Originally Posted by cincyinco
What I read today indicates that there may be somewhat of a "loophole" with rounds after 10. Its thought you can only sign picks after round 10 for a max of 100K, but that does not appear to be the case. You can go over 100K, but then it counts against your bank for rounds 1 through 10 for everything AFTER the 100K. So in essence, if you can get a guy like this to sign AFTER round 10, then you save 100K from the cap space of your round 1 through 10 bank.
So, say you want to sign a guy in round 20 who probably should have gone in round 10. He wants 450K. If you signed him in round 10 for that, thats the entire 450k against your cap. However, if you sign him for that amount in round 20, its only 350k against your cap.
At least thats how baseball america was reporting this earlier today, which is why you saw some of the higher ranked draft prospects fall and then get picked outside the top 10 rounds.
That's true but from how I understand it that 350k is taken out of the draft pool money allotted to the top 10 rounds. So the Reds have $6,652,900 to spend on their first 12 picks, but in your scenario they would only have $6,302,900 to spend on those 12 picks.
If the Reds go over that $6,652,900 there are pretty severe financial penalties depending on how far over they go:
Penalties for exceeding the Signing Bonus Pool are:
Excess of Pool Penalty - (Tax on Overage/Draft Picks)
* 0-5% - 75% tax on overage
* 5-10% - 75% tax on overage and loss of 1st round pick
* 10-15% - 100% tax on overage and loss of 1st and 2nd round picks
* 15%+ - 100% tax on overage and loss of 1st round picks in next two drafts