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<h1>MLB's New Pre-Arbitration Bonus Pool: A Positive Step Forward</h1>
<p>Recently, Major League Baseball (MLB) revealed the allocation of its <a href="https://apnews.com/article/baseball-172bcc30db6aa4197e4e462e7a57dd9e" target="_blank">pre-arbitration bonus pool</a>. One headline grabbed attention: <a href="https://www.fangraphs.com/players/paul-skenes/33677/stats?position=P" target="_blank">Paul Skenes</a> received an unprecedented bonus of $3,436,343 for his outstanding sophomore season. This is great news because Skenes emerged as one of the top players in baseball in 2025. It's refreshing to see a compensation model that aligns talent with earnings. However, while Skenes' bonus stood out, the $50 million pool benefited a wide array of players—101 in total, with every MLB team having at least one recipient.</p>
<p>I view this development as highly positive. The bonus pool, established through the latest collective bargaining agreement, collects $1.67 million annually from each team to support its $50 million payout. The pool rewards players based on achievements, with Skenes' Cy Young Award bringing in $2.5 million, while others, like <a href="https://www.fangraphs.com/players/daylen-lile/29995/stats?position=OF" target="_blank">Daylen Lile</a>, earned $150,000 for finishing fifth in the Rookie of the Year voting. The majority of the funds are distributed to the top 100 pre-arbitration players based on a WAR formula jointly devised by the MLB and the MLB Players Association.</p>
<p>Initially, this program didn’t seem crucial to the new CBA, but it has proven to be a significant enhancement for the sport. Historically, baseball's pay structure has been unbalanced, with pre-arbitration players largely restricted to minimum salaries. Occasionally, teams offer slightly higher salaries, with Skenes making $875,000 this year. However, this structure would have meant he earned about $1.6 million for 2024 and 2025, instead of the $7.2 million he made under the new arrangement, which is undoubtedly an improvement.</p>
<p>The bonus pool acts as a subsidy for teams that field younger, high-performing players. By distributing the funds evenly across all teams, clubs that feature multiple talented pre-arbitration players can provide fairer compensation without incurring excessive costs. Take the Milwaukee Brewers, for instance; while Skenes received the largest individual bonus, the Brewers topped the team bonuses with a total of $4,742,392 awarded across ten players, showcasing their numerous valuable young contributors.</p>
<h2>Achievements of the Bonus Pool</h2>
<p>This year marked the first instance where every team had at least one player awarded a bonus. However, it’s clear that the bulk of the bonuses went to teams that prioritize developing young talent—ranging from small-market clubs to larger teams with effective player development systems. This suggests that the bonus pool is encouraging teams to invest in young talent, ultimately benefiting the sport as a whole.</p>
<h2>Evaluating the Success of the Program</h2>
<p>From a qualitative standpoint, the bonus pool has been a resounding success, providing compensation to some of the most undervalued contributors on major league rosters. Still, one must question whether the allocated amounts are appropriate. Analyzing salary and WAR data from 2019 through 2025 reveals consistent contributions from pre-arbitration players, indicating that while WAR distribution has stayed stable, the relative earnings for these players haven’t increased dramatically.</p>
<p>Despite the improvement in total salary through the bonus pool, the proportion of contracted salaries for pre-arb and arb players has remained steady compared to free agents. Taking the bonus pool into account, the overall balance of financial distribution appears fairer, showcasing the pool's intended effect of increasing compensation for players typically earning less compared to their longer-tenured colleagues.</p>
<h2>Conclusion and Future Considerations</h2>
<p>The bonus system is achieving its objective by raising salaries for players who have historically been underpaid. There’s potential for the bonus pool to expand or even integrate players already eligible for arbitration. The mechanics can evolve, and although I’m not fixed on the WAR calculations or compensation framework, it’s evident that the pre-arbitration bonus pool is fulfilling its purpose effectively.</p>
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