On his ESPN.com blog, Keith Law writes that the draft pick compensation system in baseball needs to be eliminated.
The real intent of compensatory picks was to try to place a drag on free-agent salaries: A team should be willing to pay less for a free agent if part of the price of signing him is a lost draft pick.
In some cases this year, those attached draft picks aren't just dragging down salaries but are limiting markets entirely. Signing Jason Varitek will cost a team its highest unprotected draft pick; the same goes for Juan Cruz and Orlando Cabrera. All three of these players -- and perhaps others -- are facing reduced interest from clubs because they are not deemed worthy of the loss of a pick. Unless you're the Yankees, where you might only be giving up a fourth-round pick for signing a player because you've signed higher-rated free agents already, you don't want to surrender a first- or second-round pick to sign a catcher with a bat that's below replacement level.
Law also thinks taking draft picks out of the equation for free agents might loosen up the trade market, as teams would then work harder to get something in return for players they're sure to lose.
Back to the point of limiting markets, however, I've been wondering if the draft pick cost is a reason why the Tigers haven't made a move on Juan Cruz (or Brian Fuentes, though his financial demands are another obvious obstacle), who's a Type A free agent. Perhaps Detroit has decided not to sign any player who'd cost them a draft pick.
(The Tigers did pursue Kerry Wood, who was also a Type A. However, Billfer reminded me over instant message that the Cubs didn't offer Wood arbitration, so signing him wouldn't have cost a draft pick.)
Just to clarify, Detroit would not lose its first-round selection (ninth overall) in next year's draft by signing someone like Cruz, as those in the lower half of the league standings have their picks protected. (At least they got one perk from finishing in last place.) A Type A free agent would cost them a second-rounder, however.
And that is not insignificant, as we're talking about a slot that has yielded players like Cody Satterwhite and Danny Worth - both of whom could soon be major league contributors - in recent years. Under those circumstances, would signing Cruz be worth the price?