Do Higher Signing Bonuses Help Players Advance?

A lot has been written over the past year about pay at the minor league level and attempts to fix things, and with good reason — it’s a pretty bad situation, and with fundamental decency in mind, it is certainly a good thing that it may be changing.

But alongside that discussion, I’ve been kind of curious of how changing minor league pay would actually change performance. In theory, paying players more could let them focus on baseball, translating to better performance. If that’s the case, it’s even possible that paying players more could actually “pay for itself” if the value of the extra wins players generate outweighs the costs of paying them more. In a perfect world, to test that, you could randomly pay some players more than others and see which group does better.

We don’t live in a perfect world, but we do live in one where signing bonuses are still pretty random. Yes, obviously players drafted higher receive higher bonuses on average, but there’s still pretty significant variation across the board, especially when you get into later rounds. In 2015, for example, there were 105 players drafted who had assigned “slot values” of between $130,000 and $200,000, and their bonuses were anywhere from $2,000 to $1,000,000. While in general higher bonuses should go to more talented prospects, it also stands to reason that two players drafted around the same time with around the same slot values should have around the same talent level and chances to make the majors.

With that in mind, I took a look at a couple different ways of seeing how well players with much lower bonuses progressed. Using 2014-16 draft data from SBN, I had a set of all players drafted in the first 10 rounds along with their signing bonuses and slot values, which I then matched with FanGraphs’ data on player appearances at either the Triple-A or major league level from 2014 to 2019. In total, this left me with 922 players, of whom 319 (~35%) made a Triple-A or MLB appearance and 144 (~16%) that made an MLB appearance. 153 (~17%) had a signing bonus of $50,000 or lower. I looked at two different ways to see how signing bonuses varied with advancement.

Test No. 1 – All players of similar slot values 

My first test was for all players in the 10th round or higher with a slot value under $200,000 — 309 players over the three-year set. How did the low-bonus group do here in terms of making it to Triple-A or to MLB?

Players Drafted in 10th Round or Higher
Year / Bonus # Players % AAA/MLB % MLB Avg Slot Value Avg Bonus Avg Pick #
2014 – Regular 60 31.7% 13.3% $157,893 $149,275 248
2014 – Low 42 23.8% 2.4% $148,869 $12,417 274
2015 – Regular 58 20.7% 5.2% $168,976 $192,859 251
2015 – Low 47 29.8% 2.1% $159,598 $15,309 276
2016 – Regular 60 11.7% 1.7% $173,602 $162,233 257
2016 – Low 42 21.4% 0.0% $165,919 $14,571 277
Total 309 23.0% 4.5% $163,147 $102,684 262

2014 alone suggests that yes, giving players more money is associated with a better chance of making it to Triple-A or the major leagues (with the caveat that these players were on average drafted a bit earlier, too). In terms of making the majors, that was consistent across all three years — but surprisingly, in 2015/2016, the lower bonus group was actually more likely to make it to at least Triple-A, despite being on average a lower draft pick. That seems odd.

What about differences between types (batter/pitcher) or ages (HS/college) of players? The data only includes 29 high schoolers, which isn’t enough for any meaningful samples, but filtering to only college players and grouping by batter vs. pitcher still shows similar results (though our sample sizes are getting pretty small here):

Players Drafted in 10th Round or Higher
Year / BP / Bonus # Players % AAA/MLB % Majors Avg Slot Val Avg Bonus Avg Pick
2014 – Batter – Regular 28 32.1% 10.7% $ 159,489 $ 166,829 245
2014 – Batter – Low 17 5.9% 0.0% $ 150,835 $ 12,941 274
2015 – Batter – Regular 20 15.0% 0.0% $ 172,515 $ 147,060 244
2015 – Batter – Low 20 25.0% 5.0% $ 157,870 $ 14,350 279
2016 – Batter – Regular 24 12.5% 0.0% $ 175,038 $ 157,117 254
2016 – Batter – Low 21 14.3% 0.0% $ 165,371 $ 15,405 279
2014 – Pitcher – Regular 23 43.5% 21.7% $ 155,043 $ 135,013 256
2014 – Pitcher – Low 22 40.9% 4.5% $ 146,691 $ 11,432 278
2015 – Pitcher – Regular 25 28.0% 8.0% $ 166,352 $ 154,020 258
2015 – Pitcher – Low 27 33.3% 0.0% $ 160,878 $ 16,019 273
2016 – Pitcher – Regular 32 12.5% 3.1% $ 172,047 $ 164,163 261
2016 – Pitcher – Low 21 28.6% 0.0% $ 166,467 $ 13,738 275
Total 280 24.6% 4.6% $ 162,887 $ 90,697 264

Low-bonus 2014 hitters showed a much worse success rate at advancing and 2014 pitchers were about a wash, but all other groups still showed a higher advancement rate for low-bonus players. This seems like a mixed record for whether paying players more leads to better results.

Test No. 2 — Matching low-bonus players to regular players

My second test was for low-bonus players drafted a bit higher, and testing their performance versus a very similar group of regular players. I identified every player drafted in the top 250 with a signing bonus of $50,000 or below, and then I found the closest draft pick with the same batter/pitcher and college/high school status. This gave me 48 low-bonus players and 48 “normal” players over the three years. Again, the results were surprising:

Drafted Top 250, Low Bonus vs. Typical Bonus
Year / Bonus # Players Avg Pick AAA% MLB% Avg Slot Val Avg Bonus
2014 – Low 16 200 50.0% 25.0% $ 223,063 $ 21,875
2014 – Regular 16 203 50.0% 12.5% $ 222,625 $ 211,369
2015 – Low 18 207 50.0% 11.1% $ 214,650 $ 27,500
2015 – Regular 18 208 38.9% 0.0% $ 213,639 $ 185,033
2016 – Low 14 209 21.4% 0.0% $ 225,679 $ 18,214
2016 – Regular 14 209 14.3% 0.0% $ 225,450 $ 201,679
Total 96 206 38.5% 8.3% $ 220,375 $ 110,792

With the repeated caveat that these are very small sample sizes, you can again see that the group with lower signing bonuses actually outperformed, and had at least as good a result of making Triple-A or MLB in each year.

So, what does this all mean? Both results seem pretty counterintuitive and not at all in line with what I expected, which was for higher signing bonuses to translate into better odds of advancement through a team’s system. Again, these are small samples, so I’m prepared to say the jury is still out on whether higher pay would lead to better player performance, but at least at first glance when it comes to minor league pay, it seems like we’ll have to rely on teams doing the right thing because it’s the right thing to do rather than doing the right thing to boost performance.

We hoped you liked reading Do Higher Signing Bonuses Help Players Advance? by Conor Durkin!

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misterjohnny
Member
Member
misterjohnny

There are reasons these guys got lower signing bonuses. Maybe they have bad medicals, or they are seniors with less negotiating leverage, or High Schoolers who have no business going to college. They may have a talent level higher than their draft position.

Dominikk85
Member

I don’t think it is correct to assume talent level based on draft position. In the first two rounds that might be mostly true but teams do intentionally move signability guys down and to save money they sometimes will draft a cheap senior in the 10th round. I think the actual signing bonus is a better proxy for talent level than slot value. This makes it very hard to quantify the effect of signing bonus, the high bonus guys are just better on average and given the same performance they are also more likely to make the majors. High picks… Read more »

Kibber
Member
Kibber

I think teams should spend on providing healthy and comfortable lifestyles for their players
foster an environment that encourages success and look after basic needs the best way possible