What’s the impact of MLB cutting ties with Mexican League?
By Jose de Jesus Ortiz
If Mexico was a baseball country instead of a soccer country, Major League Baseball teams might have been more concerned about the edict deputy commissioner Dan Halem sent out on June 19 temporarily stopping transactions with Mexican League teams.
MLB teams have been told to stay away from the Mexican market as they prepare to sign the best 16-and 17-year-old international amateur free agents when the international signing period opens on July 2.
Fortunately for MLB teams, North America’s top soccer power doesn’t compare to the Dominican Republic and Venezuela as a baseball-producing country.
A Different Pipeline
MLB can afford to take a hard stand with the Mexican League teams without drastically disrupting the annual flow of top, young international baseball talent that are signed immediately after the July 2 international signing pool opens.
Halem’s memo, which was first reported by Yahoo.com’s Jeff Passan, hardly bothered MLB teams.
“It’s not like they shut down a huge pipeline,” said a top baseball executive who has signed players out of Mexico. “Keep in mind this is temporary. That’s why I don’t feel it’s short-term concern. They’re not cutting us out of crazy talent, and they’ve also not told us it’s permanent. Time will tell.”
Mexican League System
To appreciate why MLB wants to clean up the acquisition system to make it more transparent in Mexico, it’s important for fans to know how the Mexican League system works.
Unlike players in Venezuela, the Dominican Republic, Panama or even those eligible for the June draft in the United States and Puerto Rico, Mexican players can sign with Mexican League teams as early as 14.
By the time those players are eligible to be considered by MLB teams at 16, though, their rights are almost always held by Mexican League clubs. Young prospects in Mexico are tied to clubs based on where they live, meaning their local clubs essentially have territorial rights over them if they want to sign professionally.
Moreover, those contracts stipulate that the Mexican League team owns the player’s negotiating rights with MLB teams. According to an MLB executive, the majority of those contracts stipulate that the Mexican League team would receive 75 percent of whatever an MLB team would pay to acquire the Mexican prospect’s rights.
That’s a major reason some top Mexican prospects’ parents would rather not sign with Mexican League clubs. Those rights are signed away in perpetuity, locking in those prospects to a club until that team sells their rights.
A Complicated Relationship
Venezuelans, Dominicans, Panamanians and other Latin Americans can sign with MLB clubs at 16 years old on July 2. In theory a Mexican prospect can wait until he’s 16 and sign directly with an MLB organization. Since the Mexican prospects are not part of the working atmosphere between MLB and Mexican league, there has been a gentlemen’s agreement in place for years stating that MLB teams should go through Mexican League teams to sign these prospects.
That gentlemen’s agreement is in place in part because MLB teams know there would be repercussions if they signed a prospect without going through a Mexican League team.
A Mexican prospect’s parents can refuse to sign with a Mexican League team, but that decision would be made knowing they would practically become pariahs in their local baseball community.
MLB international scouts also understand that their work in Mexico will be made much more difficult if Mexican League teams find out that they even tried to negotiate directly with a player.
A Mexican Loophole
On the other hand, there was one major benefit for MLB teams that signed players out of Mexico in recent years. Only the percentage that went to the Mexican player counted against a team’s international signing bonus pool.
For instance, a $2 million transfer fee to acquire a Mexican League player would only count as $500,000 against a team’s international signing pool because the player would receive only $500,000 in the deal.
Teams that blew past their international signing bonus pools during the last July 2 signing period cannot sign international free agents for more than $300,000 during this signing period. So in theory an MLB team could have gotten a $1 million prospect out of Mexico this year without eclipsing the $300,000 limit because only $250,000 would count against the international signing pool limit.
Until further notice, though, teams must wait to see if MLB and the Mexican League can reach a deal to reopen the Mexican market without the Mexican League teams serving as middlemen.
Featured Image: Miguel Tovar / LatinContent WO