I spent some insomniac time researching the international signing bonus “pools” and “slots”–the system mlb and the union have devised to regulate the int’l market for young players until they figure out how to build an extraterritorial draft (or until they figure out a better provisional non-draft system–because this one sucks). Teams get ranked by record, as in the regular draft, so that the recent winners like the a’s and Giants have less money in their “pool” to pay for signings. (Teams get sliding-scale “slot” money too, which they can “trade.” Someone else can track that down.)
Anyway, the top “pool,” for Houston or some team like that, was slightly over $5M last year. “Slot” amounts are lower, so you’re looking at less than $10M max, I guess. There’s a penalty, or tax, imposed if a team blows by its pool amount. So, not being able to sign 19-year old Yoan Moncada to a major league contract under the new system, a team will need to pay him a $40M (est.) “signing bonus.” That team, apparently, then would have to pay as much as a 100% penalty. Here’s what I think is the strange part–the tax money goes into an ancillary mlb fund used to develop international operations. Nobody expected that fund to grow large, so it’s not clear what mlb will do with the $40M Moncada windfall.
BaseballAmerica and Fangraphs both have a bunch of detailed articles on this stuff. I haven’t sorted out how the US government’s relaxed approach to Cuban players (announced last week, I believe) further throws the signing-bonus system out of balance.
$80M–for a 19 year old? Perhaps there’s a silver lining: maybe after signing he’ll get no more than the mlb minimum $1/2M in salary for a few years, keeping the lucky team under the entirely separate luxury tax cap. But that’s a guess.
I welcome additional scholarship on these issues. (This effort cured my insomnia.)