Major League Baseball and the MLB Players Association agreed to a new Collective Bargaining Agreement last year that will have an enormous effect on college baseball due to how it will affect the MLB Draft. This is the first draft that will feel the effects.
I'll do my best to explain the new Agreement and how I see it effecting college baseball and the MLB Draft.
Keep this in mind before we get into the nitty gritty of the Agreement - in the past teams could spend whatever amount of money they wanted to when trying to sign a draft pick. It didn't matter if the prospect was drafted in the first round, 14th round or even the 41st round.
An example of that happening last year is when the Chicago Cubs signed Dillon Maples, who was thought to be unsignable due to his strong commitment to the University of North Carolina, for 2.5 million dollars after drafting him in the 14th round. The new Agreement will very likely prevent that from happening.
Why do I say that very likely won't happen again?
In the new Agreement, each team, based on where they draft, is allocated a certain amount of bonus money they can spend on their picks in the first 10 rounds. The amount is based on a sliding scale which is determined by where the team is drafting. As an example, the first pick in the first round is allocated more bonus money than the last pick in the first round. And the first pick in the second round is allocated more money than the last pick in the second round. And it continues that way through the 10th round. The total bonus amount allocated for the first 10 rounds is added up and that is the total amount a team can spend on their total picks in the first 10 rounds. They can spend the money they are allocated for the first 10 rounds however they see fit. But they can't spend more than the total allocated for the total 10 rounds. After the 10th round, the bonus amount changes drastically, and is the same for each pick whether it be the first pick in the 11th round or the final pick in the final round, which is the 40th round. The bonus money amount from the 11th through the 40th rounds is no more than $100,000 per pick.
I'll give you an example of a team and the bonus amount it is allocated for the first 10 rounds of the draft. The Twins total allocated amount for the picks they have in the first 10 rounds is $12,368,200. They are allocated that amount because they pick higher than most other teams. The higher the pick, the higher the amount that is allocated for that pick. On the opposite end of the spectrum is the Angels who only have a total bonus money amount of $1,645,700 to spend for all their picks in the top 10 rounds. Their amount is much lower because their picks are much later in the rounds. That is the total bonus amount each of those teams can spend for all the players they pick in the first 10 rounds. They can't spend any more than that. However, they can spend it any way they want to among their picks in the top 10 rounds. If they want to give their 2nd rounder more bonus money than they want to give their 1st rounder they can do that. If they want to pay the 10th rounder more than the 7th rounder they can do that, also. The key is to stay within the total allocated amount for the first 10 rounds.
I mentioned that teams are allocated a certain amount that they can spend for their picks in the top 10 rounds. What is to keep them from overspending? The answer is penalties. There are penalties, some of which are very severe, that will be imposed on teams that overspend.
If a team spends more than the amount it is allocated for the first 10 rounds up to 5% then it has to pay a 75% tax on the overage. If it spends 5% to 10% over its allocated bonus pool then it pays a 75% tax on the overage and also loses a first-round pick. If it over spends by 10 to 15 percent then it has to pay 100% tax on the overage and also loses a first- and second-rounder. If it spends 15% or more, then it has to pay 100% tax on the overage and loses two first-round draft picks. As you can see, the penalties can be very, very severe to clubs who go over their allocated amount.
What about penalties for teams that spend more than the $100,000 on players drafted from the 11th round on?
The penalty that they will incur is this - the amount they over spend on those draft picks is taken away from the amount they are allocated for the first 10 rounds. In other words, let's say they pay a 12th-rounder $250,000, which is $150,000 over the amount they were allocated to spend on that draft pick. Then the overage of $150,000 is taken away from their top 10 rounds bonus money allocation they are given.
Throw in this fact and you'll understand why teams will very rarely spend more than $100,000 on 11th through 40th rounders.
Going back to the allocated amount a team is allowed for all of its picks among the first 10 rounds. If a team fails to sign a pick among the top 10 rounds, then they lose the bonus money they were allocated for that specific pick. In other words, that money is gone because they failed to sign that pick. Here is an example of this. The Angels, as I mentioned before, have been allocated $1,645,700 for all the picks they have in the top 10 rounds. Let's say they don't sign their 3rd-round draft pick, which they were allocated $416,300 in bonus money for. All of a sudden the amount they have available to spend on their top 10 round picks goes from $1,645,700 to $1,229,400. If a team also spends additional money over and above the $100,000 they are allowed for each draft pick among the 11th to 40th rounds that money is also taken away from their 1st- through 10th-round allocation That could add up fast and prevent them from signing other top 10 rounds picks.
One other rule that has been imposed is Major League contracts can no longer be offered to draftees by teams. That will prevent teams from paying draftees Major League salaries as an inducement to sign with them.
Although this won't affect who is drafted, another part of the new Agreement is the signing deadline imposed on MLB teams. In the past, they had until mid-August at midnight ET to sign their draftees. This year, the deadline to sign their draftees is mid-July at 5 pm ET (July 13th is the actual date this year).
What I provided above are facts about the new Agreement. Here are a few of my opinions on how it will affect college baseball.
1) I believe more college juniors and seniors will be drafted in the first 10 rounds by MLB teams because they are viewed as more signable. High school players will continue to be drafted in the first few rounds, but only the ones who are pretty sure bets to sign with pro teams. Remember, if a team fails to sign a draft pick among the top 10 rounds, then they lose the amount they were allocated for that specific draft pick. Due to that, signability is very, very important this year.
2) I expect many four-year college baseball signees who are pro prospects, unless they are first- to fourth-round talents (this year, 4th round picks are allocated in the $280,000 to $370,000 bonus range, an amount that could pull a player away from his college commitment), to not be drafted at all, especially players who signed with higher profile teams and conferences. In the past, teams could draft a player who appeared to be unsignable late in the MLB Draft then offer him half a million dollars or even millions of dollars late in the process if things didn't go as planned with early round draft picks. The new rules prevent that from happening, especially the $100,000 bonus amount for players drafted from the 11th to the 40th round. In my opinion, players who sign with a high profile college simply won't forego a college baseball career and education for $100,000, although if they are drafted in the first four rounds, then it is very likely they will sign.
3) Eventually, I see Major League Baseball getting more involved with college baseball. There is already talk that MLB might help fund college baseball scholarships. With more college players being drafted by pro teams and with more high profile high school baseball players going to college, I could see that happening. Colleges will, basically, become more like a minor league for pro ball. But the NCAA will have to address the issue of limiting athletic scholarship to 11.7, which is the current amount that colleges can offer.