The Cincinnati Reds have a pretty big workout today in the Dominican Republic with top Cuban prospect Eddy Julio Martinez. You can read all about that at the link above, it’s not directly what we are going to be talking about today. Indirectly though, it is what we will be talking about.
The possible signing bonus to get Martinez is rumored to be eight figures, so it won’t come cheap and the Reds have been in on this kid (he’s now 20) since the beginning, so they know the price and are still pursuing him. It would easily be their largest signing of an international player under the age of 23 since the new rules went into place on signing international players (those under 23 can only be signed for a limited amount of money or you pay very harsh penalties – such as 100% tax on the overages of your spending limit as well as limiting the price you can spend on players in future seasons on the international market place).
The new system for international signings went into place in 2012. For the 2012 and 2013 season there was a cap for all teams at $2.9M. In 2014 and 2015 teams were handed a set number, based on how good the team was the year before, with no team getting a budget higher than $5.3M in either year. Big market teams, and even a few smaller market teams are going over their budgets at will.
In the 2014 signing period the New York Yankees were given a spending limit of $2.19M. They spent more than $2M on three different players each. In total, they spent over $20M on players and another $18M on penalties paid to Major League Baseball for going over their limit. All they had to do was pay that overage and sit out of big signings. What does that sitting out matter when you just signed 10 of the top 30 players in one class? Probably not a lot.
The Dodgers did the same thing this year, spending $16M on one player and another $4.6M on two other top 10 caliber prospects. Given their bonus pool of just $2.02M, after penalties, the Dodgers have spent more than $40M this year to sign players when Major League Baseball told them they could spend $2M.
The Cincinnati Reds have toed the company line of Major League Baseball. They’ve never gone over their budget handed to them. With that said, they haven’t been stingy overall on international signings. They spent big on Aroldis Chapman and Raisel Iglesias, but neither of those signings required any sort of penalties either.
Big market teams have been using their massive amounts of cash to work the system and acquire top end talent on the international market. It’s a lot easier for a team like the Dodgers or Yankees to immediately come up with an extra $20M to pay in penalties to infuse massive amounts of raw talent into their system than a smaller market team that’s working with a much smaller margin.
The Chicago Cubs had to basically sit out of the 2014 signing period after blowing past their signing budget in 2013, but they came back in 2015 with a pool allotment of $3.23M. They have already spent over $9M on bonuses and have been linked to another $2M worth of players. That would put them in the $15-20M range of spending for the year.
The Reds have made to bigger signings this year, spending $1M on outfielder Cristian Olivo and another $650,000 on shortstop Miguel Hernanrez. Those two represent the two of the three largest bonuses paid out by the Reds since the team signed Yorman Rodriguez in 2008 for $2.7M (not including Chapman and Iglesias, who signed big league contracts). Their budget this year is $2.87M, so they are still well under it. Maybe they go for the big splash this year and change things. For now though, it seems that just like in free agency, small and mid-market teams are finding themselves behind the 8-ball when it comes to the international marketplace for talent.