Is this Cuban baseball player worth a 100 percent tax?
Yoan Moncada is on the cusp of signing a contract with the Boston Red Sox that includes a $31.5 million bonus. Under current rules, the Red Sox would have to pay twice that amount to Major League Baseball for signing Moncada.
The news that the Boston Red Sox are about to sign Cuban import Yoan Moncada is just the latest indication of the changing demographics within Major League Baseball (MLB), as the talent pool is increasingly filling out with some of the island nation’s brightest baseball stars.
Moncada, an infielder, has agreed to a deal with a lucrative $31.5 million signing bonus, according to CBSSports.com. Moncada’s payday shattered the previous record for an international signing bonus of $8.25 million when the Arizona Diamondbacks signed fellow Cuban pitcher Yoan Lopez in January, according to Baseball America.
Moncada will be the first player to sign under MLB’s new rules for Cuban-born players following the White House’s announcement the two countries would work to restore full diplomatic relations last December. Now Cuban players can sign with an MLB team by only providing a sworn affidavit, stating that they are not an agent of the Cuban government, have no intention of returning to Cuba, and proof they have taken up residency in a third country, according to Yahoo Sports. Moncada was living in Guatemala before he signed with Boston.
Previously, to avoid non-compliance with the “Trading with the Enemy Act,” MLB teams had to secure a specific unblocking license from the Office of Foreign Asset Control if they wanted to sign a Cuban player who had defected, according to MLB.com.
Under MLB rules, a team is allowed to spend $700,000 annually on international players who are under the age of 23 and/or have spent less than five years playing in their home-country’s top baseball league, which is the Serie Nacional in Cuba. Teams are also given a bonus pool beyond the $700,000 to spend depending how they performed the previous season in which teams who finished at the bottom of their respective divisions get more cash to spend, according to MLB.com.
The Red Sox had already exceeded this cap through their signings since late last year and the rules call for a heavy financial penalty for teams that blow past their allotted number. This comes in the form of a 100 percent tax. For the Red Sox, they will need to fork over a total of $31.5 million by July 15 and have three years to pay off the rest of Moncada’s bonus, according to MLB.com. If a team exceeds the annual limit, then that team can only spend up to $300,000 on international prospects for the next two international signing periods which run a year in length from July through June.
The pool of Cuban-born players experiencing success at the major league level seems to grow longer each year, just as the contracts they sign are increasing in value. In August 2014, the Red Sox signed outfielder Rusney Castillo to a monster $72.5 million contract, which was the highest price tag for a Cuban player at the time, and he is projected to be in the mix to start on Opening Day in center field, according to the Providence Journal.
It could be argued the latest wave of Cuban ballplayers began when the Cincinnati Reds signed pitcher Aroldis Chapman to a six-year $30 million contract in January of 2010 after his defection at a tournament in the Netherlands. Chapman did not disappoint and so far has compiled 113 saves in his five-year career.
After the Chapman signing, more teams became sold on the Cuban market – this despite the difficulty in scouting potential prospects in Cuba and once identified, the logistical difficulties of actually acquiring the talent.
The Oakland Athletics signed outfielder Yoenis Cespedes to a four-year, $32 million deal in 2012, and he finished runner-up in the American League Rookie of the Year voting and stands to cash in when his current contract expires at the end of the 2015 season. Yasiel Puig signed a seven-year deal with the Los Angeles Dodgers for $42 million in 2012. Last year’s AL Rookie of the Year, Jose Abreu signed for $68 million as a 27 year-old with the Chicago White Sox and finished third in the American League in home runs.
Moncada’s relative ease in signing with a major league team could not have occurred without the hardships his countrymen faced when they left Cuba to play in the Majors, which is partly why the league sought to change its policy towards Cuban players, according to Yahoo Sports. This way, they would not have to smuggled out of the country, like Puig, by human traffickers who may have ties to Mexican drug cartels, according to ESPN.
Moncada is projected to start the season on one of the Red Sox minor league affiliate teams, according to Bleacher Report.