The deterrents are not working.

They hardly make anyone think twice about being penalized. The possibility of signing a superstar easily trumps the tax and draft-pick penalties to sign elite foreign talent.

This is the current Major League Baseball entry system for players born outside of the United States, Canada or other U.S. territories. Have citizenship anywhere besides those locations, and the market opens up for a player as wide as his talent dictates.

Cuban infielder Yoan Moncada experienced this over the winter, finally capitalizing last week when the Boston Red Sox agreed to pay him $31.5 million, plus a 100 percent tax paid to MLB because the Red Sox spent over their allotted pool. That move instantly made Moncada the team’s top prospect as a 19-year-old infielder.

Moncada’s contract sparked renewed criticism of the system. Columns were written. Questions were raised. Rebuttals followed. Outrage spewed. Tweets were posted, like this one from Tampa Bay Rays pitcher Drew Smyly:

Smyly’s thoughts were echoed across the Internet. But he also made sure to note he was not blasting Moncada or the deal he signed—only the system MLB runs and that the MLB Players Union agreed to.

First-year MLB commissioner Rob Manfred agrees the system must be revamped, and that may lead to an international draft or some revised form of the current rules when the next collective bargaining agreement is negotiated. During spring training media day last week, Manfred spoke about the efforts being done to fix to improve the current system, via Jorge L. Ortiz of USA Today:

We thought we put a set of deterrents in the international signing pool that would be effective. So far, I will say they have not been quite as effective as we hoped for. But remember, the piece that has not yet kicked in is the inability to sign in the following years, so we’ll have to see how that piece of the deterrent plays out before we make a full judgment.

But even when big-money teams like the Red Sox, New York Yankees and Los Angeles Angels feel the effects of their spending during the next international signing period, which starts July 2, it is not likely to keep them from doing it again. Manfred knows this, and so do other MLB executives.

That is why there will likely be a change during the next CBA after the current one expires in 2016.

“I don’t think the financial penalties give everybody a fair chance,” Milwaukee Brewers general manager Doug Melvin told Ortiz. The Brewers were part of the Moncada bidding. “They don’t deter clubs from getting involved. That 100 percent penalty [for every dollar above the assigned pool] doesn’t seem to scare off a lot of teams.”

However the system is altered, it must account for older and veteran foreign players, as it does now. Under current rules, any international player at least 23 years old and with at least five years played in a professional league recognized by the commissioner’s office does not count against the bonus pool.

That part of the system must remain intact.

If Yu Darvish or Masahiro Tanaka or Hyun-Jin Ryu were subject to the same draft rules as domestic amateurs, or put into an international draft pool, why would they ever come to the United States? If professional international stars did have to go through that process, they would likely have to take pay cuts.

Latin American players would not face the same situations as Asian counterparts because their leagues do not pay nearly what they might make as minor leaguers.

But open-market signing bonuses are a different story, as Moncada’s deal signaled. Of course, that price would go down if American, Canadian and Puerto Rican players were also allowed free agency and not forced into the amateur draft because supply could match demand.

But as it stands, there is a limited supply of players of Moncada’s ilk in the current market, and major league teams set his value between $25-31.5 million by the end of bidding.

“I would have loved to be a free agent in college and made the best deal I could,” Red Sox outfielder Jackie Bradley Jr. told Peter Abraham of The Boston Globe. “Maybe I should have moved out of the country. If everybody was a free agent, you’d get what your real value is. But that’s never going to happen.”

No one is arguing that an international draft would not help competitive balance throughout the system. But more than an issue of competitive balance, this is about cost control and cost certainty for owners.

For instance, one of the highest bonuses ever given to a Latin American player, not counting bonuses for Cubans, came from the low-budget Oakland A’s when they signed Dominican pitcher Michael Ynoa for a $4.25 million bonus. And in two of the last three international signing periods, the frugal Rays went over their allotted bonus pools by 39 percent in 2012-13 ($4.03 million) and 35 percent (approximately $4.025 million) during this current period.

Neither of those teams is on the same financial level as the Red Sox or Yankees. They are routinely on the bottom of the annual payroll rankings, but they are still willing to spend big on the international market, and in the Rays’ case, pay expensive penalties. So competitive balance is not necessarily the issue here.

This is more about owners no longer wanting to watch bids for international players skyrocket north of $60 million with the penalty as they did for Moncada, whose bonus was the largest ever given to an international free agent.

By way of the current MLB amateur draft, the largest signing bonus ever given was $8 million by the Pittsburgh Pirates for Gerrit Cole in 2011. The following year, MLB instituted a stricter bonus-pool structure. Since then, the highest bonus is $6.7 million by the Chicago Cubs to Kris Bryant, a player who might command more than Moncada if he were allowed the same free-agent opportunity.

There are a myriad of other variables that must be considered when adjusting how the international market runs.

Latin American players are often their family’s only source of income, they must deal with street agents who push PEDs and the falsifying of birth certificates. And potential penalties that come with getting caught—the player, not the street agent, will be punished—are typically issues not associated with American or Canadian prospects.

Another thing to consider: Bonuses for players like Ynoa and Moncada are rare. And if an international Latin player is not signed by 20 or 21, the age when American college players can still garner massive bonuses, he is likely to remain unsigned because he is deemed too old to be an elite prospect. If an international draft is put into place, Manfred and his people must consider this issue and possibly stop teams from signing international free agents as young as 16. 

Also, the million-dollar bonus for a Latin player—we focus on Latin America because that is where the bulk of the international market is—is a rarity. Americans are so aware of them only because they are newsworthy when they happen.

So if an international draft is implemented, it should go farther in gaining equal pay for Latin players as compared to their American counterparts. Not the other way around.

And as for Cubans like Moncada or Rusney Castillo or Yasiel Puig or Jose Abreu, by escaping their communist island, they risk their freedom and lives. Again, this is something players coming through the amateur draft cannot relate to for the most part. And as things stand, players who flee the island are not immediately granted inclusion into the free-agent system and may not be immediately eligible for a future draft if current rules are not altered in the next CBA.

“Good for [Moncada],” Red Sox prospect Deven Marrero told Abraham. Marrero was a fist-round pick in 2012 and received a $2.05 million signing bonus, which hardly gets a headline stateside but would be a major payday for a Dominican player. “I know guys from Cuba have to go through a lot to get to play baseball here. I have respect for them because they have to work a lot harder than we do to get to the major leagues.

“To get to this country, to escape, they risk their lives sometimes. That money is well-deserved, in my mind.”

A change in the current system is a good thing, but not for the reasons the Moncada deal “exposes.”

What it brings to light is how cheap it is for teams to shop on the international market, with rare exceptions such as Moncada. For instance, the Yankees signed 28 international free agents during this period, spending a total of about $15.5 million, according to Baseball Prospectus.

A team that drafts in the top 10 of the current amateur draft and half will likely use around half of that amount on a single player. This is partly why teams are willing to pay double for elite international talent when it hits the market late, like Moncada.

Again, the Moncada deal shows why teams are willing to take on tax penalties, but it does not expose an unfair advantage the Cuban might have over someone like Bryant. It ought to show the huge gap in overall pay between players drafted in the current system and the majority of those signed as international free agents.

When the system changes in 2016, it might keep players like Moncada from snatching a $30 million bonus, but that is only good if across-the-board bonuses match what current draftees earn.


All quotes, unless otherwise specified, have been acquired first-hand by Anthony Witrado. Follow Anthony on Twitter @awitrado and talk baseball here.

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