International Signing Bonus Pool

There is a maximum limit on the aggregate amount of money each MLB club can pay as signing bonuses to international first-year players before penalties begin to accrue.

Each MLB club is assigned an International Signing Bonus Pool (ISBP) for each International Signing Period (ISP). A club’s ISBP is based upon the club’s winning percentage from the previous season. (Clubs that finish with lower winning percentages will receive a larger ISBP than clubs with higher winning percentages, with the ISBP increasing inverse to the previous season’s standings). In the case of two clubs finishing with the same winning percentage the previous season, league standings from two seasons back will be used to break the tie. If the clubs are still tied, league standings from three seasons back, four seasons back, etc, will be used to break the tie.

The Cubs ISBP for the 2016-17 ISP is $2,063,100 (it was $3,230,700 in the 2015-16 ISP), and because the Cubs exceeded their 2015-16 ISBP by more than 15%, they will not be allowed to sign any international free-agent subject to ISBP signing bonus limits to a contract with a signing bonus in excess of $300K in both the 2016-17 and 2017-18 ISP.    

A club's ISBP consists of four separate "Signing Bonus Values" (SBV) plus an additional $700,000. Each SBV corresponds to a particular "slot," and each slot is assigned a specific cash value (TBA prior to the start of the ISP).  

A Signing Bonus Value (SBV) can be traded, but with some restrictions:

1. An SBV can only be traded during the International Signing Period (ISP) to which the SBV was assigned (July 2nd through June 15th of the following year);

2. An SBV cannot be sold for cash. However, cash can be exchanged if it is used to offset the salary or salaries of a player or players acquired in return for the SBV;

3. An SBV cannot be substituted for a "Player to Be Named Later" (PTBNL);

4. The entire SBV must be assigned to the other club when it is traded;

5. A club may not acquire an SBV in a trade if the club has already paid signing bonuses equal to or in excess of its ISBP;

6. Once acquired, an SBV can be traded ("flipped") to a third club, as long as the third club has not already paid signing bonuses equal to or in excess of its ISBP;

7. A club's originally assigned ISBP can be increased by a maximum of 50%. If a club acquires an SBV in a trade that causes the club's ISBP to increase to an amount that is more than 50% above the club's originally-assigned ISBP, the portion of the SBV that caused the club's ISBP to increase to an amount that is more than 50% above the club's originally-assigned ISBP is subtracted from the SBV. 

A signing bonus paid to a first-year international player age 23 or older who has spent all or part of at least five seasons playing in an MLB-recognized foreign professional or "major" league does not count against the club’s ISBP. (A signing bonus paid to a first-year Cuban international player age 23 or older who has spent all or part of at least three seasons playing in Serie Nacional does not count against the club’s 2013-14 ISBP, then beginning with the 2014-15 ISP, a signing bonus paid to a first-year Cuban international player age 23 or older who has spent all or part of at least five seasons playing in Serie Nacional does not count against the club’s ISBP).

Also, a club’s six highest signing bonuses of $50,000 or less and ALL signing bonuses of $7,500 or less that are paid to first-year international players do not count against the club’s ISBP. (Beginning in July 2014, only signing bonuses of $10,000 or less that are paid to first-year international players will not count against a club’s ISBP).

The penalty for a club paying signing bonuses in excess of its ISBP is a tax (no draft picks are forfeited) and a restriction on bonuses that can be paid to international players during the next ISP:

1. A club that pays signing bonuses that exceed its ISBP by 5% or less must pay a 75% tax on the ISBP overage, but there are no restrictions on bonuses in the next ISP.

2. A club that pays signing bonuses that exceed its ISBP by 5-10% must pay a 75% tax on the ISBP overage, and is permitted to sign only one international first-year player to a bonus of $500K or more in the next ISP.

3. A club that pays signing bonuses that exceed its 2013-14 ISBP by 10-15% must pay a 100% tax on the overage, and is prohibited from paying a bonus in excess of $500K to any international first-year player in the 2014-15 ISP; then beginning with the 2014-15 ISBP, a club that pays signing bonuses that exceed its ISBP by 10-15% must pay a 100% tax on the ISBP overage, and no player may be signed to a bonus of $300K or more in the next ISP. 

4. A club that pays signing bonuses that exceed its 2013-14 ISBP by 15%+ must pay a 100% tax on the overage, and is prohibited from paying a bonus in excess of $250K to any international first-year player in the 2014-15 ISP; then beginning with the 2014-15 ISBP, a club that pays signing bonuses that exceed its ISBP by 15%+ must pay a 100% tax on the ISBP overage, and no player may be signed to a bonus of $300K or more in the next two ISPs. 

Money collected from the tax on clubs that exceed their ISBP will be used to further the development of international baseball.  

A player subject to ISBP restrictions cannot be signed to a Major League contract. 

 

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  • Check out John Arguello at Cubs Den for great analysis & photos from Cubs AZ Instructs

    link

    Arizona Phil 7 hours 23 min ago view
  • soler + hammel for mike trout is pretty much a sure thing. *nods*

    crunch 12 hours 41 min ago view
  • Not an inspired outing by Rondon. Seemingly got ahead of every hitter but had no swing and miss pitch today, slider had no bite.

    Somebody give Soler some smelling salts - yeesh

    Eric S 12 hours 42 min ago view
  • And...now that runner scores on a single...

    The E-Man 12 hours 54 min ago view
  • So where do you think Soler will be traded to this off season?

    jacos 12 hours 55 min ago view
  • And right on cue he throws to third with no chance to get runner on 2nd so the batter takes 2nd easily. How long has he been playing baseball??

    The E-Man 12 hours 55 min ago view
  • Man you cannot put Soler out there late in games for Playoffs. Yuch...

    The E-Man 13 hours 3 min ago view
  • Such is the life of a fatted calf...

    JoePepitone 13 hours 16 min ago view
  • fowler with a triple in the 4th...he's a HR away from a "natural" cycle

    crunch 13 hours 49 min ago view
  • ...and contreras takes one off the hand and he's in obvious pain. sigh.

    he's staying in the game, though he's wringing his hand out during breaks in the action. aside from that he seems to have no issue giving signs or tossing back to the pitcher.

    ...and he's batting in the cubs half of the following inning. sweet.

    crunch 13 hours 53 min ago view
  • his collapse started on august 21st this season...so it's a slight improvement.

    but wow, what a collapse since then...only 2 out of 7 can be considered good/decent.

    crunch 14 hours 5 min ago view
  • I'm really going to enjoy watching Hammel watch the playoffs.

    Jackstraw 14 hours 24 min ago view
  • The always combustible Jason Hammel

    jacos 14 hours 44 min ago view
  • Hammel :(

    Charlie 14 hours 46 min ago view
  • That was fun.

    Charlie 17 hours 45 min ago view
  • "home field advantage through the playoffs?"

    Except for the away games.

    VirginiaPhil 17 hours 58 min ago view