Spring 1998: The J.D. Drew Saga
Imagine a system which allows Major League Baseball to sign hundreds of players each year for a fraction of their market value, with no protest from the Players' Association. Now imagine the owners' own ineptitude threatening to destroy this system. This is the story of J.D. Drew, Scott Boras and the amateur draft.
The owners instituted the amateur draft in 1965 to keep themselves from bidding up the value of top prospects. While the reserve clause bound players to their organization for life upon signing their first contract, amateur players remained free to sign with whichever club offered the most money. This freedom allowed untested 18-year-olds to sign for more up-front cash than a veteran could earn in ten years. But after Rick Reichardt used his bargaining leverage to extract a $205,000 signing bonus from the California Angels in 1964, MLB decided to eradicate this sliver of free market.
The result was the amateur draft, which, from the owners' perspective, proved an instant success. In its first year, #1 pick Rick Monday signed for $104,000, barely half of what Reichardt had received the year before. The next three #1 picks signed for $75,000 each. Reichardt's bonus remained the most ever paid to an amateur until the Mets signed Darryl Strawberry for $210,000 in 1980 -- but by then, Strawberry's bonus was only 150% of the average player's salary, compared to the 1400% Reichardt had obtained.
The amateur draft was that baseball rarity, a successful, legal way to reduce salaries. Baseball's antitrust exemption and precedents from other pro sports effectively kept disgruntled draftees from challenging the process in court. The Players' Association didn't object to the draft: it doesn't represent draftees, and its members knew that money not needed to sign amateurs would likely wind up in their own pockets.
The draft allows major league clubs to obtain exclusive negotiating rights to players completing their senior year of high school. A player who opts for college is again eligible for the draft after his junior year. The drafting club retains exclusive negotiating rights until one week before the next year's draft, in which unsigned players can again be drafted. The draft thus keeps salaries down by forcing players either to sign with the drafting club, or to sit out a year in hopes of receiving a better offer from someone else.
The draft rules defined draft-eligible players to include those who had never "signed a professional baseball contract." When they were written, "professional baseball" included only major league clubs and their minor league affiliates -- but after the Northern League and other independent minor leagues formed, the rules weren't amended. Scott Boras, a former Cardinals and Cubs farmhand who had become one of the game's most powerful agents, saw a loophole.
Boras represented Jason Varitek. Now a Red Sox catcher, in 1994 Varitek was a Georgia Tech senior hailed as the year's best catching prospect. The Seattle Mariners drafted Varitek in the first round of the 1994 draft, but when Seattle refused to meet his asking price, Varitek signed with the St. Paul Saints of the independent Northern League. Boras asserted that since Varitek had signed a professional contract, under MLB's own rules he was no longer eligible for the draft and would become an unrestricted free agent one week before the 1995 draft. The Mariners averted a showdown by signing Varitek before the deadline.
At the time no one knew what a player like Varitek would be worth in the open market. That would soon change, thanks to a series of mind-boggling blunders by club executives. Major league rules require clubs to tender contracts to their draft picks within 15 days after selecting them, but in 1996, only one team met this deadline. As a result, four of the top 12 picks sought and won free agency. #2 pick Travis Lee soon signed a four-year, $10 million contract with the Arizona Diamondbacks, a deal worth $7.5 million more than #1 pick Kris Benson received from Pittsburgh. Now everyone knew the stakes.
MLB tried to close these loopholes before the 1997 draft -- but it missed one. While the rules relating to contract tenders were amended to give clubs the opportunity to cure any violations without losing rights to their draftees, as of draft day, the definition of "first year player" in the Major League Rules still included Northern Leaguers. This left open the tactic Boras had recommended to Varitek. In 1997, Boras represented Florida State outfielder J.D. Drew. Drew, picked #2 in the 1997 draft by the Phillies, demanded "Travis Lee" money of $11 million; the Phillies countered with a "standard" offer of $2.05 million. When the Phillies wouldn't budge, Drew signed with the Northern League; Boras declared that he would become a free agent a week before the 1998 draft.
Months later, MLB revised the rule to "clarify" that players who had signed only with independent leagues were still subject to the draft: Drew could play in the Northern League until he was 40 without ever being able to choose his own major league employer. Drew and Boras fumed. They could have sued over the rules change or the draft itself, but such a battle could keep Drew out of the majors for years, and the courts have repeatedly affirmed the legality of the NFL and NBA drafts.
Enter the Players' Association. While Drew wasn't eligible for membership in the MLBPA, the union was determined to protect the principle, established in a prior arbitration, that MLB couldn't change the draft rules without its consent. And by bringing the matter to baseball's independent arbitrator, the MLBPA could bypass the courts and obtain a ruling on Drew's status before the 1998 draft. Management spokesmen warned that a ruling for Drew could render the draft obsolete.
On May 19, arbitrator Dana Eischen upheld the MLBPA's grievance -- but Drew may not benefit from the ruling. Rather than declaring Drew a free agent, Eischen held that because Drew wasn't a member of the MLBPA, his rights weren't subject to arbitration. Drew's status will therefore be determined by the Executive Council, which is virtually certain to send him through the draft once again. If they remain dissatisfied, Boras and Drew can now turn to the courts for redress, armed with Eischen's ruling. Thus the J.D. Drew saga is not over -- and the Northern League remains an option for draftees dissatisfied with their offers. Let's see what happens with the draft Class of 1998.
Copyright © 1998 Doug Pappas. All rights
Originally published in the Spring 1998 issue of Outside the Lines, the SABR Business of Baseball Committee newsletter.