And The Rich Get Richer

Read through the article–there’s all sorts of shadiness around this deal, and you have to imagine that it’ll lead to some loopholes in the process being closed. This, of course, is nothing new for the Yankees, who signed Alfonso Soriano after he retired from the NBP (the Japanese league) at the ripe old age of 22, prompting MLB and NBP to create the posting system we’re all so familiar with today. To go one step further, I wonder whether Cashman had any qualms about this signing, given that he’s essentially screwing the GM of the Diamondbacks, Kevin Towers (reportedly one of his closest friends).

What’s more, it turns out the Yankees doubly benefited from this loophole. Carlos Martinez, previously calling himself Carlos Matias, signed with the Red Sox before being similarly annulled. He then ended up with a $1.5 million contract from the Cardinals–and a ranking of 52 on Keith Law’s top 100 prospect list (which Law himself calls extremely conservative).

And what’s even odder is that it appears that neither of these prospects had lied about their age–only their names–as the ages on both sets of contracts match. Which draws into question the purpose of suspending them to begin with.

While I’m happy to see the Yankees prosper and the Red Sox lose out on a serious talent, I’m left imagining how furious I’d be if the tables were turned.

Will is a lifelong New Yorker and Yankees fan who splits his time between finance, music, and baseball. He was one of the early contributors to IIATMS, though life took him away for some time. He is very excited to be back.

About Will@IIATMS

Will is a lifelong New Yorker and Yankees fan who splits his time between finance, music, and baseball. He was one of the early contributors to IIATMS, though life took him away for some time. He is very excited to be back.

24 thoughts on “And The Rich Get Richer

  1. From the article: "Paniagua's case has brought out further frustration from teams who contend that MLB's rules can enable a player to use a suspension to make 65 times his original signing bonus, leaving the original signing team with nothing."

    I understand the frustration on the part of the Diamondbacks. I understand that Paniagua committed fraud, and was eventually rewarded with a much larger deal. But this is a kid coming from a country with a per capita GDP of around $8,600, and a 14.6% unemployment rate. So baseball issues aside, my heart just isn't breaking when I hear about a kid from a poor country managing to snag a huge guaranteed deal that could truly change his life and his family's life.

    This strikes me as a serious moral issue facing baseball. Writers on this blog have talked about the possibility of a global draft, and the myriad logistical difficulties. An international draft could help even the playing field between big money teams who have more dollars to sign free agent prospects. However, it could also reduce the amount of money flowing from some of the richest men on the planet, to some who may be coming from genuine poverty.

    It's the rare occasion when I will accept as morally sound a rule that takes away the power of a teenager from a developing nation to harness the free market, in order to give a billionaire a better deal.

  2. JP, thumbs up for me on an astute comment. Jason, the D-Backs went into their Paniagua deal with eyes wide open, knowing the deal could be voided depending on the results of the MLB's investigation. They took a risk, and they lost. The proposal to "reform" this situation is to give teams like the D-Backs a right of first refusal to resign the prospect to a second contract, after the first contract is voided. As you know, a right of first refusal tends to depress the value of whatever it is that is subject to that right — again making JP's point that we ought to favor anything that puts more money into the hands of these free agents.

    Jason, my first reaction was like yours, but I'm coming to see this differently. The MLB rules seem to require teams signing these Latin American kids to at least get their names and ages right. This seems to be part of MLB's effort to clean up the way these kids have been exploited by their agents and others in Latin America. I don't know all I should about baseball in Latin America, but it doesn't seem like much for a team like the D-Backs to do the work required to make sure they know who they are signing. I can't get too upset that the D-Backs are losing out on a kid they signed on the cheap without knowing the kid's name, particularly since nothing more happened to the D-Backs than is provided in the rules.

  3. How despicable – a team has to know the NAME and AGE of a player they sign? I know NOTHING about this story – but if a team doesn't even look into that – who knows what else is going on behind the scenes.

    As I read, I was actually expecting the guy to come back with a different name and id, to sign with a different team for more money. At least he's the same guy, and everyone knows it.

    I think the words Due Diligence would apply somewhere in this scenario.

  4. Jay–

    Here's my question. If it were easy to find out a player's name and age in these countries, don't you think the teams would do it? These stories are all over the place. Players as famous as Albert Pujols and David Ortiz (originally David Arias) have their ages in question. There's no actual way to "look into" it at this point.


  5. Seems like a tricky issue. Apart from seeming like the original team should have the right to straighten out the contract mess prior to another team being able to swoop in and sweep up the player.

    Beyond that that though, MLB (and the players' union) has to be careful to not encourage fraud in its contracts either by teams or the people they are hiring. I'm not exactly sure how they would do that though.

  6. Also, if you take that standpoint and run it to its logical conclusion (where players have adjustable salaries year to year) we no longer have baseball, because it’s not a profitable sport for owners.


    how does breaching a contract reach a logical conclusion for adjustable salaries? i can see the point of constantly changing salaries being bad for the owners, but i have no idea how you are getting from A to B. a handful of players breaching contracts due to false identification is not going to lead to adjustable salaries for every player in baseball and the owners going broke.

  7. Pirate,

    Well, my point was that the logical conclusion of this, assuming we agree it's better for the game and morally defensible, is that ALL players should be able to renegotiate their contracts. If you think it's okay for these guys to get away with it, shouldn't it be fine for the rest of them, as well? But heck, let's constrain it to IFAs, just to keep it more reasonable.

    From my perspective, either these changes in contract are good, or they aren't. If they are, everyone should be allowed to do similar, if they're not, no one should. Loopholes, in general, are kind of bad for business. It's just a theoretical exercise. And if you suddenly let every player who added a few MPH to their fastball (which happens at that age!) renegotiate, you'd be transferring a lot more than $1 million here or there. This would actually probably HELP the Yankees, by the way. With the largest payroll, they'd also be able to buy up all the talent, while other teams would get stuck with the lower ceiling players (even with rights of first refusal, the Marlins can only sign a few guys like this before they hit their payroll limitations).

    This ISN'T me begrudging Juan Carlos his payday. But I know if I was playing alongside him as a similar talent who wasn't able to renegotiate, it might erk me just a wee bit.

  8. What's next? Voiding a player's contract because he didn't report his full name to the team? Would have been nice for us to void the contract of James Kevin Brown, the Sox with Michael Averett Lowell and Toronto with Robert Victor Ryan. Would have been nice if Henry Halladay became a free agent because Roy isn't his first name.

    The real age part is definitely acceptable, but the name part feels weird. It doesn't matter what you call a guy. For example, your boss might know your father as Mr. X, your father's friends know him as Bob, the guys down at the bar know him as Robert, and you know him as Father. It shouldn't matter what you call a person, as long as people know that who is being addressed, and it is appropriate and polite.

  9. But Jay, that was Colorado.

    We're talking about the Dominican Republic. To act as if there's not a gigantic difference between these two places seems….well, naive.

    The contract they signed him to was for $17,000. Semi-mega dollar contract? Now you're just trying to be difficult.

  10. Allen,

    But if the rule was meant to protect the player from being taken advantage of, why are you seeming behind the player essentially being allowed to break his contract using it?

    Don't get me wrong–if it comes out that the reason this occurred was that the player wasn't even getting paid, then you'd be exactly right. It seems to me that Badler would have included that in his article if it was so–he tends to be very thorough.