FG on Fox: The Price for Yoan Moncada
On Tuesday, the Diamondbacks announced they’d signed Cuban right-handed pitching prospect Yoan Lopez to a contract that includes an $8.25 million contract. This is the largest signing bonus given to an international prospect since Major League Baseball instituted new rules governing these signings in 2012, and signing Lopez means that Arizona is accepting the penalties that go along with blowing past the allocated bonus pool they were given.
But $8.25 million won’t stand as the record signing bonus for very long. It won’t even be the largest signing bonus by a Cuban named Yoan, because Lopez’s record is going to be shattered in a few months by Yoan Moncada, a 19 year old who is being billed as one of the best prospects to come off the island in a long time. Here is what FanGraphs lead prospect writer Kiley McDaniel wrote about Moncada in his original profile back in October.
“Moncada is 19 and packs a lot of tools into his 6’1/210 frame. He’s a plus-plus runner with above average raw power from both sides of the plate and the tools/skills to stick in the infield, possibly at shortstop. Moncada is the quick-twitch type with big bat speed that clubs covet and his track record of hitting at big tournaments and in Cuba’s professional leagues is excellent considering his age.”
Additionally, Ben Badler of Baseball America has written that if Moncada was eligible for the 2015 draft, he’d be in the mix to be taken #1 overall. This is not the kind of prospect who hits the open market very often, and naturally, all of the big money plays are reportedly interested. McDaniel has previously reported that the Red Sox and Yankees are “heavy favorites”, while MLB.com’s Jesse Sanchez has put the Dodgers in the mix as well. With those three teams potentially engaging in a bidding war, Moncada is likely set for the kind of signing bonus that will make Lopez’s deal seem like an afterthought.
Dave is the Managing Editor of FanGraphs.
Yankees, Red Sox, Dodgers…
lame.
I hope he goes to a smaller market.
but what about arbitration?
Does his compensation have to come via a signing bonus? Would it be possible for a team to pay a minor leaguer a different salary for what all other minor leaguers get paid in salary? I know it would upset the industry norm but is there any rule saying that a minor league player needs to be paid X amount?
Try reading the article
The team that signs Moncada won’t be able to sign that kind of contract, as players 22 and under have to be signed to minor-league contracts, and the entirety of their compensation has to be paid in a signing bonus.
Can the player and team agree to the signing bonus being paid out differently than a lump sum today? Maybe they agree to $50M, but deferred with interest?
$5.25M per year for 12 years would include about 3% interest, so the player gets roughly the same amount in total adjusted for inflation and the team buys itself some near-term financial flexibility.
My understanding is that they can. But it still all counts as a signing bonus.
Sure, I mostly looking at the [from the linked full article]:
“So, what kind of offers are we going to see, given that the signing bonus will only represent half of the cost of signing him, and that the money will have to be paid up front?”
If it really has to be 100% paid before he even suits up for his first minor league game, that is a big chunk of cash to swallow. If they could spread out at least the signing bonus, that would at least relieve part of it.
Granted, I suppose they could offer him $50M, owe MLB $50M and take out a $100M loan from a bank to pay it off. MLB and Moncada get their up front money and the team can pay it in whatever fashion they agree to with the third party [or I guess fourth party :)]
What kind of team of Cuban born players could you put together in the MLB these days?
Posted this on the foxsports site, in reference to part of the ‘rest of the story’, but figured worth posting here too:
“I’ll guess that he’s going to end up commanding a $50 million bonus when all is said and done, pushing the total acquisition cost to $100 million when the taxes are figured in. Winning teams don’t get high draft picks, so this is a unique opportunity for the biggest spenders to land a talent that might be equivalent to the top pick in the draft.”
Does this suggest that teams would fall all over themselves to pay the team with the #1 pick roughly $90-95M [to account for the actual signing bonus they’d pay the player] for that pick — if such a deal was allowed?
Even if the player was basically a star from day one — worth ~$30M per year until they became FAs, that doesn’t seem like a great deal.
That player will get about $2M before arbitration and then something like $45M in arbitration. Plus the $100M is $147M. So in the best case, we’re talking about a $33M profit over six years, probably starting 2-3 years from now spread out over the next six years. In present value, maybe $25-30M — for the best case.
I imagine the average case is probably a loss and the worst case is being out $100M.