With July 2 eight weeks away, baseball officials are still operating without finalized language of the new Collective Bargaining Agreement, but teams do have an outline of the new rules for international amateur signings.
By now, players who will be old enough to sign on July 2 must have registered with Major League Baseball by May 1. Otherwise they will have to wait until July 2, 2013, to sign. Players who were already eligible to sign—mostly anyone 17 or older, or anyone born before September 1995—do not have to register, but if they sign after July 2, their bonuses will count against a team’s bonus pool.
Until July 2, teams can spend whatever they want on international bonuses and none if it will count against their bonus pool. After that, the new spending rules will be in effect.
Every team has a $2.9 million signing bonus pool for the 2012-13 signing period. Any team that spends more than $2.9 million will be subject to a variety of penalties:
• Teams that go 0-5 percent over will pay a 75 percent tax on the overage.
• Teams that go 5-10 percent over will pay the 75 percent tax on the overage and won’t be able to sign more than one player for a bonus of more than $500,000 in the 2013-14 signing period.
• Teams that go 10-15 percent over will pay a 100 percent tax on the overage and won’t be able to sign any player for a bonus of more than $500,000 in the 2013-14 signing period.
• Teams that go 15 percent or more over will pay a 100 percent tax on the overage and won’t be able to sign any player for a bonus of more than $250,000 in the 2013-14 signing period.
The 2012-13 signing period begins July 2, 2012 and ends June 15, 2013. The dates from June 16, 2013 through July 1, 2013 will be considered a “closed period” when no one will be able to sign. MLB said it will need time to calculate each team’s total spending and potential penalties. Also, due to the new mandatory registration system, the commissioner’s office will need time to prepare and disseminate information about registered players to clubs.
The $2.9 million bonus pool does have a few exemptions that will allow a team to spend a little bit more. A team’s six highest signing bonuses of $50,000 or less will not count toward its total. For 2012-13, players signed for $7,500 or less also won’t count (in 2013-14 that number goes up to $10,000). So there’s enough wiggle room to spend up to $3.2 million without facing any penalties. All players must sign a standard minor league contract, so no major league deals are allowed.
The bonus pool limits probably won’t affect the majority of teams, because only a handful have gone well beyond $2.9 million-$3.2 million in
2011 or in
2010. Teams like the Rangers, Blue Jays, Royals, Pirates and Cubs may have to scale back, but even those teams will have to make small adjustments rather than drastic changes.
The international signing pool includes any player not subject to the draft, which includes anyone from outside the United States, Canada or Puerto Rico—with a couple of exemptions. One is that any player who had previously signed with a major league club will not be subject to the bonus pool. It’s a corollary to the draft rule, where if a player has already signed with a team out of the draft, he’s no longer draft eligible and any contract he signs thereafter will not count against an organization’s draft bonus pool. So a Dominican player released out of Triple-A who signs as a minor league free agent won’t have his contract count against his new team’s international pool.
The other exemption involves players coming to MLB from foreign professional leagues. Players who are at least at least 23 and have played five years in a recognized professional league, such as Japan’s Nippon Professional Baseball, will be exempt.
For the next two years, Cubans will be exempt as long as they are 23 and have played in a Cuban professional league for at least three seasons. Beginning in 2014-15 Cubans must have five years of pro experience to be exempt. So if Yoenis Cespedes had still been unsigned by July 2, he would have been exempt from the new rules anyway, where 20-year-old outfielder Jorge Soler will be subject to the new rules unless he can get all of his paperwork pushed through and sign before July 2.
One area of confusion among international scouts is how the league will treat Mexican League transfers, including players like Blue Jays righthander Roberto Osuna and Pirates righthander Luis Heredia, who were acquired from their Mexican League teams at 16 years old.
According to an MLB official, the league will count only the amount that goes to the player against the team’s bonus pool. Typically, that is 25 percent of what a major league team pays to a Mexican League to purchase his rights. So a club paying $400,000 to a Mexican League team for a player would only have $100,000 count against its pool. The rule applies to Mexican citizens only, the official said, so teams can’t send a Dominican or Venezuelan player to a Mexican League team to try to get around the new bonus rules.
MLB officials have said that any team that attempts to circumvent the new signing regulations to get around the bonus limit will be subject to severe penalties.