Teams are allowed to exceed the money in their pool, but not without cost. Penalties range from a tax to the forfeiture of Draft picks the following year, depending on how far above the pool a team goes.
The international system will be somewhat similar, with a pool and penalties for exceeding that pool. For the 2012-13 signing period, every team will have the same pool of $2.9 million. Starting in 2013-14, the pools will be based on the prior season's winning percentage, with a range of approximately $1.7 million to $4.8 million.
Major League Baseball is also trying to maintain some equity in the system, mandating that all international players must be registered with the MLB Scouting Bureau in order to be eligible to sign. That's a direct parallel to how the Draft system works in North America.
"They are putting the brakes on the spending in the amateur ranks," former general manager and MLB Network analyst John Hart said. "They wanted to try and level the playing field.
"Everyone is going to be looking, how are we going to beat the system?"
In addition to the spending controls, there will be fairly significant changes to how teams are compensated in the Draft for losing free agents. The Elias-based system with Type A and Type B free agents is a thing of the past.
In order to get a compensation pick going forward, a team has to offer a free agent a guaranteed one-year contract equal to the average of the top 125 paid players in Major League Baseball, an amount believed to be about $12 million. Compensation can only be given for a player who was with a team the entire year. The days of trading for a Type A free agent for two months merely for the compensation picks are over.
"With the free-agent compensation, you're still trying to help these clubs with the lottery, but the days of Tampa Bay picking 12 times [are gone]," Hart said, referring to the 2011 Draft bounty the Rays collected over the first two rounds.
The lottery Hart refers to is the competitive balance lottery which will go into effect in 2013. It appears to be meant to help offset the inability to use the compensation system in the way the Rays did a year ago. The bottom teams in market size and revenue will be put into a lottery to receive one of six picks following the first and second round. Those picks can be traded at certain times of the year.
There are still details to come on how all of this will work, and there's no question front offices across baseball are going over the finer points to figure out the next steps.
"That's what clubs are going to be doing now," Hart said. "They're going to huddle their guys, they'll look at it and say, 'What does this mean for our [Draft], for our international signings?'"