Under ex-Scouting Director, now Vice President – Scouting, Ray Montgomery, the Brewers executed drafts in 2015 and 2016 that were perhaps as impressive for their impeccable talent and bonus slot pricing as they were for the actual prospects landed. Montgomery aggressively used the Milwaukee bonus pool in 2016 to land C Payton Henry, 3B Chad McClanahan, SS Trever Morrison, CF Zach Clark, and LHP Blake Lillis, bolstering a heavy set of top rounds with tools that will be sweet enough to dream on during long development paths. Johnson essentially picked right back up where Montgomery left off, even though the approach to the first five rounds in 2017 look quite different than the 2016 path. Now, awaiting the draft signing deadline, there is a quartet of interesting high value high schoolers to watch for Milwaukee’s draft. According to BrewCrewBall’s running draft tracker (by now a Milwaukee fan’s draft institution), the Brewers front office has approximately $521,000 remaining to spend prior to any of the harshest MLB slot penalties kick in. Paying 75 percent tax on such an overage would price remaining prospects at a cost of approximately $912,000 to the organization.

Following my previous survey of historical draft value, the table below estimates the historical value range for the four highly ranked (BaseballAmerica Top 500) Brewers high school players that remain unsigned. I compare those values with the 2017 MLB draft slot that those players would have been assessed at had they been picked earlier, according to their ranking.

Take a look at the draft slot total for these four players: based on the 2017 draft protocol set by MLB, these four players almost perfectly fit the remaining allowable non-penalty overage that the Brewers can spend prior to the deadline. This is quite a nifty value play: Milwaukee will have to shell out significant cash to sign these players, but their value is not so high as to tank the draft into severe penalty zone (after a 10 percent overage, the Brewers will have to pay significant taxes on the overage and begin forfeiting draft picks). Moreover, the Brewers could simply prioritize one prospect or another. For instance, Milwaukee could decide to spend their remaining money on a projection pitching project like Christian Santana, or they could sink more money into the athletic-but-raw Leugim Castillo in order to add to their collection of low-minors toolsheds. In terms of historical value, these players as an aggregate group are worth the $912,000-with-penalty price ta

Even if none of these prospects sign to the Brewers, the draft strategy worked in the sense that the front office stuck with a specific set of gambles and priced them out accordingly. This pricing system and lack of risk aversion puts the Brewers in a position to make a few last minute signings that further expand system depth. Of course, if the Brewers farm system was volatile entering 2017, although promising several potential impact roles for those risky profiles, the club has doubled down on that profile in this current draft. This is the luxury of a deep system with much of the big impact assets at the advanced stages of the minors; the Brewers can afford to gamble on boom-bust in 2017, and perhaps move to more conservative drafting strategies in 2018 and 2019 as the advanced prospects depart via trade or through MLB graduation (or just keep doubling down!). It’s difficult to assess a draft within three years, let alone three weeks, but it should be clear that this current front office are aggressive in terms of pricing risk and talent profiles, and that the 2017 draft exemplifies this approach as a strength for their talent acquisition.

Although Brewers fans are years away from knowing whether these picks worked out, it is worth taking a look at who the Brewers used their first five picks on.

2B/LF Keston Hiura, Round 1, Pick 9
Hiura is a college junior from UC Irvine, ranked #14 by BaseballAmerica. He grew up in Valencia California. He turns twenty-one at the beginning of August.

Hiura was a top-ten pick due largely to his bat. He set the UCI batting average record at .442 this season. His batting average improved in each season at UCI. He doubled his walk total from the 2016 season to the 2017 season, going from 25 to 50. Hiura displayed modest power in his time at Irvine, but relied mostly on high double numbers and solid contact.

Hiura doesn’t have a set position. He has spent time in centerfield and at second base. He spent most of this spring at designated hitter due to an elbow injury, which left some experts concerned about the lingering effects of the injury. In Hiura, the Brewers got an established college hitter, who they likely wouldn’t have taken if they had any concerns over his injury.

Tristen Lutz, CBA, Pick 34
Lutz is still just 18 years old, he turns 19 in August. He is an outfielder from Arlington Texas, ranked 35th overall by BaseballAmerica. He is a big kid. He has a 6-foot-3, 210 pound frame and uses all of it to hit for big power. He played centerfield in high school but because of his lack of speed is expected to make the move to a corner spot.

Lutz has a long time to develop before he is anywhere close to the big leagues, but on tools and potential alone he has one of the brightest outlooks in this years draft.

Caden Lemons, Round 2, Pick 46
Lemons is a tall, right-handed pitcher high school pitcher from Vestavia Hills, Alabama. BaseballAmerican ranked Lemons 57th. He showed up this Spring with a velocity bump, hitting as high as 97 MPH on occasions. He is also just 18-years-old, and doesn’t turn 19 until December, leaving him plenty of time to grow into his 6-foot-6-inch frame and possibly add a couple miles per hour to his fastball.

Lutz is a long-term project, but if everything goes right he has the body and the fastball to be a major league contributor one day.

KJ Harrison, Round 3, Pick 84, ranked 68^th by Baseball America
Harrison is a soon-to-be twenty-one-year-old college junior from Hawaii, who played his college ball at Oregon State University.

He is listed as a catcher but did not spend much time behind the plate his junior year. He was drafted for his offensive skills, not his ability to hold his own in the gear. He spent most of the year at first base. Some scouts believe he can make his way back behind the plate, according to MLB.com.

The Brewers seem to be betting on his catching abilities. If he can develop his defensive skills behind the plate the Brewers might have just found a steal of an offensive catcher in KJ Harrison.

Brendan Murphy, Round 4, pick 114
Murphy is a high school senior from Mundelein, Illinois. He’s regarded as the top prospect from Illinois in this year’s draft, and BaseballAmerica ranked him 119th. He’s a left handed pitcher with a three pitch mix. He doesn’t turn 19 until January first, he still has plenty of time to grow and mature as a pitcher. His fastball sits in the low 90s. He uses a changeup to complement his fastball along with a slow breaking-ball.

Murphy is as polished as a high school arm will get. Like many of the Brewers earlier picks, there is a lot of time to develop for this teenager but he has a solid head start as far as pitch arsenal goes.

Updated Cashing Out OFP
Market Trading Strategies
Redesigning Compensation

From an organizational standpoint, the Draft is frightfully inefficient, forcing clubs through 40 picks to potentially return two or three MLB players (which would be a moderately successful draft in most cases). In this regard, the Draft poses a paradox of sorts, for MLB teams have the advantage of underpaying talent in the draft while also being forced to sink significant resources in terms of research, humanpower, and organizational structure to see Draft Day surplus materialize on the field. Of course, any alternative solution (such as pure amateur free agency) is untenable without full revenue sharing across MLB clubs, so here we stand with an imperfect institution for filtering talent into the professional baseball ranks.

Last week, I analyzed the Brewers’ organizational surplus returned and developed from the major “Rebuilding Era” trades (roughly July 2015 onward). What is stunning about those trades is that the organizational surplus has appreciated significantly over a relatively brief period of time. While the MLB players (from Jonathan Lucroy and Carlos Gomez to Khris Davis and Francisco Rodriguez) and prospects (like Cy Sneed and Trevor Seidenberger) traded away from Milwaukee have depreciated in surplus value (overall), the Brewers have largely returned a group of talent that has appreciated (via trade). Here, one might think about Josh Hader (who marched from “just interesting” straight to the top ranks of the Baseball Prospectus Top Ten lists between 2016 and 2017) in terms of elite talent, to Ryan Cordell (who is perhaps solidifying a very clear floor for an MLB role, regardless of whether he delivers on a starting role ceiling) in terms of depth talent; and that’s before one even attempts to quantify the value of Freddy Peralta, Carlos Herrera, Josh Pennington, or Yeison Coca (who are probably a year away from clear valuation in public prospect analysis).

Naturally, the trade return surplus does not define the organization’s full surplus, as the team can also use the Draft and International signings to build a well-rounded club. So, how does the Brewers draft-and-develop surplus compare to the trade surplus?

This problem proved difficult to solve. There are at least two ways to assess draft talent once players are within the organization: (1) players can be judged against the historical value of their slot (this comparison would place a player’s Overall Future Potential (OFP) surplus against the depreciated historical MLB production from the draft slot, which means that the risk of a player reaching the MLB from the draft is taken into consideration when evaluating a player); (2) players can be judged against their own annual prospect evaluations (for example, Monte Harrison’s surplus could be assessed by comparing the fluctuations between his 2015 assessment as a “High 6 first-division regular/All-Star” and his 2017 assessment as a volatile potential five-tool centerfield package). Method (2) is quite tricky, however, because it includes a “Chicken and Egg” problem; for example, in the case of Harrison, if he materializes value as a 50-to-60 OFP MLB profile, was that initial assessment always his value, and was the fluctuation simply evidence of the time necessary to graduate a high school prospect to the MLB? Or was the fluctuation something real, actually placing the 60 OFP tag in doubt? It is not clear to me that I have the methodological tools or proprietary analytics available to answer these questions, so I am using method (1) to rather crudely assess a player’s OFP (or MLB production, once graduated) against their historical draft performance.

From the get go, there is one extreme bias built into this system, and that bias is “reaching the MLB.” This seems unavoidable, to my mind: as former President Doug Melvin said, “I’d rather make the cover of Sports Illustrated than BaseballAmerica” (interestingly leaving the question open about how he’d feel on the cover of the BP Annual…). Meaning, MLB teams do not draft and develop to possess 45 OFP, 50 OFP, 60 OFP, or 80 OFP prospects; they draft and develop to turn 60 OFP prospects into 60 OFP MLB players (or at least that’s the hope). That there are a full range of MLB performances between the extremes of a “prospective OFP” and “actual MLB floor or ceiling” does not render it more valuable to assess draft slots at their ability to produce prospect rankings. Prospect evaluations are held against the assumption that value is delivered at the MLB level (as a side note: this leaves a rather interesting question about trading prospects for MLB wins, which is another possible application of the MLB draft, and one that basically allows clubs to cash out variations of uncertain futures. Basically, a “long-term uncertainty” [the prospect] is turned into a “short-term uncertainty” [the MLB player], which hopefully delivers MLB wins).

In order to assess surplus, I divided the system into “earlier” and “later” drafts. The earlier drafts span 2010-2013, representing the last remaining prospects on the MLB 40-man roster (such as Yadiel Rivera), and the last Bruce Seid draft before the righteous strategy shift in 2014. The 2014 Seid draft, and 2015-2016 Ray Montgomery drafts, represent the “later” drafts. This is also convenient because the 2014-2016 drafts have not seen a system graduate to the Brewers (Brandon Woodruff is probably closest). Since each of these periods comprise around one hundred system players to track, I attempted to focus on top prospects, “interesting depth guys,” and (for the earlier draft) players who reached the Brewers club or were traded.

2010-2013 Drafts: Of Devin Williams and Jimmy Nelson
While the early Bruce Seid drafts are generally know by Brewers fans for their inability to deliver impact MLB stars to the Brewers club, the drafts should be known for their fantastic depth trades. Witness the organizational players involved in impact moves for the Brewers, from the Gerardo Parra buy-in (yielding Zach Davies) made by Melvin to the Jason Rogers and Cy Sneed trades (to name a few) made by GM David Stearns.

It’s difficult to estimate whether surplus performance for this draft would have been better by assessing each prospect against their historical OFP progressions, rather than being assessed against the value of their respective pick. This is especially tough with someone like Jimmy Nelson, whose career is in progress and is essentially what a “middle rotation” report (from some of his middle year scouting reports) looks like at the MLB level. The 2011 First Round picks truly were as bad as advertised, costing the club approximately 5 WAR based on the historical value of those picks. However, one ought never assess a draft solely by the early rounds, as Jacob Barnes is poised to recover at least 2 WAR (and perhaps more, either through several seasons’ playing time or eventual trade return) thanks to his transformation as an impact reliever from the 431st pick. In terms of either MLB surplus or OFP, Devin Williams remains the most valuable player of this group (based on 2015-2017 assessments), even if the righty is currently injured and therefore has more risk in that profile.

2014-2016 Drafts: Brandon Woodruff and Cy Sneed
For all the clamoring about the 2015 and 2016 drafts, these prospects demonstrate simply how valuable reaching the MLB is, and how much less valuable OFP surplus is by comparison. Prospects like Lucas Erceg, Corey Ray, Trent Clark, and Cody Ponce (among others) may have great overall upsides, but the risk of failing to reach the MLB diminishes the polish from those OFP. Each of the aforementioned prospects reached the Brewers’ 2017 Baseball Prospectus Top Ten (the only players drafted by the Brewers to reach the Top 10), and their collective surplus compared to the historical value of their respective picks is $15.2 million (or roughly 2-to-3 WAR). Still, in terms of overall surplus, these three drafts are worth at least $120.7 million in depreciated surplus (which could reasonably be cashed into approximately 20 WAR via trade or successful development). Brandon Woodruff is the most valuable prospect among each of these drafts, another fantastic win for Bruce Seid’s last draft.

I want to use a prospect such as Mario Feliciano or Demi Orimoloye to demonstrate the sheer difficulty in assessing prospect ceilings. Orimoloye is known as one of the toolsheds from his draft, and the outfielder is putting it together at the plate during his first full professional season. There’s obviously a ways to go with Orimoloye, which was known from the start. Orimoloye is an extremely risky prospect, but one that could have a potential starting right fielder profile if everything breaks the right way. But at this point, with so few tools materializing (and rightfully so, it’s merely halfway through his first full season), is Orimoloye a 50 OFP (average MLB RF) profile? Does the promise of five potential tools make him a 60 OFP (impact RF) ceiling? I split the difference between Orimoloye and Mario Feliciano, who is a catching prospect working in his first full professional season. The idea that Feliciano could remain behind the plate makes him an immediately more valuable prospect, even with all the extreme risk considered. But there is a problem with the calculations here; shifting Feliciano from an “unknown” ceiling to a 50 OFP ceiling changes his surplus from approximately $0.1 million to $7.0 million, which is an extreme shift (basically one full WAR). The same issue exists with Orimoloye, who may have the surplus value most deflated by my approach. In this case, I’d rather err on the side of caution than hype, but I want to explain this issue to demonstrate and acknowledge that this is all quite subjective and ready to fluctuate.

Finally, I’d love to point out that although Milwaukee has failed to return surplus that matches historical value of the draft picks used in these 2014-2016 drafts, the Cy Sneed trade (for Jonathan Villar) has almost perfectly covered that deficit. This is an extreme argument in favor of trading prospects; there is a sense that cashing out the risk of developing organizational depth into immediate MLB wins will improve the overall value of the franchise. This is especially so because that traded surplus can be applied at the MLB level, immediately, and that’s the whole point: however it happens, via trade or development, the purpose of the MLB draft is to deliver MLB wins.