MLB rookies will often be paid far less than they appear to be worth due to the elusive deals known as MLB rookie contracts.
When a player ascends to the big leagues, the team that first signed or drafted the player has complete control over him for 3 years. Although they may choose to sign the player to a big deal, the team can ultimately decide to pay the player whatever they want, as long as it is above the league minimum.
The first three to four years of a player’s rookie contract are known as his “pre-arbitration years” and the rookie has no say in his salary during this time. Such deals are a way of rewarding skilled rookies. Since the team has the player under club control, the player must either accept the pre-arbitration amount or not play at all.
“February 1, 1913 – Jim Thorpe signs the largest rookie contract in baseball history to date when he agrees to a three-year, $18,000 deal with the New York Giants.” – @ JVAN
This is why new MLB players, however good they may be, do not often get paid much. Jeremy Pena, who was the World Series MVP for the Houston Astros this season, only made $700,000 this season.
In 2014, the Los Angeles Angels signed Mike Trout to a $1 million pre-arbitration deal, setting a record. This came after the 2013 season in which Trout led the MLB in runs and walks. The previous pre-arb record was held by Albert Pujols after the St. Louis Cardinals resolved to pay him $900,000 in 2003 and 2007.
“Mike Trout signs a 1 year $1 million deal. Highest deal for a pre arbitration player.” – @ MLB Buzz
At some point, the player becomes arbitration eligible. This means that his team will attempt to reach a deal in which both are comfortable with the amount being paid. The arbitration is sometimes settled privately between the team and the player.
Finally, if a player exceeds his arbitration and rookie limits, then the team can sign him to a proper contract. At the end of the contract, the player becomes an unrestricted free agent and can sign wherever he pleases.
MLB rookie salaries are unique
Baseball is unlike other sports. In sports such as soccer and basketball, young players can be signed for extraordinary sums of money. However, in baseball, the more experience that you have directly leads to increases in salary, often, by a lot.
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