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How the Orioles can use the second-largest signing bonus pool in the MLB draft to their advantage

Operating with the second-largest signing bonus pool in the 2019 Major League Baseball draft as a result of having the first selection in each round, including the No. 1 overall pick, Orioles executive vice president/general manager Mike Elias is well aware of how to use that system to the organization’s advantage.

The Orioles have a bonus pool of $13,821,300, the total of the slot values of their picks for the draft’s first 10 rounds. However, the Arizona Diamondbacks have the largest bonus pool ($16,093,700) because they have seven of the first 75 picks.

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The top pick has a slot value of $8,415,300, so if the Orioles’ selection — they’re choosing among a group of about four players, Elias said Friday, that likely includes Oregon State catcher Adley Rutschman, Texas high school shortstop Bobby Witt Jr. and California first baseman Andrew Vaughn — signs for under that amount, the excess slot value can be used toward signing other selections for over their slot values.

“It’s a big advantage,” Elias said. “If we end up using every dollar of it, just kind of straight up, meaning for each player it’s slotted for, great. It means we really liked those guys and got ’em, and if it ends up to where we’re pushing some of that money around and maybe signing a high school player later in the draft that his talent dictates or a college sophomore with a little bit of a price tag, then that would be good, too.”

The Houston Astros took the under-slot approach in 2012, when Elias served in an advisory role before his rise to director of amateur scouting and eventually assistant general manager. With the first overall pick, Houston drafted Carlos Correa, a Puerto Rican high school shortstop who was universally considered among the top handful of prospects available but not a leading candidate to go first overall. The Astros signed him for about $4.8 million, well below the approximately $7.2 million slot value.

As a result, the Astros were able to sign high schoolers, such as Lance McCullers Jr. in the supplementary first-round and current Oriole Rio Ruiz in the fourth round, getting them to bypass college. Correa and McCullers played key roles for the Astros’ 2017 World Series championship team, while Ruiz was traded to the Atlanta Braves for Evan Gattis, another title contributor.

“The Carlos Correa perfect storm kind of thing that happened, I don’t know if that’ll ever happen again,” Elias said. “No. 1, it was the first year of this new system. No. 2, we had this belief that he was the best player in the draft, but he thought he was going, like, sixth or seventh, which is a rare thing, and then also the spread between the bonuses that first year was a lot bigger than it is now. To have something sort of that dramatic happen again, I don’t know that we’ll see that again and have it work out on top of it, so we’re gonna focus on taking who we think is the right pick, and we’ll just kind of see how it all falls.”

That draft was not an outlier in Elias’ time with Houston. In 2015, the Astros drafted Alex Bregman second overall and Kyle Tucker fifth overall, both slightly ahead of predraft projections. Because both signed under-slot bonuses, when consensus top-10 draft prospect Daz Cameron fell out of the first round, Houston was able to sign him to a $4 million bonus after drafting him with a competitive-balance pick at No. 37 overall.

The Astros had two top-five picks in 2015 because they didn’t sign 2014 first overall pick Brady Aiken after discovering a medical problem with the left-hander’s pitching elbow. That came with bonus pool implications, as well. Because they did not sign Aiken, the Astros got the second overall pick in 2015, but they lost Aiken’s $7.9 million slot value in the 2014 draft. As a result, they reneged on offers to fifth-round pick Jacob Nix and 21st-round pick Mac Marshall, both of whom agreed to over-slot deals Houston could no longer afford.

A player taken in rounds 11-40 can receive a maximum bonus of $125,000 without being counted against the bonus pool. For the 2019 draft, any team that goes over its bonus pool allotment by 0-5% pays a 75% tax on the overage. For 5-10%, teams pay a 75% tax and also lose a future first-round pick. At 10-15%, they lose both a future first- and second-round pick in addition to a 100% tax, while anything over 15% costs two future first-round picks and a 100% tax.

“There is that possibility,” Elias said of the Orioles spending above their pool. “It’s not something that we do just to do. I’ve had years where we end up tapping into that and then other times where we don’t. So if it’s worthwhile to do it, we’ll do it. But there’s pretty heavy penalties attached to it, so you really gotta be sure you wanna do it.”

Holding four of the draft’s first 79 picks, the Orioles could elect to save money with the first overall selection — possibly by taking Vaughn, Vanderbilt outfielder J.J. Bleday, Georgia prep shortstop C.J. Abrams or another player other than the consensus top two of Rutschman and Witt — and use those savings for signing players to over-slot deals later in the draft.

Arizona’s bevy of picks makes that approach difficult. Because the Diamondbacks have four picks between Baltimore’s first and second selections, it’s possible Arizona ends up drafting whatever player or players the Orioles would target with any savings from a potentially cost-efficient first pick. Elias said Friday that the Orioles will put together a list of about 45 players to select from with their second pick at No. 42, a group that will narrow to about 10 because of availability and signability.

It’s a fluid process, one that likely won’t sort itself out fully until weeks after the draft. The deadline to sign 2019 draftees is July 15.

“It’s impossible to predict,” Elias said. “It just depends on where the guys go in the draft, but we anticipate utilizing the full pool.”

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