To Sign Or Not To Sign? How High School Draft Prospects Weigh Value Of College Experience
In the waning hours of Aug. 15, 2010, A.J. Vanegas spent the day before his 18th birthday as one might imagine any recent college-bound high school graduate might. He hung out with family and talked about what the future might bring.
For the Stanford-bound Vanegas, however, that future involved deciding if he would accept a $1.8 million bonus offer from the Padres as the organization sought to buy him out of pitching for his father’s alma mater.
“It was always kind of lurking, that decision,” said Vanegas, San Diego’s seventh-round pick out of Redwood Christian High in San Lorenzo, Calif. “It kept building up and building up as we were getting closer and closer. It was interesting, that whole summer.”
From an outsider’s perspective, it can seem so surprising that every year top high school baseball prospects like Vanegas decline signing bonuses that can stretch to seven figures in favor of heading to college.
Each year, high school prospects must weigh financial, educational and personal priorities to decide how much they truly value their college experience. It’s often a group decision for the player, involving his parents, an advisor, and other friends or family. Being a big leaguer is the long-term goal, but year after year top draft prospects bypass beginning their pro careers after factoring a variety of reasons.
Under the current draft rules, implemented in 2012, which incorporated bonus pools and penalties for exceeding those pools, the debate over whether or not to sign typically happens during or before the draft.
Prior to 2012, teams could put dollar figures on the table for draft picks no matter the round or slot value. This ensured coveted prospects had to turn down an offer in-hand before heading to campus, as the Padres did when attempting to pay a firmly committed Vanegas like a first-rounder.
Kendal Volz, who chose attending Baylor over a six-figure offer from the D-backs in 2006, relayed the best advice given to him by a coach during the draft process.
“He said, ‘You just need to decide what dollar figure is worth taking away your college experience,’ ” Volz said.
That college experience is the first decision prospects make—in most cases, these players have been committed and looking forward to playing for their college of choice for at least a year before the draft.
With that commitment comes the dream of competing for conference championships or making it to the College World Series and creating a lifelong bond with teammates.
Drafted by the Padres the same year as Vanegas with the ninth overall pick, righthander Karsten Whitson turned down an offer north of $2 million to honor his commitment to Florida. His desire to play in Omaha and fulfill a childhood dream was that strong.
Attending college itself often becomes a goal for these prospects long before the thought of playing professional baseball occurs. For current Giants farmhand Sam Wolff, who chose college over a six-figure offer from the Angels, making it to campus provided benefits beyond baseball.
“I was really excited about the college experience—for me it was valuable to go to college,” said Wolff. “It comes down to you personally putting your value on an education.”
College also has the comfort factor—players are used to living at home, going to school, playing baseball.
Coaches also sell themselves. The relationship between coaches and their players fostered over the recruiting process plays as large a role in getting players to campus as the school itself. That bond sold 2008 grad Austin Stadler on valuing his Wake Forest commitment strongly enough that he fell to the 40th round of that year’s draft.
“You fall in love with the coaching stuff that recruits you—pro ball doesn’t do that,” Stadler said. “The relationship you build in college with your coaching staff is pretty damn cool . . . You’re treated more like family.”
The obvious and most enticing incentive for prospects to pass up college is the draft signing bonus—what could be considered “life-changing money.” While finances differ depending on the socioeconomic background of the player in question, a dollar figure that could stretch into the millions can tempt even the strongest of college commitments.
It also provides the most pressure on players, because money offered now might not be there down the road. Prospects know the risk of the money not being there the next time they’re draft eligible, but most 18-year-old athletes getting draft attention are brimming with self-confidence.
“I thought I was going to go to San Diego, be in the rotation, go for three years, get a bigger bonus, get drafted higher, and everything would be good,” Wolff said.
As an Auburn commit selected by the Red Sox in the second round of the 2007 draft, current Tennessee-Martin assistant coach Hunter Morris thought those same lines.
“I believe(d) wholeheartedly that I can go to Auburn for three years, improve on my game, be that much closer to playing in the big leagues,” Morris said. “And if I do what I’m supposed to do I’m going to get my shot in professional baseball.”
On the surface, signing for hundreds of thousands of dollars at 18 years old can be deemed too good to pass up. However, when you look past the big round number that gets announced when a player signs, the financial aspect for draft picks can be more nuanced.
Despite being a recent high school graduate, the drafted player doesn’t start at zero when it comes to financial leverage, as former minor league pitcher-turned-financial advisor Jonathan Perrin points out when discussing how a player should calculate the dollar figure that it’d take to convince them to forgo college.
“You start with the value of your college scholarship,” Perrin said. “From there, you have to look at the time-value of having a college degree versus not having a college degree—hundreds of thousands of dollars over your working career.”
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The value of the bonus itself is a little misleading. High schoolers who sign might be putting college on hold, but they’ll get an instant education on taxes, because even on the lower end, bonuses will be owing 15-20% to Uncle Sam, with bonuses in the upper six to seven figures coming in at closer to 30%.
As for the term bonus, when taken into account with the low monthly salaries of seasonal minor league paychecks, the bonus works more as a salary advance than an amount lumped onto an ongoing living wage. For some, that payout delivered at age 18 could be the last money they ever make in baseball—chances for a post-career nest egg are less likely if a player has been living exclusively off their bonus for four to seven years.
To incentivize leaving behind a college scholarship, players who signed and negotiated participation in MLB’s Continuing Education Program (CEP), have available funds during or shortly after the conclusion of their career to pay for tuition and living expenses at an accredited institution. That’s a great perk, especially for players without a full scholarship, but it might not work out as smoothly for many players after their playing careers, especially signees with no college credits to their name.
According to the CEP guide, all payments made are “treated for federal tax purposes as taxable ‘wages.’ This means that all CEP payments are subject to income and employment tax withholding at the time of payment.” Effectively, the payments operate as less than a full scholarship.
Furthermore, for many players who forgo college and play out their initial seven-year minor league contract, working on a college degree from scratch in your mid-to-late 20s can be a less appealing proposition, especially for retiring players with families to support. The time value it takes to get a degree might not be something those players can afford, even with CEP payments available.
Admittedly, the higher the dollar amount, the seemingly more difficult it can be to turn down for any draft prospect. Per George Iskenderian, a certified MLBPA player agent and former minor leaguer himself, the decision should focus on more than the dollar amount they’re agreeing to.
“This decision should never be made solely for money,” Iskenderian said. “I tell guys all the time, ‘As soon as you sign on the dotted line, it is your job now, and you are valued based on performance.’ ”
Gauging readiness to make baseball their job is what it comes down to for these prospects—and it’s a tough job.
There’s a reason that when the Padres attempted to woo Vanegas they flew him out to Petco Park. To get Vanegas to pass on Stanford, the Padres needed to sell him on the end goal, not life in the minors. The minor leagues carry a not unfair stigma of long bus rides, crammed apartments and baseball being about development over winning.
There are perks to signing beyond money. It is all baseball, all the time, and in the same way that the pro ball lifestyle can be a difficult adjustment, life on campus and in the classroom might not be for everyone.
Of the players who agreed to an interview for this story, only Wolff remains in professional baseball. None reached the major leagues, and only Volz received a higher bonus out of college than his high school offer. After multiple injuries during his time at Wake Forest, Stadler’s high school draft selection turned out to be his only chance to play pro baseball. Still, he cherishes his time competing in the Atlantic Coast Conference and Cape Cod League.
“When I look back on everything, I got to play High-A-ish baseball for four years, ups and downs a lot, but I got to compete with a lot of people,” said Stadler. “I wouldn’t take that back, at all.”
Whitson took his Gators to Omaha, but arm injuries led to him signing for $100,000 and throwing all of four professional innings, but the current South Florida assistant coach carries zero regrets.
“Can’t wake up every day going, ‘What if?’ ” Whitson said. “Own it, and live life.”
It’s not always as simple to not wonder what might have been. Vanegas was torn about the decision. Injuries led to an up and down college career, and while he got a Stanford degree and did eventually pitch in the minors, the internal debate stayed with him long after deadline day.
“It weighed on me,” Vanegas said. “The whole time you were playing, if you would do bad . . . you would always wonder to yourself, ‘Was this the right decision? Did I screw up?’ ”
Vanegas’ eventual decision to decline that $1.8 million offer resonates with many of his peers who made the same choice.
“I remember telling my parents, ‘I just want to be a normal kid. I want to do what my friends are doing, and go to college,’ ” Vanegas said. “Some of (my) best friends were made in college . . . My family is from the South Bay. They got to come to all my games. To me, that actually has more value than money could offer.”
When the players interviewed for this story were asked what monetary value they would place on their college experience, the most common response was: