This entry will tell a story. Actually, it will tell three stories that weave together to tell one story that Major League Baseball would almost certainly prefer not to tell. I prefer to live in reality with all of its messes, so here we go.
The New International Signing Bonus Regime
Seen largely as a precursor to an international draft, MLB and the MLBPA agreed to institute a new system to curb spending on international amateur free agents in advance of the 2012-13 signing period. Teams spent a total of $47M in the 2011-12 signing period between July and December 2011, yet they appear to have spent significantly in the first six months of 2012 as well, a rarity in the past but an impact of the new system in place in July 2012. Spending in calendar year 2011 and 2012 was down $3M, suggesting that the new regime had its desired effect; the MLBPA preferred to see some of that cash deposited into the pockets of members as opposed to those of Dominican, Venezuelan, Taiwanese, and South Korean teenagers.
Overall, spending went from $73M in 2010 to $87M in 2011, down to $84M in 2012, then back up all the way to $97M in 2013. Such figures do not include the massive deals given to international free agents Yoenis Cespedes, Jorge Soler, and Yasiel Puig. Simply put, even with strict penalties in place that significantly limit maximum expenditures in future years for exceeding a team's bonus pool, teams just kept on spending.
The penalties themselves were designed to be so onerous that no team would reasonably exceed them. Each team is given a pool of bonus money to spend in inverse relation to their wins in the previous season. The pool is calculated by giving each team $700K and then the corresponding amount to each of their imaginary international draft pick slots. This method is important because those slots may be traded.
The most stringent penalty in the 2013-14 period is enforced against a team that spent more than 15% over its pool allotment. If spending exceed 115% of the bonus pool, the team pays a 100% tax on the overage and may not sign a player for more than a $250K bonus in the 2014-15 signing period. Effectively the penalty takes the team out of the running for any of the top 50 international prospects in the subsequent year. A team exceeding the bonus pool in the same fashion in the 2014-15 signing period instead of the 2013-14 signing period is met with an even harsher penalty: the same 100% tax on the overage and the inability to extend a bonus in excess of $250K in the next two signing periods.
Chicago Cubs Spending in the 2013-14 International Signing Period
Generally speaking, spending continued to climb at a gradual rate. After a few international bonus slots were traded, bonus pools ranged from the Cubs with $5,520,300 down to the Angels at just $1,389,700. Just two teams spent in excess of $4.5M, but they both blew past that number. The Rangers and the Cubs acknowledged and took advantage of the fact that spending 115.0000001% of your bonus pool was met with the same penalty as spending 150% of the bonus pool, although the attendant tax hit obviously increased as well. Both clubs spent over $8M on international amateur signing bonuses.
The Rangers have employed this strategy for years with their approach in the 2013-14 period suggesting only that they would largely continue along the same lines until the Collective Bargaining Agreement stopped them from doing so, which it will for the 2014-15 period as their penalty restricts them to maximum bonuses of $250K.
But for the Cubs, this represented a major shift. I examined what records I could find of the Cubs spending on international signing bonuses dating to 2007. For each year, I recorded every bonus of at least $100K and then assigned a gradually escalating estimate for bonuses below that $100K figure, starting with $1.5M in 2007 and climbing to $2.1M in 2013. By my calculations and estimates, the Cubs spent the following amount on truly amateur international free agents (thus, Jorge Soler and Gerardo Concepcion are excluded as veterans of Cuba's Serie Nacional):
2007: $2.72M
2008: $3.74M
2009: $4.725M
2010: $6.975M
2011: $7.02M
2012: $4.67M (this year would otherwise include $10.6M of bonus and salary for Soler and Concepcion)
2013: $13.8697M (excludes $1.6M salaries for Soler and Concepcion; includes $3.1247M in tax)
(It is possible that reporting of these signings improved over time, thus explaining some of the increase in spending. I think a philosophical shift in the organization is more likely.)
The Cubs didn't just spend: they spent on the premier talent available. The great folks at Minor League Ball, Baseball America, and MLB.com provided rankings of the top 30 (or more) prospects available in July 2013. The following shows the Cubs' haul with their respective rankings by the three sources above in parentheses:
$2.8M for OF Eloy Jimenez (1, 1, 1)
$1.7M for SS Gleyber Torres (2, 2, 3)
$1.625M for RHP Jen-Ho Tseng (12, 23, 29)
$850K for RHP Jefferson Mejia (20, unranked, unranked)
$650K for RHP Erling Moreno (48, 16, 17)
Unknown amount for 3B Wladimir Galindo (64, unranked, 25)
The Cubs also added C Johan Matos for $270K. While that bonus is not substantial for a July 2nd signee, it was an essential addition to an organization without any catching depth.
Still, two names on the above list stand out and they are those with "unranked" written after their names. First, Mejia was unranked by Baseball America and MLB.com because he had previously falsely reported his age and was forced to wait a year to sign by MLB. Regardless, 6'7", 220 lbs. righties who throw in the low-90s are wonderful assets whether they are 16, 17, or 18, so the Minor League Ball ranking is likely most indicative of his talent.
Second, Galindo did not sign until December 18th, an oddity for top amateur talent. It is possible that identity issues delayed his signing, although I have not been able to find anything suggesting such. Still, Galindo's signing shows that the July 2nd signing period lasts all year, until the next July 2nd period (technically, the signing period runs from July 2nd to the following June 15th).
Cecilio Aybar and Identity Fraud
As noted above, Gleyber Torres was the #2 player for Minor League Ball. But that's not entirely accurate. Minor League Ball initially released their rankings on April 28th. In the intervening months, Minor League Ball's #2 prospect, a Dominican shortstop "named" Obispo Aybar-Lara was suspended from signing for one year by MLB when it was revealed that the 16-year-old Aybar-Lara was actually 19-year-old Cecilio Aybar, Obispo's older brother. The Minor League Ball ranking addressed the concerns, noting that Aybar would still be in the 15-20 range and worthy of a seven-figure bonus even if he proved to be 19 instead of 16 with his speed, defense, and a quick bat providing value regardless of age; his true age almost certainly curbs any power projection as a 165 lbs. 16-year-old offers more physical projection than a 19-year-old of the same weight. Still, 6'0", 180 lbs. - a realistic physical projection - would be plenty of size to stick as a shortstop if the glove and speed are legitimate. The site did re-rank prior to the signing period opening, placing Aybar at #31.
As punishment for falsifying records, Aybar received a one-year ban from MLB leaving him eligible to sign as of April 26, 2014. In many ways, Aybar is merely another in the long line of age and identity fraud among Latin American teenagers who seek to add a zero to their bonus number.
So How Does It All Fit Together?
You can probably see where this is going. Because Aybar's one year ban leaves him eligible to sign in April 2014, he is eligible to sign a bonus that will count against the signing team's 2013-14 pool provided that he signs his contract prior to June 15th. By my count, the Cubs, Rangers, and Dodgers have clearly exceeded their pools by more than 15% while the excess of some other teams appears close to the limit based on some admittedly imperfect information.
Regardless, the twisted situation has presented itself: a top international prospect, one worthy of a high-six or low-seven-figure bonus, is about to find himself on the market with the three most aggressive spenders on the international market as his three most incentivized suitors as the Cubs, Rangers, and Dodgers will not incur any additional penalties for a signing of any amount (beyond the tax payment). To make matters worse for MLB (and better for the signing team assuming that it is one of these three), they get to use cash from the 2014 budget to make the signing, effectively allowing them to participate for major talent in the 2014-15 signing period in spite of the CBA's penalties.
Aybar's punishment for his identity fraud may very likely be a few months of shame and a six-figure bonus anyway from a desirable team. I suppose that there is a remote possibility that concerns about Aybar's ability to obtain a visa will quash his market, but this seems highly unlikely.
With all of that said, I hope that the Cubs pursue and sign Aybar. I tend not to think too highly of speed/defense middle infielders because I want everyone to hit for power, but a 70 speed shortstop with the chops to be an asset with his glove and a playable bat is a really valuable asset. If Aybar's projection doesn't match the bonus, they should probably avoid him. But if he really is a top-30 talent or thereabouts, the chance to acquire him for the Cubs is yet another golden opportunity to beef up the farm system even if MLB and MLBPA might just hate it.
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