What-is-a-Signing-Bonus-in-the-MLB-Draft

MLB Draft: High School vs. College

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June is a special month for the few players who hear their names called in the MLB Draft. Being drafted is a dream come true for many players, but there is a lot more to it than celebrating on draft day.

Both high school and college baseball players are eligible for the MLB Draft, but the experience of being drafted and negotiating with teams is very different for each.

Let’s take a deep dive into how the MLB Draft works for high school and college players.

When Are Players Eligible for the MLB Draft?

MLB teams can’t just draft anybody. Players must be eligible for the draft in order to be selected or signed as a free agent.

High school players are eligible upon graduation from high school. College players are eligible after their third year of college or upon turning 21 (whichever happens first). Junior college players are eligible after their first year of junior college.

Having to wait three years before being eligible again for the draft is a big disadvantage of going to college in the eyes of some high school players. For others, they see it as three years to develop into an even better prospect and improve their draft stock.

The one year wait period for junior college players is an advantage for those who aren’t quite ready to jump into pro ball but don’t want to wait three years to gain eligibility for the draft.

What is Signability in the MLB Draft?

One of the most common terms spoken among scouts when the MLB Draft rolls around is signability.

Signability refers to a prospect’s willingness to sign a professional contract.

For example, if Player A is a high school senior and is committed to a top tier college program and tells MLB scouts that he is going to college regardless of who drafts him and when, then scouts would say he is not signable.

On the flip side, Player B is a high school senior and is also committed to play in college, but he has made teams well aware that he would rather play professional baseball than go to college if given the opportunity. He would be considered signable.

Even if Player A is more talented than Player B, Player B may have a better chance of being drafted because of his signability. Teams may feel as if they would be wasting a draft pick on Player A.

While some may think Player B gets the better end of the deal in this scenario, by expressing his desire to sign a professional contract, he loses quite a bit of leverage in negotiating his signing bonus which we will discuss further.

What is Leverage in the MLB Draft?

The MLB is a business, and some players have more leverage than others when it comes to negotiating contracts.

Leverage in the MLB Draft refers to the advantage the player has in negotiating his signing bonus upon being drafted.

The players with the most leverage in the MLB Draft are high school players and college players who have college eligibility remaining.

Even though some of these players want to play professionally, teams do have to consider the fact that they have the option to continue on with their collegiate career; therefore, they may have to offer them a more lucrative signing bonus to lure them away from college baseball.

College seniors have the least leverage of all draft prospects because they do not have the option to return to school; therefore, they are typically offered considerably lower signing bonuses.

In our previous example, while Players A and B were both high school seniors with plenty of leverage, Player A had more leverage than Player B because of his unwillingness to sign. If drafted, Player A could ask for a larger signing bonus to lure him away from his commitment.

What is a Signing Bonus in the MLB Draft?

When players are drafted, they are all given rookie contracts which are not always negotiable. However, they can negotiate a signing bonus.

Every draft prospect receives a signing bonus upon being drafted. Where the player is drafted and how much leverage he has determined his bonus.

Before the draft, each pick is given a slot value. The slot value refers to the amount of money that pick is worth. The higher the draft pick, the higher the slot value. This can be thought of as a property value when buying a home. It is there to use as a benchmark when negotiating a price.

Teams can offer players signing bonuses above or below the slot value. Any time a player receives an above slot value bonus, it takes away from the money another player in the draft may receive.

Sometimes, teams try to save money by drafting college seniors early in the draft. Since these players have very little leverage, teams can offer them below slot value signing bonuses and give that money to players with more leverage.

Here is a list of every player that was signed in the 2021 MLB Draft along with the slot value and signing bonus for each pick.

How many rounds is the MLB Draft?

The MLB Draft is 20 rounds with each team getting one pick in each round. The draft consisted of 40 rounds until 2020 when it was shortened to 5 rounds due to the COVID-19 pandemic. After that year and the restructuring of the minor leagues, the draft now consists of 20 rounds.

Can players sign a pro contract without being drafted?

Yes, MLB teams can sign players they don’t draft. This is called an undrafted free agent. The same rules that apply to being eligible for the MLB draft apply to being signed as an undrafted free agent. These players receive signing bonuses as well though they are typically much lower than their drafted counterparts.

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