How Teams Spend On International Players Throughout The Year

As much as we try to emphasize that international scouting is a year-round process, it’s impossible to escape how much emphasis the industry places around July 2.

The data supporting that is overwhelming. Teams spend almost as much money on international amateur players on July 2 as they do the entire rest of the year.

Jose Abreu

Jose Abreu (Photo by Ezio Ratti/IBAF)

While that statistic may be striking, the fact that teams spend a lot on July 2, the first day of the international signing period, isn’t any secret. Just as interesting is what the data on how teams spend their international money throughout the year tells us, particularly now that we have a complete calendar year of data with teams operating under signing bonus pool restrictions.

The chart below includes teams’ estimated spending and the number of players they signed on the international amateur market during 2013, so split between the 2012-13 and 2013-14 signing periods. We’ve excluded Cuban players or Asian professionals who are exempt from the bonus pools, such as Jose Abreu, Miguel Gonzalez or Alexander Guerrero. If a Cuban player does count toward a team’s bonus pool, he is included, although that doesn’t really affect our what we’re looking at. Indians righthander Leandro Linares ($950,000 in July) and Reds outfielder Reydel Medina ($400,000 in August) were the biggest bonuses from that category.

Since comprehensive, accurate bonus information on players whose rights are purchased from Mexican League teams is difficult to obtain, we have also excluded Mexican League signings. Since Mexico only accounts for a small percentage of signings, that shouldn’t affect the monthly spending data significantly anyway. Players having their contracts terminated due to age or identity issues may affect some of the signing totals, but shouldn’t have a major impact on the month-by-month trends.

Month Spending Signings
January $3.27 million 67
February $3.60 million 64
March $2.70 million 54
April $2.27 million 58
May $1.47 million 46
June $2.98 million 40
July $58.1 million 220
August $12.8 million 58
September $3.07 million 58
October $2.38 million 71
November $5.19 million 87
December $1.60 million 49

 

We left the table in the order of the calendar year, but it’s probably more useful to think of the international calendar as beginning on July 2. Let’s run through how active teams are on the international market throughout each point in the year.

July 2: The opening date of the international signing period deserves its own category. Teams spent an estimated $40.7 million on July 2, 2013, which means they did 41 percent of their international amateur spending for the entire year on July 2. A little more than 100 players were signed on July 2 last year, including 10 players who signed for at least $1 million. Teams sign future big leaguers throughout the year, but July 2 is by far the busiest day of the year for international signings.

July: Not every player who has an agreement on July 2 signs his contract on that date, for various reasons. But from July 2-8, during the first week of the international signing period, teams do 49 percent of their international spending for the whole year. During the whole month of July, teams did 59 percent of their international spending for the year. This is obviously the month where teams sign the most expensive players on the market, but it’s also the month teams sign the most players cheap players. Teams are allowed to sign six players for $50,000 or less that are exempt from their bonus pools (this rule disappears during the 2014-15 signing period), and July is the month where teams sign more players for exactly $50,000 and more players for $50,000 or less than any other month during the year. Some of these are likely package deals, with a team signing a top prospect from one trainer and using one of their $50,000 on one of his other player’s to sweeten the pot.

Luis Encarnacion (Photo by Bill Mitchell)

Luis Encarnacion (Photo by Bill Mitchell)

August: The second-most expensive month of the year is August, in part because some players can’t sign immediately on July 2 and have to wait until their 16th birthdays later in July or August (if they’re born on Sept. 1 or later, they go into the signing period for the following year). That’s what happened with Yankees center fielder Leonardo Molina ($1.4 million), Phillies third baseman Luis Encarnacion ($1 million), Nationals third baseman Anderson Franco ($900,000) and Mets outfielder Ricardo Cespedes ($725,000). This year may have been unusually high for August because two of the most high-profile players, Cubs outfielder Eloy Jimenez ($2.8 million) and Red Sox third baseman Rafael Devers ($1.5 million) didn’t officially sign until August. But beyond the birthday boys and the delayed signings, mid-July and August are still active times for teams to strike deals with players they like in the $100,000 to $350,000 range who are still on the market. Last year teams did 71 percent of their spending for the year in July and August.

September: Spending dips to levels more in line with the non July/August months of the year. There were four international signings in the $300,000 to $350,000 range last year in September, but that’s generally the bonus ceiling you’re looking at this time of year, usually when trainers realize an exorbitant asking price has backfired on them and they need to be more realistic.

October: Overall spending decreases, though the number of international signings goes up slightly, meaning the average signing bonus decreases for players signed in October. This may be because players who aren’t signed on July 2 realize that their asking prices have to come way down, trainers want to offload players to get them signed rather than have to pay to continue developing them and teams are using their $50,000 and $7,500 exemption signings that won’t count against their bonus pool. Teams are two and a half times more likely to sign a player for one of their $50,000 exemptions in the second half of the year than they are in the first half.

November: Spending and signings spike back up in November, though this is somewhat artificial. While teams have to allocate for their bonus pools, which run from July 2 to June 15, many organizations run their operating budgets from November 1 through October 31. So when Nov. 1 comes, the international departments tend to get a little more money to officially spend. Teams will sometimes agree to deals with players in September or October, then wait until November to officially sign them to push the contracts into the next fiscal year for accounting purposes, although this obviously doesn’t affect their bonus pools from MLB’s perspective. The Padres, for example, spent $1.5 million on six players on Nov. 1, most notably on righthander Mayky Perez, outfielder Luis Asuncion and shortstop Westhers Magdaleno, all from the Dominican Republic.

December: People like to take it easy in December. With the holidays at the end of the month, players typically don’t get signed toward the end of the year and trainers like to keep their players at home so everyone can take some time off. There are exceptions, with the Rangers agreeing to a $425,000 deal with Rougned Odor shortly before the new year in December 2010 (though the contract was technically dated on January 3, 2011) or the Yankees signing Dominican shortstop Abiatal Avelino for $300,000 on December 26, 2011, although both of those were in the pre-pool era. Mostly it’s the time of year for cheap signings, with only one player signing for more than $100,000 in December 2013.

Rougned Odor

Rougned Odor

January-February: Spending picks back up again, with international directors and other senior-level scouts from the United States pouring into the Dominican Republic in January for showcases from by Major League Baseball, the Dominican Prospect League and the International Prospect League. It’s a busy time for teams to scout players for the upcoming July 2, but there are plenty of eligible players to watch at these events and for teams to invite to their academies. Australia and Panama also have national tournaments as well.

March-April: From January through April, spending steadily declines, but teams are still active looking for eligible players to sign. With the Dominican Summer League beginning in May, teams often need to fill out roster spots. This can be a good time to fill out those openings, although with MLB’s investigations sometimes taking months to complete, a player signed in April might not get approved until the middle of the DSL season and sometimes won’t even be allowed to get on the field until after the season is over.

May: International spending dips significantly in May, with the DSL season underway, most of the top eligible talent already picked through and a lot of teams maxed out on their bonus pools. It’s so slow that the only player who signed in May for at least $100,000 was Daniel Missaki, a Brazilian righthander who pitched in the World Baseball Classic and signed with the Mariners for $150,000. Only December is a slower month in terms of the dollars teams spend throughout the year.

June: All of a sudden we see a spike back up in spending to March levels despite having fewer signings overall than at any other time during the year. There are a few reasons this happens. The international signing period runs from July 2 through June 15 the following year, with June 16 to July 1 considered a “closed period” when teams aren’t allowed to sign players. With just two weeks to sign players, the number of signings isn’t very high. But the average signing bonus increases because, with bonus pool money, it’s use it or lose it. If a team has $500,000 left in its pool on June 2, it can’t carry that pool space over to the following signing period. There are no rollover minutes here. That doesn’t mean every team uses its full bonus pool, but there’s some incentive to spend here. The other aspect is that players from South Korea and Taiwan are graduating high school, which typically is when they sign. Since MLB implemented bonus pools, it sometimes makes more sense for these players to wait until July 2 to sign when teams have fresh bonus pools kick in, but it opens another door for teams to spend. Last year in June the Indians dropped $500,000 on shortstop Yu-Cheng Chang from Taiwan.

International |

Add a Comment

comments powered by Disqus