2024 MLB Draft slotting system explained: How format, bonus pools work and who has the most money to spend

Major League Baseball's 2024 draft gets underway Sunday. We've been getting you amply prepared with rundowns of the top prospects , regular mocks, and lots of other angles . That will continue up to and beyond the event itself, but now let's take a moment for more "nuts and bolts" matters. The royal we speak of the signing-bonus slotting system that underpins the MLB Draft and shapes many of the decisions that teams make.

To get you in the know, let's proceed in time-honored FAQ format so that MLB's somewhat byzantine bonus setup might be a bit less confusing for you before the names start being called. Onward we go, costumed in feigned wisdom …

So what is the slotting system?

The slotting system assigns specific dollar values to each draft position. These dollar values are in essence MLB's "recommended" bonus amount for the player drafted at said position. These are not reflective of prevailing talent markets or tailored to each player's estimated future value. Rather, they are arbitrary dollar figures, the purpose of which is to limit a draftee's bargaining power and put a cap on the bonus he'll command. Stated another way, it's a means to limit labor costs, which is what team owners crave above all else.

What are the slot values for the 2024 draft?

Here are the assigned for values – i.e., the "recommended" bonus for the player drafted at each of these spots – for the first round of this year's draft and the team that holds each respective pick (via MLB.com):

Pick No. 1: Guardians: $10,570,600
Pick No. 2: Reds: $9,785,000
Pick No. 3: Rockies: $9,070,800
Pick No. 4: Athletics: $8,370,800
Pick No. 5: White Sox: $7,763,700
Pick No. 6: Royals: $7,213,800
Pick No. 7: Cardinals: $6,823,700
Pick No. 8: Angels: $6,502,800
Pick No. 9: Pirates: $6,216,600
Pick No. 10: Nationals: $5,953,800
Pick No. 11: Tigers: $5,712,100
Pick No. 12: Red Sox: $5,484,600
Pick No. 13: Giants: $5,272,300
Pick No. 14: Cubs: $5,070,700
Pick No. 15: Mariners: $4,880,900
Pick No. 16: Marlins: $4,704,700
Pick No. 17: Brewers: $4,534,100
Pick No. 18: Rays: $4,372,900
Pick No. 19: Mets: $4,219,200
Pick No. 20: Blue Jays: $4,073,400
Pick No. 21: Twins: $3,934,400
Pick No. 22: Orioles: $3,802,200
Pick No. 23: Dodgers: $3,676,400
Pick No. 24: Braves: $3,556,300
Pick No. 25: Padres: $3,442,100
Pick No. 26: Yankees: $3,332,900
Pick No. 27: Phillies: $3,228,300
Pick No. 28: Astros: $3,132,500
Pick No. 29: Diamondbacks: $3,045,500
Pick No. 30: Rangers: $2,971,300

As you can see, the slot bonuses decline as we move down the draft order. The draft order is determined by lottery at the top end ( Cleveland very much defied the odds to land the top overall pick ). Further down, the order is determined by regular-season finish and then by postseason finish among the 12 teams that qualified for the playoffs. Other wrinkles that affect draft order include whether a team is a revenue-sharing payor or payee, whether a team signed a qualifying-offer free agent, and whether a team is above the luxury-tax threshold on payrolls (and by how much and how many years in a row). The latter consideration is why the Mets, Padres, and Yankees are picking lower than you'd think based on their 2023 records.

What's this about the luxury tax and draft order?

The luxury tax is officially and misleadingly known as the Competitive Balance Tax (CBT) on major-league payrolls, and, like the slotting system, its purpose is to put artificial limits on how much teams can pay players. If a club's CBT payroll, which is determined by calculating the average annual value of the contracts of all players on the 40-man roster, exceeds the CBT limit then penalties follow. The most notable of these involves paying various levels of taxes on the money they spend in excess of the CBT threshold, which for 2023 was set at $233 million. These penalties compound based on how far above the CBT threshold the team is and how much of a "repeat offender" they are.

For those well over the CBT line, there's also a draft-related sanction. Here's how the league explains it:

"Clubs that are $40 million or more above the threshold shall have their highest selection in the next Rule 4 Draft moved back 10 places unless the pick falls in the top six. In that case, the team will have its second-highest selection moved back 10 places instead."

(Aside: The Rule 4 Draft is the solemn and bureaucratic official name of what regular folks call the MLB Draft.) So that explains why the Yankees, Mets, and Padres saw their first-round picks slide 10 spots: each team surpassed that $233 million figure in 2023. That means not only that theoretically more modest talents will be available to them at those lower slots, but it also means less total 2024 draft bonus money for these three clubs. Now let's pose a question that gets us into that aspect of things.

So teams can't pay a draftee more than his assigned slot value?

Not necessarily. A team's draft budget is determined by what's called its bonus pool, which is the sum of the assigned slot values for all its picks. Yes, every pick in the first 10 rounds of the draft is assigned a dollar figure – from the $10.6 million you see at the tip top above all the way down to $178,800 for pick No. 315 (held by the Rangers). For picks after the 10th round, a team this year can pay those draftees bonuses up to $150,000 each without having it count against their total pool. This figure also applies to undrafted free agents.

As you have probably already figured out, the higher a team picks, the higher its bonus pool. That brings us to this year's bonus pools for each of MLB's 30 clubs (again via MLB.com):

Guardians: $18,334,000
Rockies: $17,243,400
Reds: $15,842,100
Royals: $15,418,300
Athletics: $15,347,900
White Sox: $14,593,300
Pirates: $14,000,500
Angels: $12,990,400
Brewers: $12,984,400
Diamondbacks: $12,662,000
Twins: $12,209,600
Tigers: $11,921,800
Nationals: $11,500,100
Orioles: $10,920,900
Red Sox: $10,521,600
Marlins: $10,438,500
Cardinals: $10,213,000
Rays: $10,093,100
Cubs: $9,802,300
Mets: $9,572,200
Mariners: $9,543,300
Padres: $9,360,500
Blue Jays: $8,987,000
Yankees: $8,134,500
Braves: $7,765,000
Giants: $7,566,200
Phillies: $7,381,800
Rangers: $6,997,900
Dodgers: $6,114,700
Astros: $5,914,700

Yes, there are wide gaps between the bonus pools at the top end and those at the other end of the continuum. The Astros, for instance, have a 2024 pool that's not even one-third of Cleveland's.

Can they pay him less than his assigned slot value?

Yes. We'll get to this soon in terms of pool manipulation, but again, the assigned value is intended to serve merely as a suggestion. If a team can convince a player to take less than that number, they get to chalk that up as a win. We won't pretend to guess why a player would agree to that, but it does happen. The main restriction is that if the player in question attended the MLB Combine and submitted to a medical as part of the event, he must be offered at least 75% of his slot value.

Are teams allowed to exceed their bonus pools?

Teams may do so, but it costs them. MLB.com's Jim Callis explains :

Clubs that outspend their allotment by 0-5% pay a 75% tax on the overage. At higher thresholds, teams lose future picks: a first-rounder and a 75% tax for surpassing their pool by more than 5 and up to 10%; a first- and a second-rounder and a 100% tax for more than 10 and up to 15%; and two first-rounders and a 100% tax for more than 15%.

The penalties get much steeper at more than a 5% overage, which is why no team has ever ventured into that fell territory. Getting into that first penalty phase, however, is a regular occurrence.

Clubs also do a lot of maneuvering within their bonus pools in order to make the numbers work and stay out of those deep penalty phases. Particularly at the front end of the draft, teams will sign players for less than their assigned slot bonus, which is known as signing "under slot." Those savings can be applied later to sign a player to an "over slot" bonus that's in excess of the assigned figure. For example, if the Guardians sign their No. 1 pick for less than $10,570,600, they can redistribute those savings to a pick in a later round and sign him "above slot."

All of this allows teams on occasion to land players whom they deem to have more potential than their eventual draft position suggests. It's all strategy-driven, and the groundwork for making the bonus pool work is laid long before the names are announced on draft day.

Can teams trade pool money?

Not directly, no. There is, however, a small and not frequently wielded exception. Almost all draft picks cannot be traded. The exception is a small subset of selections known as Competitive Balance Draft picks. The ten teams with the lowest annual revenues and the teams from MLB's smallest markets (there's obviously some overlap there) are eligible for such picks. Those picks can be traded, and when they are, the slot values go with them, thus increasing the acquiring team's pool and reducing the trading team's pool.

Conveniently enough, we have an example of just such a swap in this year's draft. As part of the offseason blockbuster trade that sent ace Corbin Burnes to the Orioles, the Brewers received Baltimore's competitive balance round selection. That turned out to be the No. 34 pick overall, and getting that pick swelled the Brewers' 2024 bonus pool by $2,698,300 (and reduced the Orioles' pool by that same amount).

Is there a deadline for signing drafted players?

There is. This year, it's Aug. 1 at 5 p.m. ET. If players drafted within the first 10 rounds aren't signed by that deadline then their slot money is subtracted from the team's total bonus pool. That, in turn, could foul up a team's "pool management" strategy and put them in penalty territory. Removing that slot value of unsigned players prevents teams from intentionally drafting players they will not sign and using their slot money elsewhere in the draft. The unsigned player can then go back into the draft the following year if he so chooses. The team, meanwhile, earns a compensatory pick for next year's draft if the player was drafted in the first three rounds. The position of that pick is dependent on the draft position of the unsigned player.

Anything else?

No.