July 2, 2018 International Signing Period

[BaseballCat]

This is Eshelman’s third year at Triple A and seems like a AAAA type player. Others have been getting the opportunities in the majors. Yes depth is nice, but I would rather not put him on the major league roster over others we have at AA or AAA. They must see potential in the Aussie and paid to get him out of his commit to Tulane. Looked a bit wild in the video, but hope he does well with coaching. I assume this the best they could get with Baltimore’s money. I expect Eshelman will make it to the majors with the Orioles - their minor league pitching depth is lacking .

[andyb]

Or:

Would you trade Eshelman for that guy?

Every day of the week. Allocations had little value this year so of course there was much more value in expanding international spending. Looks like we will end up spending about 90% of what we could.

The big question is whether we should have done this at the beginning of the period when there was much more talent out there. And lined up that talent a year before, knowing we would spend to the max. It is hard to tell if this is a guy that might have signed for a much lower amount (like $300K) early in the period but now gets much more since some teams like the Phillies have to spend what they had left and there was less talent that could justify that.

[Austinfan]

Baltimore wouldn't have traded these allocations (at least not for less than a "king's ransom") early in the period when they thought they were going to sign some players they missed out on.

I expect Klentak to do the same this year, make his initial signings, wait out the middle period, then target a few guys he wants to add and shop for low cost allocations. A million or so won't get you a top LA player during the feeding frenzy, but it can purchase a couple overlooked gems your scouts have unearthed.

[Florida_Sunshine]

But then aren't you supposing that Baltimore would have made the trade then for allocation?

Not sure how you get there. Please explain your thought process.

[Austinfan]

Baltimore tried to sign a couple players they eventually missed out on, which is why it's more expensive to buy allocations early in the period, when teams still think they have a shot at signing players and want to keep their options open.

As the majority of prospects are signed, many teams will have allocations left and no one they feel worthy (or with whom they have the connections to make a deal), at that point they just want to dump those allocations for whatever they can get for them.

Cash strapped teams especially may have allocations but be unwilling to spend actual money to sign second tier prospects once their first choices are gone.

[Florida_Sunshine]

I totally agree, that is why I am wondering what Andy's thought process was.

I am curious as to what he is thinking.

[julio]

He's HS age, and what they're paying him is 2nd rd comp/early 3rd rd money.

You should not assume that the Rule 4 Draft's slot values represent the actual value of the players drafted in those slots. The whole point of the slotting system and pools is to hold down bonuses - to force the market to "clear" at a less-than equilibrium price. Gessner was a free agent - his bonus likely doesn't equate to a "slot value" where would have been drafted if he were draft-eligible.

[Austinfan]

It's a crude comparison, but it is at least a ballpark sense of the value of the player.
That is, if he's a 3rd/4th round talent out of HS in the states, it's money well spent.

[andyb]

Baltimore wouldn't have traded these allocations (at least not for less than a "king's ransom") early in the period when they thought they were going to sign some players they missed out on.

I expect Klentak to do the same this year, make his initial signings, wait out the middle period, then target a few guys he wants to add and shop for low cost allocations. A million or so won't get you a top LA player during the feeding frenzy, but it can purchase a couple overlooked gems your scouts have unearthed.

Baltimore made trades early so your theory does not really fly. Their new regime came in too late for them to get anybody. They paused when the Cuban became available but he was never not going to Miami.

And allocations will be much more expensive next year with no teams in penalties. Finally, you just don't understand supply and demand. There are a lot of players available for $300K-$500K early that might have gone for $850K now. Few teams had money now. And at the beginning everybody had money. At this point there is low supply and teams desperate to get rid of their money.

It does not mean the guy we signed is not worth it. He just may be overpriced compared to what we might have gotten eariy.

[andyb]

I totally agree, that is why I am wondering what Andy's thought process was

7 teams were in the penalty this year. Plus Baltimore that did not play in the international market. LOTS of allocations were traded early. Teams like the Yankees traded for more than $3 million early and maxed out. And signed many more of the top 50-100 prospects than we did.

Baltimore traded early and traded late. They had a change in management too.

What is your thought process? Do you think the Phillies made a killing by waiting so long and spending lots of money on a prospect that most people had not heard of? He was probably the best prospect out there. But the Phillies were also probably desperate to land anybody because they are entering another year of losing some international allocations when it will be much harder to add them.

The Phillies did not do a bad thing here with this trade and signing. I just also don't think they maximized the talent they could have signed for this amount of money if they had done it much earlier. There was more talent out there. The Yankees signed 5 of the top 30 prospects in each of the last 2 years by maxing out. We got 1 or 2 each year. That is a big difference.

[Austinfan]

Don't lecture an economist about supply and demand, or I'll have to explain arbitrage to you.

Players who were worth $300K were signed, the few remaining players are late birthdays, or thought to be committed (like the guy the Phlllies signed, committed to Tulane, a signal that it would be expensive to buy him out of that commitment, no different from the draft).

Why would you wait to sign someone so you could spend double, and if that player knew he could get more by waiting, so do other players and there would be a greater supply later in the period, negating the advantage of waiting.

Early in the period you don't know who you'll be able to sign, you can make some guesses, but you're going to make errors, later in the period, you know who you haven't signed, and you know who you're potentially competitive for (it's not a free market in LA and even Asia, information is hard to come by and teams depend on their networks of contacts). So at that point you re-evaluate the value of your allotments.

[andyb]

Only if you kind of ignore supply and demand. Teams are spending money now on the last remaining prospects because spending money is better than not spending money. Even when you overpay in the international market the dollars per WAR are far greater than if you do not spend. As a cash-rich team signing this kid is a no-brainer.

When there were 100 good prospects early prospects below the top tier (like in all free agent markets) were cheaper because the demand was less. The last week is not a classic market. When there are only a couple of teams left with money to spend AND a prospect could wait till July 2nd to have 30 teams with money, the teams that have money left over NEED to spend it. Top prospects that are worth $850K would wait till 10 teams could offer it. Prospects that are worth less create a bidding war between the 2-3 teams with money left because they use it or lose it.

Supply and demand. We overpaid. But that is better than doing nothing.

[Florida_Sunshine]

I think you are wrong here. A team does not NEED to spend leftover money. They can choose as a business decision not to spend it if they feel it is not worth it. So, if a player really feels he has the leverage you say he does (and I disagree with that also), and a team feels he is not worth the money, they can just not sign him.

I also think the big pops go early, there is always demand for the premium players and that starts with day 1. And yet you honestly feel they would be better off waiting?

And my question of you to explain your thought process was pertaining to this comment by you.

"The big question is whether we should have done this at the beginning of the period when there was much more talent out there. And lined up that talent a year before, knowing we would spend to the max. It is hard to tell if this is a guy that might have signed for a much lower amount (like $300K) early in the period but now gets much more since some teams like the Phillies have to spend what they had left and there was less talent that could justify that."

First off, we DID spend to our max and that is why the Phillies made the decision to make a trade for more allocation. They only would have done that if in fact there was someone out there they wanted.

I think AF explains it pretty well above. You are supposing something you have no idea of. None of us know that the exact same trade could have been made with the Orioles early on and I think probably not. But yet, isn't that what you base your argument off of?

[andyb]

All dollars are not created equal though. A dollar spent in the international market is probably 5-10 times more valuable in terms of dollars/WAR than dollars spent in the free agent and trade markets. The draft and international spending is limited by collective bargaining, making it a non-traditional market.

Teams don't need to spend money. But they should if there are no cash flow concerns (which we do not have but half the teams in baseball do). It is the rational decision to spend the money, and to overpay for the player since we were in a "market" where there was little talent left. We also did not spend quite to our max (which is our allocation plus 75%). Other teams like the Yankees did that immediately and according to independent sources (i.e. baseball america and all other prospect rating services) came out of it with more top tier talent.

The other issue is that this prospect could have waited 2 weeks if he was really worth it. Maybe the Phillies thought they had to up their offer to what he could have gotten 7/2, but they also probably realized he was the best talent available now and to not lose him they could overpay to get him. It is probably not a dramatic overpay, but it is certainly driven by the Phillies having money to spend and few places to spend it.

Overpaying a player in a market where prices are dramatically depressed is still a win for the Phillies. Instead of trying to accuse people of not knowing what they are talking about, try making a point that explains the economics here in a more rational way.

[Austinfan]

If this prospect waits two weeks, he's now competing with the next wave of premium LA prospects, so while there would be more money available, most of it is committed to the top 30 signings (which have already been arranged for the most part). So no telling if he gets a better or worse offer.

[Florida_Sunshine]

But the Phillies only had the money to spend because they were out and traded for allotment. Are you now saying they did so without any player in mind? Because I am thinking they only did so with a deal with this pitcher in place. Do you agree with that? Are you still thinking they could have done this same deal with the Orioles early on?

The Orioles obtained some of their allotment as a salary dump of two players to the Braves, that is all that was.

As to your comment about the Phillies now not spending all of their allotment, one, it is not over yet, and two, the allotments come in certain predetermined amounts from what I have read, so it is likely that the amount of bonus will likely not match the allotment purchased.

I merely questioned your thought process as I did not see it. I allowed you to present the case you didn’t know what you were talking about.

[andyb]

The prospect pretty clearly would have gotten less by waiting 2 weeks. It is not just other teams' commitments though. It is that there is a larger supply of talent out there to compete with. We don't know for certain he got a larger bonus by not waiting, but there is plenty of circumstantial evidence that he did.

The Phillies would also have gotten less by waiting. They can spend money NOW and LATER by making this allocation deal. That means they get more talent by spending now. And international talent prices are depressed by the market rules (Yoan Moncada got $60 million including the penalties as a true free agent). So the Phillies get to participate in a skewed market at a greater level because they spent now rather than later.

[andyb]

Issues with your statement:

Allocations had little value this year. Teams were in the penalty. Allocations were cheap.

Second, the Orioles have cash flow issues. Spending the $850K would have been tough for them with the attendance cratering and them owing the Nats lots of money in their cable TV dispute.

The Phillies probably thought this guy was the best guy they could get on the market. It was rational to trade for allocations because they are cheap. They are also one of the few teams with positive cash flow and the ability to spend more internationally (i.e. the Yankees and Dodgers and Red Sox and Cubs are all tapped out and can't spend more).

It is perfectly rational to overpay here to get a good prospect that your organization would not get by waiting. All he had to be was better than Eshelman or whatever the price of the allocations were.

[julio]

A post was merged into an existing topic: July 2, 2019 International Signing Period

[allentown]

So it seems that every year when this market opens up the top players are already basically signed by teams and it all moves pretty fast

Yes, when we signed Ortiz for $4 mill, we clearly had made the verbal agreement a year before the signing was announced. There was reporting at the time that he was no longer regarded as a $4 million prospect, but that the Phillies honored their bonus commitment. (He still was regarded as a plus prospect, just not in the multi-million $ bonus category).