Pick Trades? In Baseball?

By John Franco

On Tuesday, the Pirates acquired Gaby Sanchez from the Miami Marlins, in exchange for Gorkys Hernandez and the Pirates’ recently acquired pick in the 2013 amateur draft. Wait… what?

In case you missed Paul’s article on the pick when it was awarded, the new CBA created a competitive balance lottery where the Pirates “won” an extra pick in between the first and second rounds in next year’s draft. (Yes, that would be the same CBA that made it impossible for the Pirates to sign Mark Appel… win some, lose some, I guess.) The CBA allows these picks to be traded, which is the first time in baseball history that amateur picks can be traded.

The value of these extra competitive balance picks is hard to assess, and was one of the wild cards coming into this year’s trade deadline. Prior to the Pirates/Marlins trade, the Marlins and Tigers swapped picks as part of the Jacob Turner/Omar Infante trade. Since that was a bigger deal involving notable players from both sides, it didn’t really help to put a value on the pick, but it’s worth noting that the Tigers recieved the  higher pick in the deal.

So what did the Pirates really give up by trading their pick? Jim Callis noted that the pick will likely be the 33rd pick in the draft, and carry a slot value around $1.525 million. This year, the Pirates had a total pick value (for all of their picks in the first 10 rounds) around $6.5 million. Next year’s pick value will depend primarily on where the Pirates’ 2013 pick falls (based on their final 2012 record), the value of the #9 pick they receive as compensation for losing Appel, and the smaller values for their later picks.

Keeping the competitive balance pick would have added something like $1.5 million to that total, and if the Pirates signed a player for less than $1.5 million, they could allocate the difference to other picks. Last year, the Padres took pitcher Zach Eflin with the 33rd pick and signed him for $325,000 less than his slot value.

For most teams, the loss of the pick and its associated bonus pool wouldn’t be a big deal. Of course, most teams signed their first round pick, and the Pirates did not. With the #9 pick and another pick in the 18-25 range, the Pirates will have a unique opportunity to maximize their draft value. Having  three picks in the top 33, plus an extra $1.5 million to spread around, or allocate almost entirely to the #9 pick as Scott Boras would prefer, would have helped the Pirates use that flexibility.

Now, if the Pirates want to take a player who falls to #9 and pay them well above their slot value, they will have to make their sacrifice on their own first round pick, instead of the “free” pick they had from the lottery. Alternatively, getting two top-shelf talents with their two first round picks would likely mean sacrificing most of rounds 2-10. If the Pirates play the 2013 draft straight up like they did the 2012 draft, they could lose another high pick.

(In case you’re wondering, yes, the #9 pick is still protected if the Pirates fail again, but at some point they’re going to need to sign someone. Waiting for Mark Appel, Jr to arrive on the scene might take a really long time.)