Crow will now play for the Fort Worth Cats of the American Association of Independent Professional Baseball, while the Nationals will get a No. 9a pick in next year's Draft as compensation.
That will give Washington two top 10 picks, and if the season ended today, the Nationals would get the No. 1 overall pick because they have the worst record in baseball.
General manager Jim Bowden's face and voice said it all when he spoke to the media at 12:30 a.m. ET early Saturday morning.
"We worked extremely hard at this," Bowden said. "We wish him nothing but success and good luck. It's unfortunate. The only good thing is, in previous years, you wouldn't have gotten another first-round pick the next year. That being said, from our perspective, we'll have two picks from next year in the top 10. We just have to wait 10 more months.
"We are just disappointed. We wanted to sign him. We like the pitcher. ... We went above and beyond our budget."
In recent weeks, the Nationals were adamant that they would not give Crow a Major League contract. They wanted to sign him to a deal similar to that of pitcher Ross Detwiler, the team's 2007 first-round pick who received a $2.15 million signing bonus. The Crow camp, however, wanted a Major League contract and a $9 million signing bonus.
On Friday, both parties talked for hours, and the Nationals capitulated to some of Crow's demands. They offered Crow a Major League contract and a $3.5 million bonus, which is higher than what the Orioles gave fourth overall pick Brian Matusz.
"Matusz was the first pitcher taken in the Draft," Bowden said. "We went north of that offer to get a deal done and were not able to get a deal done. The marker for pitchers [in 2008] was very clear. We offered [Crow] more money than any pitcher in this Draft."
Bowden said that Randy and Alan Hendricks, Crow's advisers, never told the Nationals how much money they wanted until Tuesday. They asked for $9 million, and the offer didn't change until 11:40 p.m. ET. on Friday, when they moved down to $4.4 million.
"What they told us was the same as what every player we were considering for the first pick, which was they want a Major League contract," Bowden said. "In his case, they said, 'We want an out-of-box deal.' We gave them a Major League contract offer during this process. We gave them an out-of-box deal in this process. The only time we got a figure from them for the player was Aug. 12."
Randy Hendricks confirmed that the Crow camp came down on its offer, but the dollar figures are a little different from what Bowden reported.
"The Nationals offered us $3.3 million, and we said, 'No,'" Hendricks said. "We offered them $4 million, and they said, 'No.'"
The Nationals, however, were able to agree to terms with outfielders Marcus Jones and J.P. Ramirez, their 11th- and 15th-round selections in this year's Draft.
A Washington, D.C., native, Jones hit .318 with seven home runs and 49 RBIs this season as a junior at North Carolina State University.
Ramirez, 18, batted .521 (49-for-94) with eight home runs and 48 RBIs this season as a senior at Canyon High School in New Braunfels, Texas. He was named a second-team All-American by Baseball America and garnered his third consecutive All-State and fourth straight All-District selections.
The Nationals agreed to terms with 30 players selected in this year's Draft.
Bill Ladson is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.