Does anyone here know any of these kids? I just can't fathom why a high school kid would sign for $20K this year instead of going to school for one year and re-entering the draft next year. Are teams promising these guys something else to make it worthwhile? Maybe just the prestige?
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@MidAtlanticDad posted:Does anyone here know any of these kids? I just can't fathom why a high school kid would sign for $20K this year instead of going to school for one year and re-entering the draft next year. Are teams promising these guys something else to make it worthwhile? Maybe just the prestige?
Unless going to a JuCo, the player would have to wait until he is 21 or a junior to reenter the draft....so he would have to wait more than one year. Agree, waiting 3 years while enjoying college ball would be a great option.
I don't think next year's draft may be much better. Well, 15 rounds better.
Juco is what I was referring to when I said one year. I guess someone convinced these kids that it's not going to get any better over the next couple of years... which may be true. Next year will have hundreds of guys queued up who would have normally gone this year, and only 20 rounds. This is a lousy time to try to break into professional baseball.
I've only seen a few outside of PR - which would be a different set of circumstances I'm sure. One was an Army commit which is a massive commitment that likely ends in the Middle East.
Another was actually very interesting. A late bloomer who only threw 8 innings in HS baseball last year as a reliever. Apparently did well at Jupiter. He had a commitment to a very expensive private school which I'm fairly confident doesn't provide many scholarships.
I probably would have went juco in both those cases, but I also don't know the situation at home. Kid on our travel team signed last year for nothing. He pretty much had a free ride to a CWS team after fin aid. Word was he wanted to help his family out right away which I can't knock the kid on.
@PABaseball posted:I've only seen a few outside of PR - which would be a different set of circumstances I'm sure.
That's a good point. Those might be the only two.
Just on the surface, I would think there is more than a small handful of kids that just really are not good traditional academic students and have either trade school, military or jumping into some family business or more entry level labor market in mind. For many of those, why not take a shot at ball first? Agree, though. Lousy time to try to break in, regardless.
I saw someone mention on another thread that getting the MLB scholarship for 4 years of college would likely be better than their college scholarship. Interesting point.
@cabbagedad posted:Just on the surface, I would think there is more than a small handful of kids that just really are not good traditional academic students and have either trade school, military or jumping into some family business or more entry level labor market in mind. For many of those, why not take a shot at ball first? Agree, though. Lousy time to try to break in, regardless.
I know of a great ball player that fits this description. No interest in school, and is also working for his welding certification. His father told me, he is going to give it a shot, if it doesn't work out, already has a good paying job lined up working with him in the Texas oil fields.
Some of the draft contracts are coming out. A 3rd and 4th rounder both signed for 20k. Lots of guys signed for 1/3-1/4 of slot in the last two rounds.
@keewart posted:I saw someone mention on another thread that getting the MLB scholarship for 4 years of college would likely be better than their college scholarship. Interesting point.
I guess that would be true in some cases, but you have to negotiate participation in the Continuing Education Program as part of your initial contract, right? And even for those who do, the reimbursement amounts are also negotiable. Call me cynical, but I'm guessing very few kids actually come out ahead on that deal.
@MidAtlanticDad posted:I guess that would be true in some cases, but you have to negotiate participation in the Continuing Education Program as part of your initial contract, right? And even for those who do, the reimbursement amounts are also negotiable. Call me cynical, but I'm guessing very few kids actually come out ahead on that deal.
Son's MLB CEP contract was pretty standard, with the tuition and room/board listed spelled out in a separate attached letter based on the current rates at his school at the time of contract signing. The actual school isn't listed, and son was a college junior sign, but if the player is committed to play at a given school, those rates would be listed. You really could attend any college. I would think any high school player signing this year could negotiate 4 years. It is their only leverage. Not sure about a JuCo commit.
The Cons: You have to start use of the CEP within 10 years of signing your first minor league contract, and within 2 years of leaving baseball. There are exclusions (ie: fraud, put on the ineligible list). I think it is pretty well known that not all players use it, so it is a true benefit only if used. Tuition and Room/Board increase over those 10 years, so you are out of pocket the difference. The tuition and R/B is reimbursed after passing grades and receipts are submitted in most cases, so you you have to come up with all the money upfront. The player is taxed on all amounts paid out, which is a quite a bite. The player has little time to take classes: the milb season runs into September so you would have to start the fall semester late, and the spring and summer semesters conflict with the playing season. (Few colleges have a January session which would work). If you wait until your playing days are over as a junior/senior sign, you will be a much older student attending college. As I understand it, the CEP now specifies how many 'semesters' you can attend and breaks down the amounts by semester. So, if you are a junior sign with 2 semesters left, that is what you get: 2 semesters (not $$ for credits spread out over several years). Son's wasn't spelled out that way, however.
The Pros: If you are taxed at the 25% rate, you could have your last 2 semesters, or all 8 semesters reimbursed at 75%. That is quite a baseball scholarship. If the high school sign player doesn't pan out in baseball in 5-6 years, he still has 8 full semesters to get that degree going full time.
On a personal note: keewartson is currently trying to finish up his degree using the CEP. He was already able to go one full FALL semester (with a quick re-enrollment and class selection turnaround) and live near campus and he loved being a "student without baseball obligations". Sure, he was a bit older and the current baseball players called him "dad", but he got to experience college a different way. He was still able to work out, rehab, and hit with one of the coaches. Plus, he got to work a camp or two for some needed $$. Currently, with the pandemic and college closures, his school has more online classes than ever before and he is able to take upper level classes online. It is not easy in summer school, and he has to take one of the classes at a different college and have the credits transfer, but it looks like he may be a 2020 grad! Yippee! If milb should start up this summer in some form, he plans to continue on with his online classes. This weird year is a "blip" of an opportunity to him finish up his last 9 credits. Since we, his parents, didn't have to pay his last year of college (less his baseball scholarship), we are paying his CEP tax obligation at tax time.
@keewart posted:Son's MLB CEP contract was pretty standard, with the tuition and room/board listed spelled out in a separate attached letter based on the current rates at his school at the time of contract signing. The actual school isn't listed, and son was a college junior sign, but if the player is committed to play at a given school, those rates would be listed. You really could attend any college. I would think any high school player signing this year could negotiate 4 years. It is their only leverage. Not sure about a JuCo commit.
The Cons: You have to start use of the CEP within 10 years of signing your first minor league contract, and within 2 years of leaving baseball. There are exclusions (ie: fraud, put on the ineligible list). I think it is pretty well known that not all players use it, so it is a true benefit only if used. Tuition and Room/Board increase over those 10 years, so you are out of pocket the difference. The tuition and R/B is reimbursed after passing grades and receipts are submitted in most cases, so you you have to come up with all the money upfront. The player is taxed on all amounts paid out, which is a quite a bite. The player has little time to take classes: the milb season runs into September so you would have to start the fall semester late, and the spring and summer semesters conflict with the playing season. (Few colleges have a January session which would work). If you wait until your playing days are over as a junior/senior sign, you will be a much older student attending college. As I understand it, the CEP now specifies how many 'semesters' you can attend and breaks down the amounts by semester. So, if you are a junior sign with 2 semesters left, that is what you get: 2 semesters (not $$ for credits spread out over several years). Son's wasn't spelled out that way, however.
The Pros: If you are taxed at the 25% rate, you could have your last 2 semesters, or all 8 semesters reimbursed at 75%. That is quite a baseball scholarship. If the high school sign player doesn't pan out in baseball in 5-6 years, he still has 8 full semesters to get that degree going full time.
On a personal note: keewartson is currently trying to finish up his degree using the CEP. He was already able to go one full FALL semester (with a quick re-enrollment and class selection turnaround) and live near campus and he loved being a "student without baseball obligations". Sure, he was a bit older and the current baseball players called him "dad", but he got to experience college a different way. He was still able to work out, rehab, and hit with one of the coaches. Plus, he got to work a camp or two for some needed $$. Currently, with the pandemic and college closures, his school has more online classes than ever before and he is able to take upper level classes online. It is not easy in summer school, and he has to take one of the classes at a different college and have the credits transfer, but it looks like he may be a 2020 grad! Yippee! If milb should start up this summer in some form, he plans to continue on with his online classes. This weird year is a "blib" of an opportunity to him finish up his last 9 credits. Since we, his parents, didn't have to pay his last year of college (less his baseball scholarship), we are paying his CEP tax obligation at tax time.
As to the taxes, do you not get to use the American opportunity credit or the lifetime learning credit? Seems that would offset a lot of the tax liability.
Don't get caught up in the educational incentive. It is not as it appears completely. It is taxed as a luxury item since it is part of a package so it can be taxed as high as 40%. It has to be used for educational purposes and has to be used in 10 years. I was trying to find the article and will keep looking but it said something like 9% of all guys who take the educational incentive actually ever use it. If you use it, it is a good deal but usually does not equal out to what a guy who was being drafted out of high school would have received in scholarships and other stuff.
I think some guys ran from college and the fear of not playing to go to MiLB where they will still not play or get paid. I know there are exceptions such as not good in school, need money now, etc. as has been discussed but when you say $10,000 walk away money that is not life changing money. I just do not understand except in very rare cases. A friend's son graduated and did not want to do any more education so he took the $20,000 and the educational incentive just in case. He was told he will probably not be doing anything until maybe this fall or next spring. Dad was not pleased with his decision but is trying to be supportive. He had a great scholarship and could have been close to finishing short post grad degree if he had gone back.
Just to add some info. Son went back after almost 10 years, and 2 years after leaving MLB. I didnt know there was a time limit. I also thought it was within 3 years of leaving MLB. He played a year in independent and went to play in Mexico to make the extra money needed, because he WAS going back. When he signed in 2007 yearly tuition at Clemson was 20k, which is the amount he negotiated and agreed. It was about 30k when he returned for OOS.
For those that do not know quite a few programs have funds available for their returning athletes. At Clemson it's called the Tiger fund. It's not uncommon at P5 programs because they NEED you to graduate. It is, I think a very important question to ask during recruiting especially if the player can be signed out of HS.
Anyway, also included was a 1200 stipend per month for living expenses paid up front per semester. Plus the 32 credits.
One thing to note. Every time a player moves up a notch in pro ball, his scholarship money is reduced by 1000. So the longer you put it off, the more it might cost you.
I do not know of anyone of my friends sons or his friends that were drafted that did not graduate, or finish up right away. I have a friend whose son was drafted out of HS and got his degree from an online school. By the time he was done playing he had his degree.
I didn't really understand why a HS player would not go to college first, but all situations are different.
@roothog66 posted:As to the taxes, do you not get to use the American opportunity credit or the lifetime learning credit? Seems that would offset a lot of the tax liability.
Yes, if the player qualifies. Son received half his bonus the the year he went back to school that one fall which disqualified him.
I did put a note in his tax file for this year though!
TPM, the living expenses are not paid up front anymore. Nor the tuition. Everything is reimbursed after receipts and official grades are turned in. (Lucky are the players that go/went to the larger schools that have their own "tiger fund" to pay for the tuition! Schools DO want their players to graduate!)
@keewart posted:
TPM, the living expenses are not paid up front anymore. Nor the tuition. Everything is reimbursed after receipts and official grades are turned in. (Lucky are the players that go/went to the larger schools that have their own "tiger fund" to pay for the tuition! Schools DO want their players to graduate!)
Does the MLB scholarship fund cover room and board because it did not when son signed, was for tuition only. And it was through reimbursement also at that time. But I am assuming that everything is negotiable.
I see some of the endowments from smaller programs and it's kind of hard to believe that schools will not cover expenses, even if not to help subsidize. That's if schools really want them to graduate.
Good article in The Athletic about some UDFAs who signed with the Phillies. One HS kid mentioned that getting a four year scholarship made it a "No brainer". A college pitcher (Jr.) apparently negotiated tuition for his final year of college and a one year masters.
@TPM posted:Does the MLB scholarship fund cover room and board because it did not when son signed, was for tuition only. And it was through reimbursement also at that time. But I am assuming that everything is negotiable.
I see some of the endowments from smaller programs and it's kind of hard to believe that schools will not cover expenses, even if not to help subsidize. That's if schools really want them to graduate.
Son's contract listed tuition and living expenses separately (the equivalent to one year at the time he was a junior).
Now, as I understand it, it may list by semester. I guess when the tuition/room/board increases, and then reimbursed at a later time, it could eat up more than what one semester costs which leaves little for the last semester(s).
I think A LOT of players are going to use the CEP this fall, since many classes are online and players can do that no matter where they may be. I know of several from sons school that are.
@PitchingFan posted:Don't get caught up in the educational incentive. It is not as it appears completely. It is taxed as a luxury item since it is part of a package so it can be taxed as high as 40%.
Son's (CEP reimbursement) was listed as regular wages on his W-2, combined with his milb wages. In a lump.
Not sure how it could be a luxury item.
(Sorry for so many posts, but we are going through it now and learning as well and I am posting for others that may want the info. Plus, I do his taxes.)
I saw an article on a Massachusetts kid explaining he took the bird in the hand. He said who knows what next year brings. He added he will get half his senior year in during the fall. Then take the last five courses based on availability.
