The Cubs and Red Sox are doing interesting things for their ambitions. Boston overhauled their young and unpredictable club with two of the top free agents on the board while the Cubs’ rotation makeover coincides with a slew of young offensive talent already in place. Neither team is yet finished as the outcomes of Scherzer, Shields and whatever we’re calling San Diego still loom toward the New Year. Regardless, their intent for 2015 and beyond is the same: win.

But these two teams are interesting for another reason. It’s not often that clubs expected to contend in one year also happen to have top 10-selections of that year’s amateur draft, but that’s exactly what will happen this coming June. The former club of Epstein and Hoyer will select 7^th overall. Their current club will select 9^th and if all goes according to plan, each club’s 2016 selections figure to fall well out of protection.

But rising from this is a fascinating opportunity. It’s a very rare opportunity requiring the unique but exact convergence of factors surrounding these two teams, swinging the cost/benefit ratio to an extreme. The Red Sox intend to be at the top of the standings this season and based on what they’ve done, chances are good that they will. The Cubs are not far behind and as opined by Dave Cameron may be just a leap or two from the same goal. Whatever happens, each of the next two seasons project to be followed by two of the strongest free agent classes in history. 2015 should include Justin Upton, Jordan Zimmermann, Jason Heyward and more. The 2016 elite is likely to be headlined by Stephen Strasburg. There is going to be a hefty number of qualifying offers and little reason to care.

Focusing upon the next two years is important. The current collective bargaining agreement is in effect until December 1^st, 2016, specifying the rules that govern draft bonus allotments and the penalties for their violation. Summarized below:

–        0-5% overage: 75% tax on the overage

–        5-10%: 75% tax on the overage and loss of 1^st round pick in subsequent draft

–        10-15%: 100% tax on the overage and loss of 1^st and 2^nd round picks in subsequent draft

–        15% or higher: 100% tax on the overage and loss of 1^st round picks in subsequent two drafts

o   Note: If a team lacks the selection subject to penalty due to a prior penalty levied from draft overages, the team will be penalized in the next draft in which said selection is conveyed.

To date, no team has spent beyond the 5% threshold and thus no team has been penalized a selection.

But then no team has been in this particular position before, a situation perhaps too unlikely to have been considered during CBA negotiations. Under the rules above, teams are pressured either to adhere to slot value or to strategize by shifting their allotments in favor of two or three top talents. The Cubs and Red Sox will have no such limitations this June. They can spend with complete and utter impunity.

Part of how this is possible is due to the language of the CBA and the impending sequence of events. A theoretical chronology:

1)     The 2015 draft begins

2)     Boston or Chicago picks who it wants and spends as much as it wants

3)     Boston or Chicago receives the maximum penalty, including tax and forfeiture of 2016 and 2017 1^st-round selections

4)     2015 free agent class – Either team signing a QO free agent forfeits its next highest 2016 selection (2^nd round)

5)     2016 free agent class – Either team signing a QO free agent forfeits its next highest 2017 selection (2^nd round)

6)     Draft Penalty completed

Why would they do this? Because of who they are and because there is every incentive for doing so. Consider the maximum penalty – forfeiture of 2016 and 2017 first round picks – only for these two clubs, it’s entirely probable that none of these picks project to exist. Notice I said project, which is a critical distinction, because at the time of the 2015 draft their 2016-17 selections are officially still in place.

Implying, what if they can be sacrificed? The Cubs and Red Sox each operate at the highest levels of revenue and at their current win-curve trajectory are virtually guaranteed to be major players on the free agent market in each of the next two years. As a demonstration, both have already signed major targets this off-season. It’s easy then to imagine either team having to relinquish their top selections anyway, except either club can decide that in June as opposed to November. Given enough information by then, they’d have to ask themselves: What do they have to lose?

Lets assume each team performs toward the fringe of the playoffs and we assign them the 23^rd selection in 2016 and 2017. In Boston’s case we could argue this will be even lower, or a few spots higher for the Cubs if you think they aren’t quite playoff ready, but as a middle ground the 23^rd selection is a good place to start. Keep in mind by June, enough games will have been played to know this with some certainty. Let’s also assume that the first-round selections in each year will be lost to FA compensation. This isn’t an exact process since picks will be added or removed to a varying degree, but using 2014’s values will give us a rough estimate going from one year to the next:

*Boston forfeits 2^nd round selection (Hanley Ramirez)

In addition to forgoing the top 30 prospects, dwindling bonus pools severely damage teams’ ability to pay for any talent at all. By employing this strategy, Boston and Chicago can essentially punt drafts in which they might have expected to extract little value in the first place. In exchange, they take full reign to obtain as much talent as they wish in the coming draft – and the talent will be there. Even as restrictions pressure draftees to sign close to slot nevertheless talent falls due to signability, particularly when coming from high school. In the scenario above, a team is looking at one 7-figure talent, maybe two if slots can be shifted. Compare that to what they might obtain with 40 limit free selections.

Just as important, where these teams select has a significant influence on realistic return. Where top ten selections can result in impact talents, selecting early in each round is an opportunity to grab a falling talent well before other teams consider themselves able. Within current strategies, teams have to be cautious of the round in which they decide to risk on higher prospects as the ability to pay is tied directly to their selections in other rounds. But if money is no object, the Cubs and Red Sox can simply pick whomever they want whenever they want, in which case having the higher position becomes a huge advantage.

This isn’t foolproof. It would have to be a “calculated risk” decided upon almost the day-of. For one thing, it’s impossible to predict exactly what a free agent class will have to offer. If several projected free agents instead sign extensions, it becomes more difficult to justify devaluing your top selection. By June, teams should have a better sense of the picture ahead but it won’t be crystal clear. These teams will have to be reasonably confident not only that targets will exist, but that they’ll have a reasonable desire to sign them.

For another thing, at a certain point the cost in payable tax becomes a bit unwieldy. Perhaps the key then isn’t to sign as many top prospects as possible but rather enough to make up for impending losses in the two subsequent drafts. Because their pools are relatively large both teams will be partly insulated, but past that you’re paying double what you normally would per prospect. That requires confidence that the talent available is worth the additional costs, something not often expressed by teams prior to the current CBA.

That’s an argument to be made however, simply because the successful development of a few can exponentially result in surplus value. Should you prefer a direct measure of dollars, studies such as this one routinely demonstrate the windfalls in appropriately identifying and obtaining draft talent regardless of where they’re picked. In today’s league with today’s prices, that’s as tempting an idea as ever and if you wonder whether teams still place premiums on potential, look no further than the international market. Furthermore, the value of a prospect is predicated not on “Will he produce major-league value?” but rather “Can he?” The extractable value of potential in trades should be evident as I write this.

But the third and perhaps the most critical obstacle is the league itself and whether it takes the power to reject bonus agreements. This is suggested in the CBA document linked above, where the “uniform player contract” specifies required-approval by the Office of the Commissioner. Whether this suggests the Office would actually exercise its right of refusal isn’t clear. The only precedent as far as I know is MLB’s refusal to allow a $6M bonus to Matt Purke, a unique situation in which MLB had control of the Rangers’ finances. Particularly controversial deals have drawn little more than ire. Strict stipulation of penalties in the current CBA implies a team’s right to accept said penalties should it choose to do so. For the Commissioner to explicitly prevent a team from exercising this right is bordering on breach and may be actionable or subject to a grievance by the club or by the MLBPA. This is where the issue gets a little messy and comes down to debates beyond the scope of this article.

I won’t hesitate to call this what it is: a gambit. Strategies like this enliven the game and introduce an element of danger that can either pay off or egg face. Regardless, it highlights yet another flaw to the system in place. In one sense, this strategy is a novel way of playing within the rules, which is at the very heart of high competition. In another sense, it goes against sportsmanship in that this strategy is available only to teams who can realistically devalue their top selections, i.e. teams operating with enough capital to consistently invest at the top of the open market.

But rules are rules. The Cubs and Red Sox have the chance to align their playoff ambitions with a prospect bonanza not yet seen. They’ll have their pick among the elite and after that, should the dominoes fall along the way, they can – and should – take full advantage.

Jonathan Aicardi is a researcher with UCSF in the study of glioblastoma and the proprietor of Another Mariners Blog! Because apparently the world needed another one.

This trade, at least in its basic terms, has been well covered. I personally don’t believe that one of these players is really any better than the other, not in any significant sense. The Mariners gave away a roughly league-average player and received a roughly league-average player in return, but as a result paid a penalty in salary and in team control — for essentially no reason. Jeff has gone over all of that on two different websites. It’s a nice deal for the Jays. It’s less than that for Seattle.

Where it gets ugly is at the far periphery, the tertiary implications of this deal that, on its face, really indict a disparity between the Mariners’ front office and the rest of baseball.

The Mariners now need a right fielder, having just traded theirs. A right fielder is an everyday player theoretically assigned for about 1500 defensive innings and 700 plate appearances; and therefore someone who will be competing, on average, against a very high threshold of performance. From 2012-2014, the average full-time right fielder produced 2.6 WAR/600 per FanGraphs. The market price for 2.6 WAR, at the established pre-season price of $7M/win, is approximately $18M. This is about in line with what’s been observed to date. The 2015 cost of these players on the open market:

In order to obtain someone to meet this threshold, you have to pay. You have to pay a lot. Nick Markakis just signed for 4 years and $44M. Nelson Cruz signed for $57M to knock out just one half of the workload, also costing a draft selection. Victor Martinez signed for $68M to knock out just one half of the workload. He didn’t cost the Tigers a draft selection, but that’s unique to the Tigers. For someone who can do it all, you’re looking at Hanley Ramirez, and then you’re looking at nine figures. The $/win for the four free agents above is $7.12M. Their average salary for 2015 is $15.0M for 2.2 WAR. Four of the five signed for 4 years or more, the exception being Torii Hunter, who is likely to retire.

The Blue Jays now need a #5 starter, having just traded theirs. A #5 starter starts more-or-less every 5 days. About once every 4 or 5 weeks, his start might be skipped thanks to an off day. An average #5 starter makes roughly 30 starts for roughly 180 innings per year. On average, this type of pitcher meets a very low threshold of performance. From 2012-2014, there have been 257 qualifying seasons for starting pitchers. The average performance of this group is 2.7 WAR/200 IP. Population sections of 20% amount to 51 or 52 individuals per section, the lowest ranked section theoretically accounting for the #5 slot. The average performance of this section is 0.9 WAR/200 IP. At the established pre-season price of $7M/win, the market price for 0.9 WAR is approximately $6.5M. The cost of these players on the open market:

**Option picked up

To obtain players who can meet this threshold, you can generally pay fringe talents for 1-year deals or look to candidates from minor-league affiliates for league-minimum salaries. This position is not often filled by a singular person, as teams rarely have that many reliable starters on a roster due either to scarcity or to budgetary constraints. The Mariners themselves filled their 5-slot in 2014 with a combination of Erasmo Ramirez, Blake Beavan and Brandon Maurer, winning 87 games. This is not uncommon. The Orioles, Angels and Athletics all employed variations of this theme.

The average $/win for the above free agents given guarantees is $6.3M. The average guaranteed salary for 2015 is $5.8M. None of these players is signed beyond 2015.

The Blue Jays took their high-cost need and exchanged it for a low-cost need, transferring the balance onto the Mariners.

This is not to say that the Blue Jays have to sign a #5 starter. If someone better presents themselves at a price they can incur, they absolutely have that option. But if they decide to follow the standard rotation model, that’s okay too, because most of baseball either does or has to. The penalty for playing down to the average #5 starter is relatively small.

The Mariners no longer have this luxury. There’s no such thing as a #5 right-fielder. If you were to place the terms of this concept on the right-field position, you’d have a replacement player, the penalty for which is a couple wins. The Mariners, at least in their position, can’t afford that.

This isn’t about obtaining talent for talent, salary for salary, years for years. This is about understanding your market, about being able to let your environment work for you. We don’t have to sugar-coat this. There are people who get it and people who don’t. Jack Zduriencik, for whatever reason, just doesn’t get it.

But the Mariners aren’t constrained to budget limitations in the way the A’s and Rays are. They don’t struggle in the draft the way the Yanks, Astros and White Sox do. The Mariners, for all of their issues, have a winning team with a young core to credit them, and Zduriencik has quite the hand in that. That his knack for strategy might be among the lower tier of his peers is a singular constraint among many working parts, and the hope is that the rest of the machine can overcome the deficiency — the same way a lot of teams do.

But I won’t blame you for cringing at what might be next. Their propensity for this kind of deal is matched only by their propensity to compound one mistake with another. And given their shiny new need, they may not have much of choice.