The History of the Amateur Draft and Signing Bonuses
How baseball moved from open bidding for amateurs to the 1965 draft, the draft-and-follow loophole and the bonus pools of 2012, with the rules at each stage and what they were meant to do.
Before 1965 there was no amateur draft in baseball. A young player was free to sign with any club that would have him, and the clubs that could offer the most money, or had scouts in the right town, signed the best talent. The first draft was held in June 1965, and the first player chosen, outfielder Rick Monday of Arizona State, went to the Kansas City Athletics. In the six decades since, the draft has been reshaped several times, most sharply in 2012, when bonus pools tied to each pick replaced a market in which a few clubs spent freely.
The history of the draft is a history of one question: how should a sport divide a limited supply of young talent among clubs of very different resources? The answers have included open bidding, a rule that forced big-bonus players onto major-league rosters, a reverse-order draft, a loophole called draft-and-follow, a league-recommended price list for picks, and finally a hard-edged system of pools and penalties. Each answer came with side effects, and each one is still argued about.
This article walks through those stages. Rules are described as they stood in recent seasons and change with each labor agreement, so check the official MLB.com rules for the current text. Player statistics come from the historical record through the 2025 season, which does not contain draft data.
Before the draft: money chose the club
In the open market clubs signed amateurs through scouts, tryout camps and personal contacts. A player who had several offers could pick the best one, and the clubs with the deepest resources could afford to outbid the rest. After the Second World War, bonuses grew, and the owners looked for a way to hold them down without setting up a draft.
Their answer was the bonus rule. Under versions of it that were in force at various times in the 1940s and 1950s, a player who received a bonus above a set amount had to be kept on the major-league roster for a period, usually two years, instead of being sent to the minors to develop. The idea was that a club would think twice before paying a large bonus if the player would sit on its bench. In practice it produced the bonus baby, a teenager on a major-league roster who was not ready to play.
The historical record shows what that looked like. Harmon Killebrew, who would hit 573 home runs and reach the Hall of Fame, appeared in 9 games for Washington in 1954 with 13 at-bats, hitting .308, at an age when most players are in the low minors. Sandy Koufax joined the Brooklyn Dodgers in 1955 and pitched 12 games that year and 16 in 1956 before he became a regular starter; he finished 165-87 with 2,396 strikeouts. Both became stars, but the rule was widely criticized, because a teenager sitting on a major-league bench was not getting the playing time that develops a hitter or a pitcher.
The 1965 draft: a new rule for an old problem
Baseball adopted the draft in 1965 on the model of other sports. The football draft had existed since 1936, and baseball's owners wanted a way to spread talent, hold down bonuses and stop the bidding wars. The rule that made it work was simple. Teams picked in reverse order of the previous season's record, so the worst club chose first, and a drafted player could negotiate only with the club that selected him. If he did not sign, that club kept its claim to him until the next draft, and he could not sign with anyone else.
Monday was the first pick, taken by the Athletics out of Arizona State. His historical line shows a solid, long career: 1,986 games, 1,619 hits and 241 home runs, from 1966 to 1984. He was a good player, not a historic one. Others in the same draft were chosen far lower and did more. Johnny Bench was chosen in the second round by the Reds and hit 389 home runs on the way to the Hall of Fame. Nolan Ryan was selected in the 12th round by the Mets and struck out 5,714 batters in his career, a record. The 1965 draft is a standing reminder that the order of selection predicts less than the first-round hype suggests. The First Amateur Draft of 1965 tells the story of the first selections in detail.
A further example is the 1966 draft, when the Mets, choosing first, took catcher Steve Chilcott and the Athletics, choosing second, took Reggie Jackson. Jackson hit 563 home runs. Chilcott never reached the major leagues, and the historical record has no record of him. The lesson is the same.
| Player | Draft | Historical career line |
|---|---|---|
| Rick Monday | 1965, first overall | 1,619 hits, 241 home runs |
| Johnny Bench | 1965, second round | 2,048 hits, 389 home runs |
| Nolan Ryan | 1965, 12th round | 324-292, 5,714 strikeouts |
| Reggie Jackson | 1966, second overall | 2,584 hits, 563 home runs |
The table is a small sample, picked because the names are famous, and it would be wrong to conclude that early picks are worthless. Over many drafts, higher picks do reach the majors more often than lower ones. What the examples show is the size of the uncertainty: a scout is projecting a teenager's or a college student's body, skills and habits years ahead, and even the best evaluators miss. That uncertainty is the reason clubs value extra picks, extra looks and extra years of information, and the reason the loophole described next was so useful.
Draft-and-follow: the loophole that lasted decades
Because a drafted player who did not sign stayed the property of the drafting club until the next draft, clubs found a way to use the rule to their advantage. They began to select players who were headed for junior college or whose futures were uncertain, often in late rounds, and to keep their rights for the year. The club could watch the player develop at school, then sign him shortly before the next draft if he improved, usually with a better-informed price. The practice was called draft-and-follow.
It had a real effect on how talent was found. A club with a good network of scouts could take many late-round picks as options, at no cost beyond the draft slot, and decide a year later which ones to sign. The player, meanwhile, could not shop himself to other clubs. For a young player from a small school or a junior college it was a way to be seen; for the club it was a cheap bet on a larger pool.
The original system ended with the 2007 draft, when the signing deadline was moved to the summer of the draft year, a change that removed most of the advantage of holding a player's rights for a year. A club that wanted to sign a late-round pick now had to decide quickly, and a player who went to school had to be drafted again the next time. A limited form of draft-and-follow returned under the 2022 labor agreement, for players picked after the tenth round who attend a junior college. How draft picks become major-leaguers is covered in How Teams Develop Pitchers in the Minors, and the farm-system structure that employs them is explained in Minor League Affiliation Explained.
The big-bonus era, 1990s to 2011
With free agency in the major leagues from the mid-1970s and rising revenues from the 1990s, the sums paid to amateurs rose. Top picks and their agents learned to use leverage: a college player could threaten to return to school or to sit out, and a high schooler could say he would attend college. Clubs that were willing to pay above the commissioner's office's recommended amounts could land the best talent, and clubs that would not, or could not, got what was left.
The league's answer for a time was the slot system, a list of recommended bonus amounts for each pick that clubs were asked to follow. It was a guideline and not an enforced rule, so some clubs ignored it, and at the top of the draft the figures climbed. In 2009 the Washington Nationals signed pitcher Stephen Strasburg, the first pick, to a four-year contract worth about $15 million, then the largest deal ever given to a draft pick. By 2011 owners and players were ready to bargain over the issue, and the new labor agreement took effect in time for the 2012 draft.
2012: bonus pools replace the free market
The labor agreement that took effect for the 2012 draft turned the recommended slots into a binding system. The core features, in plain terms:
- Every pick in the first ten rounds has a slot value, set in advance by the league.
- A club's bonus pool is the sum of the slot values of its picks in those rounds, plus any extra picks it holds.
- A club may distribute its pool as it likes. It can give one player more than his slot and another less, as long as the total stays within the pool.
- Bonuses over a modest threshold for picks after round ten count against the pool.
- Exceeding the pool brings a tax on the excess. A small overage, up to five percent, costs a 75 percent tax; overages of more than five percent also cost the club its next first-round pick, and the largest overages bring a 100 percent tax and the loss of more picks.
A hypothetical example shows how the penalty works. Suppose a club's pool is $10,000,000 and it spends $10,300,000, which is 3 percent over. It would pay a 75 percent tax on the $300,000 excess, or $225,000, and keep its picks. Spend 8 percent over, and the club pays the same 75 percent tax and also forfeits its next first-round pick. Because the penalties for large overages are severe, most clubs stay inside or very near their pools.
The first drafts under the system showed how clubs adapted. The Houston Astros, who picked first in 2012, took shortstop Carlos Correa and signed him for well under the slot value, then used the savings to sign a later pick for more than his slot, the pitcher Lance McCullers Jr. That is the approach of the pools: save at the top, spend where talent falls. Clubs also began selecting college seniors in rounds six through ten, who have little leverage and will sign for little, to build savings for others.
| Year | Change |
|---|---|
| 1965 | First amateur draft, reverse order of record |
| 2007 | Signing deadline moves to the summer of the draft year, ending draft-and-follow |
| 2012 | Bonus pools and binding slots; 40 rounds; competitive balance picks added |
| 2020 | Five-round draft in the pandemic season |
| 2021 | Draft cut to 20 rounds and held during All-Star week |
| 2023 | Lottery for the first six picks among clubs that missed the playoffs, agreed in 2022 |
Rounds, lotteries and the shape of the modern draft
The 2012 agreement also cut the draft from 50 rounds to 40 and added competitive balance rounds, extra picks after the first and second rounds awarded to smaller-market or lower-revenue clubs. In 2020 the pandemic shortened the draft to five rounds, and from 2021 it has run 20 rounds and been held during All-Star week, so that it shares the national spotlight with the Midsummer Classic.
A lottery for the top picks, agreed in the 2022 labor deal, was first held for the 2023 draft. The goal was to reduce the incentive for a club to lose on purpose to secure the first choice, a practice known as tanking. The lottery covers the first six picks among clubs that did not make the postseason, and the rest follow in reverse order of record. The mechanics are set out in the league's rules.
Eligibility is separate. In general a player is draft-eligible after graduating from high school, but a high schooler who chooses college cannot be drafted again until he has completed three years or turned 21. A college junior may be drafted and use the threat of returning for his senior year as leverage, which is part of why college juniors often get the largest bonuses.
What the pools did and did not do
The case for the system is straightforward: it brought predictability to costs and protected small-market clubs from being outbid. The case against it comes from the players' side. A drafted amateur has one potential employer and a price largely set in advance, and critics say that the pools hold down his earnings at the moment he has the least bargaining power. The league answers that the system protects competitive balance. Both statements can be true.
What the pools did not do is end the search for edges. Clubs now spend scouting and analytics effort on finding the players who are worth more than their slots, and on the late-round players whose signing bonus fits in leftover pool money. The draft is also not the only route for amateurs: international prospects sign under a separate set of bonus pools, the subject of other articles on the site.
Common questions
Who was the first pick in the first draft? Rick Monday, an outfielder from Arizona State, chosen by the Kansas City Athletics in June 1965.
What was draft-and-follow? A practice in which a club drafted a player who went to junior college or another school and kept his rights until shortly before the next draft, signing him then if he had improved. It ended with the 2007 draft, when the signing deadline was moved, though a limited form returned under the 2022 labor agreement.
What is a bonus pool? The total a club may spend on its picks in the first ten rounds without penalty, built from the slot values of those picks. Exceeding it brings a tax and, in larger cases, the loss of draft picks.
Does the draft guarantee a major-league career? No. The 1965 first pick had a long career, but a second-round pick of the same draft, Johnny Bench, was a Hall of Famer, and the 1966 first overall pick never played in the majors.
Who is covered by the draft? Players from the United States, Canada and U.S. territories. Players from most other countries are signed as international free agents rather than drafted.
Where to go next
For the human story of the first draft, read The First Amateur Draft of 1965, and for how the minor-league system is organized after the draft, read Minor League Affiliation Explained. The latest picks and prospect rankings are on the draft and prospects topic page, and the minors page follows drafted players through the system.