Yoan Moncada Is Affecting All of International Baseball

Yoan Moncada was declared a free agent by MLB on Saturday morning. I wrote in depth about his situation from almost every angle last Thursday and also wrote about when news broke that he had left Cuba last month. I sent out a number of tweets on Saturday explaining Moncada’s current situation. He still needs to be cleared by OFAC (a U.S. government agency) before teams can offer him a deal or sign him and the timetable for that happening is unclear.

Often, OFAC clearance happens before MLB clears a player, so that indicates it could happen quickly (weeks), but Moncada’s situation is pretty unusual, which most guess will slow the process down (months).  The reason that OFAC clearance timetables vary so much relative to MLB’s clearances is that OFAC clearance is a product of the government (which can be backlogged at times, have political interests to protect, etc.) working with the paperwork that the agent submits.  Moncada should be free to sign within a few months, well ahead of the June/July timeframe when the 2014 international signing period turns over to the 2015 period and a number of factors change.

I said I covered this from almost every angle last week, because there are three things I didn’t mention in my first two articles about Moncada that have recently come to my attention.  The first is all the unsubstantiated chatter and rumors about how Moncada leaving Cuba played out.  I didn’t go into detail on this because I’m still working to get some things confirmed to help fill in these blanks, but the rumors are picking up.  I still have international scouts asking me for any information I have on this topic, specifically the stuff I haven’t written, because teams are getting heavy into their due diligence.  I don’t have anything else to report right now, but I can guarantee you that between now and when Moncada finishes his first pro season, this story will eventually become less confusing, as we learned with Yasiel Puig’s defection.

The second thing I didn’t note was pointed out Friday by Ben Badler.  As I’ve also noted in a recent article on the topic, while teams can’t technically negotiate with players before the July 2nd signing period opens, it’s now commonplace with MLB’s three-year-old rules for teams to have deals done with players 9-12 months before they’re eligible to sign.  This happened before the rule changes, but rarely; more often, early deals for high profile players were done about 3-6 months in advance.  This is a response to soft caps on spending being in place (which most team treat as hard caps); if you can only spend so much money, the best way to find bargains is to offer security to players via a verbal deal even earlier in the process.

Multiple seven figure talents for the 2015 July 2nd period are already locked up and the same teams that are aggressive in this market tend to be the same teams mentioned as those likely to be aggressive on Moncada.  As I noted last month, the Cubs are one team with heavy rumors they will blow way past their 2015 international pool, but they can’t go over $250,000 with any bonus until then; the Rangers (in the same position as the Cubs)  and Blue Jays (free to spend now and in 2015, as are most other clubs) are also believed to be shooting to do the same in the 2015 July 2nd market.

If a team has a high profile 2015 class player lined up for July 2nd but then signs Moncada by June, then they can’t spend over $300,000 on a player in 2015, which would force them to back out of those deals. The good news is that Moncada’s deal likely comes in the winter, allowing those players who had verbal deals and thus stopped working out for clubs plenty of time to re-establish their market.  That said, much of the money will be committed by then and the players’ leverage for what could be their only payday would evaporate.  This would also harm the club’s ability to make an aggressive strike with multiple verbal deals in future years, although with the two-year ban on $300,000+ bonuses after signing Moncada, there may be an international draft in place before they could feel the effects, something I’ll get more into below.

An Important Distinction

The third angle is something I found when I went deep into the rules related to Moncada’s signing.  It’s something that requires some explaining, but most teams don’t know about it and the ones that I’ve talked to about it aren’t happy.

In the draft, when teams go over their bonus pool, that money goes into an account that gets dispersed at a later date to the clubs that receive revenue sharing payments and who didn’t go over their pools.  Since the penalties for going way over your pool in the draft are harsher than in the international market (loss of picks/pool and a tax rather than a tax and temporary ban on big bonuses), no team goes way over their draft pool and thus this pool of money from draft penalties is pretty small.  So small in fact, that most clubs I talked to, including scouting directors and executives that focus on rules, didn’t know every detail of this rule.  Teams tend to not go over their pool in the draft but the stakes are low, so it doesn’t affect strategy very much.

This rule is quite different for the international market.  Here’s the language, straight from the CBA, about where the international bonus penalty money goes:

During the 2012-2013 and 2013-2014 signing periods, any tax proceeds generated as a result of a Club exceeding its Signing Bonus Pool will be used by the Office of the Commissioner, after considering the recommendations of the Committee, to offset the cost of international reforms. Thereafter, unless an international draft becomes operational, the Office of the Commissioner may use the tax proceeds to further the international development of baseball.

When this was written, MLB didn’t think teams would blow way past their bonus pools, because they thought they had put in controls with a similar amount of punishment to the draft rules.  Consistent with that line of thinking, this language seems to assume there won’t be much money in the international bonus pool penalty fund.  This money is to be used for expenses (like additional international personnel, uniforms/facilities for official MLB showcases and prospect leagues, etc.) and then, before saying the fund becomes discretionary after all expenses are paid, it mentions a draft.  MLB seems to be saying something like: “this fund won’t have much money in it and it’s unlikely it’ll be a big amount before we get an international draft up and running, but if somehow we’re wrong, the money will just get folded into the general international baseball budget.”

MLB’s Opaque Intentions

The 30 clubs are having a hard time figuring out what MLB’s international intentions are.  The clubs and MLB meet once a year at the Winter Meetings to talk about rules and international personnel don’t think that’s nearly often enough, given the shifting landscape in the market (domestic scouting directors meet twice a year).  In these meetings, MLB doesn’t tip their hand about an international draft and clubs assume this is because the draft is at the top of MLB’s international to do list; Bud Selig has publicly supported the international draft concept many times over the years.

MLB recently enacted a rule that has angered many teams. The positive outcome of this rule change is it will likely crack down some on the 9-12 month early verbal deals that I referenced above, but the cost (making things harder for teams, agents and players) is universally seen as too high. The rule changed what types of players can stay in team academies and barred independent organizations like the DPL and IPL (who organize games between top prospects in order to market under-scouted kids and give scouts more chances to evaluate) from holding workouts in the manner they have for years.  The email announcing the change came in the middle of the week, saying the rule was in effect tomorrow; clubs had hours to kick kids out of their academies, cancel visits for the coming days/weeks and the IPL and DPL were forced to change their plans and move events to worse facilities.

This rule patches a hole that was created by MLB’s rules in the first place, and it solves a relatively minor problem that didn’t concern clubs much.  Scouts want good scouting to be rewarded and early deals increased the degree of difficulty, but still rewarded good scouting.  The new rule lets scouts see players less often and makes more of those looks in heavily-attended, MLB-controlled showcases/games.

Every club I’ve talked to is strongly against an international draft, for literally dozens of reasons.  The main issues, and ones that need a lot of time, money and personnel thrown at them, are getting as many countries as possible to opt-in to a draft, thus avoiding another version of the present Cuba exception, where players from a couple countries not involved in the draft get huge contracts in a free market.  MLB needs resources for dealing with each country’s government (there are more than a few problematic countries that could undermine the whole effort) and, in many cases, helping to work around or solve typical third-world obstacles that it’s taken years for MLB to work through in the Dominican.

I should note that MLB has done a very good job in this area, particularly in the Dominican, of reducing identity/age fraud, PED use and paperwork issues while also running their own showcases and leagues.  Until recently, this list of good things MLB had done included allowing the IPL and DPL to play their league games at MLB team facilities in the Dominican and America without interference.

What This Distinction Means

I point all of this out because this international bonus pool penalty fund had about $10 million in it through the first two signing periods under the new roles.  After the Yankees obliterated bonus records this year, along with less extreme overages by the Red Sox, Rays and Angels, another roughly $23 million was added to the fund.  Given the runaway hype train that is Moncada’s projected bonus, I’d estimate his upcoming deal will add another $40 million to the fund.  That means that a fund that was probably never intended to have much more than $10 million in it will soon have over $70 million in it.  In effect, the leeway around MLB’s international rules will net them over $70 million that some argue should be going to these kids, but instead will presumably be going toward creating an international draft, the one thing nearly no one involved in this market wants to happen.

Teams may not like this, but one marginal team choosing or not choosing to blow past their international pool likely won’t change anything.  In the same way, Moncada is going to get a ton of money regardless of whether one or two teams decide to sit this one out.  If anything, those making the personnel decisions for clubs will see this as a reason to be even more bold in spending money on international players.  Executives seeing 1) this penalty fund expanding 2) a two-year ban on big bonuses for blowing past your pool and 3) a CBA expiring on December 1, 2016 have to assume that, whether it’s via an international draft or harsher penalties that cause a hard cap of sorts, the odds are increasing that there is only one more chance for each team to spend wildly on international prospects.

I had to talk ten executives to find someone that knew where the international bonus pool penalty money was going and how it was supposed to be spent; even that exec forwarded me the rules language didn’t know the complete answer before he looked it up.  From the clubs I shared this information with, none of them were happy and all of them were surprised to varying degrees.  One international scouting director joked that the Dominican kids in MLB’s Prospect League will have really nice uniforms next year.  In light of this news, it looks like the smartest move for a club is to spend lots of money while they still have the chance.



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Kiley McDaniel has worked in the scouting departments of the New York Yankees, Baltimore Orioles and Pittsburgh Pirates and has written for ESPN, among other outlets. Follow him on twitter for real-time thoughts on the players he’s seeing and hacky attempts at humor.


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grant
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grant
1 year 6 months ago

Excellent research and analysis.

Pirates Hurdles
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Pirates Hurdles
1 year 6 months ago

I’ve yet to really hear a good argument against an international draft that isn’t just a status quo defense. If the NHL can do it with far inferior resources and having to deal with difficult nations, then MLB can do it as well. The NHL system of owning drafted players rights for 3 years is an excellent model. Equitable distribution of amateur talent is supposed to be one of the primary goals of the current CBA, but it has made a mockery of international talent acquisition. If revenues are not going to be evenly shared, then talent acquisition must be made fair.

Balthazar
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1 year 6 months ago

Yep. I think an international draft simply normalizes talent acquisition strategies and budgets, and is in the interests of most of the clubs. The downside is that the handful of teams with brilliant international scouting departments get less of a competitive advantage out of them going forward. Which is why, on the status quo basis, teams are adamantly against such a draft: Everyone would like to think that they can be above average, even if they aren’t now, and the hope of such a competitive advantage is too intoxicating to face the reality that most teams don’t and won’t excel.

What is completely against the interests of 90% of the clubs, though, is the certainty that star level international prospects will have their prices bid up past the ability of most clubs to stay in game for them. Plus there will be major international signs who tank, and take $50-70M with them. The first time one of the Big Boys gets burned like that, we’ll see much more favorable sentiment for an international draft. I do believe it’s coming, but it may not be on this push to make it happen.

james
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james
1 year 6 months ago

I think this big pay day will change all of that. The more cost controlled teams will have the wake up call they need to realize this system, even with good scouting in those areas, is not in their best interest.

I think the real net, is a few of these countries make what amounts to their own major leagues in name only, but are as good as AA and AAA leauges. Get their players through those systems, so they can sell them at 22 (taking a cut through posting).

grant
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grant
1 year 6 months ago

A difference with the NHL is that the countries players are drafter from there are northern hemisphere countries with better overall information systems than in Latin America. Many players are from Sweden, Finland, etc, highly developed. The worst is Russia, but even it is far more advanced than the Dominican or Columbia.

Seems to me that if MLB wants to start with an international draft if could start by including European and Aussie/NZ kids in the normal draft. It’s not a lot of bodies, but the incremental adjustment eventually gets you there. From there look at the most advanced Latin American countries, one at a time.

Pirates Hurdles
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Pirates Hurdles
1 year 6 months ago

I don’t buy that NHL teams have better scouting in place for Europe than MLB teams do in Latin America. MLB teams have entire academies in place to find and evaluate talent. I’d wager heavily that MLB teams have better info on Latin prospects than NHL teams have on guys from Latvia.

attgig
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attgig
1 year 6 months ago

i think there’s just more organized teams and leagues in Europe for ice hockey for teenagers (school system and school athletics) than there are organized teams and leagues in latin america (i believe most countries have only free primary education). Without baseball centers, there would be no organized leagues for kids who aren’t well off to participate and to show their skills. i’d wager heavily that mlb teams have better info on latin prospects because they create their team training academies.

if you create an international draft, there’s less incentive for individual teams to create their academies and gain any competitive advantage against other teams. if MLB is really getting all this money and they’re set on an international draft, they better figure out how to keep that income flowing, and be ready to buy and take over operations of all the individual team’s academies.

Roger
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Roger
1 year 6 months ago

He didn’t say better scouting. He said better information systems. I think he’s referring to things like being able to verify identities and birthdates.

asdfasdfasdf
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asdfasdfasdf
1 year 6 months ago

MLB teams certainly pour more resources into the problem than the NHL does. They have to; in Venezuela, people’s access to modern communications leaves a lot to be desired, and in the DR, transportation is a bigger issue.

Cabrera
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Cabrera
1 year 6 months ago

There’s like 6 player from Colombia in MLB, not sure why you include it.

Teddy Wolvesevelt
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Teddy Wolvesevelt
1 year 6 months ago
Pirates Hurdles
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Pirates Hurdles
1 year 6 months ago

I have read it and I don’t buy it. A worldwide draft would consist of more rounds and teams would still stock developmental teams whether in the US or Latin America. The recent trend has been for teams to add more rookie level affiliates to give more guys a chance, not less. I also don’t buy the money issue, if you combine all talent acquisition into one draft then the budgets go up accordingly. Money being spent in Latin America now gets spent in the draft, no one loses money. As we have seen, teams are perfectly willing to spend more for amateurs than MLB allows, no one is trying to rob the poor children.

Roger
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Roger
1 year 6 months ago

Budgets don’t go up the same way because, as we can by the overall behavior in each the past few years, there is more incentive for going over caps in IFA than the draft because the “no players over $300k” penalty is much less severe than the loss of 1st round draft picks. If and when IFA is converted to a draft, we’ll seem the same relatively glacial pace of inflation as MLB shuts down the free market. Then teams will turn to MLB FA to spend their money, where inflation has been and will continue to be rampant. Soon players signed for the bench will be making $10-15M per year.

james
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james
1 year 6 months ago

It is not the weak penalty, but more about the way in which you can go over. Look at the yankees this year, 10 top 30 international prospects. They are out of it for 2 years, but basically got 10 first rounders this year in exchange for giving up the next 2 first rounders… on that logic, every team with deep pockets should do the same. The penalty is not huge, but the upside of gaming the system is massive

web
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web
1 year 6 months ago

If it happens, the Yankees and other high revenue teams couldnt continue to swallow up most if not all of the best international players. The Yankees would not be able to sign 27 players for more than 8 times their slot. The Cubs, Rangers and other teams also could not corner the market for a year.

JP
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JP
1 year 6 months ago

I’ve harped on this often in the comments here.

An international draft redistributes money away from poor kids in the developing world to American billionaires (or hundred-millionaires). That is the real reason owners would favor an international draft. “Competitive balance” is a totally BS justification.

And in any event, competitive balance is a terribly weak justification for taking away money from poor kids in the developing world to save money for poor, long suffering MLB team owners. Sorry developing world, it’s just a bigger tragedy that small market teams are somewhat disadvantaged at winning a children’s game.

And as we know, competitive balance is still a HUGE problem in baseball. That’s why the Yankees, Mets, Red Sox, White Sox, Cubs, and Rangers continued to dominate the game with their big market money, while the A’s, Royals, Pirates, Nationals, and Orioles simply cannot compete playing in their small/medium market backwaters. Right?

Pirates Hurdles
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Pirates Hurdles
1 year 6 months ago

This is what is wrong with many who dismiss the need for balance.

So, if Boston and Pittsburgh have equivalent front offices in every regard. Which team posts the better record? The answer should be 50% of the time for each, but the current system shifts the ratio dramatically.

Small revenue teams should not be punished for making better decisions than large market teams. The current system does exactly this. Pretending it does not is putting your head in the sand. Outcome based statements like your final paragraph does nothing to separate decision making from the resource advantage. Small revenue teams compete when a larger proportion of the decisions go right, the large revenue are afforded many more mistakes.

Anyway, back to the point, a worldwide draft does not take money out of the pockets of poor children. The top players still get bonuses in line with their American counterparts and would no longer pay massive fees to their “pimps”. The existing system limits costs beyond what teams themselves even want (and thus teams are ignoring the rules). It also guarantees that high revenue clubs get the first shot at any premium talent brought up through external channels such as Japan or Cuba. The NHL system already deals with issues concerning players in foreign leagues.

Simon
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Simon
1 year 6 months ago

In which case, you need just to say that each team has the same amount of money to spend. Nothing else will lead to a situation where the Pirates and the Red Sox are equally likely to post a better record, given equivalent front offices. The real question is whether baseball needs greater parity than it already has.

JP
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JP
1 year 6 months ago

Yes, a draft DOES take away money from poor children. It is irrelevant that top prospects may still get bonuses in line with their American counterparts (hint: American draftees’ earnings are also diminished by the draft. Aroldis Chapman’s signing bonus dwarfed Stephen Strassburg’s).

It is beyond dispute that with a draft (or even with teh current spending cap system) international prospects receive smaller bonuses than under a free market system. Instead of bidding against each other, prospects can only negotiate with one team, and owners may very well collude on a slotting system to further limit costs.

I never said small market teams and large market teams have an exactly equal chance of winning. Big market teams still have an advantage over small market teams. But small market teams can clearly still compete and win, if not quite as often as big market teams. Cry me a damn river.

Anyone who thinks that is sufficient justification to redistribute wealth away from the developing world towards super-rich Americans’, takes baseball WAY too seriously.

It’s a game.

Carson's Johnny
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Carson's Johnny
1 year 6 months ago

You are right that the draft is there to drive down wages. You are wrong that competitive balance is in good shape. It totally is not.

If we roll a dice and I win on 1-5 and you six my assurances that you sometimes win are not an argument that it is a “balanced” game. I never understand the people who are like “the Yankees don’t always win”. No one is ever claiming they would win all the time even with a billion dollar payroll.

james
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james
1 year 6 months ago

You have stated a thing, but not really characterized it as good or bad. Is this really a bad thing.

The yankees have a ton of fans across the US. The Padres struggle to keep the few fans they have in their own town. Wouldn’t it be in the leagues best interest for the more popular teams to win more often. This is the same general model that European Soccer has been using for a very long time, to a lot of success.

RobM
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RobM
1 year 6 months ago

An international draft will remove incentives for teams to actually invest and expand internationally. If an international draft was in place going back to the 1960s, the expansion of players from Latin America, for example, never would have happened. The international draft (which will happen) will effectively end MLB’s expansion into other regions.

james
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james
1 year 6 months ago

is that a bad thing. They have already reached a real foothold there, and have invested heavily into the infastrucure. While the old school local agents were a bad team, are teams coming in and locking these guys up on cheap deals early much better>

bob
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bob
10 months 29 days ago

Cheap deals for MLB teams are still life changing money for Dominican 16 year-olds and their families.

asdfasdfasdf
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asdfasdfasdf
1 year 6 months ago

I don’t think you’ve thought this through. Fairness among MLB teams should perhaps be a goal, but it really, really shouldn’t trump the rights of these kids. And, even as spectators of the sport who care nothing for the athletes’ lives or families, we want a system that encourages teams to find and nurture the best talent they can as much as the system can.

Most international draftees (from the Dominican, at least) come from a background of crushing poverty. There’s a substantial population of rural poor there who aren’t even at the level of subsistence farming because they have too little land that is not productive enough.

Turning to the other country with lots of international draftees, Venezuela isn’t food-secure; domestic production accounts for 40% of consumption. Venezuela’s thus heavily dependent on food imports, which it pays for by exporting oil. (And, if you haven’t heard, violent crime rates in much of the country are absurdly high, which can’t be good for the quality of urban life.)

Outside of fairness to draftees, why shouldn’t we want an international draft? Trying to become a professional baseball player is a risky proposition for anybody; the bust rate for first-rounders is something like 50%. Busts don’t make very much over their baseball careers beyond the signing bonus.

You’ll notice that the calibre of talent coming from Puerto Rico has declined since PR was made a part of the draft. It’s almost as if talented Puerto Rican kids started choosing careers other than baseball when the chance to get paid a market rate for their services dried up. That’s bad for us as spectators.

In the US, there are lots of teenage athletes who star in both baseball and football. They often go on to play football instead of baseball in part because they have greater certainty of high future earnings in football. That’s bad for baseball spectators.

As spectators to the sport, we also want teams to try as hard as they can to “discover” and nurture baseball talent wherever they can. Giving teams a competitive advantage whenever they successfully find and nurture top talent is a pretty good way to do that. Better players trained better means the top flight of players is that much better. That’s good for us as spectators.

Mark
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Mark
1 year 6 months ago

Why can’t the Rangers or Cubs have a verbal agreement and then wait until July 2nd to officially sign Yoan Moncada. If the money is there, would he not wait an extra 4-5 months?

Rawson
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Rawson
1 year 6 months ago

Shhh!

Dave
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Dave
1 year 6 months ago

Interesting thought.

I’d speculate it’s because Moncada is so high profile that it would be really obvious what had happened – that a team had worked around their bonus limitations by agreeing to a verbal deal with him during the 2014 signing period – and that some other team would file a grievance about it or MLB would take issue with it.

Basically, I imagine that other teams and MLB will tolerate a certain amount of shenanigans regarding verbal deals with more run-of-the-mill prospects, but Moncada is a big enough prize that skirting the rules won’t be tolerated.

Teddy Wolvesevelt
Member
Teddy Wolvesevelt
1 year 6 months ago

They absolutely can. The reason Moncada and his agent want to hit the market well before July 2 is so every team, including those in the penalty for 2014-15 and those that will be hit for 2015-16, can throw itself in the bidding war and jack up the final price.

RobM
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RobM
1 year 6 months ago

They could. Their bid, however, will need to be more than the teams who can bid on him now. Of course, if he doesn’t sign before July 2 and it turns out to be the Rangers or Cubs who sign him, it will be obvious that the rules were, umm, bent. Not sure what MLB would do, if anything.

Avattoir
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Avattoir
1 year 6 months ago

Why don’t the Blue Jays just get on one of the regular flights between Toronto and Havana, and once down there set up their own Cuban player cartel? There’s no legal, travel or business restrictions that would stop a Canadian entity from doing this. The fact that it HASN’T happened may speak more loudly to the room to doing this being over-ridden by the cartel nature of MLB itself.

I do have trouble – quite a bit of it – with Kiley’s implied premise that there’s meaningfully broad opposition to an international draft for MLB. The way this article portrays the tensions against and for is by the vehicle of posing a meaningful distinction between player agaents and player development types – so, either totally self-interested or the EMPLOYEES of MLB franchisess – and “MLB”, presumably the commissioner’s office.

But this distinction is NUTS! What made Bud Selig different from the MLB commissioners of the previous 70 plus years, going all the way back to Landis, was that the owners finally ‘released’ the commissioner’s office from the veneer of being an objective overseer of all interests in MLB, not just owners but also players and fans. From Selig on, presumably on, that artifice is gone, and what we now KNOW about “MLB” is that it’s primarily responsible to the maintainence of the BUSINESS of MLB, making money off hosting games of baseball played in a house league. Yes, it’s possible for “MLB” to be opposed in fact and interest to a given MLB franchise owner, such as the Dodgers before their current ownership group, but the room for that opposition was created by the broader view of the previous owner’s actions and neglect bleeding the goose that lays the golden eggs.

capnsparrow
Member
capnsparrow
1 year 6 months ago

Selig is gone. Its time to get rid rid of his lousy ideas too. He whored the game out to TV. Now he wants to keep as much of that money as possible by creating more crap like this that the league has to run

Teddy Wolvesevelt
Member
Teddy Wolvesevelt
1 year 6 months ago

I’m afraid Manfred only wants to push Selig’s dream of an intl draft further.

RobM
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RobM
1 year 6 months ago

Quite true. He was Selig’s right-hand arm.

Manfred, however, is not Selig. It will be interesting to see if he can keep the owners as together on these issues without a revolt forming. When the owners are unhappy, the Commish goes away.

Avattoir
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Avattoir
1 year 6 months ago

Plus a lot of Selig’s staying power had to do with his being an actually active [wink wink nod nod] owner, and related to that fact, his having known a lot about where the other owners hide their skeletons and what buttons to push to have used that knowledge.

Manfred doesn’t have ANY of that. So, inevitably, he’ll face a choice between, as it’s put above, ‘whoring out’ even more outrageously than Selig ever did (quite a standard), or trying to walk a narrow line thru the minefield of ALL the interests … which’ll get him fired, inevitably, just by the act of trying.

Balthazar
Guest
1 year 6 months ago

High-quality reportage, Kiley, and I like the big picture commentary on the decision context for major international spending by the clubs.

Everything points to wildcatter spending on major internationals for another season or two, with a big shake up coming after that, whether draft or given the political complexities maybe more likely a hard cap. A hard cap can be done domestically by MLB, and still mollify the ‘no draft, never’ sentiment. I do think that there will be a consensus for further restrictions on bonuses. The situation now is that the bidding on major free agents is quickly collapsed to a handful of big money teams, with the odd gambler, and many clubs effectively shut out will be interested in throttling bat max bonuses to the point where they themselves can still hope to regularly make a competitive offer if there is no draft.

Clock
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Clock
1 year 6 months ago

First off, awesome article. Really one of the best I’ve ever read, anywhere.

One question for me though is that the CBA language states specifically that “tax proceeds generated as a result of a Club exceeding its Signing Bonus Pool will be used,” not the overall bonus amount. Wouldn’t the fund be smaller than you are projecting then if it’s just the tax proceeds from the excess bonuses? Maybe I’m misunderstanding the term tax proceeds, but any clarification would be greatly appreciated.

Thanks

Dave
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Dave
1 year 6 months ago

My understanding is that it’s a 100% tax on the excess bonus amount

Kiley describes it in the sidebar here – http://www.fangraphs.com/blogs/yoan-moncada-is-affecting-all-of-international-baseball/#comment-4817509

Each team’s total international Signing Bonus Pool is on the order of $2 to $5 million. For a signing bonus on the order of the $40 million projected for Montado, the tax will therefore basically equal the amount of the signing bonus.

Dave
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Dave
1 year 6 months ago

I copied the wrong link, Kiley’s description of the tax is in the sidebar here – http://sbb.scout.com/story/1417487-go-inside-the-yankees-int-l-spending-spree

Chris @ Flipping A Dollar
Guest
1 year 6 months ago

This is fascinating. Great article and I love how you’re looking at the long term impact of these types of decisions. I wonder who ends up biting the bullet and taking a shot at the kid.

Pirates Hurdles
Guest
Pirates Hurdles
1 year 6 months ago

Well, there are only so many teams that have $60-80 million (with the 100% penalty included) around to risk on a developmental player.

Teddy Wolvesevelt
Member
Teddy Wolvesevelt
1 year 6 months ago

Great stuff!

Some Guy
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Some Guy
1 year 6 months ago

This Moncada situation gets more and more interesting by the day, great work Kiley!

web
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web
1 year 6 months ago

He can’t be cleared until he relinquishes his Cuban passport and establishes residency in another country. Until then, by law he is not allowed here.

smart people
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smart people
1 year 6 months ago

this is fascinating

Gary Mugford
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Gary Mugford
1 year 6 months ago

Any cap system is designed to level the field economically. Any cap system that doesn’t include penalties for breaking the ‘gentlemanly’ rules is ignoring reality. Which is what happened here. The really smart way to have developed this would have been to hire ex-GM’s and associated boffins and asked them how they would have beaten the system. I’m not an ex-GM and I would have had no trouble spotting the weak overage penalties as being a non-existent deterrent to monied and determined rules-‘breakers’.

What should have happened was a complete barring of international signings for a number of years based on the level of overage. Hard and fast. That would still allow for somebody to make a one-time grab for a Moncada-type talent. But at the same time, it would mean no more talent-lottery cards for the next, let’s call it, five years for going over the team’s supposed cap by 800 percent.

Maybe that means Moncada signs for ten million dollars rather than ninety, with teams looking at him as being worth two years of no signing, but not for five years of darkness in the wilderness. It also allows the small market teams into the cost-evaluation game. Maybe Moncada would be worth THREE years of no signing to them. So he gets a twenty million dollar offer from them.

The fact is, even if Moncada would start at a ten million base rather than fourty or fifty, his own abilities would be the insurance that a lifetime free of financial worries would still be possible. HE isn’t the one I worry about. It’s the teams who CAN’T decide to ignore the rules that causes me pause.

In reality, I don’t see this issue of bad rules-making to plague MLB much longer. Moncada might be the final straw that cements the formation of the international draft. He won’t actually be the cause. The Yankees, Cubs and BoSox will have made it painfully obvious that the system as designed is fatally flawed. And good on them for stepping up with the dollars and the desire to be the best. For them. But not for baseball.

An international draft is a can of worms with a high likelihood of problems and issues for a number of years after it gets implemented. I think it will lead to more MLB academies established throughout Latin America, with the odd Academy here and there elsewhere around the world (Europe, Australia, etc.). With the monies MLB generates, it seems inevitable that spreading the brand with MLB-branded schools will mean setting up Academies where the kids get baseball instruction AND fed properly and educated and given English comprehension tutelage.

The issue will then eventually fall upon the loopholes MLB has created for Cuba and Japan/Korea. Those will eventually have to be melded into the International draft too.

Should make for entertaining debating for the rest of my natural life … and I still hop to see 2050.

John
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John
1 year 6 months ago

That was a phenomenal article and bringing you in was a great move. So I’m wondering if it is even a consensus in small markets that an international draft is bad? And do all teams have the money they need to spend big? I wonder because if the Rays did I feel like most other teams should be able to as well

David
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David
1 year 6 months ago

If Moncada signs for $40M and then goes on to somehow meet Alex Rodriguez’s first 3+ years of production in the bigs, they’ll have gotten about a 2X return on their investment.
If he “only” turns out to be Bryce Harper, they’ll have paid a slight premium for the production in his first three years, with the right to pay a slight discount for years 4-6.
That’s an awful lot of risk to take on for a signing team.

robb
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robb
1 year 6 months ago

I dont like the idea of an international draft. i dont like the buscones getting rich. lets make the penalities harsher. if you go ten percent over your allotment you cant sign a prospect for over 250k. if its 25% you cant sign anyone the next year and pay the full overage in tax. 50% 2 years same overage. 75% 3 years double the overage. 100% 5 years triple the overage. that sure stop runaway spending.

Cicero
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Cicero
1 year 6 months ago

Kiley great article, if the international draft happens do you see the Mexican, Japanese or Korean leagues changing their posting rules to add more latin talent? Seems to me if I was the 10 best latin 16yo playing in Japan for 5 years for a chance at a 100m payday would look good to me, if I was a japanese leage the posting fees would be worth the development time

Jeff
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1 year 6 months ago

What are the chances Moncada gets signed this offseason, say sometime between now and January 15, by a team? When do you guys think he will sign if you had to guess? This offseason? Sometime during the beginning of the year, maybe around April or May?

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