Let’s track draft signings and talk about the draft bonus pool system

The draft is over, and the Royals have 43 new players they could potentially add to the fold. They won’t sign all of them of course, teams sign over 80% of the players drafted in the first 20 rounds, but it generally tapers off after that.

You may be wondering why the Royals took a college senior with an 8.47 ERA in the first ten rounds, or a player ranked 230th by Baseball America with the 58th pick. It all has to do with the draft bonus pool system.

Baseball was worried that amateurs in the draft were getting millions of dollars despite a high bust rate because teams couldn’t exercise restraint (aided in part by “adviser” Scott Boras). So in 2012, they implemented new bonus pool rules. MLB would assign a “bonus value” for each slot in the draft, pick one would be worth $X, pick two would be worth a little less, and so on. Teams could take combine all the value from their picks in the first ten rounds in a draft bonus pool and disperse the money to picks however they want, so long as they do not exceed their overall pool. After the first ten rounds, the draft bonus limit is $125,000, and if teams go over that amount it must come from their draft bonus pool.

So to sign a guy like Brady Singer, the Royals may have to go a bit over the slot amount for that pick, $3,349,800. That means they must make up the difference somewhere else, which is why they probably drafted a guy like Zach Haake, a college senior with an 8.47 ERA for Kentucky. Haake, having pretty much no leverage, will probably have to take whatever bonus the Royals offer him, and it will likely be well under his slot bonus amount of $258,000. The earlier you can take an “underslot” guy, the more his slot bonus will be, and the more money you can use from that slot value to apply to someone else’s bonus.

Many times, teams with multiple early picks like the Royals had this year, will try to go with an underslot player early - like the Royals did in 2013 with Hunter Dozier. This allows them to grab a top-shelf talent later in the draft that slid due to being a difficult sign, like the Royals did later in that draft with Sean Manaea. Why not just grab Manaea early? Because if he fails to sign, the team loses that draft bonus slot amount, wiping out a lot of their pool. However, if you take him later and he fails to sign, you lose less from your pool, since the assigned slot value is smaller.

This year, the Royals had $12,781,900 to spend in their bonus pool, the most in baseball due to their compensatory picks for losing Lorenzo Cain and Eric Hosmer. But they opted not to take the strategy they employed in 2013, instead grabbing a top-shelf talent like Brady Singer with their first pick. There may be some massaging of the draft bonus pool, but for the most part I would expect most Royals signings to be around their assigned slot value.

Players have until July 6 to sign. Short-season leagues begin play next Friday, on June 15. We’ll track players that have signed here.