Just read about Gianluca Dalatri on uncutchapelhill.com. 2 time Gatorade POY for NJ. USA National Team, ACC ROY & NC #1 Pitcher rolling into his soph year (2018). Offered 1.5 million after HS. Turned it down to play college ball. Hurt 2018 & 2019. Looks like he’s completely done with BB now. Aside from the personal tragedy here, the $$ lost is brutal. I just can’t ever see turning down the $$ & pro training to play at college. Thoughts ?
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The two things that can go wrong not signing out of high school are getting injured or proving in college ball you were over projected and overrated. High school signees are likely to make the majors sooner (if they make it).
The big plus for college ball is if a player doesn’t cut it in baseball he only has a year to go to get his degree, if a player wants to ultimately become a high school or college coach he’s going to need his degree. I believe many college head coaches have or are working towards a masters.
The older brother of one of my son’s travel teammates signed out of high school. He was a offered way too much not to sign. At twenty-seven he was a freshman in college. He said it was hard at first. But at his age college was all business and not a party.
There are a lot more variables. I’m sure they will be brought up in this thread.
I wish I had personal experience to share. But from observation, while you're probably right in general, I think there is no single right answer.
Don't know the accuracy of the rumors, but I heard that one kid my son played with was being told by a couple teams he'd be drafted 5th or 6th round out of HS, so that's maybe $200K to $400K tops in bonus money, unless they did something creative. Right now he's projected to be a top 5 pick in a few months. So that's more like $6 to $8 million, if nothing goes wrong. If that's the case, the kid will have made a huge payday by taking the risk of playing in college to prove the clubs wrong in how they valued him.
(I understand that his lifetime earnings if drafted out of HS could be higher than drafted out of college, despite the huge disparity in bonus money, but there's no certainty in that.)
I look at it as a case by case basis...looking at multiple factors such as maturity, and work ethic. I know quite a few college studs who were home sick and ended up transferring close to home after college freshmen year. I can't imagine what that would be like for an 18 yo professional baseball player with no family or friends. I know a few professional baseball players (who also played college baseball) and they've described it as a lonely as well. It seems like all of them took up golf and fishing in their spare time.
So, I'm hung up on your word "every". But I think there are definitive positives especially for pitchers, because you know that team is going to treat your arm like a prized possession.
I think for every unfortunate story like the above you have one like Joey Bart. He was offered (I think) ~$400K out high school and was really insulted by it. Was told that he literally played with a chip the size of the Grand Canyon on his shoulder for three years at Tech.
I think he proved himself right by going to school and got a little over $7mil which is just slightly better than $400K. 🤔
I would take the life changing money and go to college later. There are some exceptions of course. If your dad is a doctor with a private practice and your mother is a high paid lawyer you might afford to not take the offer. Some guys like to bet on themselves and try to become a 4 mil guy instead of a 1 mil guy but that is risky.
I think carter stewart tried that after he got low balled after an injury and he got worse in college so it didn't pay off for him.
Dominik85 posted:I would take the life changing money and go to college later. There are some exceptions of course. If your dad is a doctor with a private practice and your mother is a high paid lawyer you might afford to not take the offer. Some guys like to bet on themselves and try to become a 4 mil guy instead of a 1 mil guy but that is risky.
I think carter stewart tried that after he got low balled after an injury and he got worse in college so it didn't pay off for him.
I think Stewart signed a deal to play in Japan that’s significantly more than he would have gotten in the draft.
First, a player can insure against injury; makes sense if your worth out of HS is 1.5 million.
Second, hindsight is always 20-20.
Third, there are many, many, many threads on going pro from HS. As others have noted, it's not one size fits all and the many variables are weighed differently by each player/family in light of each's respective circumstances.
Take the signing bonus:
It's a no brainer!
CTbballDad posted:Take the signing bonus:
- Pay the $400K taxes
- Give him $50K play money
- Give mom and dad $50K
- Set aside $250K for house down payment down the road
- Put $750K away for retirement, will be worth $5.5M (7% compound int.) before he turns 50
- Go back to college on MLB dime
It's a no brainer!
27% taxes? I’m moving to CT. 😂
I'll refine the numbers a bit (but it's still back of the envelope rough computations).
1,500,000 - 150,000 (agent's commission) - 550,000 (state and federal taxes) = 800,000.
800,000 - 50,000 (mom and dad) - 50,000 for walking around money (for five years) = 700,000.
Note: no car purchase (a dubious assumption) and 10,000 per year in walking around money is 800/mo. If he's footing his own bills - including off season conditioning, food and rent, that number is really low.
The house down payment doesnt include a number for mortgage payments, insurance, property taxes, and maintenance. The earlier the house is purchased, the less compounding and the earlier cash is required. But, assume he borrows another 250,000, that means he needs 25,000 cash annually to support his home purchase.
Now, if he retires without making it to MLB at least six years after the contract he does have the MLB scholarship to use (if he leaves before without club consent, he loses it). That scholly money is taxable; AND, add in whatever inflation has done to tuition, room and board. Assume the actual dollars he needs to finish in four years is 100,000. But MLB pays 75,000 and he owes 25,000 in taxes. He needs to come up with 50,000 in cash. He takes that from the savings and loses in year seven 50k worth of compounding. And, he needed to pay taxes upon any sale of stock/mutual funds (cap gains) AND pay tax upon receipt of distributions in the years received (dividends, cap gains).
That 5.5 million nominal amount is a mere memory of hope.
Now, if he makes it to MLB he's in much much better shape.
It's a very complicated issue with very complicated numbers and very complicated assumptions and variables.
Consult your accountant!
PS. Over a 30 year period, it's really difficult to HOLD (and thereby defer taxes) in an investment for that entire period. Because the amount invested is not able to be in a tax deferred account (IRA) [at least the overwhelming overwhelming majority], every transaction will be taxed and, therefore, dramatically lower the final sum.
In all seriousness, an agent? If my son were to get drafted and some guy knocks on our door the day before, no way he’s getting 10% when he had nothing to do with the 18 year journey to get there. Why do you need an agent if slot money is somewhat pre-established? I understand teams play games with the slot money, but do you really need an agent for that?
From time to time, we get parents asking about the need for an agent. Most dont need one; BUT, a first or second round HS pick definitely needs one to maximize the signing bonus (IMO). Most parents simply dont have the experience or knowledge needed to negotiate at that level.
Slot money AS A TOTAL AMOUNT is established. But the distribution of money to individual picks is absolutely subject to negotiation. And clubs DO NOT have the player's best interests in mind while negotiating.
I know a 1S HS pick who took half of slot. He needed the money right then and there. He was well aware of the risk. After a brief struggle in MILB - the growing pains and maturarion process of a HS age draftee - he made it. Now four years into MLB, his choice proved right; that bonus is long gone, but the riches of MLB dwarfs that amount.
Dominik85 posted:I would take the life changing money and go to college later. There are some exceptions of course. If your dad is a doctor with a private practice and your mother is a high paid lawyer you might afford to not take the offer. Some guys like to bet on themselves and try to become a 4 mil guy instead of a 1 mil guy but that is risky.
I think carter stewart tried that after he got low balled after an injury and he got worse in college so it didn't pay off for him.
Who says the parents are going to give the kid their money? My mother recently died. I’m in my sixties. I wasn’t going to wait forty years. I know a kid in the situation you just gave who signed for 1.5M. Any less and he was headed for college. 1.5 was his number.
Re: agents ... They do more than scoop up a commission just for being present for slot money. If a kid is weighing signing out of high school versus college ball the agent is working for him beforehand as an advisor. The agent is using his network to find out the behind the scenes word on the player and his worth. After signing the agent is working on getting the player equipment, pending future endorsements and local promo gigs.
Years ago I asked a friend (played for the Bills) how he could stand staying in Buffalo in the off-season. He told me he made a lot of money (relative to the late 70’s) doing autographs and posing for pictures at car dealerships and other businesses along with local public speaking gigs. I know the local AA and G League players where I am now get some of these jobs.
Years ago TPM provided a real good explanation of everything an agent does for minor leaguers. When she sees this thread maybe she will provide some info.
CTbballDad posted:In all seriousness, an agent? If my son were to get drafted and some guy knocks on our door the day before, no way he’s getting 10% when he had nothing to do with the 18 year journey to get there. Why do you need an agent if slot money is somewhat pre-established? I understand teams play games with the slot money, but do you really need an agent for that?
In all honesty, if someone shows up the day before, that more than likely means your son won't be drafted very high or drafted at all. Seriously.
Most high prospects usually have advisor/agents well before their draft year. Those advisors/agents have relationships with teams. Teams do want you to have fair representation.
We met sons agent in HS, he said go to college. After 3 years at CU not only was he his agent come draft day, but very close friends and still today, many years later. FWIW, he doesnt work with HS players anymore, college and current MLB guys only, and still only works with players he feels will become MLB players.
The really good guys chose you, not the other way around.
The good ones stick with you through good times and bad times. They take care of your needs, equipment, vacations, doctors, you name it. The most important thing is that I learned is that unless you are going to make the really big bucks, GO TO COLLEGE first. MLB is a business, big business and you are just another player. You need someone because your HS coach, mom or dad, or the pro guy you may know can't help you because they don't know one thing about your situation and most have no clue about the business of baseball.
You will need a reliable investment firm who is knowledgeable in working with athletes. They put your sons on a budget. Son is still with the same guy. My son was a high pick, but the cardinals had a lot of picks that year and that was before slot. His agent got him some lucrative card deals ( one thing they do) and never paid for anything he needed in season or off season. All those undergarments you see the ML players wearing are not provided in milb, neither are bats, gloves, shoes, etc. Mine had so many shoes he gave them to the guys who had no agent. All in all after all these years he has a really nice nest egg which thankfully he doesn't need to live his life.
1.5 mil, state taxes if applicable, 25% to the government, social security, medicare on the amount, 4% to agent. Not bad. But I would still send son off to college. I am a huge college baseball fan. IMO it beats the pro experience.
Most important thing is to have options, that's the key.
SHU is right, for every bad story you here there are good ones.
More importantly, putting money aside, if you got hurt, where would you want to be?
Seriously, there is a lot to think about, everyone is different, just giving advice that has never changed.
We had a kid from our old club go in the 3rd round last year. Slot was around $700K, he got $3M. Most ever for a 3rd rounder. I'm confident his advisor had something to do with that...
baseballhs posted:We had a kid from our old club go in the 3rd round last year. Slot was around $700K, he got $3M. Most ever for a 3rd rounder. I'm confident his advisor had something to do with that...
You are probably 100% correct!
CTbballDad posted:In all seriousness, an agent? If my son were to get drafted and some guy knocks on our door the day before, no way he’s getting 10% when he had nothing to do with the 18 year journey to get there. Why do you need an agent if slot money is somewhat pre-established? I understand teams play games with the slot money, but do you really need an agent for that?
Are you going to use PG ratings to tell you what value your son has? Or the old guy at the hitting shed who knew a kid who got drafted one time? Or maybe what the scout tells you?
Seriously, good advice is very valuable.
I read the article, the kid was a freshman All American and weekend starter at UNC in year one. Not saying I would've passed up the money, but there are certain situations where you can justify it. He was a bigger kid who came on late and going to college was likely the advice many would've given him, without injury he would've been projected to go in the first half of the first round. When you have an offer from a prestigious university and expect to get better it becomes a lot harder to take the money when there is more out there and a degree.
2019's teammate turned down 2nd round money in the 4th round to go to college. He likely won't be academically eligible this calendar year. Another turned down 5th round money to go to college, he will likely be a top 60 pick. For every situation gone bad there is another that ends positively.
FWIW I would never turn down first round money. You can only move up so many spots. It worked for guys like Cole and Appel but is moving up 16 spots worth it if you don't have a Vandy, Stanford, UNC, Duke type school in your back pocket? Not sure. But lets say he signs and the injuries happen. Now you're a 23 year old with no degree or skills other than the sport. There are a lot of factors that go into it ranging from family, to school, to maturity. Not just about the money.
Tyler Beede - drafted out of high school, first round, selection 21 by Toronto. Turned it down and went to Vanderbilt. Played three years in the SEC, got most of his education behind him, got to experience college like many of his peers, at a great university in a nice city. Drafted after his junior year, first round, selection 14, San Francisco Giants.
RJM posted:Re: agents ... They do more than scoop up a commission just for being present for slot money. If a kid is weighing signing out of high school versus college ball the agent is working for him beforehand as an advisor. The agent is using his network to find out the behind the scenes word on the player and his worth. After signing the agent is working on getting the player equipment, pending future endorsements and local promo gigs.
Years ago I asked a friend (played for the Bills) how he could stand staying in Buffalo in the off-season. He told me he made a lot of money (relative to the late 70’s) doing autographs and posing for pictures at car dealerships and other businesses along with local public speaking gigs. I know the local AA and G League players where I am now get some of these jobs.
Years ago TPM provided a real good explanation of everything an agent does for minor leaguers. When she sees this thread maybe she will provide some info.
True...... was witness to this two years ago with a close friends son. This is exactly how it worked. One MLB team was even upset because the family had an adviser. Money wasn't right, kid bet on himself and he's at a P5 now. So far his gamble has worked, but we will see.
Go44dad posted:CTbballDad posted:In all seriousness, an agent? If my son were to get drafted and some guy knocks on our door the day before, no way he’s getting 10% when he had nothing to do with the 18 year journey to get there. Why do you need an agent if slot money is somewhat pre-established? I understand teams play games with the slot money, but do you really need an agent for that?
Are you going to use PG ratings to tell you what value your son has? Or the old guy at the hitting shed who knew a kid who got drafted one time? Or maybe what the scout tells you?
Seriously, good advice is very valuable.
Truth!
My sons CU teammate was ranked around 150 in the draft year before son. Both had the same agent.
He was ranked 150th junior that year according to PG.
He was drafted 4th overall by the Cubs.
Agent said, never pay attention to that stuff.
One of the reasons that one might consider an agent advice.
Every situation is different. I coach a kid that turned down 1st round draft $ out of HS because he was 17 yrs old. Both his parents (who were divorced) had personal issues and financial problems. He was afraid he would never see the money and he was right. Decided to go to an SEC school that has a HC with (undeserved) rep as a pitching guru. Had unspectacular 3 years there (actually went backwards) and was drafted again after junior year and turned down 10th round money. Most people called him stupid. Went back for senior year knowing he had no leverage and had another lackluster year. Signed after senior year with the Marlins for next to nothing. Most people again called him stupid. After 2 years Marlins have restored him to what he was in HS and they love him. Kicker in the story is that by staying in school he not only got his degree, but he met and married a great girl who is a smoke show and comes from a family that is independently wealthy. He is financially secure for the rest of his life and free to pursue his dream with no financial pressure. None of this would have happened had he signed out of HS. So you never know. And btw, couldn’t have happened to a better kid.
Goosegg posted:
Now, if he retires without making it to MLB at least six years after the contract he does have the MLB scholarship to use (if he leaves before without club consent, he loses it). That scholly money is taxable; AND, add in whatever inflation has done to tuition, room and board. Assume the actual dollars he needs to finish in four years is 100,000. But MLB pays 75,000 and he owes 25,000 in taxes. He needs to come up with 50,000 in cash. He takes that from the savings and loses in year seven 50k worth of compounding. And, he needed to pay taxes upon any sale of stock/mutual funds (cap gains) AND pay tax upon receipt of distributions in the years received (dividends, cap gains).
I am repeating myself, but for anyone that is interested, the MLB Scholarship now is actually a "tuition reimbursement program". The student/player pays for his tuition, room, board, and the MLB program will reimburse THE PLAYER what was stipulated in the contract after his grades and receipts are turned in (you actually have to take and pass the classes, lol).....MINUS THE FEDERAL TAXES. If you live in a state that has taxes, you will need to pay estimated taxes to your state as well. It is a huge sum that is taken out, because the payroll calculations think you are making that per pay period. (It all washes out when you do your taxes).
Not complaining, just making it very clear that the money has to be paid up front. At least for son's organization. That sum could be hefty for the likes of Stanford, Vandy, H-Y-P, Duke, oh heck....any college!
CTbballDad posted:In all seriousness, an agent? If my son were to get drafted and some guy knocks on our door the day before, no way he’s getting 10% when he had nothing to do with the 18 year journey to get there. Why do you need an agent if slot money is somewhat pre-established? I understand teams play games with the slot money, but do you really need an agent for that?
Someone in the baseball world told me keewartson didn't need an agent if not going day one in the draft. Glad we didn't take his advice.
But, who knows? Son was told he would go in the top 10 rounds, but you don't know until draft day. Son picked his own agent (he was 21 and in college) based on the agents that contacted him and one that works by referrals only. He has been so valuable. Son was drafted (for slot, byw) in round 5, from a mid-major. Would he have been that high without an agent? Who knows. He has helped with injuries/doctors/surgeons and is a basic point of contact of "what's going on" for promotions, advice, support. The freebies/promo items that come son's way are nice.
From what I have heard and our experience, agents do not take 10% from draftees, and if that is what is quoted to your son, he should move on or negotiate.
Edited: Maybe those $1M+ players do pay their agents 10%! I wish I knew!
keewart posted:CTbballDad posted:In all seriousness, an agent? If my son were to get drafted and some guy knocks on our door the day before, no way he’s getting 10% when he had nothing to do with the 18 year journey to get there. Why do you need an agent if slot money is somewhat pre-established? I understand teams play games with the slot money, but do you really need an agent for that?
Someone in the baseball world told me keewartson didn't need an agent if not going day one in the draft. Glad we didn't take his advice.
But, who knows? Son was told he would go in the top 10 rounds, but you don't know until draft day. Son picked his own agent (he was 21 and in college) based on the agents that contacted him and one that works by referrals only. He has been so valuable. Son was drafted (for slot, byw) in round 5, from a mid-major. Would he have been that high without an agent? Who knows. He has helped with injuries/doctors/surgeons and is a basic point of contact of "what's going on" for promotions, advice, support. The freebies/promo items that come son's way are nice.
From what I have heard and our experience, agents do not take 10% from draftees, and if that is what is quoted to your son, he should move on or negotiate.
Edited: Maybe those $1M+ players do pay their agents 10%! I wish I knew!
I think it’s closer to about half that amount.
keewart posted:Goosegg posted:
Now, if he retires without making it to MLB at least six years after the contract he does have the MLB scholarship to use (if he leaves before without club consent, he loses it). That scholly money is taxable; AND, add in whatever inflation has done to tuition, room and board. Assume the actual dollars he needs to finish in four years is 100,000. But MLB pays 75,000 and he owes 25,000 in taxes. He needs to come up with 50,000 in cash. He takes that from the savings and loses in year seven 50k worth of compounding. And, he needed to pay taxes upon any sale of stock/mutual funds (cap gains) AND pay tax upon receipt of distributions in the years received (dividends, cap gains).
I am repeating myself, but for anyone that is interested, the MLB Scholarship now is actually a "tuition reimbursement program". The student/player pays for his tuition, room, board, and the MLB program will reimburse THE PLAYER what was stipulated in the contract after his grades and receipts are turned in (you actually have to take and pass the classes, lol).....MINUS THE FEDERAL TAXES. If you live in a state that has taxes, you will need to pay estimated taxes to your state as well. It is a huge sum that is taken out, because the payroll calculations think you are making that per pay period. (It all washes out when you do your taxes).
Not complaining, just making it very clear that the money has to be paid up front. At least for son's organization. That sum could be hefty for the likes of Stanford, Vandy, H-Y-P, Duke, oh heck....any college!
I think the player would find an “equivalent school” in the area that he lives. For example, if he commits to Duke but lives in Atlanta, he may go to Tech.
Also, if he’s allotted $120k for school and only spends $80k, would he get the difference, less taxes?
I think the player would find an “equivalent school” in the area that he lives. For example, if he commits to Duke but lives in Atlanta, he may go to Tech.
Also, if he’s allotted $120k for school and only spends $80k, would he get the difference, less taxes?
If drafted out of high school, you are correct....it is a dollar amount stipulated in the standard contract probably based on the the tuition/room/board at the committed school in today's dollars. I am sure everything can be negotiated before the contract. We were glad for just the standard contract scholarship!
Son was drafted as a junior in college, so his "scholarship" amount was based on the school he currently attended. It would be pretty hard to go his 4th year to "tech" and still graduate. It works for those drafted out of HS.
As for getting any scholarship balance not used in the contract, I don't think it works that way. It is a tuition reimbursement plan, and actually, not utilized very much. The pro players don't need (to finish) college and many milb players were not college material anyway. Plus there are deadlines to start/finish classes. And, the standard contract reads for 'undergrad only'....so you can't use "leftover" amounts for a law degree. But, if that unused scholarship portion is important to you, see if it can be negotiated. I would hate to tie up a contract, or not come to an agreement, because of 'possible unused funds at a future date,' however.
SHU,
He would not get the difference. The school bills the fund, from the drafting team. As Keewart stated, school must be paid when the bill is due. The drafting team may take months before a check is sent and goes to the player from the fund.
One more point, every time a player moves up one level, and there at least 90 days (I believe that's the time period), a very large sum gets deducted from the account. It was a grand per move, not sure if it's still that amount. That's why it is a smart idea to go back to school in the off season.
Most very large programs have funds available for their returning athletes, not just baseball. They want their athletes to graduate.
TPM posted:SHU,
He would not get the difference. The school bills the fund, from the drafting team. As Keewart stated, school must be paid when the bill is due. The drafting team may take months before a check is sent and goes to the player from the fund.
TPM, keewartson's organization would not allow the school to bill them. It was not set up that way, but other organizations may be different. We (parents) fronted the tuition money and paid the bill, then son was reimbursed after he submitted grades and receipts. Then HE reimbursed US the full amount before taxes were taken out 
SEVEN MORE CREDITS TO GO!!! (eventually)
I agree with Fenway, every case is different. I can speak some to what happened to my son and our thought process.
Son could have gone out of high school , but to us it was really not life changing money. It might have been to some but wasn't enough for him to forego Vanderbilt. He is now a DE soph and we are going through this again.
Now I can tell you this... out of high school the scouts were interested , even I would say up to national crosscheckers and DofS. So if he had gone out of high school he would have been in the low leagues and fighting his way out of the lower levels , being away from home and no education. Much much harder than being in college.
Now after one year of playing in college and and playing again this year his scout meetings are a little different. They are talking about the higher rounds , the brass is more involved, they are getting to know him on a much deeper level.
Now I am not saying that going to Vandy and playing baseball is easy, but the support system is so much better , the chance of success once you hit the minors is so much higher.
I had a fan ask me how much would it take for Ethan to go pro? And I said its really not the money , it's if he is mentally , physically ready to compete and try to hit a 40 man roster. Getting 1.5 seems like life changing money but , taxes, agent fees, a new truck, and you have 750k. Not bad , BUT I would rather he have everything at his disposal to get better and then get drafted and have a chance of making a 40 man. and jumping a couple levels ..... IF you do this you will laugh at 750K IF you don't get your shot at the MLB you still have your bonus from college , and in this case a Vandy education.
I have seen a lot of players who they and their parents thought their son was the next coming , decided to go pro out of high school , spent the bonus, didn't make it.... has no money and no degree. Furthermore I have seen players that thought they were the next Trout, got to college and were slapped with reality and ended up thankful and happy they had the degree, maybe a few years in the minors, but realized what a mistake it would have been to take 1.5 ...
Example.... Kyle Wright... good player could have gone out of high school for 800k.... went to college 36 months later signed for 7 plus million.
IF you are a superstar , a legit athletic marvel, you will get the big money and can go out of high school , if you are signed at a SEC school GO TO SCHOOL chances are you will realize you are not MLB material , and at least you have your education... if you get better in college then you will get a shot.... and be more prepared for it... as far as saving 750k for 30 years..... 90% of the time life doesn't work that way, and the college education will more than pay for that... as far as going back to college at 25-27 .....that could happen, but if you have a wife and two kids by then.... probably won't
Bacdor...I am curious about DE sophomore....doesn’t he have to be 21 prior to the draft? Forgive me if that’s a dumb question...I’m just trying to learn the rules!lol
5) Time Period for Determining Eligibility to Contract. A player who will become eligible to sign a contract under the High School, College or Junior College Rules within 45 days of the conclusion of the First-Year Player Draft (and thus is eligible for selection in the draft under Rule 4(a)) will be deemed eligible to sign a contract with his selecting Club upon selection, or with any Club if not selected upon the conclusion of the First-Year Player Draft.
nevermind....sometimes you just need to read to find answers! Lol
this would change a bit when the draft days are moved to Omaha.. some that would be eligible will not be and some that were not , will be.
There’s always a deadline dividing line. I just saw where your sons 21st birthday was after draft and was curious.
