International Amateur Free Agency & Bonus Pool Money

Definition

As per the 2017-21 Collective Bargaining Agreement, clubs are each subject to a spending cap for amateur international free agents. Each club will have at least a $4.75 million bonus pool to spend, with those that have a pick in Competitive Balance Round A receiving $5.25 million and those with a pick in Competitive Balance Round B receiving $5.75 million.

Clubs will be able to acquire up to 75 percent of their initial international bonus pool money in the 2017-18 and 2018-19 signing periods and up to 60 percent of their initial pools in subsequent signing periods. This means that a club with an initial pool of $5.75 million can increase its pool total via trade to approximately $10.1 million during the 2017-18 and 2018-19 signing periods. The 2017-21 CBA also allows international funds to be traded more freely, as teams must now simply trade international money in increments of $250,000, unless they have less than $250,000 remaining in their pool. Under the 2012-16 CBA, teams were assigned four tradeable "slots" with different values designated for each slot. The money was able to be traded only in those increments.

Beginning in the 2017-18 offseason, any team that is over the luxury tax threshold and signs a Major League free agent that has rejected a qualifying offer will lose $1 million from their international signing pool in the following signing period. A team that is not over the luxury tax would only forfeit $500,000 of its signing pool in the subsequent period.

Each year's international signing period begins July 2 and continues through June 15 of the following year. Under the CBA, international amateurs are defined as follows:

• Player resides outside of the United States, Canada or Puerto Rico and has not been enrolled in high school in any of those locations within the past calendar year.
• Player is at least 16 years of age or will turn 16 years of age prior to Sept. 1 of the current signing period.

Any player meeting that criteria becomes eligible to sign a Minor League contract with a Major League organization for a signing bonus that fits within said team's allotted pool. Players that sign for a total bonus of $10,000 or less do not count against a team's allotted bonus pool.

Foreign professionals -- defined as players who are at least 25 years of age and have played as a professional in a foreign league recognized by Major League Baseball for a minimum of six seasons -- maintain exemption from the international bonus pool.

Clubs that accrued penalties for exceeding their international bonus pool money under the stipulations of the 2012-16 Collective Bargaining Agreement will not have those penalties wiped out by the 2017-21 CBA.

History of the rules

Under the terms of the 2012-16 Collective Bargaining Agreement, international pool money was scaled based on the previous season's standings. Clubs were also able to exceed their international bonus pool, but they had to pay a luxury tax for doing so.

In addition, clubs that exceeded their pool by five to 10 percent were banned from signing a player for more than a $500,000 bonus the following signing period. For clubs that exceeded their pool by 10 to 15 percent, the maximum bonus they were able to offer dropped to $300,000 during the next signing period. Finally, clubs that exceeded their pool by more than 15 percent were not allowed to sign a player for more than $300,000 during the next two signing periods.

International bonus money was also tradeable under the 2012-16 Collective Bargaining Agreement, but each club's bonus pool was divided into four "slots." For instance, a club with a $3 million pool might have had a $1.5 million slot, an $800,000 slot, a $400,000 slot and a $300,000 slot. The money was able to be traded only in those increments. Moreover, clubs were able to acquire no more than 50 percent of their original pool size.

Also of note: Previously, foreign-born players were granted exemption from the amateur-bonus-pool rules if they were at least 23 years of age with at least five seasons in a professional league recognized by Major League Baseball.