Why haven't the Yankees traded away their international bonus slots?

We saw an unusual trade over the weekend: the Cubs traded Arodys Vizcaino and three international bonus slots to the Braves for one of their bonus slots and Tommy La Stella. At FanGraphs, Carson Cistulli provided an excellent analysis of the trade. Among the great points there: since the Cubs were forbidden from signing any international amateurs to bonuses above $250,000 during this signing period, it would have been very tough for them to have found a use for the $832,000 in bonus money they lost in the trade.

Once upon a time, I had a professor who explained the reasoning behind the progressive tax rate this way: what can you do with a sixth cheeseburger? It has some value to you, because maybe you derive some satisfaction from giving it to a person of your choice. But you can't really eat it, so it doesn't have anywhere near as much value to you as the first cheeseburger, or even the second, or the third.

When it comes to the international bonus pools, the Yankees, Red Sox, Rays and Angels are, functionally, vegetarians. Having blown past their limits, they're going to incur penalties for the next two years regardless of the amount of the overage. There is still some benefit to them, because they're paying a 100% tax on the overage, but it may be that just like pool money for the Rule 4 Draft, international bonus pool money is worth more than real money. It may be that it's worth more than double real money.

Cistulli's analysis of the La Stella trade seems to support that idea. With all of the necessary caveats, Cistulli speculated that, given its valuation in the La Stella deal, international bonus money might be worth as much as nine times as much as real money, but probably just three times as much. Hm. If the Busted Teams in this year's international signing period save $2 for every $1 in bonus money kept, but market rate for each $1 is $3 — doesn't it seem like they could sell their bonus slots at $2.50 per dollar and still make out in the deal?

When I say "sell," I don't mean for cash. The Collective Bargaining Agreement actually forbids that. Cash can only be exchanged in a trade involving international bonus slots if it "is included to offset the salary obligation of another player" involved in the trade (CBA, Attachment 46, II.D.5). Whether the cash is truly meant for that purpose is up to the Commissioner's Office, which is also tasked with preventing players from being sold.

Although it was prompted by a slightly different circumstance, the La Stella trade is probably a good model for how to cash out a bonus slot in a currency other than cash. Few players are more interchangeable than bench guys, and every team needs to carry some; if a team plans to have bench players who are vaguely useful, there's some minimum of quality that a carousel of minor league callups might not surpass. Paying such a guy the major league minimum instead of $3M or so is about as close as a direct credit to the balance sheet can get, as Cistulli noted.

Finding a market for bonus slots

Every team would happily sell $2 for $2.50, most likely, but that doesn't mean the demand is there. The Busted Teams can't sell slots to each other — the CBA prohibits teams from trading for slots after blowing their own pool (CBA Attach. 46 II.D.4). And any of the other teams can only raise their pools by so much; if a team acquired new bonus slots that pushed its total beyond 150% of its original pool, its pool would get reduced to that 150% level (CBA Attach. 46 II.D.3). That latter point is why there was a slot headed back to the Cubs in the La Stella deal, by the way. The extra bonus money may not have any value to the Cubs beyond its status as a trade asset, but it was literally worthless to the Braves.

I've had trouble scratching together information about international amateur signings, in this period and in general. Without that, it's hard to come up with team-by-team totals by adding together smaller deals. But it does appear that several teams have made no big international amateur signings so far, and without a couple of those, it's hard to run up against the bonus pool limits. There's some set of teams that don't appear to be in danger of scraping up against their slot totals; you can cross them off the list.

Between the requirement to increase your pool before you blow it, the limit on how much can be added, and the fact that many if not most teams are either well under or well over their bonus allotments, the marketplace for these extra bonus slots may be really limited. Maybe the La Stella trade looks even better for the Cubs, then, although one hopes the Braves at least gave the Yankees, Red Sox, Rays and Angels a few phone calls before pulling the trigger on La Stella.

The four Busted Teams are run by smart people, and they employ dozens more. I find it hard to believe that they don't appreciate that they could trade away their bonus slots if they found a good deal. Instead, I think it's likely that they're waiting for a marketplace to develop. If teams have informal deals with international amateurs many months in advance of each period, then for many clubs, everything may be proceeding according to plan.

It may simply be too late for teams to find a market for their bonus slots. Plans on how teams approach the international signing period can still change; Yoan Moncada will see to that personally. But few teams will see their plans change for the duration of this period. To be eligible to be signed during a particular July-June period, one must be registered with the Office of the Commissioner by the preceding May 1, unless one has a "compelling justification for his failure to register" sufficient in the eyes of the Commissioner (CBA, Attach 46 II.F.1, 2). Moncada seems like he has a pretty good one, but it may be that no other exceptions are even granted by the Commissioner for the duration of this period.

The time is now

It may seem silly to pick now to put folks on notice of this "sell your slots if you go over your pool" thing, but I assure you it's not. If it's really the case that informal deals with next year's international amateur class are being agreed on right now, then it's now that teams should act. By next July, it is likely to be too late. If you're the Cubs, for instance, and you're gearing up to bust your bonus pool again next year, why not arrange some pre-period informal deals with other teams as to your bonus pools, at the same time as you arrange deals with your new bumper crop of amateurs? The perhaps-insufficient drawbacks of busting one's bonus pool has created something of a land grab, and some teams are grabbing all they can, like the Yankees, who have managed to take away about ten years' worth of signings in a single year. All I'm suggesting is that they milk it just a little bit more.

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Ryan P. Morrison is a writer and editor at Beyond The Box Score. He writes about the Arizona Diamondbacks at Inside the 'Zona, and talks D-backs and sabermetrics with co-author Jeff Wiser on The Pool Shot. Follow him on Twitter: @InsidetheZona.