Now the Time for D-backs to Consider Next Year’s International Amateur Signing Period

In the international signing period that started July 2, 2013, the Cubs and Rangers earned the CBA’s top penalty for exceeding their bonus pools, becoming ineligible to sign anyone during the 2014-2015 (current) bonus periods. This year, it’s been the turn of the Red Sox, Rays, Angels, and Yankees. The Yankees, in particular, have taken huge advantage of their one-year window to spend whatever they like without adding any (additional) penalties; although their bonus pool this year was just under $2.2M, they spent more than $12M on the very first day of the period, ultimately signing nine of Baseball America’s top 30 international amateurs for the period.

The Rays went a different route, signing the period’s top prospect, Adrian Rondon, to a $2.95M bonus. By going more than 15% above their just-under-$2M bonus pool in one fell swoop, they incurred the Collective Bargaining Agreement’s top penalties all at once. Despite that, they signed just one more amateur from BA’s top 30, Jesus Sanchez (#27), perhaps signaling that they just didn’t have the money to go all out. Meanwhile, the Red Sox adopted a “Yankees Lite” approach, signing a lesser mix of amateurs that pushed them over, and the Angels played it cool before suddenly shelling out $8M to Cuban amateur shortstop Roberto Baldoquin.

The D-backs’ bonus pool for this period ranked 15th overall at $2,316,600, based on their 81-81 finish in 2013. The top international amateur signed by the club is… I have no idea. I did look, too. If you come up with a name, drop me a line.

It shouldn’t be that way next year. Just as the D-backs will have the #1 overall pick in the Rule 4 Draft next June, they will have the top bonus pool for the next international amateur signing period, which will start on July 2nd. This year, the top pool meant $5,015,400 (Astros). Under the current CBA, the increased bonus pool is part of the consolation prize for finishing in last place, and if the D-backs fail to capitalize, they’ll be frittering away a golden opportunity. But more than just using their pool and signing some of the top guys, the D-backs could capitalize even more by going all out and pretending they’re the Yankees, just once, and just in this context.

Time is now

Unfortunately, they can’t sit around and wait to figure that out in the spring. Insiders suggest that under the current international bonus pool system, teams have been making pre-period deals with 15 year olds something like nine months in advance. That’s how we found out last December that the Yankees were almost definitely going to blow past their bonus pool allotment in the current July-June signing period; rumors circulated of pre-period deals they had already arranged, and people did some simple math.

That means the D-backs are running out of time to make arrangements for the top prospects of the next period, already. As noted, the Rays nabbed Baseball America’s top prospect for $2.95M, and while that busted their pool in a non-fixable way, it would fit comfortably within the D-backs’ pool next year. The Mariners, Brewers, Phillies, and Blue Jays all signed top prospects without busting their pools. The Yankees, Red Sox, Rays and Angels will all be out of the running for top picks next year, but even in this current Yankees-dominated period, there’s plenty of evidence that lots of other teams will vie for the top talent.

There are really three possibilities for the D-backs next season. The first is that they could spend as normally, perhaps getting close to their $5M-or-so limit. But there are two creative alternatives, as well.

Option Two: Bust that pool

Is it really that far fetched that the Diamondbacks could be next year’s Yankees? In the aftermath of the Hellickson trade, Dave Stewart explained his willingness to part with Justin Williams and Andrew Velazquez in part as they were far from the majors. Well, 16-year-old international prospects are about as far from the majors as we can get, and digging in on them a year early means having an eye for the distant future.

To be kept without risk of exposure to the Rule 5 draft, any 16-year-old signed next July would have to be added to the 40-man roster within five years. That’s why Enrique Burgos is on the 40-man now. That’s a wrinkle to the rules that doesn’t seem quite right to me, because it’s so damned early. The rules have different lengths of years for players signed before or after they turn 19, but there’s a big difference between an 18-year-old and a 16-year-old. That’s probably why the D-backs almost lost Ender Inciarte for good two years ago.

Putting that aside: there’s still plenty of room in the organization for a bumper crop of international signees, and one thing I think Stewart’s Hellickson logic doesn’t account for is: these guys have value before they reach the majors. They can be traded (after they stay in the org for a year). This is a land grab, pure and simple. Sure, some of the houses will have cracks in their foundations once they get examined with a couple years of organized ball. Some will have a park or an important building built next to them, and their value will increase. And some of the time, the team will get exactly what it pays for.

The D-backs have been given VIP access in this particular land grab. I believe we will be hearing about this current Yankee class of international amateurs for years and years and years — it was a brilliant way to buttress their system without losing draft picks. The Rays did not fully capitalize on busting their pool, and maybe that’s for financial reasons. But why didn’t the Red Sox? They had every incentive to go after this as hard as the Yankees, and have nearly the same kind of financial resources. And yet they came away with just two of BA’s top 30 international amateur prospects. I think that’s some evidence that doing this is hard.

It will take some planning and an immediate and severe commitment to spend $10M-$15M in next year’s signing period, but if they can do it, they should seriously consider it. With the Yankees and Red Sox off the board in the same year, there may never be a better opportunity. And because the D-backs will have a high bonus pool to start with, they’ll pay less in penalties (bonuses over a pool are taxed at 100%). It does make sense.

Option Three: Spend $6M-$7M next year

I have another suggestion, though. $5M is a lot to play with, and maybe the pool will even be a little higher than that. No matter which option they pick, they’re going to have to work hard to spend wisely. If they work a little harder, they can squeeze out just a little more benefit.

See, Attachment 46 to the last Collective Bargaining Agreement is all about a future international draft. MLB and the MLBPA don’t know what that will be like, at least yet; there’s a procedure in there for figuring that out. Maybe it will be a separate, second draft; maybe everyone will go into the very same draft. But if it’s a separate draft, having picks could be nearly as important as having them in the Rule 4 Draft.

The problem: we don’t know when there will be an international draft. My read of the planning procedure and the different rules for each period is that the parties planned to have a planning committee in the first full year of the CBA and then institute a draft the following year. There may not be much warning. And if the D-backs bust their pool next period, that could be a real problem, because there could be an international draft in the summer of 2016.

If the D-backs bust their pool next year and then there’s a draft the following year, they will forfeit picks. That’s bad. And that’s part of why I like this alternative of spending more than $5M but less than $7.5M.

The other reason: the opportunity is there. Under Attachment 46 to the CBA, teams are permitted to acquire other teams’ bonus pool space (by acquiring specific bonus slots), but they still may only have a pool that is 150% of their original allotment. If the D-backs get $5M even, they could increase their pool to $7.5M and sign players to the tune of that new amount — they’d just have to trade for bonus slots. If they traded for $3M in extra pool space, they’d still only be able to use $7.5M total.

The opportunity arises because not every team can actually use their pool space. It appears that the Tommy La Stella trade on Sunday was prompted by exactly that phenomenon. The Cubs didn’t have their pool space reduced this season as a penalty for busting their pool last period; the only penalty was that they couldn’t sign any players to bonuses over $250,000. That made it really hard to actually use their whole bonus pool. That meant that they had bonus pool slots that weren’t worth very much to them, and which ended up being worth more to the Braves.

This is my proposal. The Diamondbacks should get a pre-period deal in place to acquire the bonus slots of the Yankees, Red Sox, Rays, or Angels. Next year, those four teams will be in exactly the same position that the Cubs were in this period. To that list, we can probably add whatever team signs Yoan Moncada. We can also probably add the very same Cubs; today at Beyond the Box Score, I explored the idea that the Yankees and other Busted Clubs could trade away their slots this year, and we think we know that the Cubs will bust next year. A bonus dollar for the Cubs next year will be worth $2 to them (because it will increase their taxes if they trade a dollar away), but for the Yankees, Red Sox, Rays or Angels, it will cost them nothing. In fact, each of those dollars are probably worth just a few cents to them next year.

The same pressure that requires the D-backs to start making bonus arrangements with 15-year-olds right now is the same pressure that requires them to make some deals with those teams right now. Having an extra $2.5M next period is nice, but if you don’t know you have it, you probably can’t spend it effectively. If the D-backs come to a kind of pre-deal with one of those four clubs right now, they can go about their current business planning as if they had the larger pool.

Between the three options, Option Three seems the wisest to me. There’s no risk of not being given a dance card in 2016 if there’s an international draft, and they can still sign a top guy or two in the period after next. There’s little risk, and the cost is minimal. Data suggest that teams think a dollar spent on international amateurs is worth three real dollars. It’s time for the D-backs to plan as if they’re going to spend all — or more than all — of next year’s bonus pool.