher in the 12th like the Angels did if they thought they had the money. Maybe instead of Cadyn Grenier you throw another $800k at Xavier Edwards, who went the next pick, was ranked a lot higher, and is a top 100 guy now. Who knows?

 

We know this team isn't going to spend big on FA, and until recently hasn't spent internationally. They have saved plenty of money in those places. The draft is a place where they can get a relative advantage if they choose to do so. Mayo is their #13 prospect according to fangraphs, #14 on pipeline. You get an extra one of those every draft eventually one will pop into something nice.



#10 BSLBobPhelan

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Posted 03 August 2021 - 02:27 PM

Much ado about nothing IMO, they're pretty much spending it all.



#11 Mackus

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Posted 03 August 2021 - 02:51 PM

Much ado about nothing IMO, they're pretty much spending it all.


But they aren't spending it all.

If it wasn't money and just sheer picks, how would we feel if they always skipped their 4th round pick and instead signed one extra undrafted FA? That's probably the best quick analogy I can come up with for how much they are not spending, between the unspent allocation and not dipping into the 5% penalty-free overage. They could've given out $750k more in bonuses this year, which is equivalent to mid-3rd round slot. So they could've given a million dollar plus bonus to a 6th or 7th round pick instead of staying nearer slot.

If we like them signing Creed Williams for $1M instead of using only $200k like the slot suggest (or Mayo or Baumler last year, with slightly different numbers), shouldn't we also dislike that they didn't do that with another pick in that range when they had enough pool to be allowed to do so without any future picks being lost as penalty?

#12 TwentyThirtyFive

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Posted 03 August 2021 - 02:57 PM

Its a fair criticism but its also not as simple as just saying spend more. Look, when it comes to this ownership group we know they're rarely if ever going to go the extra mile. They're cheap. Its just something you learn to live with at this point.

#13 Mackus

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Posted 03 August 2021 - 03:17 PM

Its a fair criticism but its also not as simple as just saying spend more.

 

Sure, not in any one year.  It's certainly possible that a well-intentioned team could have meant to use every penny but by some combination of the board unfolding a certain way, unsigned pick for medical or other reasons, negotiations going better than expected with some picks, or whatever they end up spending a little less.  

 

However I don't buy that for the Orioles.  Elias certainly is well aware of all the rules and is manipulating the bonus pools in the way he sees fit to be the best use of resources. And he's consistently stayed a couple percent shy of the allocation pool, yet alone dip his toes into the 5% overage range.  I can't believe that this isn't a dictate from ownership to only spend up to the allocation and not further.  If he was allowed to spend 6-7% more, he would, or at least we would intend to each year.  Staying under each of his 3 drafts is telling, IMO.  Maybe he would be allowed to spend up to 108.75% of the pool (the max after the tax) if he really felt necessary and asked permission.  Maybe, we haven't seen him go over so we can't say.  But even if he could, I still think that's crappy ownership.  The budget on both international and the draft should be absolutely every penny you're allowed to spend every year without actual future penalty.  Management shouldn't have to beg and scrape for the right to spend such a measly amount of money compared to the overall annual expenses of the team.  



#14 TwentyThirtyFive

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Posted 03 August 2021 - 03:46 PM

Yeah, I think you're almost surely right about everything above. I mean we could make a really long list of all the ways this ownership group is cheap.

#15 RichardZ

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Posted 03 August 2021 - 03:48 PM

Sure, you have a point.   They could maximize their budget and get another talented guy signed per draft.   If you want to get up in arms about that, no problem.   You have a case that they aren't doing everything they could do.   On the other hand, I prefer to sit back and see how Elias's drafts play out and how the international signings pan out.    If they do, no one will really care whether they saved 300K here or 400K there.   It seems to me that they have a pretty good idea of player's numbers and how it fits into their entire budget before they make the selections.   At the same time, it appears to me that they aren't passing on guys they really love, just to save money, meaning if there was a guy they loved sitting out there in the 16th round that would sign for 1M and put them 200K over their pool, I think they would sign him.



#16 Mackus

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Posted 03 August 2021 - 03:56 PM

I'm certainly willing and excited to see how Elias' picks do and if he's really cracked some code and can lead to an advantage for the Orioles in talent acquisition.

 

But if that is true and Elias' drafts and international signings prove to be better than other teams due to him being a great scout or having a great model or a really good feel for manipulating the bonus pool (or whatever other reasons), then that would make not spending everything they can spend in these areas an even graver crime.  If he's really good at drafting then they should arm him up with absolutely every resource they can.


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#17 BSLBobPhelan

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Posted 03 August 2021 - 05:16 PM

But they aren't spending it all.

If it wasn't money and just sheer picks, how would we feel if they always skipped their 4th round pick and instead signed one extra undrafted FA? That's probably the best quick analogy I can come up with for how much they are not spending, between the unspent allocation and not dipping into the 5% penalty-free overage. They could've given out $750k more in bonuses this year, which is equivalent to mid-3rd round slot. So they could've given a million dollar plus bonus to a 6th or 7th round pick instead of staying nearer slot.

If we like them signing Creed Williams for $1M instead of using only $200k like the slot suggest (or Mayo or Baumler last year, with slightly different numbers), shouldn't we also dislike that they didn't do that with another pick in that range when they had enough pool to be allowed to do so without any future picks being lost as penalty?


I’m thinking it’s of a margin where they want to make sure they can sign all of their guys and they’re leaving themselves some leeway in case they need a little more than expected. Maybe they could improve of their ability to squeeze every penny out of it but I’m not worried that it’s a matter of intentionally saving a hundred thousand or so.

#18 JeremyStrain

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Posted 04 August 2021 - 10:15 AM

Keep in mind this way of looking at spending /savings has a good margin of error. These are negotiations, they can’t guarantee what the price they are actually going to sign them for is. We shouldn’t be looking at them as a negative if we drafted who we wanted and signed them for a small amount less than we anticipated. By that point it’s too late to draft someone else and use that money. But you have to approximate so if you think it was going to cost you 1.5m to sign someone and they got it done for 1.3m you shouldn’t be upset that they managed to pull that off and shouldn’t expect them to throw that 200k at someone else for no reason. They still have to leave that 1.5m allocated if that’s what they expected. It’s very possible on their board they have every dime of that money “spent” but then the actual negotiators get a couple bucks off here and there.
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#19 Mackus

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Posted 04 August 2021 - 10:24 AM

Keep in mind this way of looking at spending /savings has a good margin of error. These are negotiations, they can’t guarantee what the price they are actually going to sign them for is. We shouldn’t be looking at them as a negative if we drafted who we wanted and signed them for a small amount less than we anticipated. By that point it’s too late to draft someone else and use that money. But you have to approximate so if you think it was going to cost you 1.5m to sign someone and they got it done for 1.3m you shouldn’t be upset that they managed to pull that off and shouldn’t expect them to throw that 200k at someone else for no reason. They still have to leave that 1.5m allocated if that’s what they expected. It’s very possible on their board they have every dime of that money “spent” but then the actual negotiators get a couple bucks off here and there.

 

Yes, 2035 mentioned this, and I agree that it is one of a few reasonable explanations for why the Orioles or any team may underspend in any given year.

 

But it's not a valid excuse to explain a trend of underspending over multiple seasons, IMO.  If you find out are out-negotiating the advisors every year, a team interested in optimizing would change what margin they work with.  We could argue whether 3 years in a row (and 4 of 5 with that 1 overspend year being by a very small amount) is or isn't a trend.  



#20 dude

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Posted 06 August 2021 - 11:48 AM

Catching up a little....

 

1) You can decide if you think it's a big deal (or any deal) or not, but Mackus is correct.

 

2) For the community of people that echo what Bob said above or pundits like Melewski and (maybe?) Roch say in terms of "spending it all" or "doing everything they can"...they aren't.  They are doing less than 95% of what they can.  That's not a debate, that's a fact and the position is hidden behind what they can do.  The rules aren't at 100% of Pool, they are at 105% of Pool without (meaningful) penalty. 

 

3) Nobody is or will suggest they should burn future opportunity to dive into a specific draft class.  Zero teams have done that and nobody thinks the Orioles should.  The All-In strategy is something teams leveraged in the IFA before they changed the Rules (again), and nobody is blowing out their IFA Pool now....everyone stays within the soft-cap that is imposed.

 

...but they are essentially (as Mackus pointed out) deferring to sign another 3-5 round talent kid in each draft.  If you think the no-bonus kid you signed with a late pick is more meaningful or better than a Talent that merits a 350k-650k bonus, OK, but that's what you are suggesting.

 

Imagine it this way.  The 5% overage is essentially a CompBal-C pick after the 4th rd.  Many teams choose not to use that draft opportunity, including the Orioles.  If you don't care that they don't draft a low-possibility kid in CompBal-C, fine, but they are neglecting to leverage that opportunity.

 

Whether you like the draft or the kid in the 19th round turns into something, has nothing to do with this fact.  






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