July 2nd Spending Plans Are Coming Into Focus

With the Red Sox recently adding Yoan Moncada to the fold last week (details and audio interview), the biggest international domino has fallen and now there’s more certainty for teams and agents going forward about what teams can spend on July 2nd. In an early draft of this article, I was going to point out that MLB still hadn’t told teams what their international bonus pools were, in an effort to discourage teams from agreeing to verbal deals since they wouldn’t know the exact figure of what they could spend. MLB sent out those figures this week, and they fell in line with what teams expected: last year’s slots with a 5-7% bump.

I reported back in December that up to 12 teams were rumored to be considering or had already put enough agreements in place to exceed their bonus pool. I conceded that nowhere near that many would do it and that looks to be true, with closer to five teams looking likely to go over, but many more looking to spend their full pool and maybe trade for a little more, along with rumors of teams considering going over in 2016. Part of the reason for the uncertainty about which teams are going over is the uncertainty surround young Cuban players.

Teams are hesitant to commit to taking themselves out of the market for two years when a marquee Cuban player could surface at any time, or U.S.-Cuban relations would be relaxed and many players could surface at once. Here’s an update from last week on the status of the current Cubans in question. Even going over in 2016, the last year of the current CBA and likely the last year before some sort of international draft is instituted, is dangerous because the two-year penalty would still exist in the form of draft picks taken away, in a draft that could include more players than the current July 2 process.

All that said, there are more teams spending more of their cap, or at least considering it, than in past years, which means there is more money in the market in general, which is why there are already three rumored agreements for bonuses higher than any bonus last year. This year is seen as having more depth at the upper levels than recent July 2 classes, though there isn’t that elite, generational player that fans are always eager to hear about.

I’d take Brewers SS Gilbert Lara, the top player from last year’s class (who signed for $3.1 million), over anyone in this year’s class and might also take Rays SS Adrian Rondon — who signed for $2.95 million — as well. A bonus amount isn’t always a perfect match for industry consensus on ability, with leverage from bidding teams, the savviness of an agent and discounts via early verbal deals all manipulating these prices.

The Top of the 2016 Class

Before jumping into the top five projected bonuses for the 2015 class (eligible to sign on July 2nd, 2015), I have a quick update on the 2016 class. I’ve already written about Venezuelan SS Kevin Maitan (link includes video), who has been compared by scouts to Miguel Cabrera and is being called the top July 2nd prospect in many years, probably the best since Twins 3B Miguel Sano. I talked to many scouts about Maitan in the Dominican last month and it’s been amazing that no one has said anything negative about him. With players of this age getting hype, you almost always have scouts telling you to be cautious, but everyone I’ve talked to just keeps throwing out high end comparisons like Juan Gonzalez, conceding that he’s really good and probably one of the best they’ve ever seen. In short, Maitan is a switch-hitting shortstop that’s advanced for his age across the board, but most scouts think he’ll add bulk and move off the position, like Cabrera and Sano and other elite prospects in the past.

One more name has been brought up as a high end guy in the 2016 class: Venezuelan C Abraham Gutierrez, who trains with former big leaguer Carlos Guillen. Gutierrez is average to plus across the board with precocious all fields power and the tools to stick behind the plate. He’s obviously also very young, so it’s very early to throw lofty comparisons around like with Maitan, but scouts have said Gutierrez’s overall game is along the lines of Mike Piazza.

The Top of the 2015 Class

I saw the DPL travel team in October, wrote up the top players and went to the Dominican for a few days last month to see the two-day MLB showcase and the one-day IPL/Cuban showcase that included Cuban 2B Hector Olivera and RHP Yadier Alvarez. I have notes on dozens of players for July 2nd that I’ll go into more depth in late March/early April after I’ve finished all 30 team prospect lists. The top of the market is intriguing for a few reasons, so I wanted to give an overview of the top five projected bonuses at this point as a teaser for the rest of the content.

In my next article, I’ll go into more depth about lower seven figure type players, which teams are likely to go over their pools and which should are looking like they’ll merely spend their full pool. That said, you can make some conclusions from what I’ve written below; teams can only trade for an additional 50% of what their starting cap is, and penalties start once they go over 5% above that amount.  There are a couple aggressive teams that aren’t going to hand out one the top five projected bonuses and thus aren’t mentioned below. One of those teams already has six deals done that I know about, totaling nearly $7.5 million.

I should mention that MLB rules state that negotiating of any kind, including verbal deals struck pre-July 2nd are illegal, with MLB doing their best to discourage teams and agents from negotiating. That said, MLB has never shown any intent to punish teams for doing early deals, just creating new rules in recent years to make it harder to pull off, like not sending bonus pools to teams until last week. It’s naive to think teams won’t negotiate until July 2nd, but it seems like MLB doesn’t like the market adjustment to move to earlier and earlier verbal deals (sometimes over 12 months before a player is eligible to sign) after the advent of soft caps via international bonus pools in this CBA.  You can check my article from around this time last year to see that most of the alleged verbal deals end up as done deals with the same team on July 2nd, but a couple will fall apart and the rumored prices will vary up or down by 10% or so.

Check out the FanGraphs YouTube page, where I’ve already added 18 videos of seven figure caliber July 2nd prospects.  It’s also interesting that the most marketable ability on the MLB free agent market this winter was right-handed power and all five of the below players owe most or a good portion of their value to their right-handed power.


Vladimir Guerrero, Jr., RF, Dominican

I’ve written about Guerrero a good bit in the past and not just because of his name; he’s arguably the top prospect in this year’s class. I say arguably because, at this age, it’s almost impossible to get a unanimous opinion from scouts on anyone and it should probably always be that way, given the uncertainty. The first thing fans ask me about Guerrero is if he had his dad’s arm and right now, he doesn’t. It ranges from fringy to solid average by the day, but he’s still going to add a good bit of weight and it’ll likely improve, so I’ll project him in right field.

Guerrero ran a 7.25 in the 60 at this showcase, which is 40-45 speed on the 20-80 scale, and he showed above average to plus bat speed and power, which likely end up at the top end of that range at maturity. He didn’t perform very well in the two games I saw, but I’m told he’s looked much better in terms of game hitting performance in the past. Guerrero’s draw is big bat speed, big power and physical projection, along with the bat control and feel to hit to tap into those skills in games.

I reported earlier that Guerrero has a deal with the Blue Jays for $3.2 million, but I’m now told the number actually starts with a four, with most sources saying it’s $4.4 million or $4.5 million. The Jays can trade for up to $3.486 million in their bonus pool, so if this deal goes down as expected, this would push them into the penalty range.


Jhailyn Ortiz, LF, Dominican

Ortiz is a prospect of extremes. He is 16 years old, has present 70 raw power, he’s listed at 6’2/260 and ran the same 7.25 in the 60 as Guerrero, but is probably even quicker once underway. I didn’t have the camera out, but, in on of the games, Ortiz hit a triple over the center fielder’s head and going from first to third, he looked about an average runner, which is kinda unbelievable given the other information I just told you.

Ortiz’s arm is average and he has that looseness to his actions at the plate that tell you he’s more than just the stiff slugger most guys this size are. Like Guerrero, Ortiz wasn’t quite himself at the MLB event, with the huge stadium full of hundreds of scouts likely contributing. Ortiz whiffed on more than a few sliders out of the zone, which he’ll need to clean up, but he more than showed flashes of elite ability.

A scout recently told me that he saw Cecil Fielder when he was 16 years old and people don’t realize how athletic he was back then: the scout saw him reverse dunk. I don’t know if Ortiz can do that, but he’s got some of the same athletic indicators. The consensus in the scouting community is that Ortiz has or will have a deal with the Phillies and that the bonus starts with a four, with my latest intel pegging it at $4.2 million. The Phillies could trade for up to $4.5 million in cap space, so this alone doesn’t mean they will be going over their bonus pool, but I’m sure fans will now start dreaming about Ortiz as the eventual Ryan Howard replacement.


Wander Javier, SS, Dominican

Javier is the kind of player you typically see near the top of July 2nd bonus lists. He’s a 6’0, lanky shortstop with easy actions and an above average arm with an ability to stick at the position. Javier ran a 7.01 in the 60 last month, a 50 run time on the 20-80 scale, but he’s the type of kid who will probably gain a step in the next few years; Royals SS Raul Mondesi is an example of similar prospect who gained a couple steps after he signed. Javier ran a 6.76 for me in October, so 55 speed is clearly in the tank.

Javier flashes average raw power that may even be a tick better than that depending how his body develops and he flashes some ability to show that tool in games. In the first half of the video, from last month, Javier was just okay offensively, getting off balance and swinging and missing more than expected. In the second half of the video, from October, Javier is more relaxed with better timing. While his mechanics still aren’t perfect, his feel for hitting took over when his hitting actions were more compact. This isn’t to say that Javier is trending down, just pointing out how one bad event could change a scout’s projection if he didn’t have history with the player. This type of variance is common with young players and is fixable.

Javier is widely believed to have a deal with the Twins for $4.0 million, which I believe would be the highest July 2nd bonus of all-time for a shortstop. The Twins’ pool is just under $4.0 million, which means trades could push it to nearly $6 million, so they could easily stay under after a Javier signing, with just one minor trade to add more pool space.


Starling Heredia, CF, Dominican

Heredia is one of the more interesting prospects in this class. He’s a maturely-built, athletic kid with plus foot speed, bat speed and raw power, along with a solid average arm. He has some feel to hit in games and, as evidenced from the long video above, I’ve seen him a good bit. It’s an easy multi-million dollar package and some scouts see a little crudeness as the plate, but agree the tools are elite and, at this age, you can’t be too picky about game performance.

I heard Heredia tied to the Cubs in October, but it wasn’t a done deal. I’ve been hearing him most with the Dodgers for the last month or two and that was a curious situation pre-Moncada signing, with most scouts assuming the Dodgers would sign Moncada, taking them out of play for the top 2015 July 2nd prospects. With the Dodgers decision to forego signing Moncada in the current period, allowing them to spend freely in the upcoing 2015 signing period, Heredia is still in play and their top 16-year-old target, but a deal isn’t done.

As I mentioned in my latest Yadier Alvarez update, the Dodgers are eyeing the option to go well over in 2015 and getting a number of players like Heredia, Alvarez and others, but one executive said the Dodgers were “dragging their feet” on this decision and “stringing out” Heredia. If Heredia signs with the Dodgers, the most common number I’m hearing is $3.0 million.  The Dodgers max 2015 pool after making trades for pool space is just over $3.0 million, so signing Heredia could mean the Dodgers are looking to go over their pool, but that alone may not do it.

An Aside About Age Fraud

When I wrote Heredia up in October, I cautioned against assuming he was older than 15/16 just because he physically looked more mature than that age. My argument is if LeBron or Shaq was Dominican, no one would ever believe their age, but standout athletes sometimes have huge ability at a young age; that’s what makes them standout athletes. At that link, I even gave an example of a player very similar to Heredia that’s the same age and of similar ability in America.

While MLB has helped to make steroids and age/identity fraud much less prevalent than it used to be, teams are still wary of making multi-million dollar mistakes. This has a parallel in America as well; a team will pass on a big league free agent that matches with them in every way because some of their top scouts hear he’s a bad clubhouse guy, has poor work ethic, etc. Sometimes that’s a leading indicator of trouble and sometimes it’s a false positive. International scouting directors don’t get in particular trouble for signing a player that doesn’t make the big leagues, but they do catch some flack for signing a player that lied about his age, especially when some guessed that may be the case.

So, teams are cautious and may steer clear of a player when something doesn’t seem perfect in this regard, even if the ability and price match up with the team’s needs. When you look at Matias below, you don’t question his age. A couple high level international scouts basically said the same, naming a player that looks like Matias and saying he’d feel more comfortable signing that player, with comparable ability and price, to Heredia.

In the larger scope of signing players, even if a kid lies about his age, as long as it’s one or two years and not four or five, that doesn’t make a multi-million dollar player suddenly a non-prospect. If you thought a player was going to be an impact big leaguer, a year or two doesn’t change that by much and you’d rather have an 18-year-old prospect you believe in than a 16-year-old that has a bunch of question marks, but a high upside.

In the end, Heredia is either a big leaguer of consequence or he isn’t, how he looks physically likely doesn’t change your opinion from one side of that to the other and the process of signing him is more a matter of playing leverage to get the right price than something you guess about his background drastically changing a team’s projection.


Seuly Matias, CF, Dominican

Matias compares to the player that the Yankees gave their third highest bonus to in last year’s spending spree, RF Juan DeLeon, who got a $2 million bonus.  I think DeLeon was a solid value for the Yankees and I currently have him as their top prospect from that July 2nd group. Matias is a little slighter of build and quicker, giving him a better chance to stick in center field, and his raw power is more projection now that DeLeon’s, but I could still see Matias having 55 raw power at maturity. Matias is a 55 runner right now (6.84 in the 60 last month) but good athletes this age tend to get a little faster. Matias also has a plus arm, though he was a little wild in the workout setting, so he profiles in right field if he bulks up. There’s above average bat speed, so you could see scouts hanging five above average tools on Matias on the right day.

The chatter among scouts is that Matias has a deal with the Royals, with some buzz it is as high as $3.0 million, but my latest information is that it’s $2.2 million. The Royals can trade for just over $3.0 million in their bonus pool, so Matias alone likely wouldn’t push them over, but scouts tell me Kansas City has a deal with another player for seven figures (whom I’ll write about in the next article) and that would send them over their pool if it plays out as expected.

We hoped you liked reading July 2nd Spending Plans Are Coming Into Focus by Kiley McDaniel!

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Kiley McDaniel has worked as an executive and scout, most recently for the Atlanta Braves, also for the New York Yankees, Baltimore Orioles and Pittsburgh Pirates. He's written for ESPN, Fox Sports and Baseball Prospectus. Follow him on twitter.

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Andrew
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Andrew

Kiley, do you know if Baltimore has any reported deals with anyone? Thanks

dgrussel
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dgrussel

Baltimore’s biggest international prospect deals usually involves them trading away their cap space for random players halfway through the season.