As per the 2017-21 Collective Bargaining Agreement, clubs are each subject to a hard 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 are able to trade every dollar and can acquire up to 75 percent of their initial international bonus pool money in the 2017-18 and 2018-19 signing periods. They will be able to trade up to 60 percent of their pools in subsequent signing periods.
Each year's international signing period begins on July 2 and continues through June 15 of the following year. Each July 2, players who are at least 16 years old or will turn 16 before Sept. 1 of that year become eligible to sign contracts. 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.
Note: The information contained in this glossary entry is subject to change as details emerge.