Yoan Moncada: The Most Fascinating Story of the Offseason

I wrote about 19-year-old Cuban infielder Yoan Moncada last month, but enough has happened since then that it’s time for an update. Yesterday, he had his first open workout since leaving Cuba, with scouts gathering for the spectacle in Guatemala City. About 100 scouts were there, with nearly every team represented and most rolling a few deep with heavy hitters: special assistants, VPs and directors of scouting.  Before I get to the talent, interested teams and potential bonus, I’m going to take a step back and let you guys know how weird this situation already has become.

An Unprecedented Background

I was told by Moncada’s agent last week that he was allowed by the Cuban government to leave the country, that Moncada has a Cuban passport and can fly back to the country whenever he wants to.  I haven’t been able to formally confirm this, but there’s no reason for the agent to lie about it, and multiple high ranking club executives told me this is how they understand the situation at this point as well.

Take a moment and let that sink in.  Countless dozens of ballplayers and hundreds of normal citizens have risked their lives to leave the island on makeshift boats and under the cover of darkness. The government apparently just let one of their best ballplayers in a long time just leave on a flight to Central America.  There’s been plenty of unfounded speculation about how and why this happened, with some prominent executives still unclear on how it was even possible.

There are no indications what this could mean for the next wave of players that want to defect.  Players were defecting in the old style just months ago, so it’s not like people knew this shift was happening.  It could also not be a shift at all, as the story could be much more complicated than we know right now. Or it could just be a one-time deal. We don’t know. I didn’t want to report this until I had something concrete, but teams are debating how many tens of millions of dollars they want to spend on this phenom and they still don’t know how this happened or what it means, so it seems reasonable to report the confusion.

On top of the unusual way he got off the island, Moncada is being represented not by a known baseball agent, but by a CPA from St. Petersburg who has never negotiated a baseball contract before. From my conversation with this agent, he doesn’t plan to bring in more seasoned baseball representation to assist him, either.  He told me he wanted to keep his profile low and not let this negotiation turn into a circus or to be about him, so I won’t publish his name.  That said, his involvement is a big part of this story.  How this guy got hooked up with one of the best amateur talents in the world while the dozen or so agents that represent basically all Cuban players whiffed is only fueling the fire that there’s more than a few things we don’t know about this situation.

Nothing that’s happened so far suggests that this agent can’t properly handle the duties necessary for this situation (contract negotiations, coordinating workouts, managing expectations, dealing with the media, filing the mountains of paperwork, etc.) but you can be sure that some people are doubting him.  As I tweeted earlier today, a scout at the event told me that two agents from Scott Boras’ agency went to the showcase yesterday and were removed from the premises by armed guards.

A Singular Talent

It was a pleasant surprise for scouts that what they were told to expect from Moncada—a 6’1/210 switch-hitting infielder with plus tools and a Puig body—is what they saw.  It sounds like there will be another open workout coming because, for the price that scouts are thinking it will take to sign Moncada, teams will want to see him face live pitching; he only faced live BP at the workout.  I’ll wait until that happens to formally toss around scouting grades, but the ability we were all told about is there: plus bat speed, plus raw power, 65 to 70 speed (6.6 in the 60), the feel and hands to stick in the infield and enough arm to play anywhere on the field.

Moncada’s swing is better from the left side and scouts said he looked uncomfortable taking grounders at shortstop, though most thought before the showcase that he wouldn’t figure to play there in pro ball.  The popular opinion is to stick Moncada at third base, but some scouts said not to rule out second base just yet and others suggested letting his speed play in center field, which would also minimize the defensive pressure.  Opinion is split enough on his future defensive home that it likely won’t be settled before he signs, clubs will differ on their plans for where to put him and the question likely won’t be settled for another year or two.

An Interesting Set of Circumstances

In last month’s article I detailed the odd situation that Moncada finds himself in due to the CBA’s two-year-old rules about international bonus pools.  Due to his age and lack of professional experience, Moncada is subject to these pools, unlike free-and-clear free agents from Cuba such as Jose Abreu, Rusney Castillo and current free agent Yasmany Tomas. This means that Moncada can only sign for a signing bonus and can’t sign a big league contract.  These bonus pools range from roughly $2 million to $5 million, ordered the same as the raw order for the 2015 MLB Draft, and any dollar spent over 15% above the pool amount has a dollar-for-dollar penalty, plus it triggers a two-year freeze on international signings over $300,000.

Scouts think Moncada, despite needing a year or two in the minors, is a superior talent to Abreu, Castillo and Tomas. Abreu got 6 years, $68 million, which looks like a bargain a year later. Castillo, considered a notch lower than Abreu, got 7 years, $72.5 million a few months ago. Tomas, also an inferior talent to Abreu, is expected to get somewhere between $70-$100 million. So, if Moncada were a free-and-clear free agent, he would be expected to get over $100 million, probably on a 7-9 year deal, given his youth.

This is where things get interesting. With the draft essentially having hard caps on spending and Cuban/Japanese free agents getting essentially retail values at this point, the only place to invest as much as you want on young players with a positive ROI is in the international bonus pools.  Because of personal preferences, bureaucracy in shifting huge amounts of budgetary space within baseball operations and distance to the big leagues, not all teams are acting completely rationally in this regard.

The difference with Moncada is that he isn’t a 16-year-old with little game experience that won’t play in America for a few years.  He’s a proven game performer with huge tools that could be in the big leagues in a year or two.  Moncada is the guy everyone can agree on is worth going over your pool, even the teams that trade away their international pool space or don’t bother to spend it all.

The Yankees recognized this lack of rational action and spent a record-smashing ~$30 million on bonuses and penalties last year, while the Red Sox, Rays and Angels also went over their pools (to a lesser degree), but still got the maximum punishment.  These teams had to pay the tax for exceeding their spending limits, and they also can’t sign a prospect for more than $300,000 for the next two years, starting July 2nd, 2015. That same day, the Rangers and Cubs will be coming off of their penalties for going over their pool two years ago, when the penalty was only a one-year freeze on signings over $250,000.  These years of aggressive signings, punctuated by the Yankees’ huge outlay this year, are expected to bring on an international draft (read: a version of hard caps on international spending) at some point, but MLB isn’t tipping their hand and most expect that to take a few years before it goes into effect.

An Intense Bidding War?

So, we have clubs flush with cash desperately searching for a way to spend it on impact young talent, and we have a player that basically every scout on Earth can agree is worth an enormous amount of money — even if it’s all up-front — to buy his six big league controlled years. Moncada’s timetable for being unblocked by OFAC and cleared by MLB to sign as a free agent will likely come at some point in the first half of 2015, though this varies from player to player. His agent will clearly want this to happen, because it allows him to market his player to every team in baseball.

If he’s a free agent before July 2nd, 2015 that means the Yankees and Red Sox are in play and have a ticking clock on when they have to give Moncada a bid worth accepting.  If the Cubs, Rangers or another club that would rather this expense go in their 2015 international bonus pool allotment throw out some agreeable terms, Moncada can wait until July 2nd to sign that deal.  There are already rumors the Cubs in particular are looking to blow way past their bonus pool again in 2015, so it would be great luck for them to get a chance at another Jorge Soler-type Cuban talent in their one-year spree that would come with two years of penalties and a big tax bill.

The teams that stood out most to scouts at the showcase for having a big group in attendance were the Red Sox, Cubs and Yankees, to the surprise of no one.  Slightly surprising, given their lower budget approach in the international realm, is the Braves, who had a number of heavy hitters at the showcase. Perhaps that shouldn’t be as surprising, though, as the Braves’ reshuffling of their front office this summer is clearly geared to old-school, aggressive scouting and development that was the foundation of their dynasty in the 1990s.

It’s too early to rule teams out or name a leader as teams are still forming their strategies and hoping to get additional looks at Moncada before they decide how much they’re willing to spend.  I said a month ago that a $50 million bonus (which would include a $45+ million penalty) is the most you could justify, with a projected price more reasonably in the $30-40 million area, which multiple executives have said in recent weeks is where they think this will end up.

For reference, the biggest draft/international bonus of all time is $8 million (Gerrit Cole) and the biggest guarantee (via a major league contract, back when those were legal) is $15.1 million (Stephen Strasburg).  Given the huge amount of money in baseball, the ticking clock elements for multiple big market clubs and the paucity of free market impact talent, it wouldn’t shock me if things end up higher than the expected $30-40 million target, but there’s still more that teams need to learn about Moncada before they can make that kind of commitment.