The Pros and Cons of the International Bonus Pools

Miguel Cabrera - Al Bello

Breaking down the international bonus pools and looking at the international draft and how it could change baseball worldwide.

There has been a lot of talk about MLB implementing an international draft. It is almost all negative bordering on hateful.

I hate to have a strong opinion on something unless I am fully informed, so I dove into some research. I wanted to know if everyone was right or if there was anything good about this change. I'm not talking from the penny-pinching, let the owners get rich side, more money is better. Getting good talent for cheap is always better but doing it for no other reason than to save money insults the players you sign and the people who get them to the point they are worth signing (buscones).

Just because you paid less for the player doesn't mean you won the negotiation, especially if you have to deal with the same agent again. They may feel cheated and raise the price when they have a different player you want. Everyone should feel like they won a little in a negotiation most of the time as long as there will be future interactions.

MLB has to realize that the international players need to win a little here if a draft goes into effect. I want to look at it and see if there is any way they are winning in this deal because keeping the international pipeline flowing well is vital to the health of MLB in the future.

Ben Badler at Baseball America is the best in the business at gathering and writing about international signings. He wrote reviews on every team in February and March and compiled a ton of great information on signing bonuses. As a BA subscriber (which I recommend to everyone), I had access to all of the bonus information from 2012 signings.

Some were prior to July 2nd and some were after. I didn't take the time to separate that. Either way, it is 365 days worth of data and it is just one year but I thought it would be interesting to line up that year worth of data compared to what the proposed international slots will be.

A quick explanation is that there are 120 slots, 4 for each team, ranging from $3,246,000 down to $135,300. These are not hard slots but recommendations just as in the June draft. They are also tradable but with complicated rules to read but not to understand once you get the concept.

A few unique things occurred in 2012. Jairo Beras signed for huge money. Jorge Soler signed a long deal with a big bonus. Omar Luis and Gerardo Concepcion were paid highly, mostly because they are Cuban. Julio Urias bonus may have been inflated because he's from Mexico and the team takes a large chunk of his bonus. For the purposes of this exercise, I took out the three bonuses for Urias, Concepcion and Luis for the first step of this exercise.

If you don't want to read a lot of numbers and an in-depth break down, jump to the conclusion.

The top ten bonuses last season totaled $22.8 million. This year's slotted amount for the top ten is $19.9 or 87.3% of last season. Considering there is no Jorge Soler this year so is this fair? I say yes this year, maybe not next year. Predicting Cuban defections is impossible. If you take the bonuses for 3-12, eliminating Soler and Beras, and they totaled $14.5 million last year. The slots for this season are $15.75 million, or 108.5%. There are 11 slots that are in the seven figures. Last year, 15 players signed for seven figures. That is a decrease.

Last year 40 players recieved $500,000 or more. The slots only allow for 26. This is the biggest impact to foreign players in my opinion. Last season, 100 players signed for $200,000 or more. The slots allow for 95 this year. That's pretty close. So where is the gap? Let's look at the 12-100 range. This is the bulk of the talent. Last year, those players totaled $39,466,500. The slots allow for $33,151,200. That is 84% of last year and a $6.3 million dollar gap. That's a big gap but there are still a lot of loose ends here.

Last year there were 66 that signed for $50,000 or more but fell outside of the top 120. $50,000 is the number that is used for penalty implementation in signing bonuses. If a player signs for less than that, it is not counted for penalizations, so I'm not looking at those. I don't know if these are complete totals or not but it will get the point across.

The cumulative value of these bonuses was $6.9 million dollars. This is $6.9 million not accounted for in slots. What MLB has done to rectify this gap is allowed each team a $700,000 base to work with above these slots to spend at their discretion. $700,000 multipled by 30 teams is $21 million dollars. Well that is a lot more than $6.9 million. So, what does that mean?

Overall, the total bonuses of the top 120 players last year was $66.7 million. The 120 slots this season add up to $57.2 million. That is 85.7% of last year that MLB suggests to spend on these 120 players.

All the signings from 2012 totaled $82.8 million dollars. Between the 120 slots and the base amount, MLB says teams can spend $78.2 million dollars. A difference of $4.6 million. Omar Luis and Gerardo Concepcion were $7 million alone. $4 million and $3 million respectively. Take out Soler and you are at $69.8 million. That means there is $8.4 million dollars MORE allowed for this year's class compared to last as long as there are no big money Cuban defectors.

Conclusion

This is not a bad system. It really isn't. People saying it will kill baseball in Latin America or that it is screwing over amateurs and lining the pockets of owners are over stating this by a very large extent. If I could rip owners for being greedy and taking money from poor players, I would. This isn't the reason to do it. This is nearly as well as this system could have been implemented and it still allows room to adapt as it is not yet a draft system but a solid base in place for a draft to be built upon.

The biggest losers in this system are the Cuban defectors and Japanese players who aren't free agent eligible or anyone their signing takes money from. If a draft is to happen, this needs to be addressed. These players are valuable and should not be forced into the same category as the younger players just because they don't fit easily elsewhere. It takes money from the younger players and it shouldn't. That is the glaring flaw. The age needs to be changed or a special supplemental slot needs to be added based on the players estimated talent. There are enough intelligent people in baseball to make this work without incident but I won't bet it will work.

If I would have laid out the bonus slots, I would have used $500,000 for a base instead of $700,000 and changed the equation for the slots so that it would have allowed for higher bonuses for slots 12-100. Since this isn't a draft, it's not as crucial but if it were a draft, which it may be next year, I would say that it is a must to change, especially if there is a hard slot. The $700,000 allotment is a lot of money that a handful of teams won't spend. This money comes out of the bonuses paid out to players and I don't like that.

As I stated earlier, there is $8.4 million dollars more out there this year compared to last, barring Cuban defectors, and it is possible that much doesn't get spent by teams and that would be a shame. I feel that if teams don't spend or trade at least their 4 slotted amounts, they should be punished. I'm not sure how, but taking away revenue sharing in an equal amount of their lack of spending could be fun. Taking that money and investing it in rebranding MLB in Latin America or spending it on the RBI program would be good investments.

Will the owners spend every penny? No, but teams will maneuver and utilize this the best they can, I would hope. The teams who don't spend money on amateurs can trade off all of their slot allotments and gain something else. Not everyone wants to deal with the high risk nature of the international signing system. They no longer have to and are still allowed to have chips in the game. I appreciate this to some degree. It does reward the lazy teams that do not care about working in Latin America and that is a shame. It also penalizes teams that have built in-roads over the last couple decades in these places. I don't like this either but those relationships will still help some, even if a draft is implemented.

What I like the most about this is, as a fan, is order and efficiency. It allows me to know who the best 16 year old foreign born players are. I don't want to have to scour the web looking for signing bonus data and who signed where. It is very inefficient. The future of the game should not be hidden.

Why shouldn't we know about the next Miguel Cabrera, Miguel Sano or Luiz Gohara as early as we possibly can? An international draft will help with this. It's one of many steps baseball can make to improve the future of the game for the fan. It's adding efficiency to a world that is essentially operating in chaos right now. Efficiency is the new way of the game. This is a step in the right direction.

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