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New MLB CBA May Have Negative Impact on High School Draftees

Let’s start things off simple. It is great news that the Collective Bargaining Agreement between the MLB owners and the MLBPA was agreed upon, and that baseball will continue without a gap for at least five more years. After the NBA and NFL lockouts, this is no small accomplishment. However, the good news coming from the CBA doesn’t extend far beyond the fact that it will prevent a labor dispute.

The owners have been blinded by their short-sightedness to save money in the short term, and the players are simply relishing in the fact that the minimum salary will increase by about 16% to 480,000, with a few other small free agency advantages as well. However, the people most hurt by the new CBA were the ones with no representation at the table, the amateurs.

I’m not complaining for the Strasburg’s and Harper’s of the world that will now be making a few million dollars less than before. I am talking about the majority of high school prospects that aren’t selected in the first few rounds. Due to the new slotting system with a soft cap, teams would be nonsensical to spend more than the 5% grace zone, having to pay a 75% luxury tax as well as forfeit a future first round pick, with even greater penalties if they spend more. Thus, all discussion must continue on the assumption that teams follow the new slotting system.

The new CBA rules state that any bonus of more than $100k provided to players drafted outside the top 10 rounds, will have that amount go against the team’s Signing Bonus Pool. These high school prospects, as well as the ones drafted in rounds 6-10 that will most likely only be offered less than $200k, are put into a very difficult situation. Unlike college basketball and football, even the top recruits are only offered partial collegiate scholarships, forcing the families to make up the remaining tuition. For many families, coming up with that tens of thousands of dollars for the next three years or four years is not an option; they are rather left with the decision to take that small signing bonus or attend a community college.

While $100-200k may sound like a goldmine to an 18 year old, this allure of instant money may only worsen the situation. However, the opportunity cost for accepting that money must be noted. That 18 year old will now be spending the next however many years making less than $2,000 a month. And what happens when the baseball dream dies as it does for 95% of all draftees? They are left with no college education, no real world skill set, and very little to fall back on. For families that cannot afford to pay for their child’s college education, the MLB is merely setting them up for a life of poverty.

There was an easy solution to this. Allow the teams to guarantee future college tuition to the draftees they choose, while not having it go against their Signing Bonus Pool. Honestly, who would this hurt? The owners would only have to provide those educations to the draftees as they choose. The leverage and signability effect by including future tuition is minimal and clearly outweighed. But rather, with no one at the table negotiating on behalf of the amateurs (the future of the game) they merely get overlooked and ignored. What do the current high school baseball players have to say about this? And their parents? Unfortunately, it does not matter.

This was a guest contribution was written by Justin Herzig.  Follow Justin Herzig on Twitter: @JustinHerzig.

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  3. Paying The Price: The NFL Collective Bargaining Agreement
  4. NFL Collective Bargaining Update
  5. New high MLB signing bonus

This article originally appeared on the Sports Agent Blog.


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