In a bit of a shocker, the deadline to sign Rule 4 Draft picks came and passed without the San Diego Padres striking a deal with first round selection (ninth overall pick) RHP Karsten Whitson.
The Padres also failed to sign highly touted RHP A.J. Vanegas, who they selected in the seventh round. Vanegas has a commitment to Stanford. Later picks Miguel Pena, Sean Dwyer, and Connor Hofmann also did not sign. The same can be said for a slew of late-rounders.
The Padres did go over slot to sign the likes of Zach Cates (third round, $381K) John Barbato (sixth round, $1.4M), and Jose Dore (eighth round, $450K).
As I mentioned in my draft recap, we would have to at least wait until August (after the deadline) to make any final determination on the future prospects of this draft. Well, it’s August, and you could easily argue that the Padres failed to sign the two best players they selected in this year’s draft.
What makes this so strange is that there wasn’t any rumors about Whitson being a tough sign after the pick was made or leading up to the deadline. In fact, he was reported to be a relatively easy sign for a top high school pitcher. Jed Hoyer says that the Padres had a verbal agreement with Whitson and company for $1.9M just after the draft. The number got bumped up to $2.1M at the deadline, but that wasn’t enough for Whitson.
It’s a fascinating situation and it’s easy to come down hard on the either side here. Whitson broke a verbal agreement and apparently completely changed his tune after the draft. That said, according to Hoyer, Whitson was looking for a figure in the $2.7M range. The Padres wouldn’t spend an extra $600-800K to sign an elite talent.
Listening to Hoyer’s voice, it appears that this may be as much a matter of principle as it is an economic decision. Whitson broke a promise and because of that the Padres weren’t going to give him what he was looking for. That is not necessarily a bad thing, but from a fan’s perspective the organization isn’t as strong now as it could be, with both Whitson and Vanegas going to college.
Sure, the Padres will get the eleventh pick in the 2011 draft, which is supposed to be a much deeper crop. But that’s another year down the road, another year later before the player even begins his major league development. Not to mention, the Padres won’t have protection next year, giving their draftee added leverage.
This is an interesting situation, one far too complicated to truly analyze from the outside. To me, the scary part is if, for some reason, the Padres simply let $600-800K get in the way of acquiring a very good young baseball player.
We’ve commended the Padres recently for going above slot and/or selecting different types of players than in recent years – generally, high upside guys that are going to require more money to sign (i.e., Tate, Williams, and Sampson). Hopefully the Padres haven’t let this year’s success at the major league level blind them to the fact that it is imperative for a small market team to build through a strong farm system.
For more, Nathaniel has an excellent article on the situation at Chicken Friars.
You make it sound like The Padres lost out. It’s a case of knowing only half the story. Pena was suiting up for the Cape, but left. Any idea why? Sources say it was for conduct violations.
Good recap, and I agree with your points. It seemed to me also like a matter of principle more than money. Because if it was 100% money, it doesn’t make sense to me. It would mean the Padres drafted someone at ninth overall that they didn’t think was worth 900k over slot. I would guess the compensation protection the pick next year doesn’t have, drafting two picks later even if it is considered a deeper draft at the moment, and the year of development time lost are worth more than the 900k over slot the Padres balked on paying.
Whitson’s 2.7 million demand was in line with what other high school arms have gotten relative to slot in years past. It’s too bad he didn’t start out with that so the Padres could have drafted someone else or agreed to that figure. Like Tom said in the previous thread, maybe if colleges allowed players to be represented by agents officially this madness could have been avoided.
Following up what Ben B. said, I’m also confused on why they thought that Whitson would sign for under-slot. Baseball America ranked him as the 15th best overall prospect, 7th best pitcher and 4th best high school pitcher. A player rated that highly was never going to sign for slot (or under-slot as that was the initial offer). So why didn’t they take someone lower rated who would surely take the under-slot offer? The only explanations I have are that the Padres thought they were taking advantage of Whitson’s ignorance as to his own value, the Padres FO is incompetent and totally screwed up, or the Padres never really planned on signing Whitson unless they came at their price. I can’t believe the second option so I think the failure to sign Whitson was a mix the first and third options.
@Tom
No doubt the Padres thought they were getting a bargain, but the reason they thought Whitson would sign for 1.9 million is because he said he’d sign for 1.9 million. We don’t yet know and may never know how hard they pushed to find out if he really meant it. That can be construed as taking advantage of him, and I wouldn’t argue too hard against it, but it can also be construed as “this kid really wants to play pro ball.” It’s hard (but not impossible) for me to believe that the Padres didn’t bring up the idea of slot versus overslot with him. If they didn’t bring it up, and instead fled their meeting with the family giggling into their sleeves about their good luck, that’s a poor approach. If you don’t bring it up, you can be sure that his agent will, putting it in a light much less favorable to the team.
The logic behind picking him for a 2 million-ish price tag seems clear to me. HS arms are the riskiest draft class. They were willing to take that risk at around 2 million but not more.
@Tom Waits:
I understand that HS pitchers are a risk but those drafted as high as him (or at least rated as highly as him) don’t sign for just $2m. Even Matt Hobgood who was supposedly a huge reach for the Orioles with the 5th pick last year signed for $2.4m (when he was rated by BA as the 54th best player).
Also, someone sent this article to me today: http://www2.jcfloridan.com/sports/2010/aug/17/whitson-picks-uf-ar-718920/
His father claims that his dream was always to attend Florida. If that’s true, why the hell did he agree to an under-slot bonus? I see that logic: “I really want to go to Florida but if you offer me less than even MLB’s cheap guidelines say I’m worth, I’ll take that.” That makes sense.
Tom/5 – That $2.4M bonus for Hobgood actually was slightly below slot. Agree with your other points, though.
From the ’09 draft, Zack Wheeler got $1M over slot, Tyler Matzek got $2M+ over, and Jacob Turner got $2.7M over slot. The Padres of course signed Tate, though not a HS pitcher, for $3M+ over slot.
Responding to TW from the other thread:
“But what’s not true is that a good buy at Figure A is necessarily still a good buy at Figure A + 40%.”
Tom, that’s certainly true. The way I’m looking at it, though, the draft is already favoring the organization over the player. Not only do players generally sign for relatively modest bonus figures, considering free agent salaries and such, but you also get great value out of them for their first six seasons if they do pan out. Sure, there’s a decent chance they won’t, but a $2-3M investment isn’t going to ruin a franchise.
So while $2M may have been a very good price for Whitson, $2.7 probably was too. We’re splitting hairs over a few hundred thousand dollars on a deal that could have been worth $15-20M+ in surplus value down the road.
@Tom
No doubt that’s why the Padres were ready to pick him, because he said he’d take a slot offer rather than what other “#2 arms in the draft” have traditionally taken. The only fault I can find with the Padres there is, hypothetically, that they didn’t push to see how strong that commitment was.
@Myron
Absolutely, the draft suppresses player costs enormously, and the control period is immensely valuable. But if you agree that there IS a tipping point somewhere between cost and value, then we’re just arguing over where that point should have been. Based on their other offers, they had the money to go to 2.7 if they wanted to. It’s definitely not a win for the team, but if we’re apportioning fault, I’d give most of it to Whitson and his agent.
If both sides could do it over again, you’d hope that the team would probe as hard as they could beforehand (maybe they did), Whitson would be completely honest about his intentions (maybe he was, then they changed), that any change in demands would have been communicated sooner than 11:30PM, and that the Padres might have said “2.4″ to see if he’d take that.
Keith Law thinks the Padres made the right decision because of the precedent it sets for future draft picks that their offer is their offer. “By refusing to cave in to an attempt to renegotiate an agreement with a player, they set a strong precedent going forward that lets future draft picks know that reneging on terms or changing demands will get them nowhere with the new management team in San Diego.”
He talks about some of the other Padres draft picks briefly in the article, which is insider only.
http://insider.espn.go.com/mlb/blog?name=mlb_draft&id=5473291
I’m surprised Moorad’s strong comments haven’t been mentioned. He knows that end of the business, and he wasn’t happy with Whitson’s agent. It’ll all come out in the coming weeks and months, but I suspect Whitson’s agent is going to be tagged as a Boros-like “too difficult to work with”, and not just by the Padres.
Tom, sure, I believe there’s some point where signing Whitson, on average, doesn’t make sense anymore. I don’t have any hard figures with me (a good research topic for later), but I’m having a tough time buying that $2.1M is a good investment while $2.7 is not.
My intuition says that the tipping point would be somewhere pushing $5-7M. Of course, I could be wrong. But I get the feeling the Padres didn’t make this deal because of the agent and how things we’re handled, not the actual figures.
Ben, good to see you around these parts. That’s definitely a good point by Law and may be tested next year at #11.
Larry, definitely, seems to me that a lot of this comes down to the agent, and the Padres sort of proving a point here. Not sure that’s a good thing, but my feeling is that’s what happened.