NEW YORK – Major league teams spent a record $289 million on players picked in last year’s amateur draft, an increase of 7.2 percent from 2016.
After an initial drop when restraints began in 2012, spending has climbed gradually. For the sixth straight year, no team exceeded its signing bonus pool by more than 5 percent – the level that triggers the loss of a first-round draft pick the following June.
Spending dropped from $234 million in 2011 to $223 million in 2012, the first year in which teams were assigned signing bonus pools. The total fell to $221 million in 2013, and then climbed to $224 million in 2014, $249 million in 2015 and $269 million in 2016, according to figures compiled by Major League Baseball.
Twenty-one of the 30 teams exceeded their signing bonus pools, including five who went exactly 5 percent over: Atlanta, the Los Angeles Dodgers, Milwaukee, Tampa Bay and Toronto. Four more teams went 4.9 percent over: Boston, Detroit, Kansas City and the Los Angeles Angels.
Clubs incurred $5,046,000 in tax, led by Oakland ($407,325), Milwaukee ($390,900), Tampa Bay ($389,400), San Diego ($386,775) and Atlanta ($368,175).
Teams exceeding their signing bonus pools by up to 5 percent pay a 75 percent tax on the overage, and the loss of a first-round pick is the additional penalty for going 5 to 10 percent above. For going 10-15 percent over, the penalty is a 100 percent tax on the overage and the loss of first- and second-round picks. Above 15 percent, the penalty is a 100 percent tax and the loss of first-round picks in the next two drafts.
Baseball’s labor contract assigns a slot value to all picks in the first 10 rounds, with the amount increasing each year at the rate industry revenue grew in the most recent calendar year.
A team’s pool is the total of its slots. For this year’s draft, which starts Monday, the top pick is assigned $8,096,300 and the 30th selection of the first round is $2,275,800.
If a team fails to sign a player, the amount of that slot is deducted from its pool. For the 11th through 40th rounds, the amounts of bonuses exceeding $125,000 per pick are added to a team’s total for calculating the tax.
Kansas City has the highest pool in 2018 at $12,781,900, followed by Tampa Bay ($12,415,600) and Detroit ($12,414,800).
The Los Angeles Dodgers have the lowest at $5,288,200, with World Series champion Houston just above at $5,492,900.
Detroit picks first, followed by San Francisco, Philadelphia and the Chicago White Sox.
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