![]() ![]() 650% is a pretty abstract number to consider, so let’s compare it to an standard investment for wealthy individuals such as baseball club owners: investing in the stock market. This sort of analysis can get too close to quantifying the worth of humans in purely dollar terms, although going through the exercise in this way also helps to define what a fair market price is for someone’s service. It appears that it takes about three years for the an investment in the international market to mostly mature in terms of trade value, though there’s a way to read this data where there’s further value gained in a 5-7 year horizon for full maturity. If we assume that the overhead of running a department is fixed, how should clubs think about the value of each additional dollar added to their bonus pool? We could take the table just above this one and use the projected actual 2018 row to figure out the ROI from $150 million in bonuses and the estimated $1.125 billion in value that will be created by the signees. We can also answer the question of what an international pool dollar is worth going forward. If we were to take the historic spending of 2016 and keep those signing rules, while also imagining that the talent of 2018 demanded the same outlay in bonuses and overages as the group in 2016, we could compare the two realities owners were considering in the most recent completed CBA negotiations: We also know the maximum that can be spent with hard caps in place. Going forward, we know that overages won’t exist. There are a couple of other ways to look at this data. This gives us an idea of what a club’s accounting department would say their ROI was running an international operation in these years. I used a rolling figure to smooth out any noise in the yearly results. After consulting with some international directors, I’ve estimated those costs for all 30 teams combined and added that to the bonuses, before arriving at an ROI figure that represents something close to what MLB clubs can expect a bonus pool dollar to return. Building or renting an academy, feeding and housing the players, running a DSL team, paying coaches, trainers, scouts, and administration and travel expenses are all facets of an international operation that are essential to signing and developing these players, so they have to be considered alongside the bonus expenditures. We could use the above figures to create a simple return on investment calculation, but a true ROI would compute what a team is making on the average dollar spent, so we also have to consider the expense to operate the department that signs the players. As such, a dozen years (2004-2015) appears to be our usable sample. I included up to the 2017 class, but it would appear that we need three full seasons in the system - with players having signed on July 2, 2015, and played in 2016, 2017, 2018 - before the class as a whole has developed enough to reveal how much value it could create. We have the FV of the most recent signings that are current prospect on THE BOARD, which maps to an asset value. I used seven seasons since we don’t have comprehensive service time data, which, from some spot-checking, appears to do the trick. We can grab the dollar-per-WAR figures from the years that spanned their controlled years and turn that historical WAR into a dollar amount of value created. Most of the players who signed 15 years ago are now in their early 30s and have either played out their entire careers or are into their seventh year of major league service time. Since the international market changes and matures so rapidly, it makes sense to start with the early 2000s signing classes as a baseline for a similar era to today. (The CBA says that this money was to be spent on international operations and initiatives.) We estimate those figures to add up to about $250 million over those four years, with about $100 million paid to MLB in 2016 alone. These figures don’t include the pool overage payments made to MLB from 2013 to 2016. 2017 was the first season of hard-capped bonus pools, which explains why bonuses declined and also why they spiked the year prior. ![]()
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