Well it's easy to illustrate with the number one pick. The slot value of the number one pick is $8.4 million. The slot value of number two is $7.8 million, number three is $7.2 million, and so on. If you are one of potentially five guys who could be picked number one you could fall into a slot of anywhere from $8.4 million to $6.2 million. Or, like Jordan Lawler you could fall to six ($5.7 million), or like Kumar Rocker you could fall to ten ($4.7 million). So the Pirates go to the top guy they are looking at and ask him what it will take to sign him. If he says the full $8.4 million then the Pirates move on to the next guy, and that guy isn't going to get $8.4 million, or even close to it, from anyone else.
So maybe they went to Davis and he said he'd take $7.4 million. That saves the Pirates $1 million to spend on someone else, and it also ensures Davis that he is going to probably get more money, maybe even a lot more money, than he will if he just lets the chips fall where they may.
Since they went to a slotting system there is only one overall number one pick who did not give the team that drafted him a discount on the full slot value. Because the proverbial dollar in the hand is worth two in the bush. If Davis' people think that he could fall as far as 5th, then any dollars they get him over the slot value for being taken fifth is more money than what he would likely get if he just lets it play out.