MLB Teams Get Creative With College Money To Lure UDFAs

The coronavirus pandemic changed many things about this year’s draft. Most notably, it shortened it from 40 rounds to just five. All but $100,000 of players’ signing bonuses were deferred over the next two years as well, as club owners attempted to mitigate some of their lost revenue from the halted MLB season.

The post-draft period was also affected. Though there was no cap on how many undrafted free agents a team could sign, none could be paid more than $20,000. In previous years, the maximum allowed was $125,000 (with exceptions for teams that had money remaining in their bonus pool).

Now, with the financial playing field leveled, teams are finding creative ways to lure players from the massive pool of undrafted free agents (the window to sign them opened on Sunday at 9 a.m. on the East Coast).

One particularly intriguing avenue they’ve explored is offering generous packages of money for college players. Such packages are allowed because they are not paid out in actual cash, but in agreements to be paid later.

For example, a team could offer a college junior to pay for the value of his senior year at school. If they wanted to go a step further, they could offer the equivalent value of two years at a high-end graduate school.

Once again, though, that number is only a value and not actual cash. So, if the player were a college junior signed out of, say, Tennessee, he could ask for a package that would pay him the value of his senior year at Vanderbilt (a more expensive scholarship elsewhere), and then two more years at graduate school somewhere else.

The key here is that the team isn’t paying the player directly, it pays value out to the school at a later date. 

And just because the player receives a package worth the equivalent of a year at a premier graduate school, it doesn’t mean he has to spend it that way.

So, if two years of tuition at grad school somewhere else costs less than what he received, the player can use some of that money for books and other expenses that college students typically incur. That money can go toward housing as well—even though living in an apartment off campus isn’t technically a college expense.

For the money to be usable in that case, a player can take as little as one online course. From there, he submits his lease to the team, which then reimburses him for the cost of housing.

So while the check these players are getting will only be for $20,000, the benefits of signing could be far greater.

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