Since the new CBA was announced, many people have speculated what the changes mean for the amateur draft and international free agent market. Instead of hypothesizing about how the Yankees will be affected, we went straight to the man who runs the club’s player development operation. NoMaas’ Sensei John Kreese sat down with the Bombers’ Senior VP of Baseball Operations, Mark Newman, to discuss how the labor deal changes the way the Yankees acquire amateur talent.

Sensei John Kreese: In general terms, what is your opinion on the new Collective Bargaining Agreement and how it relates to acquiring amateur talent?

Mark Newman: By definition, it wasn’t designed to help the Yankees. It actually tilts the balance to an uphill position for us, both domestically and internationally. In the past, under the old draft and international system, we designed ways to compete in talent acquisition. Quite a few of those ways have been eradicated.

SJK: Many baseball pundits would actually disagree with what you just said. The general opinion is that this hurts small market teams more than big market teams.

MN: No, no. It could hurt a small market team that wins, like Tampa — when it comes to where they select in the draft and their ability to acquire extra draft picks. We haven’t had any extra draft picks because we haven’t offered arbitration to the free agents who’ve left. If you look at the amount of extra draft picks we’ve had over the past five years, we’re at the bottom.

SJK: Do you think that’s a function of the salaries the Yankees pay and the risk that players will actually accept arbitration?

MN: Yeah, yeah, that’s part of it. That happened with Bobby Abreu. He signed for $5 million with Anaheim when he went out there, I believe it was. What he could have received with arbitration with us was substantially above that. The arbitration number sometimes has nothing to do with market value.

SJK: Back to this big market-small market argument again, if you look at spending in drafts, the small market teams dish out the most money. Granted, some of this is due to landing the top picks of the draft which demand higher bonuses, but they still have gone over-slot in other rounds. The argument is that the new rules will limit the aggressiveness of small-market teams who can’t compete with teams like the Yankees and Red Sox when it comes to free agency.

MN: Well, those teams are still going to draft high. They will have more money allocated to them to pay. We’ve been declawed. We don’t have the ability to pay over-slot now. Our ability to respond creatively to the landscape has been reduced.

SJK: Ok, well, if you’ve been declawed and have less money to spend, what will need to change and/or improve in regards to your strategy?

MN: The strategy is the same — get the best players — but, our tactics will have to change. We have to come up with different ways to develop players. All teams that are in similar situations to the Yankees will have to come up with new ways to remain competitive [in the draft] in this new environment. Those ways will be proprietary. We’re not going to advertise those.

SJK: So how does it work? You will be assigned a signing bonus pool for the first 10 rounds of the draft, and each pick will have some type of defined value?

MN: Correct.

SJK: Do you have to offer the defined value to your pick, or somewhere in that range?

MN: No, my understanding is that you don’t. If you don’t sign the pick though, you lose the money allocated to that pick. This stuff is hot off the press. Not everything has been committed to writing, and I don’t think they want everything committed to writing yet. They want to maintain flexibility, so if they see something they don’t like, they can fix it.

SJK: Do you think these new rules essentially eliminate “signability” cases?

MN: Certainly. I think they’ll severely limit the amount of players who fall in the draft. At the same time, we’ll have a better understanding of all this in two years. There’s a whole bunch of TBD [to be determined]. There will be a lot of trial and error in how we respond to the new environment. Everybody will try to game the system. Nothing wrong with that, that’s competition.

SJK: Do you think the draft will start to look more like the NBA and NFL drafts, where the perceived talent level decreases with each pick?

MN: Yes, the perceived talent level will more closely follow the order of the draft. Now, of course, the key is that beauty is in the eye of the beholder, and nowhere is that more true than in baseball. There will always be opportunity to evaluate more accurately. Our guys aren’t obviously going right to the NFL and NBA. In baseball, there is more room for projection and more room for error.

SJK: One of the arguments against the new rules is that 2-sport stars will give more consideration to pursuing the other sport.

MN: Yeah, I heard that too, but how many of those kids actually exist? The Bubba Starlings of the world are few and far between. If someone has the choice between playing for Kansas City or going to Nebraska, they’re still going to get a boatload from Kansas City if they’re a high pick.

SJK: Any idea what your draft pool amount will be at this point?

MN: It looks to be around $4.5 million.

SJK: And how does that compare to what you typically spend?

MN: We’ve spent mid-6s [million] the last couple years. We’re middle of the pack — 16th each of the last two years.

SJK: You see, though, that supports the argument that small market teams tend to be the biggest spenders.

MN: Well last year, it was Pittsburgh, Washington, Kansas City, Arizona, Seattle, Chicago Cubs, San Diego, Toronto, Boston, and Baltimore — they all spent above $10 million. Some of this small-market stuff is overstated. Toronto is not a small-market. Washington and Chicago are not small markets. The language needs to be more precise with some of this stuff.

SJK: Why is it that the Yankees have been middle of the pack when it comes to spending on the draft? Do you find more bang for the buck on the international markets?

MN: We’ve been higher relative to the competition on the international market. Internationally, we were 7th last year. The year before we were 9th. Only one year in the last seven years have we been #1 internationally. We haven’t been at the top there either.

SJK: Is that a function of what’s been allocated to pay for major league talent?

MN: No, it’s the way we’ve evaluated the market. There’s a crazy exuberance in the international market sometimes — irrational exuberance like Greenspan said. Someone gets into the market that hasn’t been in it very heavily, and you see kids go for $4-5 million. For instance, one year we signed Jose Tabata. He was the #1 guy on our list and was the highest-paid international player at $550,000, I think we paid. He got off to a good start, and everyone was like “Oh yeah!”, and the next year the Mets signed Fernando Martinez for something around $1.3 million. The highest we ever paid for a pitcher internationally was $800,000 and that was for Arodys Vizcaino [now with Braves]. Now, four years later, we have people telling me I should spend $4 million down there and that’s just crazy.

SJK: Well, every year, you’ll likely have one of the lowest spending pools for international free agents.

MN: It’s going to be a challenge. The way we look at it, there’s no point in moaning and groaning about the rules. We have to evaluate better, we have to do everything better. We’ve always been at a disadvantage in the draft. Through some strategic planning, we were able to make some headway. That’s going to be hard now. We’re all competitive people. We all think we’re smarter than we are, and we’ll try to figure something out.

SJK: Are your operations with Latin academies affected at all by these changes?

MN: No, we’re still intent on being big players internationally.

SJK: Well Mark, that’s all I got. Always fascinating and good to talk with you.

MN: Alright, see ya.

Many thanks to Mark for providing us with his insight and giving NoMaas this direct access to the Yankees.