The Web of Draft Pick Compensation: What Happened With Cubs Draft Picks This Year?

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The Web of Draft Pick Compensation: What Happened With Cubs Draft Picks This Year?

Chicago Cubs

homer at the chalkboardThere has been an awful lot of confusion regarding the upcoming MLB Draft and how the Cubs’ picks have changed over the course of the offseason.

With so many moving parts, and a seemingly never ending offseason, it’s been rather difficult to keep you all up to date (mostly because of those remaining loose ends).

But now that the dust has settled on Dexter Fowler – who has changed this conversation twice this week alone – I thought it might be time to dig into this moving target and explain the draft pick story, once and for all.

If you’re not interesting in the nitty gritty, stop here and know only this: the Cubs’ first selection in the 2016 draft will be their third rounder. That’s all you really have to know.

But if you want to know how this all came together, proceed …

Before the offseason began, the Chicago Cubs – like every team in baseball without a competitive balance pick – were scheduled to receive 40 picks in the 2016 MLB Draft. The Cubs had 40 picks, one in each of the 40 rounds of the 2016 MLB Draft.

Although MLB does not allow traditional draft picks to be traded like other professional sports (except those competitive balance picks), there is one way a team can lose or gain additional draft picks: Draft Pick Compensation.

In order to eligible for draft pick compensation, a team must extend its departing player a Qualifying Offer. That offer is a one-year deal, the value of which is an average of the top 125 player salaries from the previous season. At the end of 2015, the Qualifying Offer was set at $15.8 million dollars.

So, let’s see how the Qualifying Offer turns into a draft pick, using the Cubs as a hypothetical:

If someone played for the Cubs for an entire season and was set to leave for free agency, the Cubs could extend that player a Qualifying Offer. If that player accepted the offer (very rare), he would return to the Cubs for one more season at that pre-arranged price. If he declined that offer, though, and signed elsewhere, the Cubs would then receive an additional pick in the compensatory round of the draft – which comes after the first round, but before the second round. 

Whichever team that player ultimately signed with, would then lose their top overall pick in the upcoming draft (provided it was not among the top 10 overall picks – which are protected – in which case the team loses its second overall pick).

That does not mean that the Cubs would get that teams pick or that the teams are swapping picks in any way. All it means, is that the Cubs would receive an extra pick in a bonus round, while the signing team would lose their top overall pick.

The important thing to remember, though, is that even this hypothetical bonus pick in the compensatory round can be lost by the Cubs. Remember, a signing team loses its top overall pick, no matter where the pick comes from (even the compensatory round). Sign multiple players who received a Qualifying Offer? Lose multiple picks.

Okay, got it? Let’s see how these rules affected the Cubs, specifically, over the past few months:

At the end of the 2015 season, Dexter Fowler was set to leave the Cubs for free agency, and was projected to receive a big, multi-year deal. So the Cubs, in order to be eligible for draft pick compensation, extended Fowler a Qualifying Offer worth one year and $15.8 million – which he promptly declined (right move at the time, wrong move in retrospect).

At that point, the Cubs had all 40 picks and were expected to add a bonus pick in the compensatory round as soon as Fowler signed with any other team. Obviously, that didn’t happen, but that was the expectation at the time.

Similarly, about 600 miles south of Chicago, the St. Louis Cardinals were set to lose John Lackey and Jason Heyward to free agency. So they – like the Cubs with Fowler – extended both players a Qualifying Offer worth $15.8 million for 2016. Both players, rightfully expecting to get larger deals on the free agent market, declined their offers.

At that point, the Cardinals had all 40 of their picks, but expected to receive two bonus picks in the compensatory round – one for John Lackey and another for Jason Heyward. And, again, any team (other than the Cardinals) that signed either player would lose their top overall pick in the 2016 Draft.

On December 4, the Chicago Cubs became one of those teams, by signing John Lackey to a two year, $32 million deal. This meant, by signing Lackey, the Cubs lost their first round pick (their highest overall pick) in the 2016 MLB Draft. Separately, the Cardinals received a bonus pick in the compensatory round of the 2016 MLB Draft, for their loss.

At this point, the Cubs’ next highest pick in the 2016 MLB Draft came from the second round. If they were to sign another player attached to draft pick compensation, that’s the pick that would have been lost. (Remember, the Cubs expected to get a bonus pick in the compensatory round once Fowler signed elsewhere, but he hadn’t done so yet. So, technically, the second round pick was the Cubs next highest selection.)

Of course, one week later, the Chicago Cubs signed Jason Heyward to an 8-year/$184 million deal. Because Heyward was attached to draft pick compensation, the Cubs were scheduled to lose their second round pick (their next highest) in the 2016 MLB Draft. The Cardinals received another bonus round pick in the compensatory round, for their loss.

So far, so good? Here’s where things get slightly more complicated:

On Tuesday, it was widely reported that the Baltimore Orioles had signed Dexter Fowler to a three-year agreement worth $33 million. If that were true – which we now know it was not – the Orioles would have given up their top pick in the draft and the Cubs would have received a bonus pick in the compensatory round of the 2016 MLB Draft.

But, if you remember, the compensatory round comes before the second round of the draft. That means that that pick would have been the Cubs’ next highest pick (after the first rounder was lost for signing Lackey), and thus they were scheduled to lose it for signing Heyward.

So, when the news broke that Fowler signed with the Orioles, the expectation was that the Cubs were receiving a bonus pick which they would immediately lose, while re-gaining their second round pick – which was no longer the highest pick and thus, not the pick they’d lose for signing Heyward. At the time, folks correctly identified the Cubs’ second round pick as their highest in the upcoming draft.

Of course, Fowler did not sign with the Orioles, so none of that actually happened. Instead, Dexter Fowler signed with the Chicago Cubs and we had a lot to unpack.

But, by now, you should understand the fallout in regards to the draft. Everything goes back to “normal.” The Cubs never received a compensatory round pick, because Fowler never signed with the Orioles. Meaning that their second round pick – now still the next highest pick after their first rounder – was set to be forfeited for the signing of Jason Heyward.

So, in conclusion, the Cubs’ highest pick in the 2016 MLB Draft will now come from the third round: they lost their first rounder for Lackey, their second rounder for Heyward, and received no bonus pick for Fowler, because he did not sign with a different team.

And lastly, I’d like to add, so as not to confuse you, a brief bit on associated bonus pools:

Each draft pick in the first ten rounds comes with an associated bonus slot, the sum of which is the “bonus pool” to which teams are beholden to when spending and selecting players (lest they incur penalties). The bonus slot for each pick gets progressively smaller as you go through a round, as well as each round turns into the next.

So, the first pick of the first round has a bigger bonus slot than the second pick of the first round and both have much larger bonus slots than the first and second pick of the second round. Got it?

Because the Cubs already had a very low pick (97 wins will do that to a team) and now do not have a first or second round pick at all in 2016, their overall bonus pool will be the smallest in all of baseball.

In the end, it’s all worth it, because John Lackey, Jason Heyward and Dexter Fowler are all excellent players. Plus, you just now got to read over 1400 words on Draft Pick Compensation – and who doesn’t want that?

Author: Michael Cerami

Michael Cerami covers the Chicago Cubs, Bears, and Bulls at Bleacher Nation. You can find him on Twitter @Michael_Cerami