“That’s Amore!” Understanding the International Signing Process
By now, you’ve heard of international signings. You know the key players, and the media portrays nearly every available player as the greatest thing since sliced bread. Of course, player development is crucial for players to page huge dividends for their respective organizational. I’m not necessarily for an international draft. But, I do believe that international players should have to enter the first-year player draft. It gives each team a fair chance at acquiring a highly-rated international player. This would keep big market teams in check, and they wouldn’t automatically get the first chance at signing an international player. This week, I want to breakdown the international signing process in “That’s Amore!” Understanding the International Signing Process.
After the new collective bargaining agreement was instituted in 2016, there was no international draft like MLB had proposed. July 2 starts the international signing period and a player is eligible through the second week of June the following year. Eligible players are 17 years-old or will turn 17 years-old by the end of their first contract season. Players over the age of 17, and have not signed a Major League or Minor League contract are also eligible.
Each team is distributed $700,000, and bonuses made up of four different slots. The bonus slots are based around teams’ records from the previous season. The slots range from lowest winning percentage to the highest winning percentage. The best part of the allocation is the ability to trade bonus pool money. It’s a great incentive for teams to gain international dollars. The money doesn’t carry over from season to season, so if a team has any remaining balance, it is zeroed out. When it comes to dealing international dollars, a team can trade up to 75% of their original allocation. After the 2018-2019 season, teams can trade up to 60% of their original allocation (Source: MLB.com). In years past, teams could blow past their allocation, pay a “luxury fee”, and be limited to signings up to a certain dollar amount for the next two periods. Now, teams that exceed their budget from 0% to 5% will face a 100% tax, and teams that exceed their budgets by 5% to 10% are not allowed to sign a player for more than $500,000 during the next signing period (and pay a 100% tax). In the most severe cases, a team spending 15%+ will not be allowed to sign a player for over $300,000 and pay the 100% tax on the overage. This was put in place to deter big-market teams from overspending. In previous years, they could sign the best players, pay a fine, and move forward. I’m in favor of a penalty that limits spending for the next signing period. If Major League Baseball wants to keep the league competitive, small market teams need to be able to compete for international signings. Again, to make this completely fair, MLB should require international players to enter the first-year player draft. It’s been a long time since smaller market teams such as the Oakland A’s (Yoenis Cespedes) and Cincinnati Reds (Aroldis Chapman) signed the best international players available.
Of course, there are a few exemptions. Naturally, teams would love to be able to stock their minor league system with young talent under the age of 18. That would be in a perfect world. However, the rules do not apply to players who sign a Major or Minor league contract or are at least 25 years-old and have played in a MLB-recognized professional league for a minimum of six seasons (Source: MLB.com). There is an exemption for Cuban players who are at least 25 years-old and have played professionally, in a Cuban, Japanese, or Korean league for five or more seasons.
What would the process be without penalizing teams? There are penalties that will deter teams from having a monetary advantage over others. First, the budget can shrink if a team goes over its allocation. They lose $1million from their budget the next signing period. If a team goes over their budget allocation, they cannot sign a player for over $300,000 for the next two signing periods (think the next two years). Any team that doesn’t spend their budget allocation will have their remaining budget equally distributed to other clubs.
What Does This All Mean?
The entire international signing process was put in place to give all teams a shot at acquiring international prospects. In years past, big market teams were able to bypass small market teams by spending endless amounts of money. Now, the penalties will keep big market organizations in check. Is this a good thing? Yes. It’s always good to have a fair process in order. Is it perfect? No. Big market teams still have an advantage as they can go over their budget for the highly-touted prospect while not caring what the overage tax will be. Even if they have to spend no more than $3,000,000 due to over-spending, they still get the best player available.
One of my favorite aspects of all this is that teams are allowed to trade bonus pool money. If I were a smaller market team selling at the deadline, I’d gobble up as much international money as possible. Yes, at times you get prospects in return, but let’s be real. How often do lower-end prospects make a difference at the Major League-level? If you get one player to crack a Major League roster you’re considered lucky. A perfect example would be the Philadelphia Phillies over the weekend. They traded Jeremy Hellickson to the Baltimore Orioles for lower-end prospects plus international money. More than likely, these prospects won’t become superstars, but gaining extra international money could mean the difference in leap-frogging another teams bid for an international signing.
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Major League Fantasy Baseball Radio Show: Join guest host Andrea LaMont, and Kyle Amore live on Sunday July 30th, 2017 from 7-9pm EST for episode #96 of Major League Fantasy Baseball Radio. We are a live broadcast that will take callers at 323-870-4395. Press 1 to speak with the host. We will discuss the latest information in the world of fantasy baseball.
Our guest this week is Joe Iannone. Joe is a writer with majorleaguefantasysports.com and he focuses on spot starting low owned pitchers. His articles publish every Sunday morning.
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