The Pre-Arb Bonus Pool Is A Success

Final week, MLB introduced the distribution of the pre-arbitration bonus pool. You in all probability noticed roughly one headline from this: Paul Skenes earned a report $3,436,343 bonus for his spectacular sophomore season. That’s certainly nice information, for my part. Skenes was one of the vital thrilling and finest gamers in baseball in 2025, and a compensation system that extra intently aligns talent with wage is a no brainer to me. However whereas Skenes’ report haul drew the headlines, the overwhelming majority of the $50 million pool was unfold broadly; 101 gamers acquired bonuses, with all 30 groups boasting no less than one awardee.

I’m right here to let you know that I feel it is a fantastic improvement. The fund, established in the latest collective bargaining settlement, takes in $1.67 million from every workforce yearly to fund its $50 million payout. It fingers a few of that cash out to award winners, from $2.5 million for Skenes’ Cy Younger Award win right down to $150,000 for Daylen Lile’s fifth-place Rookie of the Yr end. The remainder goes to the highest 100 pre-arbitration gamers in a WAR formulation collectively calculated by MLB and the MLBPA in accordance with a set ratio.

This didn’t really feel like an enormous a part of the CBA on the time it was signed, however for my part, it’s been an unimaginable boon for the sport. Baseball’s compensation system has all the time been out of whack. The service time system limits all pre-arbitration gamers to the minimal wage, kind of. Groups do sometimes award salaries barely higher than the minimal ($760,000 in 2025), however usually by a de minimis quantity: The Pirates paid Skenes $875,000 this 12 months, for instance.

That flat construction implies that underneath the previous system, Skenes would have earned roughly $1.6 million in 2024 and 2025, as an alternative of the $7.2 million he’s pocketed underneath the brand new system. You possibly can’t persuade me that that’s a nasty factor. Cristopher Sánchez is a fair higher instance, as a result of in contrast to Skenes, he didn’t have an enormous signing bonus as an newbie — to not point out all of the ancillary earnings the Pittsburgh celebrity earns by way of his varied endorsement offers as one of the vital recognizable gamers within the sport. Sánchez simply eclipsed three years of service time; by way of the tip of 2024, the Phillies had paid him round $2.5 million in wage for his first two-plus main league seasons. He signed a contract extension that paid him $3.55 million in 2025, bringing his profession contractual earnings as much as roughly $6 million. Because of the bonus pool, although, he’s acquired an extra $3.5 million over the past three years. That’s an enormous distinction, and in a clearly good path for cash to movement.

You possibly can consider the bonus pool as a subsidy to groups who play younger gamers. By funding the bonus pool evenly throughout all 30 groups as an alternative of constructing the membership using every participant chargeable for paying the bonus, groups who make use of a bunch of nice pre-arb gamers can have all of it: They contribute a set quantity, however their pre-arb contributors receives a commission extra pretty.

Take the Brewers, for instance. Although Skenes obtained the biggest particular person bonus, Milwaukee took probably the most bonus cash residence as a workforce. Ten Brewers acquired a cumulative $4,742,392 in bonuses, led by Brice Turang with $1.15 million. That was solely the ninth-highest particular person award; the Brewers merely had a ton of plus contributors within the pool. Right here’s a listing of the bonus pool damaged down by workforce:

For the primary time, all 30 groups had no less than one participant obtain a bonus. But, for probably the most half, the bonus pool has flowed to groups who fill their roster with younger productive gamers. These groups are a combined bag of small-market strivers and big-budget groups with good participant improvement techniques:

From a qualitative perspective, this bonus pool has been an enormous success. It’s paying probably the most underpaid class of main league contributors, and the way in which it’s allocating the cash appears broadly intuitive. Is it the fitting amount of cash, although? To do this, I needed to do some little bit of math. I took wage and WAR information for 2019-2025 and grouped gamers by their contractual standing. I used each Cot’s Contracts and RosterResource to harmonize my sources; contract information could be troublesome to come back by.

The proportion of WAR created by pre-arb, arb, and post-free-agency gamers has been pretty fixed over the previous seven years. (Notice: I excluded the abbreviated 2020 season from my calculations as a result of it was simply so bizarre.) Dividing the period into previous CBA and new CBA, you possibly can see that the general proportion of WAR coming from gamers who haven’t but reached free company has remained roughly the identical, although with extra pre-arb and fewer arb gamers:

By way of contractual salaries, the share of cash going to pre-arb gamers hasn’t elevated a lot:

That implies that when it comes to {dollars} paid per WAR accrued, pre-arb gamers have seen their salaries enhance at a decrease fee, relative to the WAR they rack up, than free brokers. Right here’s that formulation changed into {dollars} per WAR; the pre-free-agent group combining pre-arb and arb has seen its $/WAR enhance by about 19% within the new CBA, as in comparison with 17.9% without cost brokers:

These numbers don’t embrace the brand new bonus pool. On-field worth remains to be measured the identical approach, however after including the bonus cash to pre-arb gamers, complete outlay appears to be like extra balanced:

By way of {dollars} per WAR, issues look even higher. With the bonus cash taken under consideration, gamers who’ve but to achieve free company have seen their $/WAR enhance by 22% underneath the brand new CBA, significantly better than the 19% that they might have realized with out this addition:

In different phrases, the bonus pool is doing precisely what it was presupposed to, growing salaries to the gamers who’ve traditionally been much less compensated per contribution than their tenured compatriots. I feel it might be expanded much more, the truth is, or broadened to incorporate gamers already eligible for arbitration. The precise mechanics are open to alter, and I’m not notably tied to the WAR calculation or the construction of award compensation, however it appears clear to me from the wage information that the final aim of the pre-arbitration bonus pool is being fulfilled.