If the
magnitude of deals for free agents like Robinson Cano and Jacoby Ellsbury
already seem too high to you, the market rate might be even higher than you see
on the surface. Both Cano and Ellsbury were signed with draft pick compensation
attached. If MLB teams are evaluating the draft picks accurately, the valuation
of Cano and Ellsbury are even higher than just their contracts on surface. How
much should the draft picks discount these contracts? To answer the question,
we have to determine how much the draft picks are worth by themselves.
