The 2024 MLB Draft is in the books, which means teams are now discussing signing bonuses with their draftees. The current draft pick bonus system also means those players are negotiating against each other just as much as they’re negotiating with their new employers—and some have no leverage at all.
Not all of the 615 players selected are high-profile. Many of them are like Kai Roberts, the San Diego Padres’ seventh-round pick, who signed for just a fraction of his slot value.
The current rules for signing bonuses assign a dollar amount to every pick in the first ten rounds. This year, the first overall pick was worth $10.57 million and the final pick in the tenth round—315th overall—was valued at $178,800. However, these are not fixed bonus amounts, and many players will sign far above or below their slot value.
The combined value of all of a given team’s draft picks becomes their bonus pool allotment, and that total amount functions as a hard cap. Franchises can exceed their allotment by up to 5% with a 75% tax on the overage. There are stiffer penalties for going more than 5% above the total slot amount, but no team has ever done that in 12 drafts since bonus pools were implemented.
Whether each player signs above, below, or right at their slot amount is determined by their leverage. Roberts is a 23-year-old outfielder who played four years of college ball at Utah. As a “senior sign,” he has used up his NCAA eligibility and will never have a better opportunity to sign with an MLB team than he does right now. As such, he has little negotiating leverage. In practice, these bonuses are often agreed upon before the player is drafted, as Baseball America’s Carlos Collazo explains:
In Roberts’ case, signing for $258,000 below slot value means the Padres can spend that much—plus an additional 5%—on an over-slot bonus for a different player. Usually, this will be someone younger, such as a high school athlete who can choose to sign with the team that drafted him or play in college. In other words, the money goes to a player with more leverage to negotiate.
Second baseman Travis Bazzana was chosen first overall by the Cleveland Guardians after his junior year at Oregon State. It’s unlikely he will receive the full $10.57 million slot amount. He technically has some leverage to return for his senior year, but then he would enter the draft next year with no college eligibility remaining and almost assuredly receive a lower signing bonus offer in 2025.
The Guardians will use their savings from Bazzana’s likely under-slot bonus to give over-slot bonuses to players selected later in the draft, such as high school pitchers Braylon Doughty and Joey Oakie, who they picked with the 36th and 84th overall picks.
As Collazo explained, this process isn’t new, and everyone had a reasonable idea of what to expect before they were drafted—including plenty of pre-draft handshake agreements—but it remains a flawed system.
Very few of the 615 players chosen will reach MLB, and even fewer of them will have sustained, lucrative playing careers. Most of them will be out of baseball within a few years. After all, there will be a new crop of draft picks next year and the year after that, and each of those new players will have to take someone’s job.
Unfortunately, the bonus pool system disincentivizes players from completing their college degrees because doing so drastically reduces their signing bonuses. The result is hundreds of young athletes in their early-to-mid twenties in search of a new career who lost the opportunity to finish their degree on a scholarship.
The bonus pool system is also incongruous with how safe of a prospect each player might be. An older player who has played in college against a high level of competition has a shorter development path in the minors than a teenager who just finished high school. College athletes are also more projectable and generally have less of a bust risk. In spite of this, the rules in place encourage teams to spend above slot for younger players and below slot for older ones.
There are no perfect solutions. A fixed bonus system would take away negotiating rights from players altogether. Prior to 2012, there were no bonus pools at all. Gerrit Cole signed for $8 million as the first overall pick in 2011, and that remained the record-highest bonus ever until Adley Rutschman received $8.1 million in 2019. MLB’s total revenue rose from $6.36B to $10.37B over that span, indicating how much the pool system repressed draft signing bonuses.
Not every player can enter the draft out of high school. Some might not have developed enough to warrant a high draft pick and accompanying bonus, or they think they can improve their draft stock in college. The downside is they lose negotiating leverage along the way, and if they choose to stay in school for four years, risk forgoing any sizable bonus whatsoever. It’s not an easy decision for young ballplayers to make, and it has a massive effect on their future careers—and their bank accounts.