McDaniel On International Bonus Pools

A number of teams are expected to break the bank on international talent next July, writes Kiley McDaniel of FanGraphs.com. Due to international spending restrictions, teams that spend more than 15% above their allotted pool may not ink any international free agents for over $300,000 in the following two signing periods. However, there is growing consensus within the industry that an international draft will be implemented when baseball’s Collective Bargaining Agreement is re-visited after the 2016 season. If a draft is put in place, teams will have only two years to live with the current arrangement.

McDaniel’s sources have suggested that as many as 10 teams may blow past their limit when the next signing period begins on July 2. The Cubs, Blue Jays, and Phillies will “almost definitely” exceed their respective pools. As McDaniel notes, plans will likely be affected by verbal commitments as we get closer to July. Additionally, the Yankees, Red Sox, Rays, and Angels have greatly exceeded their budgets during the current signing period, meaning they will be penalized during the next two periods.

If there truly are only two more years before a draft is implemented, then teams have an interesting “strategic choice.” At least four clubs – possibly five pending the outcome of the Yoan Moncada bidding – will be handicapped. More will spend heavily next summer, making themselves ineligible for big signings in 2016. If enough teams are aggressive, it could be advantageous to wait until 2016 for a spending spree. McDaniel also points out that the penalized teams are mostly those who usually spend a lot on international talent.

Put it all together, and it’s increasingly clear that clubs are unconcerned about the international bonus pool. While small market clubs may be loathe to pay excessive taxes (100% on overages), those theoretically get passed onto the player via a lower signing bonus. In my opinion, if most of the big spenders are excluded from the marketplace in 2016, then we could see some nontraditional sources of big bonuses.