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Earlier this week, teams around the league received their draft and international signing pool budgets for the coming year. Here's what that means for the Twins.
International signing pool
Minnesota's budget for international signings is $2,399,100. That's roughly $1.5 million less than they had to spend in the 2015-2016 period, wherein their entire budget went to sign 16-year old shortstop Wandy Javier. As we've noted in the past, there are penalties for teams who go above and beyond their allotted budgets.
- Going over bonus allocation incurs a 100% tax. Every dollar you spend over your limit becomes two.
- Exceeding the budget by 5 to 10% means the team is not allowed to sign any individual player for more than $500,000 in the following international signing period.
- Exceeding the budget by 10 to 15% means the team is not allowed to sign any individual player for more than $300,000 in the following international signing period.
- Exceeding the budget by more than 15% means the team is not allowed to sign any individual player for more than $300,000 in the following two international signing periods.
While the Twins did slightly exceed their pool last year, their overage wasn't so egregious that it will limit how much they are allowed to spend on any one player this year. A number of teams are restricted during the 2016-2017 period however, meaning that they won't be able to spend more than $300,000 on any single player. That, of course, limits the quality of prospects each of those teams will be able to target.
The clubs to be held to $300,000 or less on any one player are the Angels, Blue Jays, Cubs, Diamondbacks, Dodgers, Giants, Rays, Red Sox, Royals and Yankees. This means that while there are 16 clubs across Major League Baseball with higher budgets for international signings in the upcoming period than the Twins, three of them can't compete with Minnesota for the same caliber of player.
It's a common strategy for teams, under the current CBA, to intentionally blow their budgets out of the water once every three years. It means they can corner the market on that year's best international prospects by blowing offers from teams staying within their budgets out of the water, essentially taking on a different type of risk: spending a bunch of money once every three years for as many high-quality prospects as possible, versus spending a consistent amount of money every year on players of varying quality.
Currently, only the Braves, Cardinals, Nationals and Padres are expected to pursue this course of action for the 2016-2017 international signing period. If the Twins were to follow suit, it's a strategy I would whole-heartedly endorse. With many of the game's biggest spenders already out of the bidding (the Yankees, Dodgers, and Red Sox in particular), Minnesota might not have a better opportunity to throw their money at high-ceiling international prospects than they will this season.
There's also the issue of the current CBA, which expires on December 1, 2016, since there's no guarantee that the rules surrounding the international signing period will remain the same. Major League Baseball is constantly striving for ways to balance the field, so it wouldn't be surprising to see them close this loophole in spending. If teams across baseball want to take advantage of a chance to game the system, they may not have a better opportunity.
2016 MLB Draft budget
For the upcoming MLB draft, the Twins are currently allotted a budget $7,997,200. This is subject to change, as the draft order could still shift before June. While Minnesota is currently slated to pick 16th overall, the Baltimore Orioles (currently 14th) have made waves in recent weeks by considering signing Yovani Gallardo and Dexter Fowler. Both players refused a one-year qualifying offer, meaning that if Baltimore signs either player they will forfeit their first-round draft pick. If the Twins move up to 15th, their pool could increase based on a higher draft position.
| % Over Budget |
Corresponding Maximum
Twins Spend
|
Penalties Leveled |
| 0% | $7,997,200 | None |
| Up to 5% | $8,696,955 | 75% tax on overage |
| Up to 10% | $9,396,710 |
75% tax on overage,
loss of next season's 1st round pick
|
| Up to 15% | $10,396,360 |
100% tax on overage,
loss of next season's 1st and 2nd round picks
|
| > 15% | $10,396,361+ |
100% tax on overage,
loss of 1st round pick next two seasons
|
Just looking at the penalties themselves, which are already included in the above totals:
- Each amount in the "corresponding maximum spend" column includes the maximum overage as well as the tax on that overage.
- The cash penalty on up to 5% for the Twins this year would be as much as $299,895.
- The cash penalty on up to 10% for the Twins this year would be as much as $599,790.
- The cash penalty on up to 15% for the Twins this year would be as much as $1,199,580.
- If you go over your bonus pool by up to 10%, every $1.00 you spend becomes $1.75. If you go over 10%, every $1.00 you spend becomes $2.00. I find it unlikely that a team would ever blow their budget so severely, but if they do you know they'll think it's worth it.
The Twins have never exceeded their draft pool under the current CBA as to have a penalty leveled against them, and it's doubtful that they'll ever do so.
I have just one question for you: would you like to see the Twins blow their international signing budget this year?