10 Updates

Money Extremely Limited For College Seniors Seeking To Play Professional Baseball

Mar 30 2014, 1:00pm CDT | by

It may be the worst time in recent history to be a college senior seeking to perform for a Major League Baseball-affiliated organization.  MLB teams must remain below a designated signing bonus...

Filed under: news

 
 
 

17 weeks ago

Money Extremely Limited For College Seniors Seeking To Play Professional Baseball

Mar 30 2014, 1:00pm CDT | by

It may be the worst time in recent history to be a college senior seeking to perform for a Major League Baseball-affiliated organization.  MLB teams must remain below a designated signing bonus threshold under the current MLB Collective Bargaining Agreement.  Violation of same may result in stiff fines and/or the loss of early picks in future MLB Drafts.  A major consequence is that college senior baseball players are earning less money early in their professional careers, no matter their talent.

The 2014 Major League Baseball (MLB) First-Year Player Draft is a little more than a month away and will span a total of three days between June 5 and June 7.  More than 1,000 players will be selected by MLB teams.  Among those drafted are high school seniors, junior college players, and 4-year university juniors and seniors.  Those with the least amount of leverage are college seniors.  This has been the case without reference to the specific terms of the collective bargaining agreement that teams and players operate under.  Teams are in a position to tell college seniors, “take it, or leave it,” and if said players decline their offers, they often must look at independent baseball leagues as placeholders until they are able to once again test the MLB market.  This is far from an optimal situation for those athletes.

7 of the top 300 players listed on a Top 300 MLB Draft Prospects list  from February are college seniors, including University of Florida pitcher Karsten Whitson, ranked No. 34 overall.  Each player should know that it is likely he receives a signing bonus term sheet that includes compensation greatly below the recommended signing slot value provided by the MLB Commissioner’s Office.

Just how bad do MLB-bound college seniors have it?  In a forthcoming law journal article titled, Foul Ball: Major League Baseball’s CBA Exploits College Seniors in the MLB Draft, author Jonathan Gordon  sifted through the null   A total of 57 college seniors were drafted in the first 10 rounds and all 57 signed with the teams that selected them.  Meanwhile, high school seniors drafted in the same rounds, and certainly controlling more leverage in negotiations, were able to command roughly 20% above their recommended slot values.

On one hand, it is not hard to support an argument that those college seniors who would be drafted in the first 10 rounds, irrespective of the language contained within the Collective Bargaining Agreement, are taking a discount due to teams trying to stay within their allotted cap on spending.  However, other college seniors may be benefited by the newest iteration of the CBA — it could be causing teams to draft more college seniors in the first 10 rounds to balance their books and remain below their thresholds despite spending above slot on high school juniors.  Signing bonuses are capped at $100,000 per player from rounds 11-40 of the MLB Draft.

In 2013, the No. 1 overall pick was allotted a slot value of $7.79 million and recommended compensation gradually decreased by draft position until the last pick of the tenth round, which had an associated value of $135,000.  The numbers attached to each slot within the first 10 rounds are added up to compute an overall spending allocation per team.  The lightest penalty exists when a team goes less than 5% over its allocation and must pay a luxury tax of 75% of the amount over the threshold.  On the other end of the spectrum is a 100% luxury tax and forfeiture of its next 2 first round picks for any team that goes at least 15% over its allocation.

FORBES previously wrote about how this new, strict system may have been the impetus for the Philadelphia Phillies tattling on its 2013 MLB Draft fifth round selection  Ben Wetzler, who decided to decline the Phillies’ offer and return to Oregon State University for his senior season.  The Phillies indicated to the NCAA that Wetzler had the assistance of an agent in failed negotiations (in violation of the NCAA’s No-Agent Rule), which resulted in a suspension that kept Wetzler out of 20% of his team’s games.  Even though Wetzler chose not to sign with the Phillies, his recommended slot value was subtracted from the Phillies’ overall pool of money accessible to provide to its picks in the first 10 rounds.  The CBA has resulted in an environment that makes it tough for teams to use high picks on players they do not sign.  It also enhances the importance of signing college seniors below slot value so that they have extra money to entice those in similar positions as Ben Wetzler to forego their remaining NCAA eligibility and enter the professional ranks.

Interestingly, college seniors could engage in a cat-and-mouse game whereby they gain extraordinary leverage in the new system created by the Collective Bargaining Agreement.  While all 57 college seniors drafted within the first 10 rounds of the 2013 MLB Draft signed their offer sheets, a college senior who fails to sign at an amount well below slot could serve as a huge detriment to the selecting team.  Because the recommended slot value will be counted against the team’s entire spending allocation, the team has an incentive to sign the college senior . . . maybe not at or above the slot, but players should definitely be in a position to bargain for more than an 80% discount to the signing team.

Yet, the ultimate leverage in negotiations between MLB teams and college seniors almost always reverts to the teams.  ”[F]or the most part it comes down to money.  Juniors know if they get selected in the top ten rounds that they have leverage with scouts,” explained University of Arizona junior Johnny Field who was drafted in the fifth round of the 2013 MLB Draft and signed for $247,500, which was almost $50,000 below recommended slot.  ”If the scouts cannot work with them and meet the number they’re looking for, then they can threaten to not sign and return for their senior year. When seniors get drafted that don’t have any leverage and are forced to sign for whatever the scouts offer them, or they won’t get the chance to play pro ball.”

“If seniors could still get slot (the recommended amount) like they could as juniors and not worry about losing money or falling lower in the draft, then I believe a lot of juniors would come back for their senior year to try and improve and compete for a championship and, most importantly, receive their degree and enjoy another year of college,” continued Field.  ”I would have highly considered returning for my senior year if this [solution] was implemented.”

Such a solution fails to exist.  Expect MLB teams to select many college seniors in the first 10 rounds of the 2014 MLB Draft to dilute the excess of spending on younger players signed above recommended slot value.  With limited options outside of MLB-affiliated baseball, expect many of those college seniors to sign their offer sheets.

Want to learn more about the business of sports? Pre-order my book How to Play the Game  and follow me on Twitter .

Follow @DarrenHeitner

Source: Forbes Business

 
Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was bro ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the D ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Mi ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern states last ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 mi ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocation ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Scheme 201 ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinra ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Bangladeshi plane catches fire at Nepal airport, passengers safe
Kathmandu, July 28 (IANS) A Bangladeshi aircraft caught fire while landing at Kathmandu's Tribhuvan International Airport (TIA) Monday afternoon, officials said.
 
 
Shift work can worsen asthma, pneumonia
London, July 28 (IANS) A research has found that drugs widely used to treat lung diseases like asthma or pneumonia work better with the body clock.
 
 
Decoded: What triggers sexual arousal in you
New York, July 28 (IANS) Know why just looking at an attractive face stimulates sexual arousal? Well, it takes two to tango!
 
 
Turn your selfie into emoji with this app
New York, July 28 (IANS) Tired of seeing the same yellow-faced smileys? In an age of selfies, how can emojis be far behind?
 
 
 

Latest from the Network

Kutcher-Kunis to wed in July next year?
Los Angeles, July 29 (IANS) Actors Ashton Kutcher and Mila Kunis, who are getting ready to welcome their daughter, have begun to plan for their wedding. "The wedding will be next July. They want to focus on their...
Read more on Celebrity Balla
 
Lady Gaga portraits auctioned
New York, July 29 (IANS) Pop star Lady Gaga's "video portraits" raised over $1 million at an auction at Watermill Center here. Director Robert Wilson put on display "23 Video Portraits of Lady Gaga" series at his...
Read more on Celebrity Balla
 
Kim Kardashian followed by 'crazy driver'
Kim Kardashian claims a ''crazy driver'' followed her around Los Angeles today (07.28.14). The 'Keeping Up with the Kardashians' star hit back at rumors she was pulled over by police officers in Calabasas, California,...
Read more on Celebrity Balla
 
Elizabeth Banks is 'very genetically blessed'
Elizabeth Banks says she is ''very genetically blessed.'' The 'Hunger Games' actress, who has sons Felix, three, and Magnus, 20 months, with husband Max Handleman, insists she only recently realized she is attractive,...
Read more on Celebrity Balla
 
Courteney Cox receives engagement gifts
Johnny McDaid and Courteney Cox received several engagement presents in his native Northern Ireland. The newly-engaged couple were given complimentary souvenirs by excited fans in the city of Derry while exploring the...
Read more on Celebrity Balla
 
Ashton Kutcher and Mila Kunis to wed next July
Ashton Kutcher and Mila Kunis are planning to get married next July. The couple, who got engaged earlier this year and are expecting their first child, have reportedly set a date for their wedding next summer, as they...
Read more on Celebrity Balla
 
India at the 2014 Commonwealth Games Tuesday
Glasgow, July 29 (IANS) The following is the list of Indians who will be seen in action in the 2014 Commonwealth Games Tuesday. Schedule Badminton (Emirates Arena) Men's singles (Round of 64): R.M.V.Gurusaidutt vs...
Read more on Sport Balla
 
Indian medal winners at 2014 Commonwealth Games
Glasgow, July 29 (IANS) The following is the list of Indian medal winners at the 20th Commonwealth Games: Gold Sanjita Khumukchan: women's 48 kg weightlifting Sukhen Dey: men's 56 kg weightlifting Abhinav Bindra: men'...
Read more on Sport Balla
 
Hi-tech machine spews beer for fans mimicking Scot talk (CWG Diary)
Glasgow, July 29 (IANS) Fancy a free beer? Get talking in Scottish! A hi-tech water cooler that talks to visitors and dispenses beer is doing the rounds of the city assessing one's accent and rewarding the best with a...
Read more on Sport Balla
 
Ed Sheeran can't keep a secret
Los Angeles, July 29 (IANS) Singer Ed Sheeran is not good at keeping secrets and this habit of his annoys his celebrity friends. The 23-year-old is incredibly open about his life, and though he hasn't shared anything...
Read more on Celebrity Balla