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.

Beginning with the 2017-18 International Signing Period (ISP):

1. A club's International Signing Bonus Pool (ISBP) will no longer be divided into four "Signing Bonus Values." Instead, a club's ISBP will be a fixed amount: $5.75M for the clubs that have selections in Competitive Balance Round "B" (between the 2nd & 3rd rounds) of the MLB Rule 4 Draft, $5.25M for the clubs that have selections in Competitive Balance Round "A" (between the 1st & 2nd rounds) of the MLB Rule 4 Draft, and $4.75M for all other MLB clubs (not counting possible subtractions as the result of a club signing an Article XX-B Qualified Player in the previous off-season).

2. A club cannot exceed its assigned ISBP plus a maximum additional 75% of the club's assigned ISBP that might be acquired in a trade or trades (a maximum additional 60% of its assigned ISBP that might be acquired via trade or trades starting with the 2019-20 ISP).

3. A club can carry-over up to $400K in ISBP space from one ISP to the next ISP if a contract or contracts signed by a player or players is/are voided after the conclusion of the ISP during which the contract or contracts was/were signed. The amount of ISBP space carried-over from the previous ISP must match the amount of ISBP space that was deducted from the club's ISBP after the player or players signed their contracts. If the amount of ISBP space deducted exceeded $400K, the amount of ISBP space in excess of $400K that is carried-over to the next ISP will be divided up into 29 equal amounts and added to the ISBP of the other 29 MLB clubs. 
NOTE: A club's right to carry-over ISBP space from one ISP to the next ISP only applies to contracts that are voided as the result of the player failing his physical or being unable to obtain a visa to the U. S. or if an investigation by the MLB Commissioner determines the player falsified his age and/or identity prior to signing the contract. It does not apply to contracts voided by the MLB Commissioner as a result of a rules violation by the club.

4. An MLB club that signs an Article XX-B Qualified Player (not including its own Qualified Players) will have $500,000 subtracted from its assigned International Signing Bonus Pool (ISBP) in the next full International Signing Period (ISP) for each Qualified Player signed, and an MLB club that is a Competitive Balance Tax (CBT) payor (club's payroll from the previous season exceeded the CBT threshold) would have $1,000,000 subtracted from its ISBP in the next ISP for each Qualified Player signed. (The Competitive Balance Tax threshold is $195M in 2017, $197M in 2018, $206M in 2019, $208M in 2020, and $210M in 2021).

5. The MLB Commissioner can order a club to forfeit up to 50% of its assigned ISBP from one or more ISP and/or one or more player contract(s) can be voided if it is determined that a club and/or a player or players attempted to circumvent the international signing bonus rules.


ISBP RESTRICTIONS/EXCEPTIONS:

1. A international first-year player subject to ISBP restrictions cannot be signed to a Major League contract.

2. A player age 25 or older who has spent all or part of at least six seasons playing in an MLB-recognized foreign professional or "major" league is considered to be a "Foreign Professional" player. A "Foreign Professional" is not subject to ISBP international first-year player restrictions and can sign a Major League or minor league contract with any MLB organization without restriction. A signing bonus paid to a "Foreign Professional" does - NOT - count against the club’s ISBP.
NOTE: Beginning with the 2018-19 ISP, any "Foreign Professional" player under contract to a Liga Mexicana de Beisbol (Mexican League) club can sign a Major League or minor league contract with any MLB organization after the conclusion of the LMB season (including post-season), or (with consent of the player's LMB club) during the LMB season. If an MLB club signs an LMB player with "Foreign Professional" player status, the MLB club must pay the LMB club a one-time release fee equal to 15% of the total value of the contract if the player signs a Major League contract or 35% of the total value of the contract if the player signs a minor league contract. No release fee would be paid by the MLB club if the player's contract has expired or if the contract had been terminated by the LMB club prior to the MLB club offering a contract to the player.     

3. A player under contract to a Liga Mexicana de Beisbol (Mexican League) club who has not yet reached "Foreign Professional" player status may sign a minor league contract with an MLB organization - IF - the LMB club agrees to release the player so that he can sign with the MLB club. The Mexican League club would receive a one-time release fee equal to 35% of the total value of the contract (by rule an international player who is not yet a "Foreign Professional" cannot sign a Major League contract). The release fee paid by an MLB club to an LMB club does - NOT - count against the MLB club's ISBP.    
NOTE: Prior to the 2018-19 ISP, up to 75% of a signing bonus paid to a Mexican League player (or a player under contractual control of an LMB club) who had not yet reached "Foreign Professional" player status did not count against the MLB club's ISBP if the signing bonus was paid to the Mexican League club and not directly to the player and the player received no more than 25% of the signing bonus from the Mexican League club. 


TRADING/ACQUIRING ISBP SPACE:

A club can trade up to 100% of its ISBP, and a club can acquire up to 75% of the club's assigned ISBP via trade. (A club can acquire up to 60% of its assigned ISBP via trade or trades beginning with the 2019-20 ISP).

While up to 100% of a club's originally-assigned ISBP (plus up to an additional 75% of the club's originally-assigned ISBP that might be acquired in a trade or trades) can be traded, there are some restrictions:

1. A club's ISBP (or a portion of it) can only be traded during the International Signing Period (ISP) to which the ISBP was assigned (July 2nd through June 15th of the following year);

2. A club can trade ISBP space in increments of $250K (only) unless the club is trading all of its remaining ISBP in one transaction.

3. A club's ISBP (or a portion of it) 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;

4. A club's ISBP (or a portion of it) cannot be substituted for a "Player to Be Named Later" (PTBNL);

5. Another club's ISBP (or a portion of it) acquired in a trade can be traded ("flipped") to a third club.


RESTRICTING BONUSES (CARRY-OVER FROM PRE-2016 CBA):

Through the 2016-17 ISP, a tax and a restriction on bonuses that could be paid to international players during the next ISP were assessed if a club paid signing bonuses in excess of its ISBP in a given ISP

1. A club that paid signing bonuses that exceeded its ISBP by 5% or less was assessed a 75% tax on the ISBP overage, but there was no restrictions on bonuses in the next ISP.

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

3. A club that paid signing bonuses that exceeded its ISBP by 10-15% was assessed a 100% tax on the overage, and no player could be signed to a bonus of $300K or more in the next ISP.

4. A club that paid signing bonuses that exceeded its ISBP by 15%+ was assessed a 100% tax on the overage, and no player could 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.

NOTE: Despite changes in the 2016-21 CBA, penalties incurred by clubs in the 2015-16 and 2016-17 ISPs will continue in the 2017-18 and 2018-19 ISPs. Because they exceeded their 2015-16 ISBP by more than 15%, the Cubs were not 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 ISPs.