Commentary

Concern over MLB rule in Latin America

Rule change effectively prevents teams from paying large signing bonuses to amateurs

Updated: March 1, 2012, 12:17 PM ET
By T.J. Quinn | ESPN.com

Across the United States, the change barely elicited a mention.

In Latin America, it struck like an earthquake.

Major League Baseball's new labor agreement, which went into effect this season, changed the rules for how clubs can sign international amateur free agents, capping the amount teams can spend at about $3 million annually. Spend more than that, and teams will face a heavy tax.

The new rules are being seen as a victory for MLB's have-nots, as the price to sign individual top prospects from places such as the Dominican Republic has often reached into the millions. Even though smaller-market clubs like the As, Royals and Twins have been competitive in signings in recent years, the less-wealthy teams feared ultimately being priced out of the market.

[+] EnlargeAstin Jacobo Jr
ESPNAstin Jacobo Jr., talking to his players, fears what would follow the implementation of an MLB draft for Dominican players.

But in the Dominican Republic and Venezuela, two of baseball's most fertile sources of talent, the shift is being seen by some as an existential threat.

"There's going to be a fight. Somewhere we're going to collide," said Astin Jacobo Jr., an independent trainer in the Dominican Republic.

The fear, Jacobo and others say, is that MLB eventually will adopt a worldwide draft, which MLB officials have said they would like to see as a way to control costs. Currently, only amateur players who reside in the United States or Canada must be drafted; players from other countries sign as free agents.

Jacobo and other trainers worry that a worldwide draft would destroy baseball development in the Dominican Republic and Venezuela, noting that the number of major leaguers coming out of Puerto Rico has dropped since Puerto Rican players were added to the draft. But MLB officials say they don't believe Puerto Rico, which has a higher standard of living and more options for younger athletes than the DR or Venezuela, is a good point of comparison. Several officials have said they think the latter countries will long be a source for talent, but that trainers are worried a draft will cut them out of the picture.

MLB officials disagree, arguing that teams still would be able to sign a number of undrafted free agents every year because players from the Dominican and Venezuela are far less expensive to sign.

Both MLB and the MLB Players Association say the number of Latin American players should not diminish under the new policy, although top talent will no longer sign for the $3 million to $5 million signing bonuses that had become increasingly commonplace.

"Our overarching goal was to prevent teams with the largest amount of money from becoming absolutely dominant in the market for international players, and we think this levels the playing field," said Rob Manfred, MLB's executive vice president for labor relations and human resources.

The highest signing bonuses ever paid to Latin American players were $5 million to Dominican Nomar Mazara by the Texas Rangers, and $4.25 million to Dominican Michael Ynoa by the Oakland A's. But during talks, several sources said small-market teams were worried that large-market counterparts would come to dominate the market.

MLB and the MLBPA also created a committee that will continue to look at the issue.

MLBPA executive director Michael Weiner declined to speak specifically about the policy but said, "We look forward to working with the commissioner's office on the committee to identify a system that is fair for players and clubs and helps to further the game."

Jacobo, who led a protest in 2010 in the Dominican Republic against the possibility of a draft, said he doesn't want to rely on the goodwill of a committee. He said he and a number of Dominican and Venezuelan trainers are meeting next month, and plan to travel to the United States to get Latin American major leaguers to sign a petition against the creation of a draft.

[+] EnlargeGerardo Parra
AP Photo/Margaret BowlesArizona Diamondbacks left fielder Gerardo Parra said he is concerned about the new restrictions on signing amateur players, which he said will particularly hurt countries like the Dominican Republic and Venezuala.

"We're going to do something about it," he said.

Under the new rules, after this season, teams at the bottom of the standings will be able to spend slightly more than teams at the top. This year, however, all teams start at the same place, with $2.9 million to spend before being taxed.

While bonuses to top players will obviously decrease, there are a number of loopholes that allow teams to spend more on inexpensive players. Teams may sign up to six players for $50,000 each in addition to that $2.9 million, effectively giving teams $3.2 million before the tax kicks in. Teams may also sign as many players as they like at less than $10,000 per player. Expect to see a number of contracts being signed for $9,999 as teams continue the practice of signing players cheaply in bulk and hoping one or more pan out.

"It's not fair," Jacobo said. "It's a multibillion-dollar industry -- $2.9 million? What is that?"

MLB eventually wants to establish a worldwide draft that would "hard slot" players, meaning a player's signing bonus would be determined by where in the draft he's selected. The MLBPA, which would prefer all players be free agents, accepted the new rules as a compromise, figuring it was a better option than an international draft. If MLB is ever able to successfully push for a draft through collective bargaining, the union wants to make sure there isn't a one-size-fits-all approach, that the policy is adjusted country by country.

The union's argument is that an amateur player should have alternatives to being drafted, the way young U.S. and Canadian players do. In the United States and Canada, players are developed through organized leagues and then high school, and have the option of playing in college. In many Latin American countries, players are developed by independent trainers and often end their education before high school. College isn't an option.

Gerardo Parra, the Arizona Diamondbacks' 24-year-old Venezuelen outfielder, said including international players in the draft will hurt the players and baseball in Latin America.

"I don't think it's fair or right on several fronts. That means that if a club signs one player for $3 million that's it, they can't sign anyone else? How is that just?" he said. "If they implement an international draft it will be the worst thing to happen to baseball in places like Venezuela and the Dominican Republic. You'll find the agents and buscones will find a way to bring kids over to the U.S. when they're 15 or 16. Why wouldn't you? The pie for signing players is higher here in the draft. The best players will make their way here and baseball in our countries will, in turn, suffer and become less talented."

Jacobo said trainers will consider refusing to allow players to sign with North American teams, although industry experts see the idea as nearly impossible to execute. Major league dollars, even in diminished amounts, are awfully hard to resist in the Dominican Republic, which has a per capita annual income of $5,200.

But another alternative Jacobo says trainers and players will consider is signing with Japanese clubs, which also have academies in the Dominican Republic and Venezuela. For the average Dominican player facing equal offers, it might be better to go to the United States, but for the top-end prospects, a $5 million offer from a Japanese club could be more than enough to lure a player who can't make more than $2.9 million in this hemisphere.

"If we have to sign over there, we'll sign over there," Jacobo said.

ESPN reporter Pedro Gomez contributed to this report. T.J. Quinn is a reporter in ESPN's investigative and enterprise unit and can be reached at tjquinn31@yahoo.com.

T.J. Quinn joined ESPN in November 2007 as an investigative reporter for ESPN's Enterprise Unit, which is charged with developing long-form, investigative features to be presented across multiple platforms.