International Signing Period Preview: New Rules Shouldn’t Hurt Pirates
There has been a lot of talk about how the new draft rules hurt the Pittsburgh Pirates, who spent more than any team from 2008-2011. The Pirates have also upped their spending on the international market, with a budget of $3 M a year. They’ve gone over budget the last two years, spending a little over $9 M, which ranks fifth in baseball in that time frame.
The new Collective Bargaining Agreement limits teams to spending $2.9 M this year. That shouldn’t impact the Pirates in the same way as the new draft spending rules. They won’t be able to go over-budget for a third year in a row, but they can still sign a lot of talented players with the $2.9 M.
The new system actually benefits the Pirates. Most of their signings are smaller budget deals around $300 K or less. The spending in the international market started to get out of control last year. Texas spent $12.83 M. Toronto spent over $7 M, and Kansas City and Seattle both spent over $6 M. Unlike the draft spending, there’s nothing stopping a team from signing two or three of the top guys. In the draft you’re only limited to who is available when you pick, and you can only take one player. Stuck between a choice of Jameson Taillon and Manny Machado? Make a choice. Stuck between two of the top international prospects? Sign them both.
The draft spending rules should lower the prices on the top guys, and spread them around a bit. That will allow the Pirates to sign a top guy without sacrificing too many of the lower priced signings to stay at that $3 M budget.
The New Rules
The international market saw similar changes as the draft in the new CBA, limiting overall spending with harsh penalties for teams that go over budget.
Each club will receive $2.9 M to spend in the 2012-2013 signing period (from today to July 1st, 2013). Starting next year, clubs will receive a Signing Bonus Pool ranging from around $1.8 M to $5 M, based on the reverse order of the previous season’s standings. Also starting in 2013-2014 clubs may for trade up to 50% of their Pool. A team with a $3 M pool could trade for an additional $1.5 M to spend. Unfortunately, teams aren’t permitted to deal for extra money this year, so $2.9 M will be the budget for Pittsburgh, and every other team.
Like the draft, there are penalties for exceeding the Signing Bonus Pools.
0-5% – 75% tax
5-10% – 75% tax and the loss of the right to provide more than one player in the next signing period with a bonus in excess of $500,000
10-15% – 100% tax and the loss of the right to provide any player in the next signing period with a bonus in excess of $500,000
15% or more – 100% tax and the loss of the right to provide any player in the next signing period with a bonus in excess of $250,000
There are also two exceptions to the bonus pools. The top six bonuses of $50,000 or less don’t count toward the pool. Also, any bonus of $7,500 or less doesn’t count.
I wouldn’t expect the Pirates to go over-slot here. They don’t sign a lot of big deals to begin with, so they shouldn’t be at risk of going over-budget. Their budget the past few years has been $3 M, and they’ve only gone over twice. Once was to sign Luis Heredia (taking up $2.6 M of their $5 M in spending in 2010). The other was to sign Harold Ramirez and Elvis Escobar (taking up $1.55 M of their $4 M in spending in 2011). The new budgets should lower some of the prices for top players. Even if the Pirates sign a top player, they’d probably just make cuts on the smaller signings to stay under budget.
Julio de la Cruz
The big name the Pirates have been linked to is third baseman Julio de la Cruz. Ben Badler of Baseball America recently had Cruz going to the Pirates in his prediction of the destinations for the top 20 international prospects (Cruz ranks 16th).
The big advantage for the Pirates here is that De La Cruz is represented by Luis Polonia, who the Pirates have worked with a lot recently. The Pirates signed Edwin Espinal from Polonia last year, and even signed his son, Rodney Polonia, two years ago today. Others signed from Polonia include Willy Garcia, Leandro Rodriguez, Isaac Sanchez, and Adrian De Aza.
De La Cruz is an athletic third baseman who makes good contact, has average power now and projects for more power going forward. He also has a good arm on the field. We first heard that the Pirates were linked to him back in May. The Mets, Cubs, and White Sox have also been linked to him, but considering the relationship with his agent, you’ve got to think the Pirates have the advantage.
Don’t Expect a Busy Start
In the past few years the Pirates haven’t been very active to start the signing period. In 2009 they signed three players on July 2nd. All three were from Taiwan, and none of the signings were major. They were all to finalize deals that had been agreed upon at an earlier date.
In 2010 they signed five players on July 2nd. Those players were Cristian Henriquez, Mervin Del Rosario, Rodney Polonia, Yunior Aquiles, and Yunior Montero. The highest profile guy there was Rosario, who throws 88-93 MPH and has an above-average slider. Rodney Polonia is the son of Luis Polonia, who is the agent for Julio de la Cruz.
Last year the Pirates signed Harold Ramirez on July 2nd, and Elvis Escobar on July 3rd.
Typically the signings on July 2nd are the big bonus guys. Since the Pirates tend to go with smaller deals, they’re not usually active this early. If they sign De La Cruz, we’ll probably hear about it in the next day or two. We might also hear of some minor deals that had to wait until July 2nd to be finalized. Other than that, I’d expect the Pirates to continue their usual approach, loading up on talented guys in the $300 K or less range, which seems to have worked out well for them so far.