Justin Upton broke baseball barriers when he was selected #1 overall in 2005. He received a whopping $6.1 million signing bonus for placing his name on the dotted line [New high MLB signing bonus]. A new Golden Age of baseball had arrived. The 1994 strike was a distant memory and it seemed as though nothing could stop the rise of salaries as people were coming back to the ballparks to watch their favorite teams. Why then have we seen a shift in signing bonus money all of a sudden?
In baseball, signing bonuses tend to differ based on the round that a player is drafted in and whether he entered the draft as a high school student, college junior, or college graduate. Each year’s bonus for a given draft position (ex: 15th overall) is used the next year as a starting point for negotiations on a player drafted in the same slot. Usually, the player drafted a year later finds himself making a marginal amount more than the player selected in that slot in the prior year. That scenario could be changing, and it is something that agents should keep their eyes on.
If you look back to my Big Ass Roundup Of MLB’s New Labor Deal, I wrote:
High school seniors and college juniors (and anyone else who is not a college senior) who enter the amateur draft early must sign by August 15th of that year in order to be eligible for that season [MLB labor peace assured through 2011]. < ~Hurts agents. Not as much time is granted for negotiation between agent/club. Holdouts are virtually impossible. Player bonuses may decrease.
While it may just be a correlation, signing bonuses are decreasing. So far, bonuses are down about 10% from last year [Report: MLB May be Colluding on Draft Signing Bonuses]. And it may actually be a result of collusion, which would violate the CBA. Recommendations from the MLB office are fine, but mandatory ceilings or threats to influence spending would be a pure violation.
Let us do a quick analysis of Matt LaPorta (1B/LF), taken with the 7th overall pick by the Milwaukee Brewers. Reports indicate that he has received a signing bonus of just around $2 million [Brewers agree to deal with seventh overall pick LaPorta]. $2 million is nothing to scoff at, but there are a couple of things to note with this deal. LaPorta is represented by Scott Boras, who is known for getting every possible penny out of a team. Why then did he receive less than last year’s 7th round pick, Clayton Kershaw, who garnered a $2.3 million bonus? It is because he is a senior without leverage, or is there some sort of collusion going on? You make your own judgments.
Make sure to follow draftee signings as they continue until August 15th (the new deadline). It will be interesting to see how this all plays out, and if in fact signing bonuses will go down from last year.