A factor to the Los Angeles Dodgers having the highest payroll in baseball was their spending on prospects during the 2015-16 international signing period. The organization immediately blew past their allotted pool money and faced a 100 percent tax on agreed-upon contracts.
That amounted to $48 million in salaries, with the Dodgers’ final bill totaling $96 million after including the tax penalty. The Chicago Cubs spent the second-most during that time frame at roughly $27 million.
Much has been made about the advantage large-market teams have in certain avenues such as in the international market. Given the immediate punishment to going well beyond bonus pool money only results in the tax penalty, deep-pocketed teams often do so without much thought.
These lavish spending habits by organizations who are well-off financially have raised questions about the fairness of the current system and forced Major League Baseball commissioner Rob Manfred to review the matter for the next collective bargaining agreement, via Ken Rosenthal of FOX Sports:
“The system allows teams to spend what they spend — that’s the first point,” Manfred said. “But the most important point from our perspective is that when you see that kind of disparity in any part of the system, it generally suggests to us that the system is not functioning in a way that promotes competitive balance. Rest assured, we’re going to be making proposals to address that.”
The idea of an international draft has been kicked around but not gained much traction. If one isn’t implemented, a team official believes a cap needs to be enforced on international spending:
But an official from a low-revenue team said that without such a draft, baseball would need to establish “hard caps” in the international market to prevent teams such as the Dodgers and Red Sox from spending so lavishly.
In the MLB Draft, if a team exceeded their bonus pool by 5-10 percent, they would forfeit their first round pick in the next draft. If a team is to exceed their pool by 15 percent, then they forfeit both their first and second round picks in the following draft.
Since these rules have been in effect five years ago, no organizations have had to forfeit picks for exceeding the bonus pool.
Currently, teams that exceed their allotted money during an international signing period face the tax penalty and are limited to $300,000 signing bonuses for pool-eligible prospects over the next two international signing periods.