Article: Supplemental Draft Picks have great talent, made tough decisions

[Seth Stohs]

You can view the page at http://twinsdaily.com/content.php?r=1538-Supplemental-Draft-Picks-have-great-talent-made-tough-decisions

[clutterheart]

If you have the chance to get 1 MM USD as a HS kid you have to take - especially a pitcher. The way the some college coaches abuse their stars arms is almost criminal.

[righty8383]

Agree. You can always put money aside and use it for college if baseball doesn'twork out

[mini_tb]

Good read, Seth. Thanks! Correct me if I am wrong, but I believe the Twins re-signed Capps following the 2011 season. The second supplemental pick came from losing Kubel.

[Mike Sixel]

Good luck to both, and thanks to both for taking the time to talk to us fans. Appreciated greatly!

[roger]

Clutterheart points out a real concern, abuse of college pitcher arms. Just ask Matt Fox!

 

We all think these kids should get giddy over their $1,000,000 signing bonuses. Do we all feel the same if someone said the kid got $550,000? Because after FED and State taxes, barrring some real creative tax avoidance, that is what they get.

[gunnarthor]

Nice article, Seth. I really like Harrison and I think that, if nothing else, Boyd can become a nice bullpen arm. Good supplemental picks by the Twins.

[Mike Sixel]

$550K after taxes.....compared to the median FAMILY income in the US? Yes, yes they should be excited by that.

[Jim Crikket]

Sure, it's good money either way. But I think the point is that it's not an easy decision to make.

 

If they elect to go to college, it doesn't mean they have no shot at getting that kind of bonus later. In fact, if they perform well in college, they may make more money. Then again, they may wash out in college due to injury or poor coaching decisions or inability to focus on their game because of those pesky classes they have to take to remain eligible to play baseball.

 

In the end, it comes down to how you want to spend your first 2-3 years playing baseball after high school... for a college coach who's job security is tied to wins and losses or for managers who's job performance is evaluated by how well he gets his players prepared for advancing to the next level of professional ball.

 

Either way... signing immediately or signing after 3 years of college... you should be roughly at the same level within the organization (somewhere between low A and high A). After that, you're on even footing with the guys who chose the other path.

 

The question shouldn't be so much about which path will get you the bigger bonus, but which path do you see having the better shot at getting you to that Class A-A+ level successfully?

[Mike Sixel]

I was responding to Roger's post about the money, not indicating one way or the other what someone should do. I am not sure I get roger's post at all, frankly. That's nearly 20 years of income for a family in the US, in one check......

[Jim Crikket]

I was responding to Roger's post about the money, not indicating one way or the other what someone should do. I am not sure I get roger's post at all, frankly. That's nearly 20 years of income for a family in the US, in one check......

 

I won't speak for Roger, but here's what I took from it. $550,000 is no small amount, but when you consider what it will provide to a guy over, say, the course of his likely working years (40-45 years), it's not all that much... maybe $15-20K a year, depending on what interest rates run.

 

The difference in household income in the US between someone with just a HS education and one with a 4 year college degree is about $30K a year.

 

If he ends up using that nest egg to go back to college, that could easily eat up 20-30% (or more) of the $550,000 for four years (which would have been free if he had chosen to take a baseball scholarship).

 

Personally, I'd have taken the money in a heartbeat and I think most others would, too. But then, I'm a guy who left his spot on the bench of his JuCo basketball team midway through his second year of college to run fast food restaurants... so I'm probably not the guy to provide advice in this area.

[diehardtwinsfan]

You have to take the money. Set 80K aside in a low risk investment as college money should baseball not work out. Invest the rest wisely and you have a nice supplemental check for the rest of your life... or blow it all on whatever you want, just don't touch the 80k until you've played a few years in the pros.

[roger]

I was responding to Roger's post about the money, not indicating one way or the other what someone should do. I am not sure I get roger's post at all, frankly. That's nearly 20 years of income for a family in the US, in one check......

 

My point was simple, when you see those big gaudy numbers thrown around for the top few rounds, divide it roughly in half as most of the other half goes to taxes. A $550,000 bonus looks a lot different than a million or in Buxton's case, a $3,600,000 bonus is really different than $6,000.000. Expect Buxton is also very happy he got the bonus last year before this year's taxes went up.

 

Yes, they all are a lot of money and a lot more than the average fan will see in many years of working or a lifetime for most of us in Buxton's case.

 

Also thought that Mr. Crikket did in excellent job taking a look at what a young high school grad should consider when offerred these opportunities.

[cmathewson]

$550K = five years of good wages. It takes five years to make the majors. Until then, the minor league minimum is like $30K + meal money or something, before taxes. They certainly don't get rich off of signing bonuses.

[Mike Sixel]

your definition of good wages is way off. You are suggesting 110K after taxes is a "good wage"? That's nearly double the median, pre-tax, income for a family in this country.

 

yes, they get rich off getting $1MM in one check. That's 10 years of 100K per year pre tax. Around 20% of US households make that in a year. College educated (or higher) does not "average" that until a male is in 35-44.

 

Assuming they can generate 8% in the stock market off of 500K, they can get 40K per year. If they then work a regular job, even as a HS graduate, they make significantly more than the 80% of US households. Oh, and they still have $500K in the market if they need it, instead of tens of thousands in debt.

 

If a minore leaguer makes 30K per year, and they get 40K per year in investment income, that is a lot of money. A lot.

[70charger]

"Rich" or not, the math seems kind of simple to me. College is retarded expensive, but even in pricey private schools, you're looking at $50k a year, which should include living expenses. Four years and you're not even halfway through your post-tax bonus. No scholarship in the entire NCAA is worth that. It seems like a tough decision, but realistically, in the sandwich round, it just isn't.

[Mike Sixel]

From a financial perspective, agreed. The college experience is potentially more fun than the MiLB experience though.

[Mike Sixel]

Oh, and I have a HS senior, and make good money. AFTER help from schools and whatnot, we are looking at $35K+ per year for the schools he wants.....

[cmb0252]

Don't forget the agents cut of their signing bonus and/or the cost of any other advisor that comes out of their pocket: lawyer, CPAs, PR people, off season trainer.

[Mike Sixel]

don't forget, they get meal money, and in lower minors some live with families for free. And sorry, but lots of people pay for gym memberships/trainers. Really, people are still arguing a million dollars isn't a lot of money? Really?

[cmb0252]

A million bucks is a ton of money! Don't think I said it wasn't. I just don't think it is a no brainier as people make it out to be.

[spideyo]

The toughest thing of course, is that it's not really a choice between a million bucks and nothing.

 

On one hand, you have a million bucks (pre-tax) but you also have a pretty rough lifestyle. Low A guys aren't exactly living in the ritz and flying on charter jets. Heck, is there even an airport in E-town? Plus, the whole time you are in the minors you aren't jus conpeting against other teams, you are competing against other people in the same organization, trying to claw your way up the depth chart.

 

On the other hand, these guys have been heavily recruited to join a college program. That means a coach has built a relationship with them, likely had guaranteed them a certain amount of playing time, and they've been offered a generous scholarship. Free college is a pretty nice offer. Not only that, but you are going to get a lot more fame in the short term as the star of a college team than as just another farmhand. True, college programs don't pay you, but I'm sure you would get some nice "unofficial" gifts and perks.

[roger]

don't forget, they get meal money, and in lower minors some live with families for free. And sorry, but lots of people pay for gym memberships/trainers. Really, people are still arguing a million dollars isn't a lot of money? Really?

 

I for one am not saying $1,000,000, more or less, isn't a lot of money. My point was that when we see $1,000,000 it is reduced by nearly half after paying the taxes. That is all I was trying to say. I really don't understand how that simple statement of fact has been turned into this lengthly discussion.

[Seth Stohs]

What a strange direction these comments sections take sometimes.

 

$1 million is a ton of money, and I think a high school kid who turned that down to go to college would be pretty rich already, or just a little silly, no matter how much is taken out in taxes. $550,000... that would take me like 18-20 years to make if we account for taxes.

 

The other piece that isn't mentioned here, and I don't know if it's the same for all picks (I assume it is), but typically the signing bonus will also include college tuition. I know a guy who the Twins drafted way back when in the first five rounds. At the time, the signing bonus was still pretty nice. He played in the organization for about 3 years and didn't get out of the rookie leagues yet the Twins still paid for his college education.

[diehardtwinsfan]

I'm shocked this is a debate. It has more to do with principles than it does the money. I get the fame route, but lets not pretend that these guys don't have access to the exact same issues in the minors. People know who they are and plenty will want to be with them. Mathematically speaking, it's a no brainer too.

 

Very few careers out of college will make 100k a year. Most will be well under 50 and in today's climate, a huge chunk of grads are unemployed. They won't have the mountains of debt to go with the unemployed, but I fail to see why they'd bypass it. With some smart planning, they'd be set for life even if they never made it out of the minors. Even if they didn't want to be proactive, they could still be better off after a failed career in baseball and a return to college than simply going straight there.

[ashbury]

What a strange direction these comments sections take sometimes.

 

Yes, because colorless green ideas sleep furiously.

[Seth Stohs]

One thing I always like to say as well is that the purpose of college is to prepare a person for their future career. Well, in what career is a million signing bonus (or $6 million in Buxton's case), or even $500,000? When college is an option after that career is over (whether it's after a big league career or not), it's a no brainer to me.