Interesting read on minor leaguer player compensation from The Cub Reporter:
http://www.thecubreporter.com/Submitted by Arizona Phil
on Mon, 03/04/2013 - 11:17pm Permalink .
The Cubs have officially signed the 21 pre-arbitration players on their MLB 40-man roster to 2013 major league contracts.
A player on the MLB 40-man roster who is not yet eligible for salary arbitration is at the mercy of the club as far as salary is concerned. The player's salary is determined by the club, as long as it meets the minimum salary as set forth in the CBA.
While a club could pay all of it's pre-arbitration players the MLB minimum salary up until the player becomes eligible for salary arbitration, in practice that does not happen. Clubs pay players who perform above minumum expectation a higher salary. It's not a lot more money, but it could be as much as $50K or even $100K over the MLB minumum salary, depending upon how many years of MLB Service Time the player has accrued and how well the player has performed at the MLB level during that time. (In other words, although they both could be paid the same salary, fact is Darwin Barney will get a higher 2013 salary than Hector Rondon).
A player not yet eligible for salary arbitration is signed to what is called a "split" contract, meaning the player is paid at the "major league rate" for whatever number of days the player spends on the MLB 25-man Active List or MLB 15-day or 60-day DL during the regular season, and is paid at the "minor league rate" (or "minor league split" salary) for any days spent on optional assignment to a minor league affiliate.
The 2013 minimum salary for any player on the 25-man roster or 15-day or 60-day DL during the regular season is $490K (it was $480K in 2012, and increases to $500K next season), and the player's major league salary must be at least 80% of the player's salary from the previous season, and at least 70% of the player's salary from two seasons back.
The salary is pro-rated per day (the MLB regular season runs 183-days), so if a player making the MLB minumum salary spends ten days on the MLB 25-man roster in 2013, he would get paid $2,678 per day, or $26,678 over that ten-day period. The rest of the days he would get paid at the minor league "split" rate.
The minor league split minimum varies, depending on whether the player has accrued any MLB Service Time and whether the player is signing his first "major league" contract.
For players who are signing their first major league contract, the minor league split minimum is $39,950 in 2013. Players in this class would include Trey McNutt, Christian Villanueva, Logan Watkins, and Rob Whitenack. As long as they remain on Optional Assignment and do not accrue any MLB Service Time in 2013, they each will receive a $39,950 annual salary.
Players who have not accrued any MLB Service Time who are not signing their first MLB contract have a $79,900 minimum minor league split 2013 salary while they are on Optional Assignment. This would include players like Junior Lake and Matt Szczur.
Then there is everybody else.
A player's minor league split salary must be at least 60% of what the player was actually paid in salary the previous season. So (for example) in the case of Steve Clevenger (who spent the entire 2012 season on the Cubs 25-man roster or 15-day DL), his 2013 minor league split salary must be at least $288K (60% of his 2012 salary). So if Clevenger is optioned to Iowa and spends the entire season there, he gets paid $288K. And then if he is still on the 40-man roster in 2014, his minor league split salary must be at least $173K (at least 60% of what he was paid in 2013). That's why players sometimes get non-tendered, because non-tendering a player removes minimum salary requirements.
Lendy Castillo is making $288K in 2013 even though he is on a minor league roster, because he was paid $480K (the 2012 major league minimum salary) last season and he was tendered a 2013 major league contract prior to being outrighted.
So a player's "minor league split" varies depending on how much money the player was actually paid in salary the previous season, and whether this is the player's first "major league" contract (the first time he is on an MLB 40-man roster).
Essentially, if a player earned no more than $130K in salary last season, his minor league split the next season will not exceed the $79,900 2013 minor league split minimum. If he earned anything above $130K, his minor league split will exceed the minor league split minimum accordingly.
And for those of you wondering what the average salaries are for minor league players not on an MLB 40-man roster, it basically goes like this:
Players make about $800 per month the first season they sign after being drafted (not including the player's signing bonus). Players assigned to DSL or VSL rosters make about $300 per month. Then the player typically makes $8,000 for his first minor league full season (as the player's girlfriend or wife starts a second job), then $10,000 his second full season (this is usually when the player files for bankrupcy), then $13,000 (not including food stamps) when he hits AA, and up to about $17,000 when he reaches AAA.
Once the player becomes a minor league free-agernt, he can make considerably more money even if he has never played in the big leagues. A career "4-A" AAA player who becomes a minor league free-agent usually can make at least $25,000, and a AAA player with some MLB experience can make as much as $50K or $100K per season, depending on how the player performed the previous season and how much demand there is for the player's services during the off-season.
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