Can The Yankees Sign Jack Leiter? MLB Draft Rules Make It Nearly Impossible
If this was a draft before 2012, that would have been a very interesting pick. Under the old draft format teams could spend whatever they wanted on any draft pick, although such spending ensured a scolding from the MLB commissioner’s office. The opportunity to land a top talent with such a late pick would seem to be a steal.
But since 2012, signing a first-round talent who is drafted on the third and final day of the draft has become nearly impossible. We’ll explain why.
Under the current draft system, teams are strictly regulated on how much money they can spend in the draft. Each team gets a bonus pool allotment. They can spend up to five percent above that allotment without paying anything other than a financial penalty. But go above five percent and teams start losing draft picks as penalties. Since this system began in 2012, no team has ever been willing to forfeit draft picks as spending penalties.
So in essence, the system serves as a hard cap on how much any team can spend. Each and every team’s spending allotment is determined by when they pick and how many top-10 round picks they have. This year, the D-Backs have the most money to spend ($16.1 million) and the Red Sox have the least ($4.8 million).
Every draft pick in the top 10 rounds has a designated bonus allotment set aside for it. While that doesn’t mean that a team has to spend exactly that amount to sign the player drafted with that pick (and they usually don’t), it is the amount of money for that pick that is added to the team’s total allowed draft spending.
In the Yankees' case, New York’s allotment for its 11 top-10 round picks mean the team is allowed to spend $7,455,300 on its top-10 round draftees. The Yankees’ first pick in the draft (Anthony Volpe’s pick) carries a $2,365,500 pool allotment. The Yankees’ 10th-round pick carries a $142,200 pool allotment.
Any draftee taken after the 10th round can be signed for up to $125,000 without counting towards that bonus pool. But any signing for more than $125,000 requires using money from the $7.45 million allotment. So if a 12th-round pick signs for $200,000 that signing will take $75,000 ($200,000 minus the $125,000 allowed to be spent on late-round picks) of the Yankees’ $7.45 million pool allotment.
So, when the Yankees drafted Leiter, they could spend $125,000 to sign him without using any of their pool allotment. That’s far below what could be expected to be enough to sign a first-round talent who is headed to Vanderbilt. The reason no team drafted Leiter in the first round is because no team was willing to spend the several million dollars that they believed it would take to convince Leiter to spurn his commitment to the Commodores. Plenty of teams liked the player, but no one was convinced that they could spend the money that it would take to sign him.
Understandably, Yankees fans have spent their afternoon trying to find scenarios where their favorite team could sign Leiter
I know this is unlikely, but is there any chance they just don’t sign Volpe and use most of their pool for Leiter?— Tommy 2:14 (@DatDudeTMoney) June 5, 2019
This won’t work because of another aspect of current draft rules.
Simply put: The Yankees can’t simply not sign a top-10 round pick to save money to sign Leiter.
That $2,365,500 allotment for Volpe’s pick? The Yankees only have that pool allotment to spend if they sign Volpe. If Volpe does not sign by next month’s signing deadline, the Yankees lose that $2.35 million to spend in this year’s draft. The Yankees would receive a compensatory pick in next year’s draft (the 31st pick) but they lose the money to spend on this year’s draft class.
So, any player in the top 10 rounds that the Yankees failed to sign would cut the amount of money the Yankees can spend overall. Fail to sign Volpe and that $7.45 million pool allotment becomes $5.1 million. Fail to sign a 10th-round pick and the allotment drops by $142,200.
The only way the Yankees can sign Leiter is if he decides to sign for much less money than was available to him two days ago.
And to add one other piece of info: If the Yankees wanted to sign Leiter (and could reach a number that was acceptable to Leiter and the team) and not sign Volpe, they would have taken Leiter in the first round. They couldn't and they didn't.