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2007 MLB Amateur Draft Signing Bonuses

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.

-Darren Heitner 

By Darren Heitner

Darren Heitner created Sports Agent Blog as a New Year's Resolution on December 31, 2005. Originally titled, "I Want To Be A Sports Agent," the website was founded with the intention of causing Heitner to learn more about the profession that he wanted to join, meet reputable individuals in the space and force himself to stay on top of the latest news and trends.

Heitner now runs Heitner Legal, P.L.L.C., which is a law firm with many practice areas, including sports law and contract law. Heitner has represented numerous athletes and sports agents as legal counsel. He has also served as an Adjunct Professor at Indiana University Bloomington from 2011-2014, where he created and taught a course titled, Sport Agency Management, which included subjects ranging from NCAA regulations to athlete agent certification and the rules governing the profession. Heitner serves as an Adjunct Professor at the University of Florida Levin College of Law, where he teaches a Sports Law class that includes case law surrounding athlete agents and the NCAA rules.

4 replies on “2007 MLB Amateur Draft Signing Bonuses”

As a Tiger fan I’m really upset with the commish’s office putting pressure, with threats, etc on the Tigers to not sign Rick Porcello for more than their recommended slot money for the #26 pick.

My thought is per MLB rules they can pay him whatever they want. The guy is a top 5 talent, the MLB Draft has changed from drafting the best talent, to drafting what you can afford. The Tigers can afford Porcello, thus they took him and will pay him what they want. They didn’t break any rules, but yet MLB is threatening them and putting pressure on them to run the club the way MLB wants it to be run, not the way the Tigers want to run it.

It’s funny though, MLB was all for the BoSox paying over $100m for the rights and contract of Dice K, but are throwing a fit about the Tigers potentially paying $5m-$6m over 4-5 years for a pitcher out of high school.

I agree. I happen to know a little about Porcello and he has high potential to be a great major league pitcher. He’s smart, athletic, injury free, has a great work ethic, and would love to be on the Tigers rotation. Certain MLB Owner’s are pushing to control signing bonuses because they run their franchise to make money instead of winning baseball games. The Tigers have committed themselves to winning or least trying to bring in the best players to accomplish that goal.

Teams like KC, Tampa Bay, Washington and Pittsburgh are more interested in improving ticket sales than improving their winning percentage. The Royals have had the 7th, 4th, 7th, 4th, 9th, 6th, 5th, 14th, 2nd, 1st and 2nd first round picks from 1997 to 2007 and yet, they can’t even make it to the playoffs and all of those picks have yet to make an impact in the league. That’s pathetic. Either their picking process has had very bad run of luck or their developmental system is severely flawed. Be glad you’re a Tiger’s fan. They know what they’re doing.

I hope the Tigers don’t get bullied into making a decision on Porcello based on the leagues pressures. Detroit’s management seems more respectable and smarter than that.

I agree that the Tigers should pay Porcello what they feel he is worth. The reason Porcello fell as far as he did was due to his agent and signability issues. If the Tigers are willing to meet his price, then go for it. MLB is still part of the free market and players and prospects should make what they feel they are worth if teams are willing to pay it.

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