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This year’s draft picks got $228 million in combined bonuses

Aug 17, 2011, 12:48 PM EDT

stack of money

Note: I’ve corrected some figures that were initially listed wrongly.

Jim Callis of Baseball America reports that the 2011 draft class received a grand total of $228 million in signing bonuses, with their total guaranteed money rising to $236 million once major-league contracts are factored in.

That represents a 16 percent increase over last season, when the 2010 draft class combined for a then-record $196 million in signing bonuses and $202 million in total guaranteed money.

In other words, MLB’s attempt to suppress bonuses by bullying teams into following their “slot” recommendations hasn’t exactly gone as planned. Teams spent $132 million for players signed on the August 15 deadline day alone.

And while $228 million for a bunch of high school and college players sounds like an insane amount of money–and it certainly is, on a player-by-player basis–collectively the draft class will ultimately provide far more value than that to teams during their cost-controlled, pre-free agency seasons. And it would have been $231 million had Tyler Beede not turned down the Blue Jays for Vanderbilt.

  1. paperlions - Aug 17, 2011 at 12:59 PM

    Which comes out to an average of $4.4M per team, which can buy you 1/2 season of Nick Swisher, or 9/10 of a season of Lyle Overbay, or 1/3 season of Kyle Loshe, or 1.25 seasons of Ryan Theriot, or 1 season of Jesse Crain, or 1/3 season of Adam Dunn or, 1/6 of a season of Vernon Wells …..so, really not very much at all….meaning these types of investments should provide much greater payoff than MLB-level FA contracts.

    • pjmarn6 - Aug 17, 2011 at 3:48 PM

      Absolutely ridiculous. A teacher for your children gets less than $43,000 a year and these kids are multimillionaires by the time they are 21 because they can hit a baseball? No need to worry about the Democrats or Republicans, the crazy president or the corrupt congress, just look at the completely ridiculous insane baseball

      • Kevin S. - Aug 17, 2011 at 3:57 PM

        You would prefer that owners keep the profits? Because they’re going to generate that revenue regardless of what they pay their talent.

      • jimbo1949 - Aug 17, 2011 at 4:24 PM

        Bankers and brokers get hundred million dollar yearly bonuses for using your money to gamble with. And if they lose, they still get the bonuses and the rest of us get the bone.

        A teacher for your children gets less than $43,000 a year because taxpayers vote down education budgets on the premise that teachers are overpaid. Those are the people you need to bitch on.

      • pjmarn6 - Aug 17, 2011 at 7:46 PM

        The price of everything went up to overpay these people. The owners will always make money. And you seriously believe that Rodriguez should get $9000 every time he swings the bat? You actually believe that guaranteed multimillion dollar contracts should be paid to someone who never finished college and only has good eye-hand coordination? A film star in a movie can be watched over and over again. A baseball player plays 5 seasons has a guaranteed retirement and if he knows how to invest never has to work again. Teachers get an average $43,000 all over the U.S. and these people are paid to teach your children.
        These ball players are not scientists, not inventors, not teachers, not geniuses or anyone special. They lucked out with some special temporary physical attributes and should not be paid these enormous sums.
        I remember when baseball was free on tv and radio. Baseball players were normal people who played a game. Today all you hear is million this, appeal that, strike here, agent there, Yankees have a $2500 daily seat, $10. hotdogs. Pay for watching the game on tv, pay for listening the game on radio, endorsement here, pay for autograph. I wasn’t a good player, but I like to play the game and had I the abilities to get to the show, I would have been thrilled. Today all you hear is this personalty conflict, he doesn’t want to go to this team, small market versus big market, $250,000,000 team salary, rookie comes up and gets $450,000. Bonuses over $200,000,000. All you nay sayers have to realize YOU ARE PAYING FOR ALL THIS CRAP. I refuse. I find these salaries ridiculous, outrageous and obscene.

      • pjmarn6 - Aug 17, 2011 at 7:58 PM

        And jimbo, you don’t think these ballplayers are overpaid? How about all those scumbags who took steroids and got superinflated salaries for the next few years based on their cheating? Clemens, Rodriquez and all those others? They outright cheated. They puffed up their figures, moved ahead of other athletes, were able to make hits or lower their eras and make other players look bad. And they made billions on those drugs. We watched or read about a bunch of cheats and phonies. The owners paid them huge salaries based on drugs. Look at Rodriquez’s numbers over the last five years, down, down, down.
        Ball players made a damn good living and the public could identify with the players. I used to think, if I had a father like Mickey Mantle’s who would take me out after work and teach me the game and given me the chance to hone my skills, I might have made it to the minors. I wanted to learn and there was no chance for me. I just wanted to play baseball.

      • paperlions - Aug 17, 2011 at 8:27 PM

        The price of salaries do not drive prices, as is well established. Prices will rise until people refuse to pay the price; salaries have risen in response to the increased revenue generated by price hikes and the desire of some teams to win. Prices drive salaries, not the other way around.

      • drunkenhooliganism - Aug 17, 2011 at 8:30 PM

        someone who would complain about teachers’ salaries would be offended by a meritocracy like baseball.

      • Kevin S. - Aug 18, 2011 at 8:52 AM

        Basic logic here – if it was possible to increase prices to generate more revenue (i.e. the tradeoff of fewer fans, concessions, etc. would still be worthwhile), why wouldn’t owners do it regardless of what they’re paying players? Do you really think the owners aren’t greedy SOBs looking to wring out every last cent they can? And if they were already maximizing revenue, then player salaries rising wouldn’t cause them to raise prices, because they’d actually lose revenue then (the tradeoff would NOT be worthwhile).

        You know the single best way to put a crimp on player salaries? End the bullshit involving publicly subsidized ballparks. Add that significant expense to the owners’ ledgers, and salaries will have to come down.

  2. Chris Fiorentino - Aug 17, 2011 at 1:06 PM

    $132 million by itself obviously doesn’t sound like a lot…but when you say it is a 45% increase over last year, then it is absolutely an insane amount of money!!! If they aren’t careful, this will turn into the NFL and in 5 years, the first pick will be getting $50 million guaranteed.

    • dcburden - Aug 17, 2011 at 1:12 PM

      I bet the owners would love the NFL model – no guaranteed contracts either!

    • paperlions - Aug 17, 2011 at 1:13 PM

      I don’t think so.

      This draft was very deep compared to last year’s draft, which was considered sub-par. Much of that difference in spending between the years was based on the quality of the available of talent.

      Compared to spending money on FAs, investing in young talent, which is still far far cheaper than paying buying an average MLB regular or mid-rotation starter, is the smarter investment, much of the change in spending is because more teams have realized investing in the draft will yield more talent/dollar than investing in the FA market (which is nearly always the purchase of a resource that is declining in ability).

      • Chris Fiorentino - Aug 17, 2011 at 1:34 PM

        I guess we’ll see what the total outlay is in 2012…but this is exactly how the NFL overpaying their draft picks went to hell in a handbasket. In 2001, Vick got $15.2 million guaranteed. 9 short years later, Bradford got $50 million guaranteed.

      • Kevin S. - Aug 17, 2011 at 1:44 PM

        The cap also went up significantly. Vick’s $15.2 million guaranteed represented 22.5% of the 2001 salary cap. Bradford’s $50 million guaranteed was given to him in an uncapped year, but given the way the cap was increasing, let’s conservatively say it would have been $135 million, or 37%. They increased, but not nearly as much as the raw numbers the shrieking heads made it sound like.

      • paperlions - Aug 17, 2011 at 1:53 PM

        The NFL also has a structure where, almost without fail, the higher pick ALWAYS gets more money than anyone below him that year and more than whoever was picked the year before in the same spot. NFL draftees are typically expected to make an impact very quickly and nearly all will immediately be on the NLF roster. In addition, NFL draftees have little option once drafted, they either sign and play or wait a year.

        MLB doesn’t have this type of structure at all. Amounts paid to higher picks and to picks of previous years have little effect on most negotiations. There is nothing approximating a linear (or monotonic) decline in salaries with draft position.

        In addition, most of draftees are not expected to play for the MLB club for many years and very few are placed immediately on the 40-man roster and rarely does a player go straight to MLB.

        ….and, nearly every pick in the first couple of rounds can choose to go to school or go back to school if he doesn’t sign, very few players with no college eligibility left are high draftees….and if they don’t sign? They can just go play ball over-seas or in independent leagues and re-enter the draft the next year. Despite these forms of leverage enjoyed by baseball players that football players do not have, the vast majority of draftees still choose to sign.

        I just don’t see enough similarities between the systems to be concerned.

  3. icanspeel - Aug 17, 2011 at 1:25 PM

    It is actually a great investment for teams. Even if only 1 player turns out decent they get the player under team control for awhile and the first 2 years at the league minimum. It’s really the only way small market clubs can compete. Look at the Rays and how they built up a team.

  4. sknut - Aug 17, 2011 at 1:42 PM

    Whats the difference in total players signed this year vs. last year, I would imagine its pretty close but that needs to be factored in as well.

  5. canucks18 - Aug 17, 2011 at 2:20 PM

    The MLB needs to set Pick # signing bonus limits. These kids are making a ridiculous amount of money and agents are getting greedier every year!!!

    • paperlions - Aug 17, 2011 at 2:27 PM

      As soon as they set reasonable limits on ticket, parking, and concessions….I’m be on board with this.

      Who do you want to get your money? The ball players you go to see and root for and that make you love the sport…..or the owners that do nothing but keep raising prices and threatening to leave town if the tax payers don’t give them 100s of millions of dollars to build another new stadium on top of the huge tax breaks they already get each year?

    • sknut - Aug 17, 2011 at 3:18 PM

      Unlike the NFL the players have the leverage of going to college and they wisely use it to coax more money out of the teams. MLB needs to do away with the slot recommendations, it hurts more than it helps, especially when a team can say they followed the recommendations and missed out on signing their top pick.

    • asharak - Aug 17, 2011 at 3:27 PM

      No. These kids aren’t making NEARLY enough. Remember: this is what teams were willing to pay when the kids had essentially no negotiation leverage whatsoever, other than, “fine, I won’t play pro ball after all”. On anything resembling an open market, teams can and would have paid far more (see Chapman, Aroldis, et al).

      Also remember, teams aren’t stupid: they know how much money a successful prospect will make for them and they know how to value the risk that a prospect won’t be successful. They aren’t being bullied or badgered into signing these contracts. They’re doing it because, as large as the deals are, they expect they will still make a handsome profit in the long run.

      Owners and/or GMs don’t want bonus limits because they think the prospects are making too much. They want them because they think they (the owners) are entitled to even MORE profit per prospect.

  6. tuftsb - Aug 17, 2011 at 3:43 PM

    Once signed, players will spend 3-4 years in the minors before reaching the major leagues. Then they are not arbitration eligible for 3 years (with some exceptions). Then they are not eligible for free agnecy until completing 6 major league seasons.

    Owners effectively control salaries for about 9-10 years after the draft. Successful teams will meximize production from the players that have limits on their compensation.

  7. paperlions - Aug 17, 2011 at 4:12 PM

    Meximize? …. not sure if racist :-)

  8. aaronmoreno - Aug 17, 2011 at 7:13 PM

    Hard slotting means Bryce Harper plays football or basketball, and baseball withers on the vine.

    • Kevin S. - Aug 18, 2011 at 8:54 AM

      Definitely makes it more likely Zach Lee and Bubba Starling are in the SEC and Big Ten right now.

  9. 1943mrmojorisin1971 - Aug 17, 2011 at 11:49 PM

    The idea of guaranteed money for players who have never stepped on a major league field is ridiculous. The MLB should adopt entry level contracts like they have in the NHL. Let the rookie players earn their money for their actual performance, not their potential

    • Kevin S. - Aug 18, 2011 at 8:56 AM

      You know what else is ridiculous? Stephen Strasburg getting paid less than re-treads like Javier Vazquez. Rookie contracts price the uncertainty into what the players get. Yeah, some will bust. Others will return orders of magnitude on the teams’ investments. The owners win in this system, make no mistake about that.

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