SoSH Glossary: International Free Agency

SoSH Baseball Glossary

Baseball is filled with statistics, rules, and archaic terms that can often form what sounds like a foreign language. Sons of Sam Horn’s glossary provides a better understanding of these terms through straightforward definitions, clear explanations, and examples pulled straight from the baseball world. If there is anything you would like us to add to our glossary, please contact us.

International Free Agency

The international free agency signing period is a financially regulated time that takes place between July 2 and June 15 of the following year. During this period, teams may sign players from outside the US, its territories, and Canada, if those players are:

  • under 23 years old and have not played in a professional league that is recognized by MLB Commissioner’s Office.
  • under 23 years old and have not played five years professionally in Cuba.
  • have not previously signed with a major or minor league club.

How Is International Free Agency Regulated?

Well, I’m glad you asked, Timmy. Each team is allotted an international signing bonus pool (ISBP) which is calculated by assigning four signing bonus values (SBV), then adding $700,000. Teams with the lowest winning percentage from the previous season receive the highest SBVs. In the event of tied winning percentages, the records from two seasons ago are compared to determine which receives the greater SBV. The overall money pool for SBVs increases based on the growth rate of the industry’s revenue.

The first six players that a team signs to a bonus of $50,000 or under do not count towards its ISBP, and any players signed for $10,000 or less also do not count.

What Happens If a Team Exceeds Its ISBP?

Any team exceeding its ISBP is penalized in the form of a tax on the dollar amount over the ISBP threshold of 100%. Additional penalties are as follows:

  • If a team spends more than 5% but less than 10%, then they cannot sign any player over $500,000 during the next signing period.
  • If a team spends more than 10% but less than 15%, then they cannot sign any player over $300,0000 during the next signing period.
  • If a team spends more than 15%, then they cannot sign any player over $300,000 over the next two signing periods.

Are SBVs Tradeable Assets?

Yes they are, but there are some rules to remember:

  • Each SBV holds a specific value; when traded, the entire value must be transferred.
  • The ISBP of the receiving team can only increase up to 150% of the originally assigned total.
  • A team may not receive a SBV if it is at or above its ISBP. In other words, a team cannot trade for additional bonus pool room if it discovers an amateur talent but has already spent up to, or above, the pool.
  • A team may not trade a SBV for cash; however, it may be included in a trade to offset salaries in a player-for-player swap.

Pete Hodges has written about the call up of a top prospect, an odd tradition, and Leo the Lip.

Follow Pete on Twitter @PeterWHodges.

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