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Title: Entry Draft Signing Bonuses
Post by: Dan Wood on February 02, 2010, 03:37:36 PM
I would like to propose a change in the way we do the entry draft. In the MLB when a player is drafted, the team and the agent come to an agreement over a signing bonus. This generally comes from different funds, than the teams roster budget. Since, we only have one budget, and not several, I think we should forgo the signing bonuses. For instance and small market team, that has to sign an early round pick, automatically has to give up a decent size some of their budget to sign this unknown factor.

Without signing bonuses, it'll make it easier for all teams to compete, and it makes draft picks very valuable to rebuilding teams. I think once the player is drafted is is automatically put on your roster. If we did have separate budgets for drafts/ prospects and for our rosters then I would be all for that, but that starts to make things complicated and this league is complicated enough as it is. So that is my thought. You get a pick, you draft a guy, he does not get a signing bonus. It puts too much of a financial hindrance on running a club to pay draft picks a lot of money since we are using a salary cap for any and all financial moves.  Thoughts?
Title: Re: Entry Draft Signing Bonuses
Post by: Canada8999 on February 02, 2010, 08:21:33 PM
Draft eligible players will have signing bonuses assigned before the draft (based on pre-draft published rankings and historical bonuses), so a small market team could essentially draft all low bonus 'sign-ability' players, as they sometimes do in real life.
Title: Re: Entry Draft Signing Bonuses
Post by: Colby on February 03, 2010, 08:11:32 AM
Draft eligible players will have signing bonuses assigned before the draft (based on pre-draft published rankings and historical bonuses), so a small market team could essentially draft all low bonus 'sign-ability' players, as they sometimes do in real life.

Dan is suggesting that such bonuses don't count against the cap.  I can surely see his point, but these players usually go on the 40-man roster and count at MLB payroll in real life.
Title: Re: Entry Draft Signing Bonuses
Post by: rcankosy on February 06, 2010, 10:47:48 PM
I agree that draft picks should NOT have signing bonuses tied to them. 
Title: Re: Entry Draft Signing Bonuses
Post by: Canada8999 on February 06, 2010, 11:21:16 PM
I guess my response to that would be why do you believe they should not be included?  If the intention of this league is to closely mimic a real MLB environment, where signing bonuses and sign-ability are a huge part of the draft, then personally I don't think eliminating them as a positive change.  If we have issues resulting from the cost of prospects being too high, then I would suggest we look at increasing cap space rather than removing bonuses... in MLB the money is paid and it comes from somewhere.
Title: Re: Entry Draft Signing Bonuses
Post by: rcankosy on February 07, 2010, 01:34:22 AM
In real life, the bonuses paid to draft picks and international signings does NOT count against the salary cap unless they are signed to a major league contract like Andrew Brackman.  By the way, that happens extremely rarely.
Title: Re: Entry Draft Signing Bonuses
Post by: Canada8999 on February 07, 2010, 11:32:11 AM
In real life, the bonuses paid to draft picks and international signings does NOT count against the salary cap unless they are signed to a major league contract like Andrew Brackman.  By the way, that happens extremely rarely.

There is no hard-cap in real life - we use a cap to simulate a budget, and in real life bonuses are paid with real money, from the team's bottom line.
Title: Re: Entry Draft Signing Bonuses
Post by: rcankosy on February 07, 2010, 01:15:49 PM
There is a salary limit for luxury tax purposes although it is not a hard cap.  That was the "cap" to which I was referring, and bonuses paid to draft picks and international players do not count against it.
Title: Re: Entry Draft Signing Bonuses
Post by: Canada8999 on February 07, 2010, 04:03:46 PM
Ok - to be sure we're all on the same page regarding the various sides to the discussion, this is my current understanding.  Please add notes wherever I've missed something.

Problem: Within our current salary cap budgets, many teams will not have sufficient cap space to both field a competitive team and pay bonuses for Entry Draft Picks.

And the proposed solutions:

A)  Do not include signing bonuses for drafted players
B)  Offer teams an additional pool of money to use only on signing bonuses
C)  Increase the overall cap room for teams
D)  Do nothing

Here are the current requirements for Entry Draft signing bonuses:

Quote
Entry Draft Contracts
These are bonuses to be paid in the entry draft per a pre-ranking list provided by Baseball Prospectus before the real-life MLB draft.  These bonuses are not based on actual draft position.

1 - 7.0M
2 - 6.0M
3 - 5.0M
4 - 4.0M
5 and 6 - 3.5M
7 and 8 - 3.0M
9 thru 12 - 2.5M
13 thru 17 - 2.0M
18 thru 31 - 1.5M
32 thru 46 - 1.0M
47 thru 64 - 0.5M
all picks from 65 on require no signing bonus

Quote
  • Signing bonuses paid to drafted player count against the teams salary cap - after required signing bonuses are paid, players on the EDR are kept at no cost.  Players may be dropped from the EDR at any time, at no cost, to make room for newly drafted players (signing bonuses are not reimbursed).  Players released from the EDR are subject to standard free agency rules.
Title: Re: Entry Draft Signing Bonuses
Post by: Canada8999 on February 07, 2010, 04:06:16 PM
Personally, I think most teams should have enough flexibility to sign all of their draftees and spend less than $3.0-4.0M.  Others can spend a few million more, and cap strapped teams can spend $1.0M or less. 

For example, lets look at the Rangers.  If you were to draft exactly by slot (although you certainly would have the flexibility to vary from that if you chose), your required bonuses would be:

1-12 TEX --> 9 thru 12 - 2.5M
2-12 TEX --> 32 thru 46 - 1.0M
(no other picks require a bonus)

Total: $3.5M, which is less than the current available cap space of $18.0M.

I don't see this as a significant amount of money to spend, and since the current rules have been in place since early in the off-season, teams should be preparing accordingly.
Title: Re: Entry Draft Signing Bonuses
Post by: Canada8999 on February 07, 2010, 04:31:50 PM
Disclaimer:
Applying the above exercise to my Brewers (once my trade with Cincy is processed):

1-6 --> 5 and 6 - 3.5M
1-28 --> 18 thru 31 - 1.5M
2-2 --> 32 thru 46 - 1.0M
2-6 --> 32 thru 46 - 1.0M
(no other picks require a bonus)

Total: $7.0M

Again, these numbers are 'expected' or 'by-slot'.  There's no reason why I couldn't take the 13th ranked player at 1-6, and it would reduce my cost by $1.5M.
Title: Re: Entry Draft Signing Bonuses
Post by: Lucas Lima #52 on February 10, 2010, 03:48:31 PM
I'm not from the Rules Comitee, but let me give one idea I didn't read about it...

I kind of agree with both of you... Signability should be a "factor" into the draft, but also it makes a bit tougher for smaller teams to get early picks... So there should be some kind of money limit to spending, but at the same time it should give a "fair" shot for small market teams at prospects...

Based on that, my idea would be to create something like a "Entry Draft Money"... It would be kind of "expanding the cap" that were mentioned, but instead of letting that money open for anything, that extra cap could only be used at the Entry Draft... I don't know exacly, but it could be somewhere between 5 and 10 percent of the team total cap... If the GM wants, he could spent cap money also on picks, but this would give some extra money necessary for small franchises at the same time it would let bigger teams with more money, keeping signability a factor...
Title: Re: Entry Draft Signing Bonuses
Post by: lp815 on February 10, 2010, 05:38:32 PM
I can see both sides also, but how Ben has presented two examples, the only bonuses that would be at a decent clip are the top 10.  However, I really don't want to see the team with the 1st pick overall have to trade it because he does not have enough money, or for that matter, four or five teams with top 5 picks.  If that were to happen, it might be an issue.

Ultimately, I'll go with Ben's "D" answer, do nothing.  I'm not married to it, so if someone can show me how another method is more effective, I'm open to hear it.
Title: Re: Entry Draft Signing Bonuses
Post by: Colby on February 10, 2010, 06:00:09 PM
I can see both sides also, but how Ben has presented two examples, the only bonuses that would be at a decent clip are the top 10.  However, I really don't want to see the team with the 1st pick overall have to trade it because he does not have enough money, or for that matter, four or five teams with top 5 picks.  If that were to happen, it might be an issue.

Ultimately, I'll go with Ben's "D" answer, do nothing.  I'm not married to it, so if someone can show me how another method is more effective, I'm open to hear it.

I believe we made the ruling that the bonuses were tied to the actual players in the real draft.  Therefore, if we had this draft last year, the Nationals could have passed on Strasburg and his bonus and went after a cheaper player.  It goes against the slotting system a bit, but it doesn't hurt the small market clubs.
Title: Re: Entry Draft Signing Bonuses
Post by: Canada8999 on February 10, 2010, 07:00:14 PM
I believe we made the ruling that the bonuses were tied to the actual players in the real draft.  Therefore, if we had this draft last year, the Nationals could have passed on Strasburg and his bonus and went after a cheaper player.  It goes against the slotting system a bit, but it doesn't hurt the small market clubs.

That is correct.  While the #1 pick may lose some value in taking a player slotted a few picks later, they would save a significant amount.  If they're in love with the #1 pick and are strapped for cap room, another option is to sign the prospect to a standard contract and spread the bonus out.

It's not like there were never rumors that the Nats may pass on Strasburg just because they wouldn't be able to sign him...
Title: Re: Entry Draft Signing Bonuses
Post by: Colby on February 10, 2010, 07:38:58 PM
That is correct.  While the #1 pick may lose some value in taking a player slotted a few picks later, they would save a significant amount.  If they're in love with the #1 pick and are strapped for cap room, another option is to sign the prospect to a standard contract and spread the bonus out.

It's not like there were never rumors that the Nats may pass on Strasburg just because they wouldn't be able to sign him...

Yeah, I think our system is about as realistic as it can be while keeping things system.  The only thing I would do is expand rosters a bit over the next two years.