The San Francisco Giants agreed to terms with the first of their seven picks in North Carolina State University catcher Patrick Bailey.
With Bailey knotted up and a handshake agreement for De La Salle High School pitcher Kyle Harrison, the Giants will need to get creative with signing the remainder of their draft class.
While Bailey is the headliner, signing the rest of the class will be centered around reeling in Harrison as well.
Much of the discussion regarding signing bonuses take place outside of the public eye, so it is possible, if not likely, that the Giants already have handshake agreements with each of their remaining picks.
That said, the only public information that is available is that San Francisco has locked up their first-round pick:
As an accountant, it is my goal, no my obligation, to inform the general public about the dollars and cents of baseball.
San Francisco signed the switch-hitting catcher for about $400,000 below slot value, which they can reallocate to the rest of the class as they see fit.
That is a lot in savings. However, Kyle Harrison’s rumored signing bonus is expected to be in the neighborhood of $2.5 million. Given that the slot value for the 85th pick is $710,070, the Giants will need to find a way to shave off an additional $1.4 million following the Bailey signing to be able to keep Harrison (The slot values for each Giants pick can be found here)
That is going to be tough to find. Again, the Giants have probably worked through this already, and have agreements in place with each of their picks to be able to keep the prep arm at that price.
I would not be a good accountant if I did not provide a spreadsheet that explains the nonsense I am spewing:
The table above shows the breakdown of the slot values for each pick. The only confirmed signing is Bailey, but I have added Harrison’s projected bonus into the calculation as well.
To make the Harrison signing work, the Giants will need to do some financial gymnastics. It is noted above that San Francisco has an additional $461,759.50 that it can spend above the total slot value without sacrificing future draft picks.
However, any dollar spent over their $9.2 million purse will be taxed at a 75 percent rate of the overage.
My assumption is that the Giants will be able to sign Schmitt, Glowenke, Dabovich, and Murphy at below slot value. In the case of Glowenke and Murphy, I could see them signing for significantly below slow value.
We are seeing cases of fifth-round picks like Murphy agreeing for marginally more than the $20,000 maximum signing bonus that can be handed out to undrafted free agents.
Swiney stands as the only other pick, aside from Harrison, who could sign for at or around slot value. This is because the left-handed hurler is an accomplished collegiate pitcher, and was not seen as a reach with the 68th overall pick.
If my assumptions hold true, San Francisco will need Schmitt, Glowenke, Dabovich, and Murphy to sign for a combined $1.9 million, which would give the Giants the $1.4 million needed to keep Harrison.
That is a lot of money to shave off, but it is doable. On top of this, San Francisco has that $461,759.50 buffer that it can use above and beyond the combined slot value of their seven picks.
The Giants want to keep all of their picks. The fact that a second-round talent like Harrison fell into their laps in the third-round complicates things. However, they have a bunch of smart guys running the numbers on this detail.
There has been no indication at this point that any of their picks are unsignable, so it seems likely that the Giants should not run into any problems as they lock up the remaining six picks.