The International MLB Draft: Pros, Cons, and Alternatives

by Jared Yaggie, Associate Member, University of Cincinnati Law Review Vol. 91

I. Introduction

Opening Day of the 2022 Major League Baseball (“MLB”) season boasted 275 international players named on active team rosters, which made up about twenty-eight percent of all active players.¹ The start of the 2022 season was delayed due to a lockout waiting for the MLB team owners and players, represented by the MLB Players Association (“MLBPA”), to agree on a new collective bargaining agreement (“CBA”).² One of the highlighted issues throughout the negotiation of the new CBA was the creation of an international draft because the current process of signing international players is plagued by corruption and unethical practices.³ The CBA was eventually signed on March 10, 2022, but the international draft issue went undecided and required further negotiation expiring on July 25, 2022.⁴ The MLBPA had to decide whether they wanted to keep the qualifying offer system for international players or implement an international draft.⁵ When July 25th arrived, the MLB and MLBPA ultimately could not agree to install an international draft because the MLBPA did not want to lose the qualifying offer system, which allows a team to make a one-year qualifying offer to a player that is due for free agency before the player hits the free market.⁶

Section II of this article outlines the framework of the MLB domestic draft and how international players are signed by teams. Section II further introduces the history of corruption surrounding the current international signing process and discusses the pros and cons of introducing an international draft. Then, section III analyzes the arguments in favor of an international draft and those against it. Section IV provides a feasible solution that meets in the middle of both arguments.

II. Background

A player whose residence is in the United States, Canada, or U.S. territories (e.g., Puerto Rico) can be drafted through the MLB’s First-Year Player amateur draft, referred to as the Rule 4 Draft.⁷ Only a player who has completed high school or one year at junior college but did not attend a four-year university is eligible for the amateur draft.⁸ Players who have completed their junior year at a four-year university or who are twenty-one years of age (whichever comes first) may also be eligible.⁹ However, for an international player, there is no draft, and to play for an MLB team, international players must be signed during the international signing period.¹⁰ To be eligible for the international signing period, a player only needs to be sixteen years old.¹¹ Each team has a cap placed on the pool of money that can be used to sign international players, which is usually disbursed to players as a signing bonus.¹²

Some have called for an international draft because of the unfavorable scouting practices by teams and associated parties leading up to the international signing period.¹³ Many young players in Latin countries grow up in poverty, so they view baseball as a way of escaping that life and achieving wealth.¹⁴ Thus, the preparation to make the major leagues begins at a young age—sometimes as young as twelve years old.¹⁵ They have built a system around this practice: well-known trainers in Latin countries have established academies that provide housing, food, and education on top of premier baseball training.¹⁶ Because the international signing period opens once a player is sixteen, the four to five years prior are spent building a young player’s talent.¹⁷

The corruption and exploitation throughout this process falls on the conduct of MLB teams.¹⁸ Often, team scouts will make verbal agreements with players when they are twelve to fourteen years old, well before they are eligible for international signing.¹⁹ These oral agreements have no binding affect, and teams will promise a signing bonus they may not honor.²⁰ The problem with verbal contracts is a team’s ability to revoke their agreement by either completely backing out of signing the player or the common case of lowering the promised signing bonus.²¹ As discussed, each team is allotted a pool of money for signing international players.²² If a team only has $6 million, and over the past three years the team has promised $10 million to players eligible to sign that year, then the team either pays 100% of the signing bonus or drops the offer amount.²³ The result of this process is extreme uncertainty for the players and their families. Many players and families use a team’s pledge to make financial plans; however, when the team reneges on that offer, players and their families are put into a tough situation.²⁴ This exact problem occurred when the Los Angeles Angels backed out of two verbal agreements it made with young Dominican players in 2022—the Angels are facing lawsuits in Dominican courts.²⁵

Furthermore, trainers add to the corruption because they typically make agreements with teams for a fifty percent share of the signing bonus, so the player ends up losing half of his signing bonus right away.²⁶ There are even deals where scouts get a young player to commit for a certain amount and then make another agreement with a trainer for double, so the scout profits the difference.²⁷ The current system is harshly unbalanced. With the cap on a team’s pool, there is a major drop-off in signing bonus value after the top international players get signed.²⁸ This leaves most of the players with small signing bonuses, and they may end up receiving signing deals two to three million dollars lower than their equally talented domestic counterparts who were drafted.²⁹

The last issue with the current international signing process is the rampant use of Performance Enhancing Drugs (“PEDs”) amongst Latin players trying to gain an edge on competition early or recover their lost value after failing to sign in their international signing period.³⁰ Registration for the international signing period is not required until six weeks before the period opens.³¹ Thus, until that registration date, most trainers administer PEDs to young athletes to boost their market value before the signing period, which ultimately increases their payout.³²

III. Discussion

With all the problems and blatant corruption, why was it not a simple decision to implement an international draft? The reason is complex since there are many pros and cons to an international draft.

A. An International Draft Solves Problems of Corruption

Proponents of an international draft highlight the sources of corruption in the current system, arguing that there is more transparency with a draft and that it levels the playing field for teams. With a draft, teams are required to be transparent about their dealings and collaborate with other teams and the MLB, as for the Rule 4 Draft. Moreover, a draft makes teams stay away from verbal agreements because teams would not commit to players when there is no guarantee that they will sign them. Eliminating verbal agreements would mitigate the largest issue with the current system.

A draft also creates a better distribution of money. Because of the pool cap that teams must maintain, only the top players each signing period get the “nice” contracts worth millions.³³ The rest of the players are left either unsigned or with smaller checks than promised, and because verbal agreements with young players is such common practice, a player loses value fast after fourteen years old—as the market age for players is driven lower an unsigned sixteen-year-old holds less value. The international draft would mimic the slotting system used in the Rule 4 Draft, which sets a value for each of the first ten rounds of the draft starting with the highest value in the first round.³⁴ This system would distribute signing bonuses more equally and the overall effect would be that most of the players receive a higher signing bonus that resembles what domestic players receive. On average, players subject to the Rule 4 Draft sign for $50,000 and international players sign for $30,000, although, international players typically must pay their trainers up to fifty percent of that bonus.³⁵

Implementing an international draft would also ensure that young players have more time to develop. The draft eliminates a team’s ability to make verbal agreements with young players, which lowers the need to develop players faster and faster. A draft essentially sets the market for young players at a set time in a player’s life, rather than the current model that opens the market to a race to the bottom of which team can sign earliest. The current system forces players to develop at a rate far beyond what is healthy. Latin players have spoken out on this; Juan Soto, one of the biggest names in baseball and Dominican national, has said “they want you to be able to run 60 yards and throw 100 [miles per hour] and hit the ball everywhere from birth. That’s how it works. That’s impossible. As much as you try to make it normal, that just won’t happen.”³⁶ The hope is that a draft stops the usage of PEDs. If trainers do not have to compete with teams for verbal agreements at a young age, players do not have to gain an advantage.

B. The Draft Hurts Player’s Interests

The most notable opposition to an international draft is that it is detrimental to Latin American society and player development. Communities in the Dominican Republic and Venezuela, which produce the most Latin players in the MLB, are often very poor.³⁷ Baseball is viewed as a way out of poverty for most young players and their families, so there has been an entire industry built in those countries to help kids reach the MLB.³⁸ The trainer system has its negatives when it comes to team scouts making side deals, but overall, trainers provide players coming from poverty three meals, a place to live, education and training that is beneficial to the players, besides the use of PEDs.

A draft affects monetary incentives for trainers because it is unknown how well the trainers will be paid for developing young players. Further, despite the MLB promising trainers will be involved with team facilities, those against the draft are skeptical of how well those trainers will be compensated.³⁹ There is also a concern that the facilities will not provide the same benefits as the current ones with trainers do.

The other side of the argument against a draft is from the teams. Some teams have invested much more into their Latin American scouting than others.⁴⁰ A draft puts all the teams in the same position with the same sources and information. Thus, the draft would reward the lazy teams that are behind on building their international presence and make waste of efforts by teams that have developed a firm presence. This comes from a purely competitive standpoint as teams clearly want to spot young Latin American talent when other teams do not even bother to look. Giving those teams that have mediocre Latin American scouting is unfair.

IV. Conclusion

With all the arguments for and against an international MLB draft, there needs to be a middle ground solution that is both ethical and beneficial for both sides. The largest issue with the current international signing system is verbal agreements teams make with young players. That practice has led to the many issues the MLB wishes to solve using a draft. However, the economic impact of a draft on societies built on training young baseball players cannot be forgotten. There are ways to address verbal agreements and resulting issues without a draft that do not negatively affect the way of life in certain Latin American countries.

The MLB could establish rules that prohibit teams from engaging with international players or their trainer until they have reached a certain age, but this would require the MLB to be more hands on and hold individual teams more accountable. This would eliminate the deals trainers and scouts make because there would be no market for that corruption. However, a rule that limits the age teams may approach players alone does not solve the other resulting issues of verbal agreements. There would also have to be a way of increasing the average amount of signing deals and ensuring more players are given a base pay like a slot system in a draft, which could be accomplished by a ranking system of eligible international players. The ranking system provides tiers, and each tier is assigned a minimum and maximum value. A minimum value ensures broader fairness, and a maximum value prohibits teams from wasting all their money on one player and leaving less room for other players to be signed. Albeit, the MLB would have to remove caps on international spending. This system is identical to how they rank high school athletes in a five-star system.

Unfortunately, neither the tier system nor the draft will prevent trainers from taking a share of the contracts their players sign. That is part of the business, but there certainly needs to be regulations and a maximum established on what trainers can take.

As for PEDs, it is unclear whether a draft will stop players from taking them—it only establishes mandatory screening for the top eligible draft prospects. There is nothing stopping trainers from discontinuing their current practices of administering PEDs to give their players an advantage. Further, a positive test does not affect a player’s eligibility for a draft, it only decreases their value.⁴¹ Ultimately, more thorough testing of PEDs at training facilities will have to be carried out to hold trainers accountable. The MLB has done a good job with this already by implementing the MLB Trainer Partnership Program, which invites international trainers to take part in the program and rewards those trainers with special invites to MLB scouting events otherwise unavailable to non-participating trainers.⁴² Players at an academy of a trainer who participates in this program are subject to random PED testing.⁴³ The real problem with PEDs likely lies with the fact PEDs are widely available in Latin American countries, so the best solution will come from the MLB working with Latin American governments. Until then, the MLB can expand its PEDs testing to players not playing under trainers who participate in the Trainer Partnership Program.

In conclusion, the first alternative to an international draft that also addresses the corruption and problems the draft should solve is setting the age of when scouts may approach international players at sixteen or seventeen. Then, couple such regulations with a tiered ranking system of all eligible international players and assign a minimum and maximum spending value for each tier. Further regulations are needed to control the percentage trainers can take from players in their academy. Lastly, the MLB will have to expand its PEDs testing outside of the Trainer Partnership Program.

Cover Photo by Chanan Greenblatt on Unsplash

Jared Yaggie

Jared Yaggie was born in Philadelphia but raised in Western New York. Before law school he attended Texas A&M University majoring in Urban and Regional Planning. Jared’s background in planning gives him an understanding of land use and real estate law. In addition to real estate law, Jared’s contributions to the Law Review will be a mix of his other interests such as sports law and copyrights and trademarks. Jared enjoys exercising and watching sports in his free time.

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