OFAC Clarifies Stance: MLB Is Only Hurdle for Cubans

When I wrote on Monday about the changing policies and confusion surrounding MLB, OFAC, U.S.-Cuba relations and the unblocking process for Cuban ballplayers, this situation seemed like a muddled mess. After my first article on the topic, Yahoo’s Jeff Passan and Baseball America’s Ben Badler added further details throughout the week and reported statements from OFAC and MLB as both sides were looking to clarify their stances. There was some urgency to conclude the negative PR whirlwind, with high-ranking MLB officials upset about not being able to sign three notable Cuban players left in limbo by this delay, with the total value of their potential contracts easily in excess of $100 million.

I was first turned onto this story by Cuban phenom Yoan Moncada’s agent David Hastings, who has taken some flack in the industry for being a first-time agent and representing such a high profile player, but it appears this situation has shaken out after a one week long media cycle. OFAC sent Hastings a letter within the last hour further clarifying their stance from previous statements earlier this week. According to Hastings, the letter stated that OFAC will not grant a specific license to Cuban nationals who are already unblocked via the general license. This applies to Moncada and the other two notable Cuban nationals waiting to be unblocked, second basemen Hector Olivera and Andy Ibanez.

OFAC’s earlier statements left an opening that they could be held responsible for the delay, as they said granting both general and specific licenses to certain Cubans would be handled on a “case-by-case basis.” This suggested that OFAC could hand out the specific license and end the delay by meeting MLB’s standard for unblocking a player. At the same time, OFAC said only the general license is necessary to clear a Cuban national to sign with a team, but MLB asked for more from the Cuban players, an MLB-only policy that changed at some point in the last few years.

Now that OFAC has told Moncada’s agent and presumably representatives for the other concerned players that they will not be granting specific licenses to these players, the onus is now 100% on MLB. MLB could change their policy at any time to match OFAC’s policy and simply accept the general license as enough to unblock a player, which would immediately make all three players eligible to sign with MLB teams. This process also has been helped along by Hastings, whose close reading of the rules, lobbying efforts with MLB and OFAC and turning my attention to this matter have certainly sped up the process by weeks or months. It’s still anyone’s guess as to when these delays will end, but the week of statements and analysis now ends with everyone looking solely at MLB, waiting for them to change their policy and let these players sign.

More On These Three Players

From talking to international sources, my best estimate in that Moncada’s contract will be a signing bonus of around $40 million, which will also trigger penalties (paid to MLB) of about $40 million. The Red Sox, Yankees and Dodgers are believed to be the heavy favorites to land Moncada, a 19 year old considered to be one of the most talented Cubans to come off the island in years. Despite the signing bonus, Moncada would likely go to the minor leagues for a season or two, so this situation is somewhat unprecedented.

For an idea of his talent, a common comparison is that Moncada is a switch-hitting Yasiel Puig that can play second base, third base or center field. For more on Moncada, including a more detailed scouting report and the intriguing rules surrounding his and Ibanez’s potential contracts, see these three articles.

Ibanez is 21 and also subject to bonus pools like Moncada, meaning a close to dollar-for-dollar tax on his bonus (explained in more detail at the links in the previous paragraph), which is expected to be in the same range, though maybe a bit higher than recent deals for Cubans SS Roberto Baldoquin (Angels, $8 million bonus plus a penalty paid to MLB of nearly the same amount) and RHP Yoan Lopez (Diamondbacks, $8.25 million bonus with the same penalty structure).

Olivera will turn 30 years old in April and has had some injury issues that MLB teams will need to sort out, but he looked good in a recent open workout and will continue working out for teams in the Dominican Republic. It’s still too early to know where the bidding will land on him, but he’s seen as a potential Opening Day MLB second baseman if things check out health-wise and further workouts go well, with optimistic estimates having his value on a multi-year MLB deal in the $20-40 million dollar range.