MLB Removes $20,000 Cap On Undrafted Free Agent Signing Bonuses

Image credit: TJ Friedl (Photo By Norm Hall/Getty Images)

Signing bonuses for undrafted players will no longer be capped at $20,000, Major League Baseball confirmed to Baseball America on Friday.

Effective this year, there will be no maximum on the signing bonus an undrafted player can receive, although any amount over $125,000 will count against a team’s bonus pool.

The change marks a return to the system that was in place for undrafted free agents through the 2019 season. MLB capped signing bonuses for undrafted players at $20,000 in 2020 as part of the shortened five-round draft and kept the limit in place for the 2021 draft.

The limit allowed teams to acquire undrafted players, many of whom have become notable prospects, at a steep discount. Tigers No. 3 prospect Wilmer Flores, Reds No. 13 prospect Carson Spiers, Cubs No. 18 prospect Matt Mervis and Yankees No. 18 prospect Elijah Dunham are among the notable undrafted players who signed for $20,000 or less following the last two drafts.

The 2022 draft will take place from July 17-19, after which undrafted free agents become eligible to sign.

The largest signing bonus ever for an undrafted free agent is $735,000, which the Reds gave to Nevada outfielder TJ Friedl in 2016 after he starred for USA Baseball’s Collegiate National team following his season as a draft-eligible sophomore. Friedl reached the majors and has spent parts of the last two seasons with the Reds.