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Gausman Signing Bonus - Parameters

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hoosiers Hangout Grand Counsel

hoosiers

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Kevin Gausman was drafted by the Orioles as the fourth overall pick in the first round. Baseball America reports that 10 of the top 15 first rounders have signed. Gausman is among the five who have not signed - which also includes the third and sixth overall picks.

The MLB recommended slot for the fourth overall pick is $4.2M. Two of the three players drafted ahead of Gausman have signed. The first overall pick, Carlos Correa - a HS SS, signed for $4.8M - well below slot of $7.2M. The second overall pick, Byron Buxton - a HS OF, signed for $6.0M - just below slot of $6.2M. The fifth overall pick, Kyle Zimmer - college RHP, signed for $3.0M - below slot of $3.5M. Finally, the several overall pick, Max Fried - a HS LHP, signed for slot of $3.0M. There are several ways to interpret the data. Overall, the average signing versus slot is an average savings of approx $750k, but if the first and seventh picks are thrown out, then the average savings of the second and fifth picks is $350k - IMO, a potential data point relevant in the Gausman negotiations.

Looking back at last year, the first two picks were college pitchers, Cole and Hultzen, and both received signing bonuses in excess of $6M. IMO, the most comparable pitchers and draft picks to Gausman from last year were Trevor Bauer another college RHP who was drafted fourth overall with a signing bonus of $3.4M as part of a guaranteed $4.45M four year MLB contract. Last year's fourth rounder was, of course, Dylan Bundy. The Os signed Bundy to a $4.0M signing bonus as part of a five year MLB contract with a guarantee in the $6.2M ballpark.

I am going to use the Bundy signing bonus of $4.0M as a ceiling.

The average slot savings of $350k discussed above would result in a $3.85M signing bonus.

I am going to use a floor here of the Bauer contract - RHP college pitcher - of $3.4M. IMO, this contract/data point is the most applicable comp among all of the data.

So, my range would be $3.4M to $4.0M. I will split this range in half and predict a $3.7M bonus.

I am not sure that pre-draft analysis would have pegged the difference between Gausman and Zimmer at $700K, but this amount does free up the $ necessary to land Velasquez. It would not be surprising to see the Os look to spend Bauer-like $ and keep it closer to $3.4M to $3.5M. IMO, it would be more surprising for Gausman to get the $4.0M that Bundy received last year.

One final complicating factor is the second round contract for Kline. I am not sure if he will be a difficult signing - as in looking for more than slot - or if the Os need to create savings against slot for this spot as well. We'll see.

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Frobby Hangout Grand Counsel

Frobby

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One final complicating factor is the second round contract for Kline. I am not sure if he will be a difficult signing - as in looking for more than slot - or if the Os need to create savings against slot for this spot as well. We'll see.

It would surprise me if Kline would mess up a chance to pitch so close to home.

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Can_of_corn Hangout Grand Counsel

Can_of_corn

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Or he could come back and be #1 and make more

He went #4 in a weak draft when injury concerns dropped Golito and contract demands dropped Appel. He might not have been top 10 in the 2011 draft. What are the odds he does higher next draft?

Would be a huge gamble for him to go back for his senior season.

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paulcoates Veteran All-Star

paulcoates

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He went #4 in a weak draft when injury concerns dropped Golito and contract demands dropped Appel. He might not have been top 10 in the 2011 draft. What are the odds he does higher next draft?

Would be a huge gamble for him to go back for his senior season.

He was a sophomore. He has two years to get better which I am sure he will.

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GoldGlove21 All-Star

GoldGlove21

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He was a sophomore. He has two years to get better which I am sure he will.

I have to agree with CoC (Can of Corn), the risk that he slips from being drafted #4 overall to a lower draft slot for various reasons (injury, deeper draft, better pitchers) is a lot greater than the chances of being drafted above 4th overall.

Now, if he didn't like the Orioles or the system was as it was just last year than maybe he would walk from our offer, but I do not see it. I think that Gausman would be crazy to walk away from being the 1st overall pitcher selected and think that he could get more money by being another year older.

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olehippi Veteran All-Star

olehippi

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He was a sophomore. He has two years to get better which I am sure he will.

I don't see him not signing and going back to school. I think he will sign for close to slot money, and hopefully will get better....much better....in an Orioles uniform.

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Trackmaster Major Leaguer Cup of Coffee

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....or fall even lower or get injured and not get a cent.

So, come out now and get #4 money, or come back later where you give your services away for free for another year in exchange for a longshot of moving up to #1 or #2 to get a mil or two more, but will probably be about the same area, but could risk losing it all.

Doesn't seem like a hard choice to me. It's just a game of chicken on both sides. Both paties stand to lose a lot by standing their ground.

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Can_of_corn Hangout Grand Counsel

Can_of_corn

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Looks like we have $4,579,700 left to spend on our no. 1 and no. 5 picks. Should be able to get it done.

Is your figure before or after the 5% overage allowed before loss of picks?

I am still hopeful they can carve out enough extra cash for an overslot or two.

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