MLB Draft Cheat Sheet
Bonus Pools- Each pick in the draft’s top-10 rounds are assigned a “slot value” and then each team’s picks are summed to give a total bonus pool available to that team. The kicker here is that the pick has to actually sign to get that amount added to your pool. If a player doesn’t sign, that amount is then deducted from the team’s pool and may impact the ability to pay other draft picks over their slot amount.
Top-10 Round Picks- If you are drafted in the top-10 rounds, essentially you are signing. Out of the roughly 350 or so picks within the top-10 rounds, ~ 3-5 players total will not sign. (0.01%)
Negotiations- How do teams know that their top-10 round picks are all going to sign? Each player has what is loosely called an “advisor” who the teams will be in contact with prior to the draft. In the very top rounds it may be an executive from the team that is in contact with the advisor. When you start getting to day two of the draft it’ll be more an area manager contacting the advisors. On the third day of the draft it’ll be an area scout keeping in contact with the family.
Once teams have an idea of the number it will take to sign a player, they assign their own valuation of that player and stack their draft boards. As the draft is actually going on, teams will call players 15-20 minutes prior to their pick (lots of people are calling several players, so there can be multiple conversations going on at the same time). Teams will ask the player if they will sign for $xxxx and they need an answer within ____ minutes.
Why do teams leave them with so little time to make life-changing decisions? To prevent the advisor from taking their offer and shopping it around to other teams stating, “we have an offer of this amount of money, will you beat it?” The second is to obviously place pressure on a kid and his family to turn down what is generally a large sum of money in reality.
Now, it is common for teams to be speaking with multiple players at the same time and may get a “yes, I will sign” response from several players at the same time. This means it is not at all uncommon for a team to tell a player they are going to take them with their next pick and then not actually do so because they opted for another player who said yes. I have witnessed this heart break as kids listen and expect to hear their name called, only for the online broadcast to announce another player. At the top of the draft, those guys are obviously going to get drafted anyway, but often they have to settle for a lesser dollar amount than a team told them they would pay (as the slots go down, so does the money for the vast majority of players). On the third day though, I’ve seen multiple kids be told they were going to get picked at the next pick, then not be drafted at all in the entire draft! This happened just last year to a good kid, talented player, had his whole family there. He ended up signing with the Braves after the draft for the same amount of money he had agreed to, so it had a happy ending.
Tuition Money- What is often left unsaid with players who are negotiating to play professional baseball is that in addition to their bonus money, they also get a set amount of money to pay for school after their playing days are over. This money is based on the school they’re committed to and the number of years they have left. So, if a player is committed to Miami and is in high school, they’ll actually get more money for school than they would from their baseball scholarship. This money is above and separate from their actual bonus amount. The money is placed into a trust account and is only accessible for payment to school upon their completion of their professional career (or concurrently in some cases). Free college and a nice bonus makes it a tough decision for most players.
10th Round- You see it often, fans of teams relax after their player gets through the 10th round because they know that if you get picked in the top-10 rounds you are signing. But why do I see so few high school players drafted in rounds 8-10 and so many of the players drafted are college seniors? It goes back to the fact that a player has to sign to get the bonus pool amount for that amount. So teams take seniors, who have no option of going back to school and will assuredly sign, and they offer them anywhere from $1,000-50,000 to sign. This allows the team to have more money to spread around to other players in other slots (going over the assigned slot to get a more talented player).
Of the 30 draft picks in the 10th round last year, 18 of them signed for $10,000 or less. The first player to sign for less than $10,000 actually happened in the 6th round last year, when teams start to take their favorite “senior signs.” 7 of the 30 picks in the 8th round signed for $10,000 or less. 15 of the 30 picks in the 9th round signed for $10,000 or less.
After the 10th round- It is quite common for the 11th round to have far more talent taken than there was in the 8-10th rounds. The reason for this is two-fold: 1. Players who do not sign after the 10th round do not count against their bonus pool, so there is no risk to the team if the player does not sign (outside of losing that opportunity to take another player). 2. After the 10th round, any player that signs still goes against your bonus pool, but only the amount over $125,000. This means teams get a “free” $125,000 head start on signing the player.
As a quick math example: Player A is drafted in the 10th round and wants to sign for $250,000. His slot value is $142,200. The team takes Player B in the 11th round and he wants $10,000 to sign. The net impact to the team is a bonus pool reduction of $107,800 and they have no slot impact for the 11th round pick.
Now, take those same two players, but reverse the rounds they go in: Player B signs for the same $10,000 and this results in a net bonus pool addition of $132,200. Player A still signs for $250,000 in the 11th round, but now his net bonus impact is actually a decrease of the bonus pool of only $17,200 rather than the $107,800 if they had taken him in the 10th round.
$142,200 - $250,000 = -$107,800
$142,200 - $10,000 = $132,200 + $125,000 = $232,800 - $250,000 = -$17,200
Late Picks- It happens every year where a player is drafted in the 36th round and fans always raise an eyebrow and say, “I figured he’d go way earlier than that” or “his draft ranking makes that a steal!”
Most times, in that area, players are being picked as a favor to the scout or player. As a favor to the scout to get his ledger to reflect a pick for a player they “turned in” meaning scouted and turned in a report. But even more likely is it is a favor to the kid to get him off the board as he already knows he’s going to college and he wants the stress of having teams calling him asking what it will take to get him to sign to be over.
Rarely, teams take those guys as a fallback plan in case one of their high picks fails a physical or backs out of a commitment and they have some extra money to throw at a kid late hoping he might decide that he can’t actually turn $500,000 and free college rather than stick to his stated $1 million price tag etc.
Over Bonus Pools- Why do I see teams spend over their bonus pool amounts each year? The reason is that there is only a monetary penalty up to 5% over the bonus pool. It is a dollar-for-dollar tax on going over your pool up that amount, but there are no other penalties. After that, draft pick penalties in the next draft start taking place and no team has ever encountered those penalties under the new system.
Most teams go over their bonus pools, meaning the real hard cap is at the 5% overage. Teams utilize this amount in signing kids after the 10th round where they get the free $125,000 and then can sweeten their offer without fear of losing the bonus pool amount from a top-10 round pick.
For the team with the most bonus pool money this year- Arizona- this is a significant impact because they can go over their pool by as much as $804,685 without any penalty other than money. Add to that the $125,000 in free bonus money after the 10th round, and Arizona essentially can add an additional million dollar player outside of their own pool. They can choose to spread that out to multiple after 10th round players (and spend $250,000 etc. on each) or go with one major talent not expected to sign and give him $750,000+ to turn down late in the process.
If Arizona, Baltimore, Kansas City, Miami takes one of your recruits/players, you still have to sweat all the way to the deadline due to their size of their bonus pools adding the extra 5% to play with.
Conclusion- I hope this helps offer some clarity to the complexities of the draft and how teams manipulate dollars to maximize the talent they can add to their systems.
Bonus Pools- Each pick in the draft’s top-10 rounds are assigned a “slot value” and then each team’s picks are summed to give a total bonus pool available to that team. The kicker here is that the pick has to actually sign to get that amount added to your pool. If a player doesn’t sign, that amount is then deducted from the team’s pool and may impact the ability to pay other draft picks over their slot amount.
Top-10 Round Picks- If you are drafted in the top-10 rounds, essentially you are signing. Out of the roughly 350 or so picks within the top-10 rounds, ~ 3-5 players total will not sign. (0.01%)
Negotiations- How do teams know that their top-10 round picks are all going to sign? Each player has what is loosely called an “advisor” who the teams will be in contact with prior to the draft. In the very top rounds it may be an executive from the team that is in contact with the advisor. When you start getting to day two of the draft it’ll be more an area manager contacting the advisors. On the third day of the draft it’ll be an area scout keeping in contact with the family.
Once teams have an idea of the number it will take to sign a player, they assign their own valuation of that player and stack their draft boards. As the draft is actually going on, teams will call players 15-20 minutes prior to their pick (lots of people are calling several players, so there can be multiple conversations going on at the same time). Teams will ask the player if they will sign for $xxxx and they need an answer within ____ minutes.
Why do teams leave them with so little time to make life-changing decisions? To prevent the advisor from taking their offer and shopping it around to other teams stating, “we have an offer of this amount of money, will you beat it?” The second is to obviously place pressure on a kid and his family to turn down what is generally a large sum of money in reality.
Now, it is common for teams to be speaking with multiple players at the same time and may get a “yes, I will sign” response from several players at the same time. This means it is not at all uncommon for a team to tell a player they are going to take them with their next pick and then not actually do so because they opted for another player who said yes. I have witnessed this heart break as kids listen and expect to hear their name called, only for the online broadcast to announce another player. At the top of the draft, those guys are obviously going to get drafted anyway, but often they have to settle for a lesser dollar amount than a team told them they would pay (as the slots go down, so does the money for the vast majority of players). On the third day though, I’ve seen multiple kids be told they were going to get picked at the next pick, then not be drafted at all in the entire draft! This happened just last year to a good kid, talented player, had his whole family there. He ended up signing with the Braves after the draft for the same amount of money he had agreed to, so it had a happy ending.
Tuition Money- What is often left unsaid with players who are negotiating to play professional baseball is that in addition to their bonus money, they also get a set amount of money to pay for school after their playing days are over. This money is based on the school they’re committed to and the number of years they have left. So, if a player is committed to Miami and is in high school, they’ll actually get more money for school than they would from their baseball scholarship. This money is above and separate from their actual bonus amount. The money is placed into a trust account and is only accessible for payment to school upon their completion of their professional career (or concurrently in some cases). Free college and a nice bonus makes it a tough decision for most players.
10th Round- You see it often, fans of teams relax after their player gets through the 10th round because they know that if you get picked in the top-10 rounds you are signing. But why do I see so few high school players drafted in rounds 8-10 and so many of the players drafted are college seniors? It goes back to the fact that a player has to sign to get the bonus pool amount for that amount. So teams take seniors, who have no option of going back to school and will assuredly sign, and they offer them anywhere from $1,000-50,000 to sign. This allows the team to have more money to spread around to other players in other slots (going over the assigned slot to get a more talented player).
Of the 30 draft picks in the 10th round last year, 18 of them signed for $10,000 or less. The first player to sign for less than $10,000 actually happened in the 6th round last year, when teams start to take their favorite “senior signs.” 7 of the 30 picks in the 8th round signed for $10,000 or less. 15 of the 30 picks in the 9th round signed for $10,000 or less.
After the 10th round- It is quite common for the 11th round to have far more talent taken than there was in the 8-10th rounds. The reason for this is two-fold: 1. Players who do not sign after the 10th round do not count against their bonus pool, so there is no risk to the team if the player does not sign (outside of losing that opportunity to take another player). 2. After the 10th round, any player that signs still goes against your bonus pool, but only the amount over $125,000. This means teams get a “free” $125,000 head start on signing the player.
As a quick math example: Player A is drafted in the 10th round and wants to sign for $250,000. His slot value is $142,200. The team takes Player B in the 11th round and he wants $10,000 to sign. The net impact to the team is a bonus pool reduction of $107,800 and they have no slot impact for the 11th round pick.
Now, take those same two players, but reverse the rounds they go in: Player B signs for the same $10,000 and this results in a net bonus pool addition of $132,200. Player A still signs for $250,000 in the 11th round, but now his net bonus impact is actually a decrease of the bonus pool of only $17,200 rather than the $107,800 if they had taken him in the 10th round.
$142,200 - $250,000 = -$107,800
$142,200 - $10,000 = $132,200 + $125,000 = $232,800 - $250,000 = -$17,200
Late Picks- It happens every year where a player is drafted in the 36th round and fans always raise an eyebrow and say, “I figured he’d go way earlier than that” or “his draft ranking makes that a steal!”
Most times, in that area, players are being picked as a favor to the scout or player. As a favor to the scout to get his ledger to reflect a pick for a player they “turned in” meaning scouted and turned in a report. But even more likely is it is a favor to the kid to get him off the board as he already knows he’s going to college and he wants the stress of having teams calling him asking what it will take to get him to sign to be over.
Rarely, teams take those guys as a fallback plan in case one of their high picks fails a physical or backs out of a commitment and they have some extra money to throw at a kid late hoping he might decide that he can’t actually turn $500,000 and free college rather than stick to his stated $1 million price tag etc.
Over Bonus Pools- Why do I see teams spend over their bonus pool amounts each year? The reason is that there is only a monetary penalty up to 5% over the bonus pool. It is a dollar-for-dollar tax on going over your pool up that amount, but there are no other penalties. After that, draft pick penalties in the next draft start taking place and no team has ever encountered those penalties under the new system.
Most teams go over their bonus pools, meaning the real hard cap is at the 5% overage. Teams utilize this amount in signing kids after the 10th round where they get the free $125,000 and then can sweeten their offer without fear of losing the bonus pool amount from a top-10 round pick.
For the team with the most bonus pool money this year- Arizona- this is a significant impact because they can go over their pool by as much as $804,685 without any penalty other than money. Add to that the $125,000 in free bonus money after the 10th round, and Arizona essentially can add an additional million dollar player outside of their own pool. They can choose to spread that out to multiple after 10th round players (and spend $250,000 etc. on each) or go with one major talent not expected to sign and give him $750,000+ to turn down late in the process.
If Arizona, Baltimore, Kansas City, Miami takes one of your recruits/players, you still have to sweat all the way to the deadline due to their size of their bonus pools adding the extra 5% to play with.
Conclusion- I hope this helps offer some clarity to the complexities of the draft and how teams manipulate dollars to maximize the talent they can add to their systems.
