Draft or Daft? Is the MLB Draft worth it?

In the previous two pieces (here and here) we have worked out that money just about gets you wins but there is grey area in the middle were how you spend matters and that you can get those wins from the free agency but it is more cost effective to re-sign your own players. So, how do you get those players into your team in the first so you can re-sign them?

The way that the vast majority of players get into a MLB organisation is through the draft, there are players which are traded but these make up a much smaller number. With its 40 rounds of picks as well as compensatory picks and competitive balance picks overall there are over 1,200 players drafted each year in the MLB. The majority of them do not sign, they continue to play by in college for a few more years hoping to get a higher round pick and a higher bonus in the next few years. But ones in the higher rounds usually do and they can get a substantial bonus for signing. In 2018 the bonus cap for the no. 1 pick was just over $8m and all of the top 100 could have been offered more than $550k.

So, is offering $8m to a no. 1 pick worth it, is offering any of these bonuses worth it? How much of a gamble is the draft? That is what I have tried to answer by looking at two factors; the likelihood that a drafted player makes the majors and the average WAR of players who made it for each draft pick. To do that I have taken the top 100 draft picks from 1986 (when the draft changed to solely in June) until 2014, left the last few years out as they won’t have made it to the majors yet. I have taken two pieces of info from each of these players, did they made it to the majors and if so what their WAR was.

These graphs show good correlation for both likelihood of making the majors and average WAR of player who do make it. So the data suggests teams on the whole MLB teams are getting their picks right with the players they choose but there is quite a bit of variance for some draft picks compared to the ones around it. This is likely due to the small number of data points we are looking at but it does throw out some interesting anomalies.

  • Ones to look out for – Pick no. 20, they have the second highest average WAR for players who have made it to the majors (16.4). This largely was due there being 3 players with 50+ WAR, Mike Mussina (83), Torii Hunter (50.1) and CC Sabathia (61.1).
  • Ones maybe to skip – Pick no. 26, less than 50% of these first round picks have made it to the majors and of the ones who have they average lifetime WAR of 0.9. Brent Gates at 5.5 WAR being the best player drafted at no. 26 after 1986.

If we group some of these picks together we can see better how likely the player is going to be good or even a great player.

So, in addition to what we saw previously I have added the percentage that have made it to certain WAR levels during their career to see how good these players could become. And although 84% of top 5 picks make it to the majors, only 52% of them have lifetime WAR above 5.0. When you think that these players would be getting around $7m in a signing bonus the idea that half of them won’t even become an average major league players, it is rather staggering. But for the top 5 picks the percentage stays the higher even for the higher WAR categories, from my analysis you would expect once every 2 years for one top 5 pick to become a 40+ lifetime WAR player.

Throughout the entire range you can see that it is more likely for the higher picks to get to those higher WAR values but how do it compare to the bonuses that the teams are paying. To do that I have created a cost metric based of the bonus amount and the chance of a player getting to a certain level. For example if the bonus for a player was $2m and his likelihood of becoming a 5 WAR play was 25%, then you would have expect to spend $8m (2/0.25) to get a player of that calibre.

I have colour coded it so you can see it more easily but this shows that for lower WAR players it is more cost effective for them to have come from lower down the draft and for the higher WAR players it is more cost effective to get them from the early picks.  And as the graph below shows the trendline for the average WAR very similar to the 2018 bonus maximums, almost as if the MLB did some similar analysis to determine the ratio of the bonus to pick number. It does look like all of these picks are value for money in ratio to each other.

So how much clubs are allowed to pay each draft pick is inline with expected WAR from these players. But is that starting point of just over $8m worth it. Realistically with 10 years worth of picks in the top 5 you will have spent $70m and on average got 1 bench player, 2 starters, 1 good player and 1 All-Star (who has 33% chance of being a HoF player). Compare that to 10 picks in the 21-30 range where you will have spent $26m to get a bench warmer and a starter. You are getting real value for money on those signing bonuses for those top picks, remember the cost of a win in free agency is just over $10m so you aren’t even spending the same as 1 WAR in free agency for the top pick each year.

This all shows maybe what is to be expected from the draft, the top picks are more likely to be the best. So acquiring players each year this way is quite the gamble but it can have some big rewards. How do reduce the gamble on these younger players? One way is to wait until they have have played some more and trade for them when the risk is lower and that is what I will look into next.

Note – There were lots on slightly interesting nuggets of info I found doing this but I couldn’t find a way to include in the article, here are some of them hope you enjoy them.

  • Alex Rodriguez (117.8) is the player with the highest WAR since the 1986 draft, he was drafted first in 1993.
  • The 2002 draft had the highest combined WAR for top 100 picks (560) with the top 5 players Zack Greinke (62.7), Joey Votto (58.3), Cole Hamels (54.4), Curtis Granderson (47.3) & Jon Lester (43.1) all still active.
  • Current Astros AJ Hinch manager was drafted 3 times in 1992 (Pick 62), 1995 (Pick 72) & 1996 (Pick 75). He was the only player to be drafted 3 time in the top 100 in the my time frame. Also his lifetime WAR across 350 games was 0.0
  • Here is a list of the top player for each draft no. since 1986.

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