Kobritz: Carter Stewart challenges MLB Draft
BEYOND THE LINES
Major League Baseball instituted a reverse-order draft in 1965, severely limiting the negotiating leverage of amateur players. That may soon change.
Carter Stewart, a 19-year old right-handed pitcher from Florida, was the eighth pick of the first round by the Atlanta Braves in the 2018 MLB draft. He refused to accept the Braves’ bonus offer because it was significantly less than the $4.98 million “slot value” of the pick. Instead, he attended junior college and scouts expected him to be drafted in the second round this year, which would carry a slot value of less than $2 million.
Each MLB team is limited to a finite amount of money they can spend on draft picks, based on where they finish in the standings the previous year. Every position in the first ten rounds of the draft is slotted a specific bonus. Teams can exceed the slot amount, but cannot exceed the total bonus pool without facing penalties ranging from fines to the loss of draft picks.
Baseball’s draft is as much about cost control as it is talent distribution. The talent-acquisition cost is minuscule compared to the production players provide. While great for teams, it restricts players’ earning potential. So instead of waiting for this year’s draft, Stewart and his agent, the inimitable Scott Boras, decided to take a detour.
Prior to this year’s draft, Stewart signed a six-year contract with the Fukuoka SoftBank Hawks of Nippon Professional Baseball’s Pacific League, which will guarantee him $6 million, with performance bonuses and incentives that could triple that amount. Depending on his performance in Japan, Stewart’s next contract could dwarf his first one. A number of pitchers – including Masahiro Tanaka of the New York Yankees and Yu Darvish of the Chicago Cubs – were developed in the Japanese system and have signed nine-figure contracts in MLB.
Boras has railed against MLB’s free agent draft for years, claiming it undervalues talent. For proof of his argument, we need only look to Stewart’s contract. And provided he doesn’t get hurt, a big if with pitchers, Stewart can return to the United States as an unrestricted free agent at the age of 25, two or three years earlier than if he had signed with a MLB team.
Boras, never at a loss for hyperbole, said, “[Carter Stewart] had no opportunity to get true value in the American system. When the system failed him, [the Japanese] system allowed a far better choice and opportunity. This is the beginning of where Japan may be for American youth — the land of the rising arms.”
Boras’ prediction is premature. Not every teenager is a Carter Stewart in the making, willing to abandon his family, friends and familiar surroundings for a new culture and language 7,500 miles from home. Stewart is the first player to snub the draft and sign a long-term contract in Japan, which speaks volumes about the risks inherent in such a move.
Stewart’s gamble could pay off, or it could turn into a nightmare. Either way, the baseball world will be watching closely.
Jordan Kobritz is a non-practicing attorney and CPA, former Minor League Baseball team owner and current investor in MiLB teams. He is a professor in the Sport Management Department at SUNY Cortland and maintains the blog, sportsbeyondthelines.com. The opinions contained in this column are the author’s. Kobritz can be reached by email at firstname.lastname@example.org.