International Flavor - 2009 Style

(Editor's Note: The comments from John Mirabelli and Lino Diaz expressed in this piece are from an interview Dennis did with them back in the summer of 2007)

Major League Baseball is truly an international game. It has the first-year player draft of US and Canadian players that was just completed in June this year. Almost all Indians’ fans know about this, at least to some extent, as it is widely publicized. But there is another source for amateur talent, probably as important if not more important than the draft, that we all sort of know about but really don’t KNOW about: foreign free agent signings (both amateur and professional).

Latin America has provided us notable Indians such as Fausto Carmona and Victor Martinez. The Pacific Rim has not produced many major leaguers for the Indians (Kaz Tadano and Masa Kobayashi are the only ones who come to mind) but a number of prospects in the Indians system including Sung-Wei Tseng and Jason Smit (2006 signees from Taiwan and Australia, respectively) have come from this area.

In 2004, 45% of players in professional baseball were not born in the US. At the major league level in 2005 60% of players were Caucasian, 8.5% African-American, 28.7% Latin and 2.5% Asian. In 2006 28.7% of players on MLB opening day rosters were born outside of the US. In the 2007 MLB all-star game there were 32 Caucasian, 20 Latin, 10 African-American and 3 Asian players which translates into 35% of the all-star rosters being made up of players not born in the US and who were signed as international free agents.

Although a world-wide draft has been proposed, it has never happened. So, what is left is a free-for-all in which teams bid against each other for the top talent which can be as young as 16 years old for Latin prospects like stud prospect Elvis Araujo was when he signed two years ago and as old as mid-30s players like Masa Kobayashi, who signed with the Indians last year.

This article is designed to be a primer about international free agents signings (primarily Latin America and the Pacific Rim) and also is designed to provide readers with a list of players who the Indians could be courting in the 2009 signing period. The ‘international signing period’ begins this year on July 2nd.

THE BASICS AND THE NUANCES

Because I didn’t know a lot about international free agents and how we acquire them, I talked to two experts: Lino Diaz, the Indians Director of Latin American Operations and John Mirabelli, Assistant General Manager and Director of Scouting who, besides his other duties, is in charge of International scouting. I talked to them two years ago and both were gracious enough to give me, all things considered, over an hour of their time combined as they guided me through the process and also shared with me valuable information on the international free agents the Indians signed in 2007.

What is the international free agent market? The US (including territories like Puerto Rico) and Canada are covered by the rules of MLB’s first year player draft. However, players from the rest of the world are not covered and usually cannot be drafted. Therefore, signing rest-of-world (usually defined as Latin America and the Pacific Rim (i.e., Japan, Korea, Taiwan and Australia, primarily)) players is a free-market free-for-all where the highest bidder usually gets the player. A few players are also signed out of Europe. There are some rules but not many:

In Latin America the ability to sign a professional baseball contract is related to the player’s age alone. There is a so-called “international signing period” (July 2nd to August 31st) but it isn’t really a defined period like in the US where all draftees have to sign before August 15th or be lost. If a Latin American player turned 16 before July 2, 2009 but after August 31, 2008 then he can sign starting on July 2nd of this year. If he turns 16 between July 2, 2009 and August 31, 2009 he can sign starting on his 16th birthday. If he turns 16 AFTER August 31st of this year he has to wait until July 2, 2010 before he can sign. Players above the age of 16 on July 2nd of 2009 (i.e., players who didn’t sign when they turned 16) can sign whenever they want. So, if you don’t look closely at the players’ ages, it appears that signing players is taking place year-round which, for the older players, it is. Verification of age is very important with Latin players and if the Indians signed an underage player, as they did in 2002, MLB can and will bust them….hard!

In the Pacific Rim countries and in Europe, signing of international free agents by MLB teams is related to each country’s educational system rather than to the age of a player. Players cannot sign professional contracts until they have graduated from high school. Thus the international signing period described above doesn’t apply at all to Pacific Rim countries.

In both Latin America and the Pacific Rim, once the requirements for being able to be signed to a professional baseball contract are fulfilled, a player can sign at ANY time with a US team.

Another difference you will notice with these international free agents is that for a lot of these signees their first taste of baseball after signing as professionals won’t even be in the United States as it is for all US first year player draft signees. Some Australian signees as well as some signees from Korea and Taiwan will attend the Australian Baseball Academy for part of a year or more before playing in the US. All of the Indians’ 2009 Latin signees will start playing in 2010 on the Indians’ Dominican Summer League team while attending the Indians’ Dominican Baseball Academy. The Indians used to send some players to Venezuela after they signed but a while ago stopped supporting a team there and so now ALL of the Indians’ Latin free agent signees will start in the Dominican.


Hey, kid, want $500 to play baseball?

Some people may think that is how we acquire Latin American free agents. Well, maybe 5-10 years ago but not now. Now we are talking about year-round scouting and bidding wars between teams. This has, in turn, led to large bonuses as teams get more aggressive in Latin America. In 2008 there were 5 Latin free agent teenagers who signed for bonuses of $2 million or more. At least 20 other Latin players signed for bonuses over $500,000 including two players the Indians signed, SS Jose Ozoria ($575,000) and catcher Alex Monsalve ($750,000), both of whom are playing for the Cleveland's Dominican summer league team! Contrast this to the recent past where the Indians signed players like Fausto Carmona and Victor Martinez for bonuses in the neighborhood of $10,000. Now to sign a player of any quality in Latin America it will usually cost you from $50,000 on up. Given the history of Latin players dramatically impacting US major league teams, it appears MLB teams are willing to take that financial risk for the potential reward down the road. There is such a density of talent in Latin America that most teams scout this relatively small area extensively. With scouts from 30 teams swarming all over small countries like the Dominican Republic the competition is fierce. Not only do teams have to pay really high bonuses to kids who may not make the major leagues for up to 7 years but, due to the competition, they have to build relationships with players and their families to even have a chance to sign a young prospect.

Another challenge in Latin America is that there are no high school or college teams. That means the looks teams get at players are very limited. Players eligible to sign in a particular year will come in and do tryouts usually lasting a day or two for each team. These tryouts occur at a team's local baseball facility, normally known as a baseball academy, or, for teams that don't have one, at a local sandlot field. So, even if they do this twice for each team, those may be the only looks a team gets at a player and they may not be under the best playing conditions.

As if the money, lack of scouting opportunities and relationship hurdles are not enough to deal with, there are other challenges to signing Latin prospects. Steroid use in Latin America is rampant. Kickbacks to the ‘agents’ to get these players to sign and to scouts for recommending these players is a documented problem. Finally, players misrepresenting their ages is always a problem in Latin America and MLB has investigators who verify ages and even the identity of a player. Major leaguers like Miguel Tejeda and a number of minor leaguers have had their true ages questioned. For the Indians, the well-documented case of Kelvin Diaz, whose birthdate couldn’t be verified because he wasn’t born in a hospital, is a reminder that talented Latin players might not even be able to play in the US if their ages and, in some cases, identities can’t be verified. Just recently, two high profile Latin prospects eligible to be signed in the upcoming signing period have been suspended by Major League Baseball and are currently not eligible to be signed. Still, with all this going on, teams are willing to sink millions into scouting and signing these prospects even though they are a long way from the majors. Below is a list of the Latin players the Indians signed in 2007. Of this list only a few have made it to play even in the rookie leagues in the US with the rest still being in the Dominican or having been released. Of the ones making it to the US, only Elvis Araujo is a real prospect right now.
ARAUJO, ELVIS LHP
MUNOZ, OSWEL RHP
CAMPOS, JOSE RHP
PARTIDA, JUNIOR LHP
IZAGUIRRE, NELSON C
MORENO, HENRY C
MARTINEZ, ARGENIS SS
VALERA, FRANCISCO RHP
DE PAULA SOSA, RAMON SS
FERMIN, JOLY SS
CABRERA, JOSE, OF

I had a chance to ask Lino Diaz, the Indians Latin scouting director, a number of questions about the Latin free agent signing process and other related matters. His answers were very insightful:

QUESTION: You indicated that these are all signees starting the next season. In the new Collective Bargaining Agreement it seemed like signing guys to following year contracts went away and that their Rule V clock started when you signed them. Could you please explain if it is different for Latin signees.

ANSWER: This means that these players will start playing professionally in the next season. The Rule V rules apply to these guys from when they signed so even though they don’t play in the US next year their Rule V clock has started.

NOTE: The Rule V clock starts the minor league season in which a player is signed. So, a US kid has his Rule V clock start the year he signs since he must sign before August 15th and, at that time, the minor leagues are still playing. Latin players, it appears, either officially sign near the beginning of September (after the rookie leagues have stopped playing) to avoid this issue or are bound by slightly different rules as most Latin players signed during the July-September period have their Rule V clocks start the next year.

QUESTION: How is the competition for signing Latin players today different from the way it was 5-7 years ago and do you anticipate any changes in the Latin free agent system in years to come?

ANSWER: More major league teams are involved in Latin American and those teams are being more aggressive, being willing to make larger bonus offers even while getting fewer “looks” at the players they are making these offers to. In Latin America there are no high school teams or organized summer leagues to scout these players. Almost all the scouting is done in individual workouts as it has for many years. Still teams are willing to gamble large sums of money because they know the impact the next Miguel Cabrera (current Tigers’ 1st baseman) could have on their major league team.

As far as the system changing, I think as the years go by changes will come but they will be driven by Major League Baseball. I don’t know what those changes would be but I could see MLB putting more structure into the system.

QUESTION: Do you see there being a world-wide draft anytime soon?

ANSWER: No, I think the current free agent system actually works. Given that there is no infrastructure that would allow you to scout Latin players like we do US players I just don’t think this would work.

QUESTION: Given that you are signing these kids at 16 years old and maybe not even out of low A ball by the time they are Rule V-eligible, doesn’t this present a serious risk to losing these guys before you even know what you have in them?

ANSWER: Yes, there is some risk in signing a kid this young. However, we do a lot of work in judging not only these kids’ athleticism and baseball ability but also their makeup. Having the Dominican Academy also allows us to accelerate their development and lessen the risk of losing a player before you know what you have in them.

QUESTION: Do you expect any of these signees to play in the GCL or higher next year or will they start their pro careers in the Dominican Summer League?

ANSWER: All of our Latin signees normally play in the Dominican Summer League the year after they are signed. Some guys will take up to 3 years playing in the Dominican before they are ready to ‘travel’ (i.e., go to the US to the instructional league and/or spring training and/or a rookie level team). We feel that they need at least one season to get acclimated to pro ball before we allow them to travel.

QUESTION: The Yankees, along with other big market teams, seem to be throwing a lot of money around in Latin America. Do you think that the big market clubs are going to make it difficult for the mid- and small-market teams to compete for signing impact prospects in the future?

ANSWER: It will always be a challenge. We feel if we concentrate on the players we want and pick and choose our battles (for prospects) with the large market teams and find those places in Latin America where we can still outwork other teams we can be successful. Although I don’t want to say where those places are they do exist.

QUESTION: Do you ever see Cuba opening up and allowing their players to play in the US without having to defect? Do you guys actively scout players from Cuba right now?

ANSWER: That day is going to come. I don’t know when. We do attend tournaments that have Cuban teams in them and we collect information on their players but we don’t follow them that closely, getting all of our information from those tournaments.

This ain’t the Bing, Bob AND DOROTHY show!

Although Latin America represents a huge piece of the puzzle for US teams looking for international talent there is another area producing a lot of top prospects if not top major leaguers: The Pacific Rim. This encompasses primarily Korea, Tawain, China, Japan and Australia although we are pretty sure this road trip doesn’t include Singapore or Hong Kong. The Indians have spent money in recent years on prospects from the Pacific Rim, signing Taiwanese amateur players RHP Chen-Chang Lee (2008), C Chun Chen (2007) and RHP Sung Wei-Tseng (2007) and Australians Jason Smit (2006), Trent Baker (2007) and the since-released Jacob Reust (2007) in addition to Korean veterans Hyang-Nam Choi (2007) and the already mentioned Masa Kobayashi (2008) from Japan. So far, these moneys have not been well-spent as the Indians have little to show for it. In fact, Shin-soo Choo (Korea), obtained in a 2006 trade with Seattle, is the only Pacific Rim player on the Indians roster. It should be noted that the Indians did make an unsuccessful and probably lowball offer to get Aki Iwamura (2007) from Japan, but they lost out as he signed a very reasonable contract with Tampa Bay and has been productive ever since. It should also be noted that the Indians apparently fired their Taiwanese scout, Ming-Hsiao Hung, earlier this year so it is questionable what their scouting presence is currently in Taiwan or whether they will be signing any Taiwanese players this year.

I had a chance to talk to John Mirabelli of the Indians who is responsible for International scouting. He was kind enough to answer a lot of questions to help me understand more about Pacific Rim scouting.

QUESTION: Tell me a little about how the Pacific Rim differs from Latin America in terms of the guys you sign and how old they are when you sign them?

ANSWER: The main difference is that the ability to sign a professional baseball contract with a US team is tied to the player having graduated from HS. Also, in Latin America there is no organized amateur baseball to speak of. In the Pacific Rim there are tournaments, leagues and baseball academies where you can go and get a lot of looks at players. However, the quantity of available, good prospects is much greater in Latin America.

QUESTION: How has scouting and trying to sign prospects in the Pacific Rim changed over the past few years?

ANSWER: I have been involved in the Pacific Rim for a number of years. Not as many teams scout the Pacific Rim although that number is increasing which, in turn, makes the competition for players in Taiwan, Korea, Australia and Japan more intense and teams are being more aggressive. Unlike Latin America, baseball interest in the Pacific Rim has not exploded yet which limits the total number of good prospects available in these areas.

QUESTION: Explain a little about how the new collective bargaining agreement has effected the Rule V clock for international players and has that changed your strategy at all for signing these kids both from Latin America and from the Pacific Rim?

ANSWER: It doesn’t really impact our strategy for signing kids. The extra development year in the new CBA does help in development time but we get a good enough read on these kids in the first two years that we can tell what we have in plenty of time to make those decisions.

QUESTION: Do you think we need a world-wide draft?

ANSWER: Not yet. What might work better right now is to put a cap on the bonus budget teams can have in any one year to sign international free agents. If a team wanted to spend most of its budget on one player it could do that but that would prohibit it from signing other high-priced international free agents that year.

QUESTION: How do you compare this Pacific Rim signing group to last years?

ANSWER: That is a tough comparison to make. The number of good prospects is so low in any given year in the Pacific Rim that the strength of your group in any year can vary dramatically. I don’t think the Pacific Rim will ever be about volume. We will stay aggressive. What we ARE trying to do is to establish a presence in these countries and an identity in this market. We want people to know who the Cleveland Indians are and the positives about our organization. Establishing identity in this market is crucial to success right now. We’re hoping to have an announcement soon that will help us expand our staff and our identity in the Pacific Rim. Eventually we hope to consider scouting in mainland China but that area is very raw right now and the level of play is not that great.

2009 International Signing Period Hot Prospects

Latin America

This, of course, is the hotbed of international free agent signings. It appears that it is a much better year for position players than pitchers in this area. Below is a list of names of top Latin prospects I obtained from various sources. I have noted those who most likely will sign tomorrow (July 2nd), with whom and for what bonus when the signing period opens and those who have been linked at all to the Indians. Note that the teams I have here are best guesses but in Latin America this could change overnight.

Top Prospects Still Not Signed or Linked Strongly To One Team
Miguel Sano SS – top prospect
Jose Pena OF – linked to the Indians, among other teams
Jose Osuna RHP – linked to the Indians, among other teams
Jean Carlos Batista SS – linked to the Indians, among other teams
Luis Jolly OF
Chesler Cuthbert 3B
Cesar Perez 3B
Jacob Beltre 1B
Leonardo Perdomo RHP
Jochy Ogando-Bosio RHP
Daniel Sanchez RHP
Santiago Nesi C
Chris Cabrera RHP
Noel Arguelles LHP
Jose Iglesias SS

The latter two are from Cuba.

Prospects Supposedly Signed Already
Wagner Mateo OF – St. Louis ($3.1 million)
Gary Sanchez C – Yankees ($3 million)
Guillermo Pimentel OF – Texas ($2 million)
Jose Vinicio SS – Red Sox ($1.5 million)
Rossel Herrera SS – Rockies ($1 million)
Alex Pharma OF/1B – Mariners ($1 million)
Victor Payano SS – Red Sox ($800,000)
Juan Urbina LHP – Mets ($800,000) – son of Ugeuth Urbina
Jurickson Profar RHP – Texas ($700,000)

Australia
Ryan Battaglia
Jason Kilby
Australian Baseball Academy link
Also, players the Indians signed last year who are currently at the academy are: Mitch Nilsson (Catcher), nephew or former MLB catcher David Nilsson. Andrew Campbell a middle infielder. Martin Cervenka from Czech Republic a catcher.
No word on whether the Indians will sign any players at the Academy.
Thanks to Mark Baker, whose son Trent plays for the Indians’ Arizona League team for this information.

Taiwan
I don’t know what kind of presence the Indians will have here this year. A report I received said that their scout in Taiwan, Ming-Hsiao Hung, was fired earlier this year. Here are some of the prospects available:
RHP Chun-Chen Chiang had a workout in front of scouts recently; he topped out at 91 and showed a feel for the changeup.INF Fu-Lin Kuo reportedly recevied an offer of $30 K from the Twins, while INF Wei-Da Su was offered $20 K from the same team. RHP Ming-Chieh Lin has only topped out 86 mph in the tourney.Other potential prospects with links to their info are: Wei-Da SuPing-Chieh ChenTzu-An Wang
Thanks to the guys at Taiwan Baseball for this information and the links.

Japan
http://www.japanbaseballnews.com/?p=508

Europe
Max Kepler OF

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