MLB international spending at an all time high

MLB
21 Jun, 2017 by Yvonne Hew

$203 million was spent on international free agents in the recently closed MLB signing period. That’s a new record.

The previous high was almost $50 million less. The figure is expected to drastically reduce once a hard cap on spending begins July 2. Which may drive amateur players to other countries, or even sports, in the future.

Who benefitted most?

 

A significant portion went to four Cubans – two with the San Diego Padres who were given signing bonuses of just over $5 million. Leading the way with $26 million was Chicago White Sox outfielder Luis Robert. Padres pitcher Adrian Morejon followed with $11 million. His teammate Jorge Ona and Cincinnati Reds shortstop will receive $7 million each.

The MLB caps and new rules…

The MLB’s labor contract will soon impose a cap on bonuses for international amateurs with teams being limited in 2017-18 anywhere between $4.75 million and $5.75 million.

In an article by Associated Press (quoted by ESPN), Andy Mota said, “The party’s over for all big signing bonuses for international amateurs. It’s no doubt. It’s a reality that’s setting in, especially with Cuban players.”

 

New rules state that international amateurs are now defined as under 25 years old with less than six years experience. As opposed to 23 years old and less than five years experience.

Basically, more players will compete for less money. Agent Scott Boras predicts that this will “drive a lot of these players to Japanese and Korean baseball”.

Let’s talk numbers…

While the dollars were flying everywhere for international players, restraints were introduced in 2012-16 labor contract. Limiting spending on draft picks residing in the U.S., Canada and Puerto Rico. Bonuses dropped each year from 2011 to 2015 but rose to a cool $269 million for 2016 selections.

Meanwhile, despite a tax on teams that exceeding the assigned bonus pools, spending on international amateurs rose drastically from $74 million in 2012-13 to $156 million in 2015-16.

 

During that period, San Diego, Chicago White Sox, Cincinnati, Atlanta, Houston, St. Louis, Oakland and Washington spent the most on international amateurs – between $8.3 (Washington) and $40.8 million (San Diego).

Understandably, some American players were not pleased at the thought of international bonuses soaring while theirs came tumbling down.

According to Dan Halem, MLB’s chief legal officer, this was simply a way to “treat international players more comparable to domestic players with respect to the signing bonuses they receive upon signing their first contract”.

What are the implications?

Boras believes young athletes will turn to other sports because of “lower economic potential”. He also pointed out that “other sports are benefitting dramatically. Soccer, in particular, is clapping their hands”.

Mota suspects teams that had never signed international players are more likely to do so now that prices are lower. He too believes Japan will be more appealing to Cubans – at least until they turn 25.

Moreover, playing “hardball” with teams is “no longer going to be the case”, for owners or managers who’d been used to getting anything they wanted.

 

Expect to see more Cuban or South American amateurs turn to soccer instead of baseball. And since South Americans are more accustomed to soccer, they would certainly be more comfortable.

MLB teams receiving $500,000 cap space beyond the $4.75 million spending pool (2017-18 international signing period)

Cincinnati, Miami, Milwaukee, Minnesota, Oakland, Tampa Bay

MLB teams receiving $1 million cap space beyond the $4.75 million spending pool (2017-18 international signing period)

Arizona, Baltimore, Cleveland, Colorado, Houston, Kansas City, Pittsburgh, San Diego (Cubs can  trade their cap allocation in increments of $250,000 but they can only acquire 75 percent more than they were originally assigned)

MLB teams that are prohibited from signing international amateurs for bonuses of more than $300,000 in the next two signing periods

Atlanta, Cincinnati, Houston, Oakland, St. Louis, San Diego, Washington

MLB teams that are prohibited from signing international amateurs for any bonuses in the next two signing periods

Chicago Cubs, Kansas City, the Los Angeles Dodgers, San Francisco

by Yvonne Hew – contributor

Related Posts