Owners drop pursuit of international draft

Casual baseball fans, grab your favorite drink and a chair. You’re going to learn more about the guts of Major League Baseball than you ever imagined.

Every couple years, baseball owners and the player’s union (MLBPA) discuss the parameters for a new Collective Bargaining Agreement (CBA). Like other sports, they contain rule changes and compromises between the two parties (FanGraphs has a good write-up of the current CBA). However, that CBA was set to expire on December 1st and thus the owners and MLBPA are discussing a new one that would take effect for the 2017 season.

As previously mentioned, the owners and MLBPA work to compromise the various rule changes that would benefit one but not both groups. However, it had been reported that both sides were struggling to come to an agreement and there was the possibility that they would not finalize a deal when Spring Training arrived. This would have a significant impact as teams would put a halt to the Hot Stove, preventing trades and free-agent signings from occurring until the new CBA was put in place.

The main discussions taking place have centered around free-agent compensation (some free agents have their market decimated by the qualifying offer), luxury tax penalties (the owners feel the luxury tax isn’t strict enough for teams that go over the soft $189 million salary cap and want draft picks penalties instead), and the proposal of an international draft. Citing “competitive balance,” MLB and the owners have argued that small-market teams are unable to sign high-priced international free agents and a draft would allow those teams exclusive rights with certain players. However, in an effort to pass a new CBA, the owners recently dropped their fight in enacting the international draft.

To be honest, competitive balance is only the partial truth. Currently, teams are assigned dollar amounts that they can spend annually on international free agents. If they outspend their “bonus pool,” they are not only saddled with a tax equal to the amount overspent, but are also subjected to a limit on how much they can spend on any individual player over the next year or two, depending on the severity of the expenditure. This ranges from being able to spend only $500,000 per player over the next year to spending just $300,000 per player over the next two years. In spite of these penalties, teams have not been deterred as many international players (especially Cuban-born players recently) have been signed for tens of millions of dollars over the past few years.

Therefore, owners are also worried about the money being shelled out for unproven players. The aforementioned Cuban-born players are notable in that they have been paid with no MLB experience as if they were proven MLB free agents. For example, here’s a sampling of current MLB players that were signed out of Cuba:

• Jose Abreu, Chicago White Sox, 6 years, $68 million
• Erisbel Arruebarrena, Los Angeles Dodgers, 5 years, $25 million ($7.5 million signing bonus)
• Rusney Castillo, Boston Red Sox, 7 years, $72.5 million
• Yoenis Cespedes, Oakland Athletics, 4 years, $36 million
• Aroldis Chapman, Cincinnati Reds, 6 years, $30.25 million ($16.25 million signing bonus)
• Alex Guerrero, Los Angeles Dodgers, 4 years, $28 million ($10 million signing bonus)
• Yulieski Guerriel, Houston Astros, 5 years, $47.5 million
• Raisel Iglesias, Cincinnati Reds, 7 years, $27 million
• Yoan Moncada, Boston Red Sox, $31.5 million signing bonus
• Hector Olivera, Los Angeles Dodgers, 6 years, $62.5 million ($28 million signing bonus)
• Yasiel Puig, Los Angeles Dodgers, 7 years, $42 million
• Jorge Soler, Chicago Cubs, 9 years, $30 million
• Yasmany Tomas, Arizona Diamondbacks, 6 years, $68.5 million

Remember, these are all players that were signed with no MLB experience and the results have been a mixed bag. Abreu, Cespedes, and Chapman are established stars, Iglesias, Puig, and Soler still have tremendous upside, and then there are the busts in Arruebarrena, Guerrero, and Olivera. It’s no wonder that owners are frustrated and thus they wanted an international draft to drive down the salaries. After all, that’s what the draft for American and Puerto Rican players has accomplished. In fact, it was so blatant that Bahamian Lucius Fox, who moved to the United States when he was in eighth grade, reestablished residency in the Bahamas which allowed him to bypass the draft. He ended up signing as an international free agent with the San Francisco Giants for $6 million, which pales in comparison to the Cubans above but was a record bonus for a non-Cuban international amateur. Additionally, Fox projected as a 2nd round pick in 2015 had he stayed in the US. Alex Young, the first pick in the 2nd round from the 2015 draft, received $1,431,400 from the Diamondbacks, demonstrating that Fox made a wise financial decision to return to his homeland.

The draft allows each team to negotiate with a player without the threat of being undercut by another team, but MLB also started assigning slot values when it felt teams were overspending to sign their amateur players. The same would likely happen for an international draft, meaning that players would receive significantly less. Yes, it would allow teams like the Twins (who would have had the first pick in an international draft were it to start in 2017) to have a better crack at top international talent, but remember the list of Cubans I posted above? It was a crapshoot. How about the top young international players likely to help the Twins over the next few years? Those players are Miguel Sano, Jorge Polanco, and Max Kepler. Sano signed for $3 million while Polanco and Kepler were signed for far less. Simply put, you have to be smart with whom you scout and sign. Sure, the Twins missed out on Cespedes, but they also were able to avoid Olivera.

Ultimately, the implementation of an international draft would help the owners save some cash rather than giving it to the people that actually earn the organizations money. While there is a small argument to competitive balance, it should be noted that the richest teams haven’t always signed the top international free agents, nor have they always worked out. I don’t feel a draft is what’s best for MLB and thus I am very happy to know that the owners dropped their pursuit of the draft as part of the new CBA.