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Post by ethanbein on Nov 15, 2014 23:27:01 GMT -5
Just to play devil's advocate, the fact that it's a signing bonus and not a major league contract means that they'll still have to pay him a salary for the years he's under team control. If he truly is a stud, that will be a non-trivial amount (maybe ~$30 million). This is definitely something to keep in mind. It's not just about whether or not he can create $50-$60 million dollars in value in his team control years, it's about whether he can produce that much *above his salaries*, which will be significant if he's as good as you're hoping for that kind of money. I still think that he makes a lot of sense for the Red Sox since the bonus doesn't count agains the luxury tax and the Red Sox are the team maybe most affected by the luxury tax cap threshold, but you can't directly compare this bonus with what other Cubans FAs have gotten (Puig, Castillo, etc). |
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Post by mredsox89 on Nov 16, 2014 1:44:05 GMT -5
It's a golden opportunity for the few teams that have essentially nothing to lose outside of pure cash, which is why it likely comes down to just a handful of teams. MLB has really limited the ways for teams to make full use of their capital advantages, and this is the rare case where it is still possible.
A combination of Lester (or trade for elite SP), Moncada, and one main bat total to a good offseason, with then secondary additions that could turn it into a great one. The options are there for the taking, we'll see how agressive they truly want to be
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Post by philsbosoxfan on Nov 16, 2014 5:09:13 GMT -5
Just to play devil's advocate, the fact that it's a signing bonus and not a major league contract means that they'll still have to pay him a salary for the years he's under team control. If he truly is a stud, that will be a non-trivial amount (maybe ~$30 million). That's not necessary true, they could structure it so that the bonus is paid over time and that his salary would be the same as any other minor league player. If he was a stud, the bigger salaries would happen towrads the end of team control and would likely be nowhere near what he could get in free agency or even what he'd be worth. By doing that they shift money from their lux tax allotment to their IFA pool money. The advantage that people are referring to is relative to only the Red Sox, Rays, MFY and Angels. Those teams have already exceeded their IFA allotment so they aren't hurt by signing an additional IFA. Any other team has to take that into consideration. |
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Post by mgoetze on Nov 16, 2014 6:37:52 GMT -5
It does make some sense and really it wouldn't bother me an awful lot it the NYY carried a payroll of 3-400m, then were taxed. It would benefit the bottom barrel, poor mouthing teams also, though we would hear a lot of how the NYY are breaking the bank and buying everything. So you think if the Yankees spent an extra $100m on payroll, those poor teams would then use the tax money to add another $5m to their own payroll? I think it's more likely that those $5m would go towards upgrading to golden toilet seats on the next yacht of the poor poor owners of those poor teams. |
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Post by brianthetaoist on Nov 16, 2014 8:58:59 GMT -5
It's good that it's IFA instead of MLB payroll, for sure, but I'm not sure the advantage of this not counting toward the luxury tax calculation is as great as y'all are implying ... essentially, the Sox are going to have to pay a luxury tax on this already because of the IFA bonus pool rules. If you take for granted that the Sox are going to have a payroll close to the cap for the rest of the team, Moncada is essentially over the cap in either direction (MLB luxury tax or IFA luxury tax). I'm too lazy and/or busy to look up which is more money, but it's not a complete savings.
There is one big advantage, though: what I said is really only true for this year, so it doesn't impact the luxury tax calculations going forward and the escalating scale that would potentially kick in.
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Post by chavopepe2 on Nov 16, 2014 9:48:39 GMT -5
It's good that it's IFA instead of MLB payroll, for sure, but I'm not sure the advantage of this not counting toward the luxury tax calculation is as great as y'all are implying ... essentially, the Sox are going to have to pay a luxury tax on this already because of the IFA bonus pool rules. If you take for granted that the Sox are going to have a payroll close to the cap for the rest of the team, Moncada is essentially over the cap in either direction (MLB luxury tax or IFA luxury tax). I'm too lazy and/or busy to look up which is more money, but it's not a complete savings. There is one big advantage, though: what I said is really only true for this year, so it doesn't impact the luxury tax calculations going forward and the escalating scale that would potentially kick in. Except with the IFA tax, everyone is subject to (basically) the same penalty so - at least in theory - his market price will be reduced by the amount of the tax. With the luxury tax, only a few teams would be subject to that penalty and therefor it would be in addition to his market price. On top of that since the Red Sox are one of only a few teams that would not incur additional penalties beyond the dollar-for-dollar tax, Moncada's price tag is reduced even further (assuming of course teams consider the other penalties in their valuation of him). Also, there are a couple teams that can't bid on him, so that only drives down his market price further. Now, assuming the Red Sox and Yankees both pursue him I don't think those other factors will actually drive down his price much because there will still be plenty of competition, but those factors do help in regards to other teams getting in on the bidding. For these reasons I would take the Red Sox, Angels, or Yankees over the field to sign him. |
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Post by stevedillard on Nov 16, 2014 10:32:14 GMT -5
As Feez mentions, this will truly be a unique negotiation for a couple of reasons. Foremost, the teams are essentially paying a "posting fee" that the player will not get. However, when this happened with Dice-K, they knew they were at least paying for his major league five year seasons for that price. Here, you are paying just to bring him into the system, and once he gets on the major league payroll you are just getting some value for seasons 1-4 (paying major league minimum hopefully for value greater than Xander provided his first year). You get a slight discount off of his performance in his arb years 5 and 6, though Stanton shows that the discount may not be that large. So, for paying 60-80 mil you hope to get some positive value in seasons 1-6.
Now, from Moncada's perspective, he is getting screwed in the bonus, losing 50% to major league baseball. He then gets four years of minimum salary, and hopefully some arb payments. He would be better off going to a team that will start him in the majors quickly, to start his arb clock and 6 year free agency. That would then be a factor in signing with someone.
I assume you can get a discussion of how quickly the team will bring him up to the majors -- can you then do a wink and nod issue of doing a Longoria* -- a 7 year contract for X million. If Moncada is a risk taker, he can agree to a smaller bonus, with a strong promise of minimal minor league time, and a long-term contract that he gets 100% of, rather than the 50% bonus.
*
So, agree to a $10 mil bonus, with a wink and nod guarantee he will be called up August 2015 and then agree to a six year $60 million contract.
He nets $70 million rather than $40 mill ($30 mill bonus and $10-15 salary for years 1-6.)
The team spends $80 million rather than $70-95 mill ($60 -$80 million bonus plus $10-15 salary for years 1-6)
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Post by chavopepe2 on Nov 16, 2014 10:55:18 GMT -5
They could also give him a $1m bonus and a suitcase filled with hundreds, but that stuff usually doesn't fly...
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Post by jmei on Nov 16, 2014 10:58:19 GMT -5
As Feez mentions, this will truly be a unique negotiation for a couple of reasons. Foremost, the teams are essentially paying a "posting fee" that the player will not get. However, when this happened with Dice-K, they knew they were at least paying for his major league five year seasons for that price. Here, you are paying just to bring him into the system, and once he gets on the major league payroll you are just getting some value for seasons 1-4 (paying major league minimum hopefully for value greater than Xander provided his first year). You get a slight discount off of his performance in his arb years 5 and 6, though Stanton shows that the discount may not be that large. So, for paying 60-80 mil you hope to get some positive value in seasons 1-6. Now, from Moncada's perspective, he is getting screwed in the bonus, losing 50% to major league baseball. He then gets four years of minimum salary, and hopefully some arb payments. He would be better off going to a team that will start him in the majors quickly, to start his arb clock and 6 year free agency. That would then be a factor in signing with someone. I assume you can get a discussion of how quickly the team will bring him up to the majors -- can you then do a wink and nod issue of doing a Longoria* -- a 7 year contract for X million. If Moncada is a risk taker, he can agree to a smaller bonus, with a strong promise of minimal minor league time, and a long-term contract that he gets 100% of, rather than the 50% bonus. *So, agree to a $10 mil bonus, with a wink and nod guarantee he will be called up August 2015 and then agree to a six year $60 million contract. He nets $70 million rather than $40 mill ($30 mill bonus and $10-15 salary for years 1-6.) The team spends $80 million rather than $70-95 mill ($60 -$80 million bonus plus $10-15 salary for years 1-6) It's a neat idea, but you can bet that if he turns down a significantly greater offer from another team to accept an offer like this one with an under-the-table promise, that other team will raise a complaint about it, and frankly rightfully so. |
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Post by mgoetze on Nov 16, 2014 11:48:42 GMT -5
You get a slight discount off of his performance in his arb years 5 and 6, though Stanton shows that the discount may not be that large. Arb discounts to market value are not uniform. Home runs can get paid in arbitration, but good luck trying to teach the arbitrator about pitch framing wins. |
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Post by moonstone2 on Nov 16, 2014 13:12:26 GMT -5
As Feez mentions, this will truly be a unique negotiation for a couple of reasons. Foremost, the teams are essentially paying a "posting fee" that the player will not get. However, when this happened with Dice-K, they knew they were at least paying for his major league five year seasons for that price. Here, you are paying just to bring him into the system, and once he gets on the major league payroll you are just getting some value for seasons 1-4 (paying major league minimum hopefully for value greater than Xander provided his first year). You get a slight discount off of his performance in his arb years 5 and 6, though Stanton shows that the discount may not be that large. So, for paying 60-80 mil you hope to get some positive value in seasons 1-6. Now, from Moncada's perspective, he is getting screwed in the bonus, losing 50% to major league baseball. He then gets four years of minimum salary, and hopefully some arb payments. He would be better off going to a team that will start him in the majors quickly, to start his arb clock and 6 year free agency. That would then be a factor in signing with someone. I assume you can get a discussion of how quickly the team will bring him up to the majors -- can you then do a wink and nod issue of doing a Longoria* -- a 7 year contract for X million. If Moncada is a risk taker, he can agree to a smaller bonus, with a strong promise of minimal minor league time, and a long-term contract that he gets 100% of, rather than the 50% bonus. *So, agree to a $10 mil bonus, with a wink and nod guarantee he will be called up August 2015 and then agree to a six year $60 million contract. He nets $70 million rather than $40 mill ($30 mill bonus and $10-15 salary for years 1-6.) The team spends $80 million rather than $70-95 mill ($60 -$80 million bonus plus $10-15 salary for years 1-6) This is an intetesting post Steve.because you highlight an issue. The contract that might be in the players best interest, might not be in his agent's best interest. If the player signs a contract that gives him a lower upfront bonus in exchange for getting to the majors faster, the player can always fire the agent who would receive zero comissions on future deals. This would be true even if the agent negotiated a "wink and nod" major league deal in the near future as you imply. It's in the agent's best interest to negotiate a contract that pays him as large a bonus an upfront bonus as possible even if it harms the player's long term earnings power. What are the chances that a 19 year old kid from Cuba has an advisor that will put his client's interest in front of his own and hope for loyalty? What are the chances that he or anyone he knows, is sophisticated enough to know better? Hence the team that pays the player the largest bonus will likely get the player even though, as you pointed out , he maybe better served otherwise. |
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Post by jmei on Nov 16, 2014 13:41:03 GMT -5
Also remember that for Cuban defectors in particular, a significant portion of their initial bonus goes towards paying the smugglers/"advisers"/etc. that got him off the island and set up his residency/housing/etc. during the period prior to signing. Those shady characters will want as large of a cut as possible and the initial bonus is pretty much the only time they'll receive guaranteed financial compensation for the considerable risks they take in getting a stud player out of Cuba.
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Post by wcsoxfan on Nov 16, 2014 15:12:00 GMT -5
Also remember that for Cuban defectors in particular, a significant portion of their initial bonus goes towards paying the smugglers/"advisers"/etc. that got him off the island and set up his residency/housing/etc. during the period prior to signing. Those shady characters will want as large of a cut as possible and the initial bonus is pretty much the only time they'll receive guaranteed financial compensation for the considerable risks they take in getting a stud player out of Cuba. Will be interesting how this shakes out as the circumstances which left to Mocada leaving Cuba appears to have not involved any of the above as he has a Cuban passport and can travel back and forth as he wishes. So it's possible this isn't a consideration. My guess is that he was able to get a deal from Cuba similar to that of the deals given to Chinese nationals like Yao Ming who leave their country - they have to pay roughly 50% of earning back to the government, or else... Kiley McDaniels of Fangraphs reported (in one of his chats) that he knows 'most' of the story - but wouldn't report it yet as he hasn't received enough corroboration to report it (strange thing to hear in this day and age - thought everyone just reported speculation asap to get the scoop these days). Guessing this comes out fairly soon. |
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Post by stevedillard on Nov 16, 2014 15:42:09 GMT -5
So the first 50% goes to a socialist group and then 50% of the rest goes to a Communist group. Then the government takes 33% of what is left over. Monocada's head must be swimming trying to figure out the differences between Cuba and MLB.  |
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Post by Gwell55 on Nov 16, 2014 17:40:52 GMT -5
So the first 50% goes to a socialist group and then 50% of the rest goes to a Communist group. Then the government takes 33% of what is left over. Monocada's head must be swimming trying to figure out the differences between Cuba and MLB. I have a hard time deciphering what you said above So which one of the two 50% groups are you claiming is the democratic party and which is the republicans again? |
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Post by stevedillard on Nov 16, 2014 17:47:53 GMT -5
MLB take the 50% bonus and gives it to the poorer teams. Then, according to the above Yao Ming theory, Cuba gets 50% of what remains for allowing him out of the country. Then the US government and state government take 33% of the the remaining amount. Nothing to do with dem/repub.
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Post by burythehammer on Nov 17, 2014 10:08:36 GMT -5
And he'll still get more than any American amateur in history.
If it's known that he's paying 50% to Cuba wouldn't OFAC, uh, frown upon that?
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Post by jimed14 on Nov 17, 2014 11:11:00 GMT -5
So the first 50% goes to a socialist group and then 50% of the rest goes to a Communist group. Then the government takes 33% of what is left over. Monocada's head must be swimming trying to figure out the differences between Cuba and MLB. It's probably worse than that because I doubt contributions to Cuba or the human traffickers are tax deductible. |
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Post by Gwell55 on Nov 17, 2014 12:13:33 GMT -5
And he'll still get more than any American amateur in history. If it's known that he's paying 50% to Cuba wouldn't OFAC, uh, frown upon that? So how do we know he is paying 50% to Cuba anyway? If he doesn't give them a nickel what are they going to do complain to the US government or MLB? So far we have no evidence he is losing anything to anybody and also if he got permission from Cuba then how does anyone figure the smugglers are getting paid for smuggling him out? Seems to me the double down cycle doesn't fit here. Either the traffickers got him out or Cuba let him out one or the other I would think. |
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Post by nomar on Nov 17, 2014 12:15:59 GMT -5
With Heyward and Stanton off the market, this may be our best chance to get an impact bat although he obviously won't be in the majors anytime soon. Really hope we land him.
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Post by fenwaythehardway on Nov 17, 2014 15:52:47 GMT -5
And he'll still get more than any American amateur in history. If it's known that he's paying 50% to Cuba wouldn't OFAC, uh, frown upon that? So how do we know he is paying 50% to Cuba anyway? If he doesn't give them a nickel what are they going to do complain to the US government or MLB? So far we have no evidence he is losing anything to anybody and also if he got permission from Cuba then how does anyone figure the smugglers are getting paid for smuggling him out? Seems to me the double down cycle doesn't fit here. Either the traffickers got him out or Cuba let him out one or the other I would think. Revoke his citizenship/passport. |
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Post by Oregon Norm on Nov 17, 2014 18:02:10 GMT -5
Also remember that for Cuban defectors in particular, a significant portion of their initial bonus goes towards paying the smugglers/"advisers"/etc. that got him off the island and set up his residency/housing/etc. during the period prior to signing. Those shady characters will want as large of a cut as possible and the initial bonus is pretty much the only time they'll receive guaranteed financial compensation for the considerable risks they take in getting a stud player out of Cuba. The point I was trying to make a page back, is that this guy may not be a defector. As far as we can tell - from his flights in and out of the country - he's not. It's true that Puig's story is a dark one filled with some difficult characters, apparently including elements of Los Zetas, but this looks different. My question is why? What has changed that has him walking the runway with tacit approval of the Cuban government? There's more to this than meets the eye. Could it be that the intrusion of the gangs into this business brought this to a head? |
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Post by mjammz on Nov 20, 2014 12:22:04 GMT -5
Brian MacPherson @brianmacp
Red Sox int'l scouting director Eddie Romero has seen Yoan Moncada, declined to say much other than that team can be "aggressive" with $.
Sounds like the Red Sox will be in and in heavy. Love to hear it.
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Post by pedroelgrande on Nov 20, 2014 13:21:29 GMT -5
Music to my ears!!!
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Post by bookiemetts on Nov 20, 2014 13:52:19 GMT -5
Brian MacPherson @brianmacp Red Sox int'l scouting director Eddie Romero has seen Yoan Moncada, declined to say much other than that team can be "aggressive" with $. Sounds like the Red Sox will be in and in heavy. Love to hear it. I really like the sound of that. I'd like to think that currently having prominent Cuban players on the major league team gives us a slight advantage over say the Yanks, even though Moncada would likely never play with Cespedes. That is probably just wishful thinking though hah. |
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