2018 MLB Draft Primer: What Mariners Fans Need to Know About the MLB Draft
Draft Slot System, AKA The Bonus Pool
In a fairly new change to its draft rules, Major League Baseball has set a cap for spending allowed in the draft. This is not that uncommon, as the NFL and NBA have similar model. In this instance, the first pick is assigned a “slot value” or recommended max for signing the player selected in that slot.
However, unlike the other drafts, MLB does not limit the amount you can give to one player. Instead, they set a limit you can spend on your entire draft. This is called a “bonus pool”. The amount you are allowed to spend is proportionate to the number of picks you have and your draft slot.
The team with the #1 pick will get to spend more on these draft picks than the team with the 30th pick.
So why do they do it this way? A really simple answer is to say Scott Boras. Before MLB put in this bonus pool rule in 2012, super agent Scott Boras was turning the draft into a pure auction. Basically, Boras would demand a ridiculous amount of money to sign a player, forcing cash poor teams to lose out on premier talent, because they couldn’t afford said player.
Boras would find a team that was willing to pay his ridiculous demand, and thus was able to shuttle talent away from teams that couldn’t afford it.
You might be asking yourself, what happens if a team outspends it bonus pool? Well, according to MLB:
"A team that outspends its pool by 0-5 percent pays a 75 percent tax on the overage. At higher thresholds, clubs lose future picks: a first-rounder and a 75 percent tax for exceeding their pool by more than five and up to 10 percent; a first- and a second-rounder and a 100 percent tax for more than 10 and up to 15 percent; and two first-rounders and a 100 percent tax for more than 15 percent."
It’s common for teams to break this rule, but no team has ever exceeded by more than 5%. So if a team exceeds the pool by $100,000, they must pay 175,000 as a tax.
In fact, many teams seek to exploit the current system. We saw the Mariners do such last season. With the 55th pick, the team selected Sam Carlson, and paid him $2 million bonus, more than double the recommended slot bonus.
In order to stay under their pool bonus, the Mariners used their 3rd-10th round picks on player who would sign “below slot deals”. In layman’s terms, the Mariners spent a large chunk of their pool on their first 2 players, and punted the rest of their Top 10 picks so not to exceed the pool bonus.
Another common work around is for teams to take player earlier than they expect to go, sign them to below slot deals, and use the savings to get another player or two they like. An example is the 2012 Astros, who saved money by selecting Carlos Correa first overall, then selecting Lance McCullers Jr at pick 43.