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Does it make any sense to choose a high school pitcher in the first round?


As is well known, Bill James (among others) thinks this is a pretty dumb idea:

Perhaps the most phenomenal fact of life in baseball today is that major league teams continue to use first-round picks for high school pitchers. It has been obvious for twenty years that this is a stupid, stupid gamble ... yet every year, four to seven first-round picks are invested in these turkeys.

The problem with drafting high school pitchers is pretty obvious. It's not that it's extremely difficult to project what they're going to develop into six or seven years down the road. It is difficult, and it's difficult for high school hitters as well. But that's not the problem.

The problem is that pitchers hurt themselves. The vast majority of pitchers hurt themselves, and the years between 18 and 22 are when an awful lot of those career changing injuries happen. Drafting a high school pitcher amounts to rolling the dice on one guy's chance to pitch for six or seven years without getting hurt. And because the vast majority of pitchers do get hurt, that can't help but be a bad gamble. Whereas a college pitcher has already made it at least partially through that gauntlet. You're picking among the survivors.

That's the logic, and there have been no shortage of studies that support that thinking. See here and here, for example. And here, for you BP subscribers.

Is it still true?

The Atlanta Braves, for example, have a very strong preference for drafting high school players. The Braves' thinking has nothing to do with high school players having a higher ceiling than college players, which is a pretty dubious proposition anyway. The Braves want to take over a player's development as soon as possible. They don't want fully formed, or partially formed players - they want to be the ones who are doing the forming. Much of the Braves success over the past two decades was built on three high school pitchers - Greg Maddux, Tom Glavine, and John Smoltz. All three of whom would be in the Hall of Fame if they weren't still active. None of those three were taken in the first round, and only Glavine was actually drafted by Atlanta.

All these years later, Glavine and Smoltz are part of this year's Braves rotation, along with a man from another recent Big Three - Tim Hudson, who was drafted out of college along with Mark Mulder and Barry Zito in the late 1990s, who are also still active. Well, more or less. Mulder is on the verge of packing it in and Zito is scuffling. To say the least.

Anyway, I thought I'd check in on pitchers drafted in the first round from 2000 through 2004. It seemed to me that looking any later than that is extremely unfair to high school pitchers. How are they doing?

There were 44 high school pitchers drafted in the first round from 2000 through 2004

Year  Team       Pitcher               W   L    SV   ERA        

2001 Athletics Jeremy Bonderman 59 66 4.75 Pasco HS (WA)
2002 Mets Scott Kazmir 39 30 3.54 Cypress Falls HS (Houston)
2002 Phillies Cole Hamels 29 16 3.58 Rancho Bernardo HS (San Diego,CA)
2002 Royals Zack Greinke 26 37 1 4.39 Apopka HS (FL)
2002 Giants Matt Cain 24 32 3.82 Houston HS (Germantown,TN)
2003 Dodgers Chad Billingsley 23 15 3.53 Defiance Sr HS,OH
2000 Braves Adam Wainwright 21 15 3 3.45 Glynn Academy HS (Brunswick,GA)
2000 Blue Jays Dustin McGowan 18 19 4.66 Long County HS (Ludowici,GA)
2000 Giants Boof Bonser 17 24 5.03 Gibbs HS (St. Petersburg,FL)
2001 Phillies Gavin Floyd 13 13 5.48 Mt. St. Joseph HS (Severna Park,MD)
2003 Rangers John Danks 10 17 4.68 Round Rock HS (TX)
2001 Braves Macay McBride 6 2 2 4.35 Screven County HS (Sylvania,GA)
2000 Reds Dustin Moseley 6 6 5.54 Arkansas HS (Texarkana,AR)
2004 Yankees Philip Hughes 5 7 5.51 Foothill HS (Santa Ana,CA)
2000 Pirates Sean Burnett 5 5 5.33 Wellington Community HS (FL) AAA
2004 Reds Homer Bailey 4 2 5.76 LaGrange HS (TX)
2000 Mets Bobby Keppel 0 4 6.10 Desmet Jesuit HS (St. Louis,MO) AAA
2000 Indians Derek Thompson 0 0 3.50 Land O'Lakes HS (FL) inactive
2000 Braves Kelly Johnson Westwood HS (Austin,TX) NL (2b)
2000 Royals Mike Stodolka Centennial HS (Corona,CA) AAA (OF)
2004 Rangers Eric Hurley Wolfson Senior HS (FL) AAA
2003 Indians Adam Miller Mckinney HS (TX) AAA
2001 Indians J.D. Martin Burroughs HS (Ridgecrest,CA) AAA
2002 Dodgers Greg Miller Esperanza HS (Yorba Linda,CA) AAA
2004 WhiteSox Giovany Gonzalez Monsignor Edward Pace HS (Miami,FL) AAA
2004 Twins Steven Waldrop Farragut HS (Knoxville,TN) AA
2004 Twins Jay Rainville Bishop Hendricken HS (Warwick,RI) AA
2004 Dodgers Timothy Elbert Seneca HS (MO) AA
2001 WhiteSox Kris Honel Providence Catholic HS (New Lenox,IL) AA
2001 Brewers Mike Jones Thunderbird HS (Phoenix,AZ) AA
2001 Indians Daniel Denham Deer Valley HS,CA AA
2002 Nationals Clint Everts Cypress Falls HS (Houston) A
2003 Cubs Luis Atilano Gabriela Mistral (PR) A
2003 Marlins Jeffrey Allison Veterans Memorial HS (MA) A
2003 Giants Roger Whitaker Lufkin HS (TX) A
2004 Brewers Mark Rogers Mt Ararat School (ME) inactive
2000 Angels Joe Torres Gateway HS (Kissimmee,FL) inactive
2000 Padres Mark Phillips Hanover HS (PA) inactive
2000 Rockies Matt Harrington Palmdale HS (CA) inactive
2000 Tigers Matthew Wheatland Rancho Bernardo HS (San Diego,CA) inactive
2001 Royals Colt Griffin Marshall HS (TX) inactive
2002 Reds Christopher Gruler Liberty Union HS (Oakley,CA) inactive
2001 Reds Jeremy Sowers Ballard HS,KY No Sign
2001 Indians Alan Horne Marianna HS (Marianna,FL) No Sign


So far this group has a 305-310 record in the majors. And they include an everyday player, which is kind of cool!

And here are the 66 pitchers drafted out of college during the same period.

Year  Team       Pitcher               W   L    SV    ERA        

2002 Rockies Jeff Francis 48 39 4.81 University of Lethbridge
2002 Athletics Joe Blanton 45 40 4.08 University of Kentucky
2001 Cubs Mark Prior 42 29 3.51 University of Southern California
2001 Giants Noah Lowry 40 31 4.03 Pepperdine University
2004 Tigers Justin Verlander 37 24 3.95 Old Dominion University
2004 Angels Jered Weaver 28 15 3.60 Long Beach State University
2003 Pirates Paul Maholm 23 31 4.67 Mississippi State University
2002 Angels Joe Saunders 23 10 4.15 Virginia Tech University
2003 Nationals Chad Cordero 20 14 128 2.78 Cal St San Bernardino,CA
2001 Mets Aaron Heilman 19 27 6 4.22 University of Notre Dame
2001 Giants Brad Hennessey 17 22 20 4.71 Youngstown State University
2004 Athletics Huston Street 14 8 88 2.70 University of Texas
2000 Mets Billy Traber 12 14 5.37 Loyola Marymount University
2003 Reds Ryan Wagner 11 9 4.79 University of Houston
2002 Indians Jeremy Guthrie 9 11 3.99 Stanford University
2004 Marlins Taylor Tankersley 8 3 4 3.98 University of Alabama
2001 D'Rays Dewon Brazelton 8 25 6.38 Middle Tennessee State University AAA-DL
2004 Royals J.P. Howell 8 14 5.88 University of Texas
2004 Indians Jeremy Sowers 8 10 4.83 Vanderbilt University
2001 Athletics John Rheinecker 8 9 5.65 Missouri State University
2002 Orioles Adam Loewen 8 7 5.31 Fraser Valley Christian HS
2004 Nationals Bill Bray 7 5 3 4.33 College of William and Mary
2003 Giants David Aardsma 7 2 4.71 Rice University
2000 Nationals Justin Wayne 5 8 6.13 Stanford University inactive
2003 Padres Tim Stauffer 4 7 6.37 University of Richmond
2000 Angels Chris Bootcheck 3 6 1 5.80 Auburn University
2000 Red Sox Phil Dumatrait 2 6 6.40 Bakersfield Junior College
2002 WhiteSox Royce Ring 2 3 3.68 San Diego State University
2004 Blue Jays Zach Jackson 2 2 5.36 Texas A&M University
2004 Twins Glen Perkins 2 2 3.36 University of Minnesota-Duluth
2001 Pirates John Van Benschoten 1 12 8.84 Kent State University
2000 Twins Adam Johnson 1 3 10.25 Cal State Fullerton University inactive
2004 D'Rays Jeffrey Niemann 1 1 5.79 Rice University
2001 D'backs Jason Bulger 1 0 6.08 Valdosta State University
2000 Dodgers Ben Diggins 0 4 8.63 University of Arizona inactive
2002 Pirates Bryan Bullington 0 3 5.89 Ball State University
2002 Braves Dan Meyer 0 2 7.85 James Madison University
2004 Blue Jays David Purcey 0 1 11.05 University of Oklahoma
2004 Mets Philip Humber 0 0 6.00 Rice University
2004 Yankees Jeffrey Marquez Sacramento City College AAA
2004 Cardinals Christopher Lambert Boston College AAA
2004 White Sox Tyler Lumsden Clemson University AAA
2001 Tigers Kenny Baugh Rice University AAA
2004 Dodgers Justin Orenduff Virginia Commonwealth University AAA
2002 Athletics Ben Fritz Fresno State University AA
2003 Tigers Kyle Sleeth Wake Forest University AA
2004 Orioles Wade Townsend Rice University AA
2000 Astros Robert Stiehl El Camino College AA
2004 Rangers Thomas Diamond University of New Orleans AA
2001 Cardinals Justin Pope University of Central Florida AA
2000 Orioles Beau Hale University of Texas AA
2004 Twins Matthew Fox University of Central Florida A
2004 Royals Matthew Campbell University of South Carolina-Aiken A
2003 Athletics Bradley Sullivan University of Houston A
2000 Rangers Chad Hawkins Baylor University inactive
2000 Cardinals Blake Williams Southwest Texas State University inactive
2001 Orioles Chris Smith Cumberland University inactive
2001 Yankees Jon Skaggs Rice University inactive
2001 Nationals Josh Karp UCLA inactive
2001 WhiteSox Wyatt Allen University of Tennessee inactive
2002 Cubs Luke Hagerty Ball State University inactive
2002 Astros Derick Grigsby Northeast Texas Community College inactive
2002 Cubs Matthew Clanton Orange Coast College inactive
2002 Athletics Stephen Obenchain University of Evansville inactive
2002 Reds Mark Schramek University of Texas inactive
2000 Twins Aaron Heilman University of Notre Dame No sign

These guys have gone 474-459 as major leaguers. They also have 250 saves (the group includes two current major league closers.)

Obviously, there was once a time when we would have anointed Mark Prior as the best of this bunch. Those days are gone, and it's much too premature to make those kinds of judgements anyway. Verlander? Hamels? Weaver? Greinke? Who the hell knows. You're obviously more likely to find someone who will at least reach the majors if you take a college pitcher, because you can at least be sure that his arm won't fall off before he turns 21.

That was way too much like work, by the way. So let's take a quick peek at the Blue Jays leader boards:

Roy Halladay is by far the greatest high schooler drafted by the Blue Jays, and he's third on the all-time win list. High school pitchers hold down seven of the top ten spots, in fact. However, the top righty and the top lefty - Dave Stieb and Jimmy Key - were both college pitchers (neither was taken in the first round). Todd Stottlemyre is the other college pitcher in the Top 10 for wins (selected in the first round of the June secondary draft.)

A college pitcher has the most saves - Tom Henke. He's followed by a high schooler (Ward), another college pitcher (Koch), another high schooler (Escobar) and the college pitcher who currently has the job (Ryan). Koch was the only first rounder in that group.

Pat Gillick used nine first round picks on pitchers. As a rule, Giliick's first round picks were beneath abysmal - six of the first ten guys he took in the first round never even played a game in the majors. Two of the picks he used on pitchers were worthy - John Cerutti (college) and Chris Carpenter (high school).

And for all you Casey Janssen fans, Chris Carpenter proves that there is indeed life after a torn labrum (although now he needs to prove that there's life after a torn labrum and Tommy John surgery.)

Gillick's other first round pitchers were Matt Williams (college), Earl Sanders (college), Alex Sanchez (college), Steve Karsay (high school), Jeff Ware (college), Mark Lukasiewicz (college), and Jeremy Lee (high school). Who the hell was scouting the colleges for the Blue Jays back in those days? I guess Stieb, Key, and Timlin worked out OK.

Gord Ash, of course, drafted three pitchers in the first round - Halladay and McGowan out of high school and Billy Koch out of college.

Prior to last summer, Ricciardi had used three first round picks on pitchers, all out of college: Purcey, Jackson, and Romero. They drafted two more college pitchers in the first round last summer, although it's hard for me to take seriously the notion that the fifth guy taken by the team, with the 56th pick of the draft (Magnuson), is really a first round pick. What's up with that, anyway?
First Round Pitchers | 38 comments | Create New Account
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Mike Green - Wednesday, June 04 2008 @ 09:55 AM EDT (#186459) #
It's a changing situation, what with the new CBA rules allowing teams to control draftees longer and shorter recovery times from TJ surgery. Which is why, I guess, the A's are now drafting high school pitchers in the first round.

The return on first round college pitchers isn't so great, is it?  And a lot of them seem to find their way into the surgeon's office. Workloads in college are often watched less carefully than in the minor leagues.  This may (or may not) contribute to the subsequent problems. 

All in all, I'd much rather choose a position player than a pitcher (given similar overall talent) in the first round.

MatO - Wednesday, June 04 2008 @ 10:09 AM EDT (#186463) #

A couple of nit-picking points.  It looks like Aaron Heilman and Jeremy Sowers did not sign the first time they were drafted so they appear on the list twice.  I guess you can argue that it's an even worse investment to draft a pitcher in the 1st round and not even sign them.

If McGowan were drafted in 2004 his break-out year would be 2010 so I think it's too early to draw conclusions about HS pitchers drafted in 2003 and 2004 as they would be only 23 and 22  years old respectively.

Pistol - Wednesday, June 04 2008 @ 10:17 AM EDT (#186464) #
They drafted two more college pitchers in the first round last summer, although it's hard for me to take seriously the notion that the fifth guy taken by the team, with the 56th pick of the draft (Magnuson), is really a first round pick. What's up with that, anyway?

I consider the sandwich round to be more of a second round pick than first.  Sometimes the sandwich round goes into the 50s and sometimes it's just a few players.  I wouldn't compare a guy taken 40th to be compared to someone taken in the top 30.

Rany J did a whole big series (12 parts) on the draft a couple years ago.  Essentially the conclusion was that the value of each of the 4 groups of player was relatively equal now.

I wonder if changes in developing players got things to even out more.  There's a lot more awareness these days about pitch counts and total innings of pitchers.

I've often thought that if a team (say Toronto) took a highly touted HS pitcher even if they were opposed to it, and just babied him to keep him healthy, etc. they could then boost his value in order to trade him after a couple years if he's dominating AA.  Of course, if that happened why would you want to trade the player?
Pistol - Wednesday, June 04 2008 @ 10:22 AM EDT (#186465) #
Which is why, I guess, the A's are now drafting high school pitchers in the first round.

The last HS pitcher the A's took in the first round was Bonderman.  They took a few in the 2nd and 3rd rounds a couple years ago but haven't made it to the 1st round yet.

Hitters are better bets, but it's tough to get top pitchers outside of the first round.  And it's tough to win without top pitchers.
ChicagoJaysFan - Wednesday, June 04 2008 @ 10:43 AM EDT (#186466) #
It's a changing situation, what with the new CBA rules allowing teams to control draftees longer and shorter recovery times from TJ surgery. Which is why, I guess, the A's are now drafting high school pitchers in the first round.

I don't think the team control issue is as big of an issue as commonly believed.

A big problem with high school pitchers is not just the length of time you have them under control, but also how long it takes them to make it to the majors.  When you're talking, 6 or 7 years to make an impact (as was posted about McGowan), that pushes the present value of the prospect down considerably.  Having the player under control for an extra year is nice, but it's the length of the development curve, not so much where it happens, that is the real issue.
Mike Green - Wednesday, June 04 2008 @ 10:48 AM EDT (#186467) #
Here was Rany's conclusion, at least for non-subscribers.  College infielders were the best value at least through 1999.  The college infielders in the first round drafted during the period 2000-03 were pretty damn good, and I doubt that the conclusion has changed much.  Here they are in order: Adrian Gonzalez, Chase Utley, Mark Teixeira, Chris Burke, Mike Fontenot, Bobby Crosby, Richard Lewis, Drew Meyer, Khalil Greene, Russ Adams, John McCurdy, Richie Weeks, Michael Aubrey, Aaron Hill, Conor Jackson, Brian Snyder, Omar Quinanilla.  They are evenly balanced between early (Gonzalez, Weeks, Teixeira), mid and late round picks. 
parrot11 - Wednesday, June 04 2008 @ 10:49 AM EDT (#186469) #
I would be kind of interested if this study left out the first 5 or so picks because college pitchers that are picked that high are usually pretty "safe" bets with a fair bit of upside. The interesting thing that I noticed is that outside the first 5 picks, there aren't any college pitcher that have been or projected to be aces. The level of success for college pitchers there is marginally better if you exclude the guys that have had only a cup of coffee in the bigs.

My guess is that all pitching is risky and drafting catcher is just as risky (but we rarely hear that one). I also don't think that teams have a slightest idea of the best way to take care of a pitcher's arm (and don't don't much research to try to solve that problem) and generally follow what everyone else is doing. Not to mention that some college use their pitchers like rented mules (e.g. Rice).

Another thing is that this study is flawed in that there hasn't been enough time past to adequately evaluate things. It's to be expected that college pitchers will get to the big leagues first and will therefore have more of a chance to correct the initial struggles that most pitchers have when they first get promoted. I would have tried to look at the entire career of a pitcher, which probably means you would have had to examine data from the 90's.

Mike Green - Wednesday, June 04 2008 @ 10:54 AM EDT (#186471) #
Here is Kevin Goldstein's mock draft.
ChicagoJaysFan - Wednesday, June 04 2008 @ 10:57 AM EDT (#186472) #
Another thing is that this study is flawed in that there hasn't been enough time past to adequately evaluate things. It's to be expected that college pitchers will get to the big leagues first and will therefore have more of a chance to correct the initial struggles that most pitchers have when they first get promoted. I would have tried to look at the entire career of a pitcher, which probably means you would have had to examine data from the 90's.

I don't think looking at the entire career is a good way to evaluate a draft choice - in their last year of arb eligibility, there is really no difference between a player you drafted and a free agent.  The value for draftees comes in the money savings and pretty much nothing else (there is value in the draft picks you get as they leave via free agency as well, but that is dependent on their performance during their last 2 years of arg eligibility and thus not a whole career thing).  Thus the only time that should be factored in is their performance up to the first eligibility of free agency.

Additionally, there is significant value in a player getting to the majors earlier (the time value of money you invest in a signing bonus being among the most obvious examples of value).

For those two reasons (not an exhaustive list, but two of the more important), looking at a player's entire career and using that as a sole basis is not a great way to evaluate the pros / cons of drafting a player.
Pistol - Wednesday, June 04 2008 @ 11:05 AM EDT (#186473) #
I don't think looking at the entire career is a good way to evaluate a draft choice - in their last year of arb eligibility, there is really no difference between a player you drafted and a free agent

To some extent I agree, but you're seeing fewer and fewer good players hitting free agency.  If you don't draft them you can't tie them up.
ChicagoJaysFan - Wednesday, June 04 2008 @ 11:20 AM EDT (#186474) #
To some extent I agree, but you're seeing fewer and fewer good players hitting free agency.  If you don't draft them you can't tie them up.

I disagree - the Jays, a mid-market team in expenses, have signed Frank Thomas, AJ Burnett, and BJ Ryan as high-profile free agents in the last few offseasons, showing that it can be done.

Among those that signed contracts for more than $4 MM last year (an arbitrary number to indicate a low-level starter), you have: Milton Bradley, Mike Cameron, Luis Castillo, Fransisco Cordero, Octavio Dotel, David Eckstein, Pedro Feliz, Keith Foulke, Eric Gagne, Tom Glavine, Jose Guillen, Livan Hernandez, Torii Hunter, Tadahito Iguchi, Geoff Jenkins, Jason Jennings, Andruw Jones, Jason Kendall, Scott Linebrink, Paul Lo Duca, Kyle Lohse, Mike Lowell, Ron Mahay, Kaz Matsui, Troy Percival, Andy Pettitte, Jorge Posada, David Riske, Mariano Rivera, Alex Rodriguez, Kenny Rogers, Aaron Rowand, Carlos Silva, Randy Wolf, Kerry Wood.

The only positions where free agents seem to be lacking (shortstop and catcher come to mind) are positions where overall talent seems to be lacking, so it's not clear that drafting would solve that either (in other words, your likelihood of getting a solid shortstop in the draft recently hasn't been great as only about 10 or so have come out in the last 5-10 years).

Those are ballparked numbers for shortstop to show my reasoning and not meant to be more than directionally correct.
Mike Green - Wednesday, June 04 2008 @ 11:33 AM EDT (#186475) #
You've missed Pistol's point.  When the Rays drafted Evan Longoria, say, they get not only the advantage of the first 6 major league years, but also the advantage of being able to negotiate with him early on in his career (under favourable circumstances) with respect to the next 3-4 years .  At the time of the negotiation, the marginal utility of several million dollars is much greater for him.

I suspect that this will be much less true for pitchers, but time will tell. 

ChicagoJaysFan - Wednesday, June 04 2008 @ 11:40 AM EDT (#186477) #
You've missed Pistol's point.  When the Rays drafted Evan Longoria, say, they get not only the advantage of the first 6 major league years, but also the advantage of being able to negotiate with him early on in his career (under favourable circumstances) with respect to the next 3-4 years .  At the time of the negotiation, the marginal utility of several million dollars is much greater for him.

I suspect that this will be much less true for pitchers, but time will tell.


I don't think that was Pistol's point (the comment about fewer and fewer good players hitting free agency makes me think he was referring to the availability of free agents).

As to the ability to negotiate with players earlier in their career - for the contracts awarded so far, there haven't been any significant savings beyond the pre-free agency years.  Longoria's includes a club option 6 years from now - that may have some value, but it is also so far into the future that it doesn't provide much to the present value.  I mean, what's a reasonable discount rate for a baseball contract?  15%?  25%?  There isn't much value in savings 7 or 8 years down the line in such a case.
Pistol - Wednesday, June 04 2008 @ 12:09 PM EDT (#186482) #
I don't think that was Pistol's point (the comment about fewer and fewer good players hitting free agency makes me think he was referring to the availability of free agents).

It was a little bit of both.  The main thing is that the good young players are being signed up now moreso than before (or at least that's my perception).  As time goes the available, top end, free agents should get worse because of that. 

These days with revenue sharing and extra joint revenues there aren't teams that need to dump players because they can't resign them, so demand is higher than it was several years ago as well.  The Royals signed Meche and Guillen for big money and they wouldn't have done that years ago.  The Pirates are going to spend big money for Alvarez (and traded for Matt Morris, which was bad decision making, showed that they're spending). 

In that list of $4MM signings there's 35 in total and that's not exactly a stellar group (how many of those would those teams like to have back now?).  And I'm not sure 2009 is better (and that's still with a window prior to free agency for teams to sign players to shorten the list further).
ChicagoJaysFan - Wednesday, June 04 2008 @ 12:18 PM EDT (#186485) #
In that list of $4MM signings there's 35 in total and that's not exactly a stellar group (how many of those would those teams like to have back now?). 

What is your comparison for that not being a stellar group?  We are discussing the value of draft eligible players, so the reference point should be those lists at the top of this thread.

On those lists, you've got about 10 or so HS pitchers and maybe 20 or so college pitchers that are on par with the performance of the free agents from last year.  Over 5 years of drafting, you're not talking about a big difference between quality available in the draft and quality available in free agency.
John Northey - Wednesday, June 04 2008 @ 12:58 PM EDT (#186487) #
I think a big challenge with the draft is how it has evolved over the years.  In the 80's when Gillick was throwing away picks left right and center we never heard much about it (outside of Augie Schmidt over Dwight Gooden).  Teams generally viewed the draft as a crapshoot as did fans with rare cases of sky high bonuses which were generally given to guys to keep them from staying in college or from going to other sports (Bo Jackson and John Olerud come to mind).  In the early 90's things started to change rapidly as bonus money skyrocketed via guys like Todd Van Poppel and Brien Taylor. Suddenly the money risked in the draft itself became an issue for teams.  As the 2000's hit and internet use skyrocketed the pressure on teams to perform in the draft also skyrocketed.  Moneyball just jumped the pressure even higher as scouts vs stats became an issue for teams.  Mix in $25 million/year contracts and $100 million for a Japanese player and now the value of drafting well becomes a double money issue - first on the cost for the pick himself then on the potential savings vs other players.  Instead of the difference being about a million dollars between a successful pick and a poor one it shifted to tens of millions.   That kind of money makes a team's owner jump in just like they do for major free agents. 

So, rather than counting on Segap Wolley's memory  (aka Pat Gillick) and a handful of scouts who are more friends than anything else, teams now have teams of full-time scouts and front office staff dedicated to nothing but the draft.  This leads to cases like Keith Law second guessing JP on a single pick publicly but also helps make it so guys like JP feel the pressure to succeed on those picks rather than feeling safe to take, say, the GM's daughter  (White Sox 1993) or for all teams to miss a HOF catcher until the 62nd round.  Errors will still happen, of course, but it just makes sense that as time goes by the draft will get tighter and tighter so we won't see big time group screw-ups like the old days with high school pitchers (poor drafting mixed with poor development).
metafour - Wednesday, June 04 2008 @ 01:51 PM EDT (#186495) #
"I would be kind of interested if this study left out the first 5 or so picks because college pitchers that are picked that high are usually pretty "safe" bets with a fair bit of upside. The interesting thing that I noticed is that outside the first 5 picks, there aren't any college pitcher that have been or projected to be aces. The level of success for college pitchers there is marginally better if you exclude the guys that have had only a cup of coffee in the bigs."

Ding ding ding.

When you're talking mid to late first round the college pitching drops dramatically and you are left with a bunch of 'potential-lacking' college arms or college arms who have some sort of serious question marks that made them drop that far.  The elite college arms are always going to get snapped up in the Top 5-Top 10, after that your chances of finding a stud pitcher is probably better in the HS ranks because the majority of those kids still have quite a bit of untapped potential in regards to their stuff.  Looking at the college arms after Matusz and Crow this year you have Friedrch and Hunt.  I think I may have mentioned that I'm really not a fan of Friedrich, but regardless he is going to get taken Top 15 it seems like.  If everything works out Friedrich is said to have the upside of a solid #3 starter, if it doesn't work out (pedestrian fastball and command issues are known facts with Friedrich) he is probably going to end up as a back of the rotation guy.  Hunt on the other hand has better stuff and has the upside of a future #2 starter, however, his stuff has gotten progressively worse as the season has worn on and to top it all off he has some serious command issues -- I looked over his stats posted on BA's Top 200 list and he had a ridiculous 4.89 BB/9 innings, which is a major concern in my book.  So after the two Top 10 guys (Matusz and Crow) you have a limited upside guy (Friedrich) and a guy with good upside who has some legit command concerns and now has questions regarding how hard he has been worked because his stuff has dropped off considerably since the beginning of the year.  At that point in the draft the HS arms (Martin, Cole, Odorizzi, etc.) all likely have higher ceilings to turn out to be studs, and while there is risk going with HS arms, there is certainly risk with both Friedrich and Hunt as well.
parrot11 - Wednesday, June 04 2008 @ 05:10 PM EDT (#186521) #
By recommendation of Rob Neyer, here's an interesting piece on the Jays rotation and points out that the Jays are unique in that most of their pitchers have a wide repertoire.

www.fangraphs.com/blogs/index.php/the-toronto-spread/

ChicagoJaysFan - Wednesday, June 04 2008 @ 05:33 PM EDT (#186524) #
At that point in the draft the HS arms (Martin, Cole, Odorizzi, etc.) all likely have higher ceilings to turn out to be studs, and while there is risk going with HS arms, there is certainly risk with both Friedrich and Hunt as well.

But when do they fulfill that potential?  The problem with guys that need a lot of work to fulfill their potential is precisely that - they need a lot of work and you won't get a lot of the value from drafting them (reduced cost versus free agents).

I don't know the arbitration status of all the high school players listed at the top, but if it takes a HS until his late arb years or free agency to actually realize his potential, you haven't gained anything by drafting that potential.  I know that Hamels and Kazmir are pretty much aces right now.  But Greinke and Cain are still just potential aces and current mid-rotation starters (as a pre-empt: innings / durability is the main issue for Greinke, not performance in those innings).  For Greinke at least, you're getting close to his free agent years (I don't know his contract status, just that this is his 4th full MLB year).

If Greinke or Cain (or similar pitcehrs) stay as a mid-rotation starter and don't become an ace until their 7th or 8th year in the bigs, you don't get much advantage drafting them than you would drafting a college player who hits mid-rotation level at the same time and never progresses to ace.

Just look at one of the HS pitchers in the Jays rotation - Burnett.  He didn't fulfill his ace potential pre-free agency.  He only really had the one above average and healthy season (2002).  Let's say he pitched like an ace each of 2006, 2007, and 2008 (which he didn't of course) - that does nothing for the Mets / Marlins.
parrot11 - Wednesday, June 04 2008 @ 07:01 PM EDT (#186534) #
I looked over the draft results of the 1st round comparing the success rate between prep and college pitchers between 1990 and 1999 and came to some interesting conclusions. The first is that selecting any pitcher is a risky proposition. Past the first 10 picks there college pitchers don't seem to be dramatically safer than prep pitchers and don't tend have the same upside potential (Mussina was the lone exception). Personally, I feel that just making the majors is not a sign of success and I tried to categorize the success into mediocre, decent, good, and great performance and below are my results (note that where each player was picked overall is in brackets following the name):

Prep Arms:
mediocre: Jeff D'Amico (23), Jamey Wright (28), Jaret Wright (10), Scott Elarton (25), Chris Reitsma (34)
decent: Steve Karsay (22), Shawn Estes (11), Adam Eaton (11), Jake Westbrook (21), Gil Meche (22), Jason Marquis (35)
good: Jon Garland (10), Brett Myers (12)
great: Chris Carpenter (15), Kerry Wood (4), Roy Halladay (17), C.C. Sabathia (20), Josh Beckett (2)
total number of prep pitchers drafted: 91 (5 mediocre, 6 decent, 2 good, 5 great)
excluding top 10 overall picks: 4 mediocre, 6 decent, 1 good, 3 great

College Arms:
mediocre:
Ron Villone (14), Darren Dreifort (2), Brian Anderson (3), Mark Redman (13), Kris Benson (1), Eric Milton (20), Jeff Weaver (14), Kip Wells (16), Jason Jennings (16)
decent:  Bobby Jones (36), Paul Shuey (2), Rick Helling (22), Dustin Hermanson (3), Matt Morris (12), Braden Looper (3), Billy Koch (4)
good: Alex Fernandez (4), Aaron Sele (23), Ben Sheets (10)
great: Mike Mussina (20), Billy Wagner (12), Mark Mulder (2), Brad Lidge (17), Barry Zito (9)
total number of college pitchers drafted: 122 (9 mediocre, 7 decent, 3 good, 5 great)
excluding top 10 overall picks: 6 mediocre, 3 decent, 1 good, 3 great (two of which are closers)

As for ChicagoJays's point that we should only consider the performance prior to free agency, I understand what's he's saying but at the same time for the vast majority of these guys, their original teams either did or could have retained them beyond their first 6 years. So, the main point is that there is no reason to completely ignore prep arms in the later part of the 1st round and supplemental round if you're willing to consider college arms in that same part of the draft.

ChicagoJaysFan - Wednesday, June 04 2008 @ 08:16 PM EDT (#186535) #
As for ChicagoJays's point that we should only consider the performance prior to free agency, I understand what's he's saying but at the same time for the vast majority of these guys, their original teams either did or could have retained them beyond their first 6 years.

I actually don't think you do - probably because I haven't come out and explicitly stated my feelings and have instead addressed other people's points.

A draft choice should be thought of just like any other investment and the true way to value it is to take the present value of that investment.  This involves some sort of discount on future value due to things like time value of money.  As Einstein is attributed to have said, compound interest is the most powerful force in the world and it holds true here.  The value of a player's performance 10+ years down the road after his draft selection is borderline negligible. 

You get value in the early years because you're paying below market and you get the player's performance.  But the ability to pay at-market for performance 10 years down the line - even if it's Randy Johnson you're drafting, it pales in comparison to the value you'll get in their pre-free agency years. 

Think of it like a discounted cash flow - most of the value comes in the first 5-7 years and the residual value at the end, simply due to discounting.  Here, there is no residual value (players retire, you don't get to sell them as a perpetuity).  Also, post year 9 or so, you only get the value of the performance, not of the cash flow savings so for years 10+, there is a huge drop-off in the future value, let alone the present value. 

For something as volatile as baseball, a discount rate approaching 12% or higher could easily be reasonable (baseball has huge fluctuations in attendance every 8-10 years or so it seems, primarily due to labor strife, plus there are significant changes to the CBA, and thus profitability, every 6 years or so).  If you're working with a 12% discount rate - the value you get from a player in year 10 needs to be discounted by about 75%.  Now factor in that you don't get the cash savings you do from earlier years in the player's life and the value from that year starts to get awfully small and only decreases as you get further out.
ChicagoJaysFan - Wednesday, June 04 2008 @ 08:19 PM EDT (#186536) #
Sorry - some typos in there.  75% is the 10-year discount at 15%.  65% is the 10-year for 12%.
Mike Green - Wednesday, June 04 2008 @ 08:37 PM EDT (#186537) #
The analogy with an investment is flawed, because team's average payroll increases over time too.  So, for instance, when the Cardinals signed Albert Pujols to a 7 year extension in 2004 with salaries of $11 million in 2005 and $16 million in 2010, there is significant value for the Cardinals to the 2010 year because the key points are wins above replacement and % of team payroll in the year, and by 2010, the Cardinals payroll may be close to 1 and 1/2 times what it was in 2005 (it did go up from 62 million to 93 million between 2000 and 2005) and Pujols' wins above replacement may be fairly comparable. 

It is probably true that in general terms you are looking at performance in the 20s as the key.

ChicagoJaysFan - Wednesday, June 04 2008 @ 08:48 PM EDT (#186538) #
The analogy with an investment is flawed, because team's average payroll increases over time too.  So, for instance, when the Cardinals signed Albert Pujols to a 7 year extension in 2004 with salaries of $11 million in 2005 and $16 million in 2010, there is significant value for the Cardinals to the 2010 year because the key points are wins above replacement and % of team payroll in the year

I disagree completely.

First, how is an increasing payroll different from any other business?  Wal-mart's income (and payroll) are steadily increasing, EA's income (and payroll) are steadily increasing, Microsoft's income (and payroll) are steadily increasing.  They still look at all of their purchases / acquisitions as investments.

Second - what else are you trying to do with a draft choice than determine the best investment?  You're trying to determine which acquisition is best - nothing more, nothing less.

Third - wins above replacement and % of team payroll are nothing more than attempts to maximize your ROI by breaking it down into some more fundamental metrics (I'll say the % of team payroll is an irrelevant statistic, however).  It's no different than evaluating an investment.  Saying wins above % and team payroll are key, but not some form of ROI is the same thing as saying profit and revenues are key, but not ROI.
parrot11 - Wednesday, June 04 2008 @ 08:58 PM EDT (#186539) #
Just to add a few additional things to what Mike Green is saying, the way of seeing things leaves many things out:

1. Marginalizes talent while leaving out the resource limitations of the organization. Essentially, you need all star talent to compete (especially in this division) and probably a bit of elite talent as well (i.e. top tier talent). It should be blatantly clear that this team cannot afford to buy that talent on the free agent market so it either needs to trade for it or better yet draft/sign it outside of North America.

2. It ignores the role of arbitration. If you're successful early, you're arbitration payout will be much bigger (or if both sides come to terms prior to arbitration). So the discount is much less if any than what you're stating. Guys like Ryan Howard, Prince Fielder, and Matt Holiday serve to show pricey arbitration (or the threat of arbitration) can be. Not to mention that guys that have already made a fair chunk of change prior to approaching their free agency years are less likely to sign discounted longterm.

ChicagoJaysFan - Wednesday, June 04 2008 @ 09:03 PM EDT (#186540) #
1. Marginalizes talent while leaving out the resource limitations of the organization. Essentially, you need all star talent to compete (especially in this division) and probably a bit of elite talent as well (i.e. top tier talent). It should be blatantly clear that this team cannot afford to buy that talent on the free agent market so it either needs to trade for it or better yet draft/sign it outside of North America.

How does maximizing value, which is the goal of maximizing the return on an investment, do anything other than address the resource limitations of the organization.  Look at this in another sense - would you have said the same thing 15 years ago when the Jays were two-time defending World Series champs?  I wouldn't.  That's one example of why it's so dangerous to make decisions based on value 15 years out.

2. It ignores the role of arbitration. If you're successful early, you're arbitration payout will be much bigger (or if both sides come to terms prior to arbitration). So the discount is much less if any than what you're stating. Guys like Ryan Howard, Prince Fielder, and Matt Holiday serve to show pricey arbitration (or the threat of arbitration) can be. Not to mention that guys that have already made a fair chunk of change prior to approaching their free agency years are less likely to sign discounted longterm.

I don't follow what you mean here - can you please explain a bit further?
Mike Green - Wednesday, June 04 2008 @ 10:22 PM EDT (#186541) #
CJF, I am afraid that you have totally lost me. I thought that your analogy was between the value of a player's performance (presumably relative to salary) with a personal investment such as an annuity.  I thought that your point was that the value of a player's performance 10 years down the line had to be discounted in the same way that the value of the payout on an annuity 10 years down the line would have to be discounted.  Now, it appears that you are talking about an analogy between a baseball club's investment in a player and the investment of a company like Walmart in its' employees, but I just don't see it.   For one thing, I haven't heard of 10 year contracts in retail.

parrot11 - Wednesday, June 04 2008 @ 10:42 PM EDT (#186542) #
It really depends what you mean by value. If you mean by value getting the most albeit limited amount of production while spending the least amount of money possible, then you're getting value. If by value you mean acquiring talent than drafting the best player available gets you value. And it's value to you have a good shot at retaining or trading for something of value. Not to mention that you're not factoring in that you can keep your prospects in the minors until you feel that they're ready and that drafting guys with limited upside often returns utility players or mop up pitchers that have very little value. For you value is getting someone like Noah Lowry, Paul Maholm,  or David Bush, while for me it's getting someone like Matt Cain or Felix Hernandez.  I would rather take the gamble of waiting maybe a little longer for real contributions in exchange for a considerably higher upside. In the end, you're going to need your aces and star players in order to compete for a playoff spot and the Lowry's and Bush's of the world are only going to bring you so far.

As for my second point, it goes the following, you're going to pay no matter what course of action you choose. I'll give 2 scenarios:
-Scenario #1: you get a league average to slightly above average player from the very start. He average 10 to 15 wins with an ERA between 100+ to 105+. So you get 3 very cheap pre-arbitration years followed by a significant bump in salary during the arbitration years due to the emphasis that arbitration places on wins.  Come to time of free agency you either lose the player for draft pick(s) or a grade B type prospect. That being said, this player quite replaceable and not a determining factor in whether the team makes the post season. Potential candidate: Jesse Litsch
-Scenario #2: you get a player that has a very high ceiling but needs the first 2 seasons to start to get to it. By midway through the 3rd season he has found it and subsequently becomes a constant fixture at allstar games. Because of his late start, the amount of money that he can receive in arbitration (or what a team is willing to pay to prevent arbitration) is reduced for a player of his stature. He is either willing to give up the first year or two of free agency in exchange for guaranteed contract or is very valuable in the trade market, not to mention that he can be a crucial piece to making a team a playoff contender. Potential candidate: Erik Bedard or Roy Halladay.

Following you're way of doing things scenario#1 is the type of guy you're going to get. You still need the stars to be in contention for a playoff spot. A guy from scenario#2 will at least give you a chance not to mention that the money saved isn't as much as it originally seems and getting a player that starts to get it a couple years in makes it more likely that he takes the sure money instead of waiting until free agency. If you're goal is to spend as little as possible while in the process denying yourself the opportunity of competing for a playoff spot then by all means follow your thinking. But don't expect to make it to the post season and expect the possibility of being a mediocre team unless you happen to be one hell of trader. Focusing exclusively on low ceiling quick rising  prospects have been nice demonstrated by the Jays that it doesn't work. You need a mix. Anyway it's getting late and it's time to put this discussion to bed. We'll just agree to disagree and leave it at that.                                                                                                                                      

ChicagoJaysFan - Wednesday, June 04 2008 @ 10:57 PM EDT (#186543) #
I'm being altogether unclear, so I'll do this post and stop.  Drafting a player in baseball is the same thing as a company buying a factory, another company, or any other type of investment.  The point of all these purchases is to maximize the sum of the present value of all your choices.  I am not going to go further than that in general.

However, parrot11 - you completely misrepresented me in your post, so I'll correct you.  Scenario 2 is the player that my method would lead you to draft.  Players in arbitration typically get 20% less than what they'd get in free agency per year away from free agency (rough rule of thumb).  In other words, a player 1 year away from free agency gets about 80% of his free agency reward.  A player 2 years away will get about 60% of his free agency salary, etc..  In such a situation, based on the vague scenarios you described, you'd get a lot more savings and thus more value from the player in scenario 2.   Where I'd say to avoid player 2 would be if he didn't start to pitch like Roy Halladay until his free agency years, not his arbitration years.

f you're goal is to spend as little as possible while in the process denying yourself the opportunity of competing for a playoff spot then by all means follow your thinking. But don't expect to make it to the post season and expect the possibility of being a mediocre team unless you happen to be one hell of trader. Focusing exclusively on low ceiling quick rising  prospects have been nice demonstrated by the Jays that it doesn't work.

When did I say anything about choosing low ceiling players?  I'm saying that achieving the ceiling 10 years out won't do anything for you - and by the way, if the Jays were drafting based on a 10-year out ceiling, it wouldn't affect the team at all right now - Riccardi hasn't been here for 10 years so we wouldn't be reaping the benefits of those players.

And when did I say anything about spending as little as possible? I've talked about maximizing the value of what you do spend - the two are entirely unrelated.
zeppelinkm - Thursday, June 05 2008 @ 10:30 AM EDT (#186563) #

Geez, I have an honor's degree in Economics and I am having a hard time following this.

I think, I get what CJF is saying... (but nothing is certain in life, and this is definitely one of those times)

But I would like to have this "situation" clarified (I know you said that was your last post):

You draft a player. A HS pitcher with tremendous upside, but he's raw. He takes a long time to develop. He doesn't turn into the pitcher you want him to be until he's only got 2 years left before he hits FA. Your return on your investment to date isn't great because he wasn't providing you a lot of value to you while he was super cheap because he was still developing.

So, you extend him at a contract that would be below market value should he continue to pitch the way he has now just shown until he hit's FA. (So, he's got 2 years till FA and he's just given you one awesome year, finally showing that he might turn into the player you thought when you drafted him so long ago, so you sign him to a 6 year, $30,000,000 contract, buying out the final two years of Arbitration and the first 4 years of his FA. He accepts because that's guarenteed money and his arm could fall off between now and when he hits FA). As opposed to say he provides you 2 more stellar years at a bargain price (not sure how the arbitration would play out after that one awesome year with 2 more left) and then you lose him when he hits FA and signs a 7 year, $120,000,000 contract. Or your return per dollar goes WAY down if you sign him when he hits FA.

For example, you keep him cheap for those final 2 years at 1.5 and then 3 million (that's what arbitration awards him), and then pay $20,000,000 a year for those 4 same years of FA you could have bought out when he still had 2 years to go before hitting FA - total investment here is 84.5 million bucks for 6 years, when you could have had him for $30,000,000 for those same 6. I fully admit I just completely made these numbers and this scenario up, but i'm just trying to illustrate an example!

How does this scenario fit in? ... Did I make sense explaining it?

It seems to me that's one of the great values to a team that drafts a high ceiling player - the opportunity to extend him while he's still under your control, to buy out his FA years below market value.

ChicagoJaysFan - Thursday, June 05 2008 @ 10:49 AM EDT (#186565) #
Zeppelinkm hits it pretty close to what I was saying (however, the value of buying out free agency is something that I think gets overstated - look at Vernon).

First, we should be able to assume that scouting can quantify future performance as well as a degree of certainty of that performance (for example, there is a 10% chance Buster Posey exactly follows Mike Piazza's career line).

Now - we can think of the decision to draft a player just like doing a discounted cash flow valuation of an investment.  To do this, you need future costs and future revenues, both of which are easy to calculate given the above assumption.

Given today's available metrics, a player's performance can be translated into wins quite easily (there are many formulas out there for this) and an increase in wins can likewise easily be converted into revenue - the free agent market provides a basis for this as does the local market response to wins (based off memory of the last Baseball Prospectus talk I attended, $4 MM / win is about the free agent market rate and $2.5 MM / win is approx. the average revenue boost).  That gives us a very simple look at the value the draftee will provide over time.

The costing is similarly easy - arbitration is related to win value that a player provides, with a discount for how far away a player is from free agency.  Based on the projection for the year prior, it's easy to calculate the expected cost for the player.  Free agency is similarly easy to plug in.

So, you've projected costs and revenues, just apply a discount rate and you've got a present value of the draftee - pick the draftee with the highest present value and you're ensuring that you're getting maximum wins / $ invested, which is how organizations field the most competitive team and was the basic premise contained within Moneyball (finding market inefficiencies is nothing more than looking to maximize wins / $).

Run it using a Monte Carlo simulation since there is a lot of uncertainty (again, not difficult given the software out there today).

If you want to factor in the options for re-signing players at below market value (dubious claim) or other similar sources of value that may not be captured on a pay-per-year basis as above, you just have to factor in some real options - again, not a difficult concept.

What the above will tell you however is that you are maximizing your win / $ on a draftee in their pre-free agency periods - and by an incredibly significant amount.  And maximizing win / $ is how teams that don't have the budgets of the Yankees or Red Sox compete with them.
GoJays77 - Thursday, June 05 2008 @ 10:52 AM EDT (#186567) #
CJF, I don't see why the contributions a player makes 10 years down the line are going to be marginalized. If a HS player is selected then you have 5 years of control before they have to be put on the 40 man, then three further years where they can be optioned to the minors before their service clock begins if you need more time. It's possible that in their 10th season after being drafted they could have accumulated only two years of service time and not even have begun their arbitration years. You made claims that guys like Greinke are not aces yet and their current teams might not see the benefit of them becoming aces. That is mismanagement (and peculiar circumstances surrounding Greinke) but not poor drafting. HS and college players should be at about the same level when they arrive at the majors, it's just that college players should be expected to arrive about a year earlier. Typically college players take 3-4 years and HS players take 4-5 years.

Is your argument that a player's contributions should be discounted similar to time value of money? As you probably know, you discount because of opportunity cost. With investments, a cash flow received a period earlier could be reinvested (and receive a return of some minimum interest rate) so if the sum is the same in both periods it is better to receive the money in the earlier period (as it is assumed prudent money decisions would be made and the money would be reinvested). What is the opportunity cost with baseball players? I suppose you might claim that the money saved by not having to pay them what they "deserve" could be it but then the question arises is how much money do you save on a player while he's in the minors (that development leads to money saved in the future, it should hold some value)? If you ignore development in the minors then I suppose you are just saying pick the player that will arrive in the majors fastest (though that's awfully tough to predict, especially beyond the top 10) but limited ceiling players that arrive quickly actually could be overtaken by superstar level players in terms of money saved. Money saved would also be very difficult to predict as you have to take negotiations and such into account.

Also, I feel you've glossed over the fact that elite talent does not often become available on the FA market. The talent that makes it to the FA market generally is either with considerable risk or has a price tag disproportionate to its value (or some combination of the two). If the a player does arrive that is truly an elite talent (such as the looming possibility of CC Sabathia) then teams compete to the point where the price tag becomes disproportionate.

I think you should take a combination of the player you feel has a very strong ceiling and as strong as possible likelihood of achieving that ceiling. I have advocated taking HS pitching early in the past (Beavan was a particular favourite of mine, though I liked many others in last year's draft including Chris Withrow and Timothy Alderson) but it has to be the right type for me. I am not interested in any player with significant control issues, whether they are HS or college kids. I like pitchers that have good FBs (or if they're not currently good, at least have some projection) and command the fastball well. There are number of reasons for this, but basically it boils down to the fact that most pitchers throw their FBs a majority of the time and put themselves in good pitchers counts with it and the fact that I believe if you're physically capable of throwing a good FB then you should be capable of throwing at least an average breaking pitch. It also helps that if you can command you're FB you're more likely to command you're secondary stuff than if you don't even have FB command. With that said, I don't think the HS pitching class is very strong at all this year. I like Jake Odorizzi but there are definitely a number of other guys I would take ahead of him.

A final note, I did something similar with HS pitchers in the past but evaluated the classes slightly differently. Firstly, I do think that evaluating the two classes now you should obviously expect more results from the college players (because there are more of them and because they are further along in their careers). I don't really believe this issue can be solved by taking a look a past results (from the 90s or earlier) because the way players are scouted and handled is fundamentally different. However, I also didn't break it down in terms of W/L or ERA but rather whether the player was a quality major league player (I know it's somewhat discretionary but I left it open to challenges and most did not disagree with my categorizations). I did not include the supplementary round because I don't consider those prospects of same calibre as true first rounders. Beyond the obvious that they're being picked later, teams with supplementary choices often select risky players in this round because they feel they can as they have extra picks that year. Anyway, my findings were that HS players and College players were pretty close in terms of likelihood to produce a quality major league player (though from draft year to draft year it shifted based on the strength of the class) but that the HS kids in my short sample were actually slightly ahead and had more players who were still good prospects (and thus have a better chance at becoming quality MLBers). I felt these results don't indicate that you should go with HS pitching, just that they shouldn't be ruled out altogether.

One more thing I'd like to mention is that I'm in agreement that as you get later into the first round, the college pitchers with good talent and less risk are generally gone. I don't think this means if you're going to take a pitcher you definitely take a HS guy, but I think the risk factor becomes significantly decreased because the players the college pitchers that aren't risky there don't have nearly the same ceiling (generally speaking).

PS. If a moderator could edit my name to GoJays7 instead of GoJays77 it would be much appreciated. I go by that moniker everywhere Blue Jays related and would prefer to have it here. I tried to sign up as GoJays7 before but my application never received approval (possibly an e-mail thing) and now that username is unavailable.
ChicagoJaysFan - Thursday, June 05 2008 @ 11:08 AM EDT (#186570) #
Is your argument that a player's contributions should be discounted similar to time value of money? As you probably know, you discount because of opportunity cost. With investments, a cash flow received a period earlier could be reinvested (and receive a return of some minimum interest rate) so if the sum is the same in both periods it is better to receive the money in the earlier period (as it is assumed prudent money decisions would be made and the money would be reinvested). What is the opportunity cost with baseball players?

Baseball team's are businesses and the revenues received earlier can be reinvested in a variety of ways (scouting, marketing, facilities, etc.).
GoJays77 - Thursday, June 05 2008 @ 12:02 PM EDT (#186576) #
If you are arguing based on the revenues one player will generate for a club then I feel there is not much to go on there. For the most part one player (unless they are very special) will not increase revenues very much (if at all). Considering this and the fact that player budgets are generally set for each year and any money saved on a rookie will be reinvested in another player there can be an argument that a club will not be in a significantly better financial position (as the money reinvested in other players may result in a slightly higher win total but not so significantly that it will directly lead to a sizeable increase in revenues). The real money rolls in when you get a very good group of players (not players that reach the show quickly) and you go beyond being competitive to making the playoffs (obviously a ton of extra revenue from generally sold out games) and hopefully winning WS. To do this I think you need to select the player that you think will become the best at each spot.

If the next best opportunity is scouting, marketing or facilities then what sort of cash flows do you expect from those investments? Scouting is especially risky and I would say I don't expect much. Marketing only does so much and I don't know that the relatively small amount of money saved by the Jays on a single player could make much of a dent in the marketing world as the marginal return on marketing dollars at this point is probably pretty low. Facilities? What new facilities that this relatively small sum could pay for would really lead to any significant cash flows?

ChicagoJaysFan - Thursday, June 05 2008 @ 12:27 PM EDT (#186578) #
If you are arguing based on the revenues one player will generate for a club then I feel there is not much to go on there. For the most part one player (unless they are very special) will not increase revenues very much (if at all).

I disagree - as I broke out before - we have metrics for wins produced by player performance and similarly there are ways to determine the amount of cash generated by each additional win by a given team.  You essentially imply the same, later in your post when you say:

The real money rolls in when you get a very good group of players (not players that reach the show quickly) and you go beyond being competitive to making the playoffs (obviously a ton of extra revenue from generally sold out games) and hopefully winning WS.

(From memory on a Baseball Prospectus presentation and articles I've read - I'm not digging up links to support) - money per win is highest at both great teams and poor teams (i.e. not being a Tampa Bay Ray every year but this) - it's actually similar to a quartic function.

The fact that there are benefits to having multiple good players versus a single one doesn't change anything - it just impacts the marginal revenue you associate with wins that player will have.  You can accommodate this simply by just adjusting the revenue value per win produced by the player based on how you expect the team to perform in x # of years or else you can again run a Monte Carlo simulation based on different probabilities for team performance.

To put simply - if you think your team is in a position to be an 85-win team in 5 years (if you can't put an estimate out there like this, you're not doing a good job as a GM), you can then estimate what the marginal value per win will be at that time and can translate that into the value the player provides.

If the next best opportunity is scouting, marketing or facilities then what sort of cash flows do you expect from those investments? Scouting is especially risky and I would say I don't expect much. Marketing only does so much and I don't know that the relatively small amount of money saved by the Jays on a single player could make much of a dent in the marketing world as the marginal return on marketing dollars at this point is probably pretty low. Facilities? What new facilities that this relatively small sum could pay for would really lead to any significant cash flows?

I'll deal with facilities since I actually think it's one of the most significant in Toronto - a marginal win is worth about $2.5 million in average markets for mid-table teams.  That's a significant chunk of the refurbishment the Jays put out just a few years ago (I think the number was $15 million) and it seems to have done quite well for their attendance (witness the recent climb over the last few years which doesn't seem to track with improved rankings in standings / competitiveness).  The facilities I'm referring to are things like adding hot water in the washrooms.

Also - you don't save a relatively small amount on players in their pre-arb years, you save a ton.  Alex Rios made $300+ K in 2006.  He put up a 120 OPS+ in 128 games.  That's a huge savings there.

I also forgot about one of the easier ways that you can re-invest the money - you can put it into more players.  The revenue created from players earlier can in turn be invested in free agents.
GoJays77 - Thursday, June 05 2008 @ 12:59 PM EDT (#186583) #
CJF, I believe you are mistaken. I don't know how BP could possibly determine how much extra revenue a single win could generate (and I significantly doubt it would create any as the final record is in flux until the season is over). BP has done work on marginal payroll to marginal wins.

I disagree with any one player leading to a significant increase in revenues. My point about a very good group of players had more to do with choosing the best players than choosing the players that will get to the majors first, because it seems clear to me that making it to the majors quicker does not necessarily mean you will be the better player. The more players you choose that have the best bet to be the best players the more likely you are to get that very good group of players required to be an elite team and make the playoffs (and possibly win the world series).

My feeling is that the Jays increased revenues have to do with a number of things, with the renovations being very far down on the list. The first one is a sustained level of competitiveness that has not been seen in some time. Fans have more trust that the Jays will actually compete than during the late 90s and early 00s. Additionally, Rogers purchasing the 'Dome has allowed the team to be quite a bit more profitable.

ChicagoJaysFan - Thursday, June 05 2008 @ 01:28 PM EDT (#186589) #
CJF, I believe you are mistaken. I don't know how BP could possibly determine how much extra revenue a single win could generate (and I significantly doubt it would create any as the final record is in flux until the season is over). BP has done work on marginal payroll to marginal wins.

Baseball records have a spill-over effect.  For example, season ticket sales and local television revenues are largely driven off of prior season(s) performance, so the impact of a marginal win is there even if it comes on the last game of the season.

I did a quick google search and looked at the first article that came up.  It's not a baseball prospectus article, it's a hardball times one, but it does show how this is calculated.

And I'm sorry, but BP has done work on this - at least if you include Nate Silver as BP.  Nate Silver is a University of Chicago grad and does at least one presentation a year for the school discussing some of the things they're working on and usually analyzing the White Sox (U of C is on the South Side).  The last couple of times I've been, he's incorporated how they're maximizing their corporate value by spending to a point where their marginal payroll cost per win equals their marginal revenue from that win (more accurately, he's identified how they're not doing that and instead that they should).
GoJays77 - Thursday, June 05 2008 @ 02:04 PM EDT (#186594) #
I guess I'll have to accept it, not being able to see the math behind the win curve.

There's no doubt there's a spillover effect, but the to find the marginal value of each extra win seems to be a tricky proposition though I'd be interested to hear the methodology. Obviously, if they do have a method of calculating marginal payroll cost per win then they'd want to invest until it equals their marginals revenue. Though obviously that is not practically possible most of the time (the right player's at the right cost have to be available to get there).

I guess I'll accept that what might be best financially for a team in the draft may not be the same as what's best for a team to do in the draft in terms of how it will compete. Though to be thoroughly convinced I would definitely need to see more numbers. I will say that as the Gennaro article showed, the marginal revenue derived from a win is much higher at 90 than it is at 80. To get to 90 you need a very strong team and I think realistically the only way to get there is to draft well and get the best players (not the ones the make it quickest to the show). Even with discounting it might be possible that the player that arrives one year or two years later might pay off more. I suppose it would depend on the win curve and you need a good team to begin with (a situation the Jays will hopefully be in considering their current roster and how it projects 3-5 years from now).
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