Volume IV, Issue 9: A Publication For Your Reading Enjoyment

Major League Baseball’s new collective bargaining agreement, and its potential impact on international baseball, has caused quite a stir in the Dominican Republic as many fear it could spell the beginning of the end for the current development system.

Under the terms of the new agreement, beginning with the July 2012-June 2013 signing season, teams that sign players in the Dominican Republic and Venezuela will pay a luxury tax on signing bonuses over $2.9 million.  In June 2013, those teams that spent the most in exceeding the threshold will be capped further.

While richer teams will undoubtedly be able to conduct business as usual – at least in the first year – the new rules likely will spell an end to signing bonuses like the record $5 million given this year to 16-year-old Nomar Mazara by the Texas Rangers, who also signed Ronald Guzman, a 16-year-old outfielder, for $3.45 million.

While the new collective bargaining agreement places limits on domestic signings as well, the impact in the Dominican Republic and Venezuela is far more threatening, say those who have followed the development of baseball in Latin America.  Many feel it is a precursor to an international draft that would eliminate the current “free agent” system that allows teams to compete to sign players.  “This new system, at least on paper, puts everybody on the same level, and if that is true, a draft seems inevitable,” said one talent evaluator.

The prospect of an international draft is being studied by Major League Baseball and the MLB Players Association, following the appointment of a committee to evaluate the concept.  One member of that committee is Sandy Alderson, the New York Mets general manager who once served as reform czar for MLB in the Dominican Republic.  Though he originally supported – at least publicly – the concept of an international draft, his time in the Dominican Republic reportedly softened his position; the Commissioner’s office has voiced continued support.

Alderson will work with Tampa Bay Ray’s executive vice president Andrew Friedman and Kim Ng of the Commissioner’s Office.  Robert Manfred, MLB executive vice president, will co-chair the committee with Michael Weiner, executive director of the MLBPA. The committee will begin deliberations early next year.

MLB Commissioner Bud Selig flanked by Robert Manfred, left, and Michael Weiner

I believe the landscape in the Dominican Republic will change initially with the advent of caps on signing bonuses. Evaluators are going to have to become more selective as well as accurate with their talent assessments; no longer can most teams afford to take multimillion-dollar risks on locking down talent.  The whole point of developing talent in the Dominican Republic is that teams can sign a dozen players for the same amount they would for a handful of players in the U.S.  Now, the margin for error will be more finite.   As a result, many signees are going to have to take far less in bonuses than they might have in previous years.

But even while Major League Baseball postures on an international draft, I don’t believe it will happen anytime soon, if ever.  Teams now sign players in the Dominican Republic at age 16; the baseball draft age in the U.S. is 18.  The question would be whether an international draft would be truly international, subjecting players in the U.S. and Dominican Republic to the same team-by-team, round-by-round selections.

If so, then baseball would have to consider a universal age for such a draft, and a universal age for an international draft would eradicate the Dominican system, penalizing teams that have had success developing players in the country.  No team is going to want to sign a player to one of its development academies, develop that player for a couple of years, and have him subject to an open draft where competing teams can cherry pick.

I suspect that teams that have benefited most from the Dominican development system will fight against a draft.  The irony is that those teams historically have been able to pay the most in signing bonuses, a practice the new luxury tax is aimed at curbing.

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