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.