The Mets were not expecting to have a big draft this year. Having sacrificed their first-round pick to the Phillies in order to sign closer Billy Wagner, the Mets didn’t have a selection until the 62nd overall pick. Considering the generally weak draft class, the organization had few goals beyond building some organizational depth.

In reality, however, the Mets’ 2006 draft took a serious step in the wrong direction one week before the picks began. Upon closer inspection, don’t blame the Mets for missing out on one of the more intriguing arms available, blame Major League Baseball.

To explain what happened, we need to go back to the 2005 draft, when in the 17th round, with the 509th overall pick, the Mets selected Pedro Beato. A native of the Dominican Republic who moved to New York in his early teens, Beato pitched at Xaverian High School in Brooklyn. He showed tremendous promise early on, touching 92 mph with his fastball as a sophomore. In his junior year, Beato added another 1-2 mph on his fastball, and the 6-foot-6-inch flamethrower suddenly looked like a sure-fire first-round pick. Then disaster struck. Beato felt a pop in his elbow, and doctors found a torn ligament. Before he was ever paid to throw a pitch, he would require Tommy John surgery.

Tommy John surgery is no longer the black eye on a pitcher’s record that it once was. As medical technology has progressed, so has its success rate. At this point, pitchers often return from the procedure throwing even harder than before they were injured, as the new ligament – actually a transplanted tendon from the leg – turns out to be stronger than the original. Most teams now see the procedure as simply a delay in a pitcher’s development rather than a long-term concern.

The recovery time from the procedure is in two stages. The return to the mound takes between nine and 12 months, but the full return to form doesn’t occur until year number two. Beato followed that pattern in his senior year at Xavierian, as the lightning arm could now only muster a high-80s fastball, and he seemed tentative to really let it go as he adjusted to pitching post-surgery.

With his draft stock taking a significant dip, Beato and his advisors (“advisor” is the term for an agent who is working with an amateur while not jeopardizing his eligibility – but we all know the truth) decided that the best route would be for the youngster to pitch at St. Petersburg Junior College for one year, allowing him to be treated as a draft-and-follow. The Mets had been on Beato for years and seemed like a perfect suitor. They selected him in the 17th round.

The draft-and-follow process (the official term is DFE: Draft, Follow, Evaluate) has its benefits for both players and teams. When a team drafts a high school player, that team retains the rights to sign that player for almost one year, with those rights being relinquished one week prior to the following year’s draft. The only way for the signing rights to be lost is if the player attends classes at a four-year college.

That leaves two-year colleges as the destination for many young talents looking to improve their value from where they are originally drafted. It could be for a player recovering from an injury (like Beato) to regain his previous form, for a physically immature player to grow into his body and add power or athleticism, or for a team to take a longer look at a player who they discovered late in the process. Yankees catcher Jorge Posada is one of the most successful draft-and-follows in baseball history, signing nearly a year after being a 24th-round pick and spending a year at a small Alabama community college.

For Beato, the gambit worked. Fully recovered from surgery, his fastball was topping out at 96 mph and, with more advanced coaching, he added a darting slider and improved his changeup. He was surely a first-round talent once again, and the Mets were willing to sign and pay him. With no first-round pick of their own this year, they certainly had room in the budget to ink a potential hometown hero, and most of baseball expected Beato to sign before the deadline for somewhere just over $1 million.

Then, on the morning of May 30, teams were shocked to find out that the deadline had come and gone without a deal. Pedro Beato was back in the draft.

Why the Mets failed to sign Beato is veiled in secrecy, though a few details have since been leaked. In reaction to skyrocketing bonus figures, MLB now provides each team with “recommended” bonus figures for each draft position within the first 10 rounds. While this is not like the NBA, where the assigned money for each pick is carved in stone, there are vague penalties for going outside these recommended figures, and to do so, one must file a request with Major League Baseball that is subject to a review process. Penalties for exceeding bonuses in the past have included fines and greater difficulty in getting approval to exceed recommended bonuses in the future.

According to those close to the Beato negotiations, Major League Baseball stepped in and “recommended” that the Mets not exceed a figure of $750,000 – roughly second-round money – in their offers to Beato. The ramifications of paying Beato seven figures, which by all accounts the Mets were willing to do, are unclear, and may never be known, as there is nothing in writing to define exactly what the penalties are; according to some sources, it is clear that the penalties this year are stronger than in the past.

MLB’s right to do this is questionable at best. The league does not step in to free agent negotiations, limiting what a team can offer a player, and yet it places severe limitations on the draft-and-follow process. What is the function? Well, it certainly does nothing to curtail bonuses. Beato went to Baltimore with the 32nd overall pick in this month’s draft, and will surely get his million-plus dollar requirement. So if Baltimore, by drafting him this year, is allowed to give him well over $750,000, why weren’t the Mets, who drafted him first, also allowed to do so?

The Beato example is a clear sign that the Major League Baseball’s draft has some troublesome loopholes and that MLB has a lot of work to do to ensure things improve.

Mr. Goldstein is a writer for Baseball Prospectus. For more state-of-the-art analysis, visit www.baseballprospectus.com.