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What's your take on this one? Somewhere in between your two scenarios. Local kid down in my area was drafted #88 by the Marlins. His slot value is around $675k-$700k. He was generally considered a top 75-100 HS prospect and was second team Max Preps AA. He was signed was Miss St. His bloodlines are strong. Has a brother a year older who is starting OF for Ole Miss and was just named SEC All-Freshmen team and hit over .300.
So, $700k and start in minors as a middle infielder or off to Miss St.?
I wondered about that myself when making my post, and the answer is it's different for everyone. So let's say the $700k becomes $400k after tax. Is your family desperate for the money? Is that a life changing amount for them and thus the player? Was the player only going to college to further his career, or would he have taken a minor league contract for free? What is the player's academic potential? Is he going to college to get a degree, but without baseball the college wouldn't be interested? Or would he have a great change of a well paying job or profession without baseball?
So the question about where do you draw the line is only answerable on a case by case basis. But I feel safe in saying that (i) if you're getting over 2 large after tax, you have to take it and adjust your plans around it, and (ii) if you're only getting $100k pre-tax, that money is far less likely to be of more economic utility for the rest of your life than a college degree.