Jonathan Gordon explores unfairness in Major League Baseball draft.

Finance Senior's Research Accepted by Academic Journal

By Christine Cox | Spring 2015

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When you grow up like Jonathan Gordon did — starting T-ball before kindergarten, pitching for a state championship high school baseball team and entertaining offers to play college baseball — you take it to heart when you see college seniors routinely lowballed in the Major League Baseball draft.

“It’s happened to one of my teammates and could happen to a friend in the next draft,” says Gordon, a senior finance major at Mendoza. “And had I chosen to play college baseball, it could have affected me.”

What he’s talking about is this: If college seniors want to play professional baseball, they must essentially accept whatever signing bonus they’re offered, even as little as $1,000, for example. Conversely, high school players, junior college players and juniors from four-year institutions have greater leverage because they can reject low signing bonuses and potentially enter a future draft to earn millions.

Deeply curious about what was happening with this and why, Gordon decided to write a research paper during the summer of his sophomore year. He collected and analyzed draft data and started typing. And eventually, with guidance from his Business Law professor, Tonia Murphy, his paper was accepted by an academic journal.

“Foul Ball: Major League Baseball’s CBA [collective-bargaining agreement] Exploits College Seniors in the MLB Draft,” will be published in the University of Texas Entertainment and Sports Law Review this spring.The paper has already been cited by Forbes and received special recognition by the Academy of Legal Studies in Business when Gordon presented at the annual conference in August.

As “Foul Ball” explains, teams are incentivized to offer low bonuses because there is a recommended limit on the amount to be spent on signing bonuses. Teams that spend more than the limit are penalized. Basically, teams can be seen as having a limited pot of money to spend on signing bonuses and try to get as much as they can out of it. If they can pay low amounts to vulnerable college seniors, they have more money to pay to other recruits.

Gordon cites MLB draft statistics from 2013 that show college seniors in the first 10 draft rounds received an average of 19.77 percent of the recommended amount for signing bonuses. By contrast, college juniors received signing bonuses worth nearly 96 percent of recommended levels.

In addition to illuminating facts, Gordon questions the ethics and morality of the current system and applies academic research on ethics to his argument for reform. “I do like the open free market, but I think in some sense the seniors do need to be protected,” he says. “The draft system is not technically illegal, no one’s breaking any laws per se, but there is something inherently wrong with it.”  

Ultimately, Gordon argues that the MLB should guarantee a certain percentage of recommended amounts for the first 10 rounds of the draft. “For example, a college senior drafted in the first ten rounds would have a minimum guarantee of 50 percent of the recommended slot,” he writes. Players drafted outside the first 10 rounds should be guaranteed a minimum amount dependent on the round in which they are drafted.

“By implementing a minimum guarantee for college seniors, Major League Baseball and its Players Association would protect these players from being unfairly exploited,” he concludes.

As well as learning about his subject matter, Gordon says it was valuable to develop his research and writing skills, especially with Murphy’s help. “Really, I sent her a very casual email and just asked her to look at my draft,” he says. “She sent back a bunch of comments and within a week she sent a whole package of articles for me to look at. I was completely blown away by the help and her interest.”

Murphy also helped Gordon submit the article to journals for publication and helped him land his presentation spot at the Academy of Legal Studies in Business meeting. “I owe Professor Murphy a thousand thanks,” he says.

Murphy says it’s rare for an undergraduate student to be published in an academic journal. “It is especially impressive that Jonathan had the initiative to undertake this research project not as part of any course or for academic credit, but purely out of his active interest in the topic,” she said. “It is a great paper.”

After graduating from Notre Dame, Gordon, a native of Las Vegas, plans to study law school at Northwestern University. A former pitcher on a high school baseball team that won every state championship during his high school years, Gordon is particularly interested in how the law applies to the sports industry.