The Arizona Diamondbacks will have to wait for what the Baltimore Orioles do with the first overall pick in the 2022 MLB Draft. Orioles General Manager Mike Elias has popularized the “portfolio approach”, a term dubbed in Future Value by Kiley McDaniel and Eric Longenhagen, in Houston. The approach is to try to save as much as possible with their top selection without too much of a drop-off in talent then use the savings to make an over-slot pick with a high school talent that’s fallen well below his original expected range. By taking that approach, the hope is to be able to leverage a big signing pool into an impressive draft haul of talent. With Houston, this result has had mixed results but the successes have far outweighed the failures.

2012: Astros hit jackpot with portfolio approach with Correa, McCullers selections

The Astros were picking first overall in the first of three seasons in a row, with Jeff Luhnow more or less setting the team up to tank. At the time, Jose Altuve was getting his feet wet in the majors and George Springer was in his first full season in the minors before his 2014 debut. It’s also worth noting that this is the first year in which the current bonus slotting system was in play with stricter penalties for teams going over their total pool.

In Future Value, Kiley McDaniel and Eric Longenhagen wrote that the Astros had four players on their list for the first overall pick. Those four players were Puerto Rican shortstop Carlos Correa, California high school lefty Max Fried, Stanford righty Mark Appel, and Georgia high school outfielder Byron Buxton. Of this group of four players, only Appel hasn’t gone on to be a quality regular with their respective franchises. Houston ultimately took the player who gave them the best discount, with the team taking Correa first overall. Houston signed him to a $4.8MM deal, which is a $2.4MM savings over the recommended slot value of $7.2MM. For baseball reasons alone, Correa has been the best player in this draft with 35.2 career bWAR and a key player on an Astros team that won a title in 2017 and two more American League pennants in 2019 and 2021. He has a nonzero shot at the MLB Hall of Fame, depending on how the voters ultimately decide if the cheating scandal disqualifies him from the game’s highest honor.

The savings that the Astros got with the pick was invested in Lance McCullers Jr., a Florida prep right handed pitcher, who signed for a way over-slot deal of $2.5MM. McCullers’ bonus would be nearly double the $1.26MM slot bonus for the 41st overall pick in that draft. Over his career with Houston, McCullers was a key arm in their 2017-2021 title runs although injuries have limited his impact to only 9.7 bWAR. Rio Ruiz also signed for an over-slot deal as a third baseman, although he has bounced around different organizations and has put up a career bWAR of -0.3.

As a result of how well this approach paid off for Houston, this type of approach has been become popular for other teams in certain situations vs. best player available.

2013-14: Portfolio approach backfires

After a second year of finishing with the worst record in baseball, the Astros would have another top pick. The main candidates to go first overall that year were Stanford righty Mark Appel, Oklahoma righty Jon Gray, and UC-San Diego third baseman Kris Bryant. The Astros elected to once again go with the best deal and take Mark Appel first overall and signed him to a $6.35MM bonus, which was $1.44MM under the slot value of the No. 1 pick that year.

Appel would never quite be able to make the adjustments in the pros, going as far as their AAA affiliate in Fresno in 2015, but has not made it to the majors. He’s still pitching, right now a reliever with the Phillies AAA affiliate in Lehigh Valley. With a smaller savings compared to the previous year, the Astros opted to take over-slot deals with Jacob Nottingham, Austin Nicely, and Devonte German. Nottingham is the only player that made it to the major leagues, although he’s bounced around multiple organizations. Tony Kemp, Kent Emanuel, and Jason Martin although only Kemp played for Houston in 2017.

In 2014, the Astros were looking to take the portfolio approach for the third straight year. With the first overall pick, the Astros went for lefty Brady Aiken. They had agreed to an under-slot deal of $6.5MM, which would have given them a $1.4MM savings vs. a slot bonus of $7.9MM, but the physical revealed that Aiken’s UCL was smaller than average. While the ligament itself was healthy, that likely gave the Astros a bigger concern that the ligament would be less likely to hold up against the rigors of pitching. The Astros lowered their offer to $5MM, but Aiken elected to go to a Junior College and apply again for the draft the following year.

The fallout from losing Aiken’s slot value is they also lost Jacob Nix, a California high school righty, who had agreed to a way over-slot bonus of $1.5MM. That bonus was contingent on their ability to sign Aiken and have the savings from that pick pay for that much of an over-slot signing. Losing both players would torpedo Houston’s entire draft, which likely resulted in some changes in their scouting department, and would be a second season in which they were not able to reap the benefits of their patented portfolio approach.

In the case of both Appel and Aiken, both were considered the top player of their respective draft class and things didn’t work out. It’s just an illustration of how difficult it is to develop 18/21 year-old amateur players.

2015: Portfolio approach is great again as Astros successfully leverage a near-unprecedented draft situation

As a result of not signing Aiken from the previous draft, the Astros had a unique situation in which they had a pair of Top 5 selections. Three players were in contention for the top overall selection: Vanderbilt SS Dansby Swanson, LSU SS Alex Bregman, and Florida high school SS Brendan Rodgers. Swanson would be taken by Arizona first overall and Houston would take Bregman second. Bregman signed for another well under-slot deal of $5.9MM, giving the Astros over $1.5MM in savings. With the fifth overall pick, they would take Florida high school outfielder Kyle Tucker and signed him for a just under-slot bonus of $4MM.

With the rest of their draft class, they would take Daz Cameron with a supplementary 1st rounder and signed him to a massive over-slot deal of $4MM. Cameron would go on to be the centerpiece for the Astros to make the Justin Verlander trade two years in the future, which I consider $4MM well-spent. The Astros would pay for Cameron’s bonus with a string of under-slot picks although they would also go over slot for Trent Thornton and then a huge over-slot deal with Patrick Sandoval in the 11th round for $900K. Sandoval was traded to the Angels for catcher Martin Maldonado, who has split duties behind the plate and most of their postseason games due to his defensive skills and how loaded the top half of their lineup is.

2016: Different circumstances changes approach

2016 would be Elias’ final year running the Astros drafts, but for the first time they would not be making a top five selection. After their first taste of the postseason, the Astros would pick 17th overall. Instead of going for the portfolio approach, the Astros opted to go best player available and took Texas high school righty Forrest Whitley and signed him for $650K over-slot. Whitley had quickly emerged as a top prospect, but has stalled out recently due to injuries and hasn’t pitched since 2019. The different circumstances mandated a different approach, because the talent level at 16 may be at least a full tier under someone they could get in the Top 5.

2019: Generational talent mandates BPA approach

After the Astros lost Dave Stearns to the Milwaukee Brewers, Elias was promoted to the Assistant GM role. Since they’ve been picking at the bottom of the draft from 2017 and beyond, there isn’t much of a reason to dissect their approach since it has little impact to explaining what Elias would do with Baltimore. Elias took over after the Orioles bottomed out and had the worst record in baseball in 2018.

In their first draft, the portfolio approach wasn’t tested as they lucked into a generational catching prospect in Adley Rutschmann. Rutschmann was considered one of the most surefire #1 overall pick since Gerrit Cole in 2011 with the ability to be an All-Star behind the plate and equally as good a bat at the plate. The only other player who was in the conversation for the pick was Bobby Witt Jr., the son of a pitcher who last pitched in Game 6 of the 2001 World Series for the D-backs, a shortstop with tools that scouts drooled over.

With the choice of two great amateur prospects, they elected to take the player at a higher position of scarcity in Rutschmann first overall while Witt went with the very next pick. Rutschmann would sign for a slightly under-slot, but a then record $8.1MM signing bonus. The Orioles would save $320K in their pool, which they would use with their very next pick in infielder Gunnar Henderson. The Orioles would go way over-slot for the Alabama high school SS, which would be also paid for with a couple under-slot deals with Kyle Stowers at 30th overall and a pair of seniors in Johnny Rizer and Jordan Cannon with their 7th and 10th round selections. While not quite a full portfolio approach, this appears to be successful as both Rutschmann and Henderson are the Orioles’ top position player prospects.

2020-2021: Elias takes portfolio approach to Baltimore

Sooner rather than later, we would expect to see Baltimore return to the same strategy that Elias made popular with Houston. In the 2020 Draft, Spencer Torkelson was the consensus #1 overall pick although a lot of mocks had Baltimore taking Vanderbilt’s Austin Martin. Instead the Orioles would do what Elias is known best for and make a way under-slot deal for Heston Kjerstad. Kjerstad was arguably the top college bat in the class, but a limited set of tools outside of the bat had him projected closer to 10th than 2nd. Kjerstad signed for over $2.5MM under slot, the biggest savings pick that Elias has gotten between both franchises.

When they took that deal, they passed on Max Meyer, Asa Lacy, Emerson Hancock, Nick Gonzales, and Martin. Time will tell if Kjerstad will be the right choice, as he hasn’t played a game as he deals with the fallout of myocarditis. The condition was diagnosed not too long after he signed and threatens to end his career before it can even start. With the rest of their draft, the Orioles took Jordan Westburg 30th overall as a shortstop who projected well defensively but had major swing and miss concerns. They would take Hudson Haskin to a slightly over-slot deal with their 2nd round selection, a sophomore-eligible outfielder out of Tulane. However the big savings were put to use in their selections of Florida high school 3B Coby Mayo and Iowa high school pitcher Carter Baumler with their 4th and 5th round selections.

In 2021, they would have a chance to select Jordan Lawlar but would ultimately pass on the Texas high school shortstop in lieu for Colton Cowser. Cowser was a left-handed bat with an advanced approach with the ability to either be a passable defender in center or above-average to plus at a corner. Lawlar would go on to be taken with the very next selection by Arizona. Cowser would sign for $4.9MM, which would give Baltimore $1.28MM in savings. Most of the savings went to John Rhodes, an outfielder from the University of Kentucky with a $1.375MM bonus in the 4th round and Texas high school catcher Creed Willems for $1MM in the 8th round.

2022: What can we take away from this?

The totality of Elias’ approach in the draft can be summed up in this table.

The overall average savings with those first round picks was roughly $1.17MM under slot. If we remove Tucker, who wasn’t the first pick in his year, and Whitley, who was the only player not in the Top 5 of this list, the savings jumps to an average of $1.56MM vs. slot with the top selections under Elias. If Baltimore were to continue the portfolio approach, they’d be looking for someone to cut a deal for possibly under $7MM in signing bonus. There are plenty of names who could be appealing to that approach such as Brooks Lee, Jackson Holliday, or even Jacob Berry if they want to go with a steep haircut like with Kjerstad two years ago.

Elias’ history with top five picks in the draft would suggest if there isn’t a clear-cut player they have in mind (Rutschmann, Tucker, Whitley), that Baltimore will elect to take the portfolio approach and go for savings with the first overall selection. I have no idea how the Orioles see the top of the draft board, what they’ll sign for, and if they think there are a larger pool of candidates to go over-slot with the 33rd and 42nd picks. There are two guys in the draft I like for and would be fine if Arizona goes full-slot with the #2 overall pick in Elijah Green and Druw Jones. One will be guaranteed to be there, if not both. My gut feeling is that Elias will go to the portfolio approach if he doesn’t like Jones or Green for $8MM+, hoping to cash in on a Top 20 guy who falls to the 33rd overall pick.