In a recent comment I referred to the draft system as a kind of legal collusion. I didn't explain what I meant, and thankfully no nit-picky lawyers were on the site to tell me how wrong I was using that term in that context.
But today Baseball Prospectus's Joe Sheehan wrote the column I would have if I had time and knowledge.
His basic point is that teams have an incredible amount of artificial leverage over their draft picks in negotiations based on the simple fact that the player can only negotiate with one team. Once they're drafted, that team owns their rights, and they can either sign or find another line of work for a year. They can't shop their services to the highest bidder like a hot shot lawyer or MBA grad straight out of school could. The fancy Econ 101 word is monopsony--a market with only one buyer, which drives the prices way down (as opposed to a monopoly, where there's only one seller, which drives prices way up).
In a free market, which is essentially what baseball had in the first half of the 20th Century before Branch Rickey invented the farm system, there would be no draft and teams would just have to bid on amateur players like they do free agents. Imagine what a guy like Crow could get if the Nationals had to bid against the Yankees-Red Sox axis of evil to get him. It wouldn't be tens of millions, but $4-5 million wouldn't even be part of the conversation.
So when you hear Bowden say (and I don't mean to single him out on this, every team talks this way), "We continue to have dialog with Alan Hendricks regarding Crow...But we are not going to give out Major League contracts [to Draft picks]," it's nonsense. He's drawing an arbitrary line between major league players and prospects that has nothing to do with Crow's real value to the team.
Crow's potential and talent has enormous value in real dollars. But because of the fact that amateur baseball players in the U.S. have essentially no rights, he's not going to get even a fraction of that value until he's earned 3 seasons of service time and qualifies for arbitration. He won't really get his fair market value till he's going into season 7 as a free agent.
Look at the money that gets handed out in the DR for teenagers. You're telling me that a 16-year-old Dominican kid was worth $1.6 million, and a fat, diabetic, fat, below-average-when-healthy, fat DH playing 1B is worth $10m, but a 21-year-old college junior pitcher with the best fastball in all of college baseball according to BA and three MLB-quality pitches right now isn't "worth" $5 million? And you're buying the right to pay him the league-minimum for his first three full seasons in MLB? That's just nutso.
The difference between Smiley and Meat and Crow is that the DR is a free market. FA is a free market. The draft isn't. The Nationals could pay double slot on every first-round pick from here till the end of time, and they'd be getting a bargain.
I don't blame the team for negotiating down to the wire and using all their leverage to save money. There's really no reason not to. But don't believe for one second that there's any scenario in the world that involved the Nationals paying more than they "should." Compared to what Crow would get in anything resembling a free market, he's getting robbed no matter what he gets.
And that's why I've thought all along that it makes no sense that the team would be so cheap that they'd let him walk. They won't let him walk because they're cheap, hard-assed businessmen. They have to know that they're taking the kid to the cleaners at $5 million.
Finally, don't get me wrong. From a distant, moral point of view, pro athletes all make ridiculous salaries. If we paid people according to the value of their work to society, then teachers, trash collectors, and firemen would make millions and athletes would play for tips. But we're not talking about what's right, we're talking about what's fair in the context of a capitalist system where there's huge amounts of money being made from the talent that's being bought and sold.