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Into International Waters Of MLB

  In the second part of ESBC’s series on the trials and tribulations of minor league players, we dive into the seedy under belly of baseball. Major League Baseball’s international amateur free agent period opens up every July 2nd. Hundreds of 16 year old prospects who are not playing amateur baseball in the US or Puerto Rico are essentially put up for sale on this date. The money is life changing but the road to this point is nearly as arduous, maybe more so, as the “Road to the Show.” Today we dive into the specifics of IFA’s, the downsides of the system and a possible fix, and the controversy that even cost one general manager his career in the majors.     To truly understand the outlook of the IFA signing period as a whole, you must understand where it begins. Commonly it begins on a patch of dirt in a Latin American country such as the Dominican Republic, Curacao, and Venezuela. Unfortunately these countries, whle rich in baseball talent, is rich in little else. Aluminum bats, hats, mitts, cleats, grass all are missing from these countries to nearly the entire population. In the region, baseball is truly a lifestyle.It is the only way out of poverty for most. If at a young age, a young Latin player shows promise he is trust into that baseball lifestyle. While the “Road to the Show” may be tough for US born players, for Latin players it is just another hurdle to clear all while going from a patch of dirt to a well manicured baseball diamond.    The Dominican Republic may not be the most well known country to most but if you are a baseball fan it sure is. More of a baseball factory than country to baseball fans, it’s biggest export is gold. For all 30 teams mining the baseball mines of the DR and all of Latin America, is similar to the gold rush in the US. For a while it was a wild west. IFA rules are negotiated in every CBA and just like MiLB players, IFAs are not represented, but their futures are held in the MLBPA’s hands. Under the Bud Selig administration, it was not really an agenda item. Teams could spend as much as needed and only incur slight penalties. Rob Manfred has changed many rules and regulations and the system we have now while still broken, is holding more water than systems before. Here are the specifics:

  • Players must be at least 16 years old on 7/2 of that year.
  • Currently teams have 4.75 million dollars to spend to pay IFA’s one-time bonuses to join the organization. Certain MLB free agent compensation could grant a team an extra million.
  • Teams can trade money 4 times.
  • Teams may carry over money from even numbered years into odd numbered years, but not vise versa. For example in 2020 a team could elect not to spend any of the 4.75 million and carry it into 2021, you couldn’t do that in 2019 into 2020.

    The dirty secret (which is poorly kept) is that despite rules saying teams can only sign players when they turn 16, it is loosely enforced. Most deals are a formality by July 2nd. The main reason this is allowed to happen is, it’s very hard to really police. Most young Latin players who just got life changing money are not ready to call their team out for signing them early. Sometimes however once in awhile the cat catches the mouse.    The mouse in question was former Braves GM John Coppolella in 2017. MLB investigators found numerous violations against the Braves including signing a 14 year old SS two years before he was eligible, offering players “off the book” perks and incentives, and paying players more that the listed amount. The penalties were harsh and for the Braves, it shed light on why they had been so good during previous IFA signing periods. Nearly 14 players were released from the Braves, free to sign anywhere else. The most notable IFA prospect was Kevin Maitan,  who was signed up by the Angels at nearly the same time as Shohei Ohtani. Coppolella took the heaviest penalty of all, banishment. The penalty draws a line in the sand. Major League Baseball knows their international waters are not only murky but lawless, However this administration has shown that if you do get caught, it will not just be a slap on the wrist.      A fix to this problem is something that is needed but not easily found. As long as i could remember the main solution would be to institute an IFA draft. Most scouts and executives are split down the middle on the subject. Currently, outside of cheating, the best way to succeed in this period is to devote huge amounts of money and resources along with entire scouting departments. The current CBA expires 12-1-2021 and while other topics will be more ballyhooed, the IFA situation should get more attention than it will. The problems are plentiful but are able to be remedied in 2021. Unfortunately the biggest of the problems is lack of union representation. Like MiLB players, the young Latin Americans await the decisions that will change their lives, being decided by men who view them as negotiation fodder.

By joshabner

I am a Business Concierge MBA. That means I make you money, I save you money and I pick the right strategy so you do not pay more taxes than what you have to

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