Recycling cash for unsigned draft picks

Every general manager and scouting director from all 30 clubs wants to sign their first-round draft picks. After investing millions of dollars in scouting salaries and travel and using the time of your team’s top evaluators, not signing your first pick is the ultimate failure in amateur scouting.

This year, the Blue Jays were the only team that didn't sign its first-round pick, with right-hander Tyler Beede turning down somewhere in the $2.5 million range to attend Vanderbilt. The next highest unsigned pick was catcher Brett Austin (54th overall), who spurned the Padres to attend NC State. Obviously, these teams had budgeted a lot of money for these players, but what happens to the cash that goes unspent?

Over the past three years (2008 to 2010 drafts), there were five first-round selections who did not sign. Teams that aren’t able to sign their picks have several alternatives on how they can reinvest their money back into player talent, including:

  • • Save the full amount with interest to put toward the compensation selection in the first round of the following year’s draft. (Every team gets a compensation pick for failing to sign a first-rounder, but you don't get another compensation pick if you fail to sign that one.)

  • •Invest the money later in the draft for high school, high-ceiling talent that the club normally wouldn’t be able to sign.

  • • Utilize the money for international signings.

  • • Decide to add the dollars to the major league payroll, if the team is in a pennant race.

  • • Decide not to reinvest the money due to overall budget issues.

  • Let’s take a look at how each of the five clubs reallocated their dollars over the past three years after they were unable to sign their first-round picks: