As expected, major-league teams have handed out signing bonuses to early-round draft picks this year that are generally lower than what they were in the corresponding slots in 2008.
That stems, in part, from a significant downturn in the economy that has led to a general belt-tightening on the part of several big-league teams, and the renewed, more emphatic urging of the commissioner’s office to roll back bonuses. A year ago, signing bonuses to first-round picks were the third-highest on record.
Major League Baseball is the only major team sport that is forbidden from imposing a hard cap on signing bonuses, but it has again recommended to its 30 clubs a declining amount for each slot in the first five rounds in its ongoing attempt to curb the runaway escalation on signing bonuses. This year, those slots are 10 percent lower than the corresponding slot a year ago.
To date, 53 of a possible 171 players taken in the first five rounds of the June 9-11 draft have signed with the team that drafted them. That includes seven of 32 first-rounders. Of the 53 signed players, PG Crosschecker has identified the bonus amounts of 41.
Of the 41, only one player has earned a signing bonus greater than the amount paid to the player in the same slot a year ago. Thirty-six players have seen a drop (precisely a 10 per cent decrease in many cases), while the remaining four spots corresponded to slots where the player didn’t sign at all in 2008—though all four bonuses are well below the slot amounts that were earmarked for those spots a year ago.
Only the 71st overall pick in this year’s draft, Florida high-school lefthander David Holmberg, drafted by the Chicago White Sox, has received an amount ($612,000, according to figures provided by the Players Association) that exceeds the same slot ($590,000) a year ago.
The commissioner’s office has arbitrarily recommended slot bonuses only through five rounds, and it’s interesting to note that bonuses paid to players in the next five rounds—Rounds 6 to 10, which are not subject to the same across-the-board rollbacks—have not been as adversely impacted.
Of the 48 bonus amounts we’ve accumulated to date for players in Rounds 6-10, we’ve identified 15 players who have earned larger bonuses than players in the same slot in 2008. Three have earned the same amount and 30 have seen a reduction.
It seems apparent then, that where a player was drafted in 2009 has often played a greater factor in his chance of earning a larger bonus than was available in 2008.
For players who fell below the fifth round, who were not subject to the guidelines imposed by the commissioner’s office, they have had a roughly 15 times better chance of earning a larger bonus than those with the apparent misfortune of being drafted by teams in the first five rounds, where bonus amounts are more closely scrutinized by Major League Baseball.
With the obvious downturn in bonuses this year, players have predictably not been in any hurry to sign. Only two players selected in the top half of the first round—catcher Tony Sanchez, selected fourth by Pittsburgh, and righthander Drew Storen, chosen 10th by Washington—have signed to date, and both those selections were pre-draft deals. Sanchez agreed in advance to sign with the Pirates for $2.5 million, while Storen cut a $1.6 million deal with the Nationals. Both those amounts were less than 80 percent of the bonuses paid in the corresponding slots in 2008.
The slow rate of players signings in the first five rounds suggests that more players than ever might wait until the signing deadline of Aug. 17 (two days later than normal this year to account for Aug. 15 falling on a Saturday) to reach agreement. Historically, players who have waited until the deadline to sign have ended up being handsomely rewarded, and it will be interesting to see if that scenario plays out that way again this year—particularly in the backdrop of a bleak economy.