Hello. My name is Matt. I have a problem. I can’t stop thinking about the value draft pick compensation. I touched on the issue on Saturday when I tried to find the dividing line between players who should take the offer and those who should walk away -and those who should run (I may also have issues with making references to Kenny Roger’s The Gambler, but we can save that for another day). I also dove into the idea of draft compensation from another angle by trying what kind of price-hit free agents who received the qualifying offer have had to take. I can’t help myself. I’ll be sitting in my living room, playing with my daughter, wondering, "How much less are teams willing to spend on Ervin Santana and how can I measure it?" I need help.
I know that thinking about the cost of draft compensation is bad for me. I can see the pitying looks people are giving me as I pick up another spreadsheet, but I can’t stop. The relationship between the value of a player who hasn’t even been selected yet and a guy we have all watched play for years is too fascinating for me to dismiss. At it’s heart, this is a question of how you put a dollar sign on abstractions like potential, risk, projected future returns and experience.
I need your help to break the hold this draft compensation question has over me. Here is the scenario. You are the GM of a major league team. It isn’t the richest team and it isn’t the poorest. Your farm system sits comfortably in the middle of the pack in all the rankings and you have the 19th pick in the next draft Your team is right on the edge of the playoffs. A player that has declined the qualifying offer fits a need that you have to address in the offseason that lies ahead, but another player out there would serve just as well and he doesn’t come with draft compensation. Both players are looking for five-years and $100 million and that is a reasonable assessment of their values. You can sign either one. How much less would you be willing to pay the player that will cost you your first-round pick? What dollar value would do place on that pick?
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