Padres Sign Four International Prospects, Yankees Sign the Rest

Last Wednesday the July 2nd international signing period began, allowing major league teams to bid millions of dollars on the futures of 16- and 17-year-old kids. An article from MLB.com explains the details:

A 16-year-old international player is eligible to sign with a Major League team between July 2 through June 15 of next year if the prospect turns 17 before Sept. 1 of this year or by the completion of his first Minor League season. Additionally, any prospect who is already 17 or older and has not previously signed a Major or Minor League contract, resides outside the United States, Canada and Puerto Rico and has not been enrolled in a high school or college in the U.S., Canada or Puerto Rico within the previous year is eligible to sign during the period.

The 2012 Collective Bargaining Agreement, like it did for the stateside draft, introduced international spending pools for MLB teams based on each team’s previous year record. This year, for example, the Houston Astros have just over $5 million to spend internationally while the St. Louis Cardinals, at the other end up the spectrum, have just $1,866,300 in their pool. The San Diego Padres, near the middle of the pack, have a $2,531,200 spending budget for the 2014-15 signing period.

Here are a few developing storylines, both across the league and specifically for the Padres.

The Yankees blow away their spending cap

It was well-documented prior to July 2nd that the New York Yankees were going to pay little attention to their spending cap and they haven’t disappointed, thus far spending upwards of (an estimated) $15 million on international prospects. As Kiley McDaniel reports (in the previous link), here is a list of prospects the Yankees have signed to confirmed six-figure deals:

Player Position Country Signing Bonus BA Rank
Dermis Garcia* 3B Dominican Republic $3M 9
Nelson Gomez 3B Dominican Republic $2.25M 6
Juan De Leon OF Dominican Republic $2M 2
Jonathan Amundaray RF Venezuela $1.5M 22
Wilkerman Garcia SS Dominican Republic $1.35M 7
Hyo-Joon Park SS South Korea $1.1M 18
Miguel Flames C Venezuela $1M 16
Antonio Arias CF Dominican Republic $800K 28
Diego Castillo SS Venezuela $750K 24
Frederick Cuevas OF Dominican Republic $300K NA
Griffin Garabito SS Dominican Republic $225K NA
Servando Hernandez RHP Venezuela $200K NA

*Deal is not official

The Yankees have signed a staggering total of 27 players so far, though most of the remaining group are older than 16 and have signed for significantly less money than those listed above. New York isn’t the first team to try this tactic since the new CBA in 2012 changed the international spending landscape. In 2012, the Tampa Bay Rays incurred the maximum penalty by exceeding their $2.9 million budget by more than $800,000 and last year both the Theo Epstein/Jed Hoyer led Chicago Cubs and the Texas Rangers blew past their spending limits.

(It appeared that the Rays were again employing the tactic this year when they nabbed Baseball America’s No. 1 rated international prospect Adrian Rendon, but they’ve recently acquired enough spending money from the Miami Marlins to get back under their spending limit. The Milwaukee Brewers look to be following a similar strategy to the Rays this year, while the Boston Red Sox are expected to soar past their spending limit).

The punishments are harsh:

Teams that exceed the pools by up to 5 percent have to pay a 100 percent tax, and teams that exceed the pools by 5 to 10 percent are not allowed to sign a player for more than $500,000 during the next signing period, and they must pay a 100 percent tax on the pool overage. Teams that exceed the pools by 10 to 15 percent are not allowed to sign a player for more than $300,000 during the next signing period and have to pay a 100 percent tax on the pool overage. … In the most severe penalty, teams that exceed the pool by more than 15 percent are not allowed to sign a player for more than $300,000 during the next two signing periods, in addition to paying a 100 percent tax on the pool overage.

The Yankees fall squarely into the “most severe” penalty category, meaning they’ll pay a 100 percent tax on the overage and won’t be allowed to sign a player for more than $300,000* over the next two signing periods. If we peg the Yankees spending for 2014-15 at $15 million – and that figure could go up if they reel in Bryan Emery**, who they’ve been linked to – that means they’ll be investing nearly $27 million into this international class once you factor in the tax.

*The original CBA puts this figure at $250,000 but most recent reports have it at $300,000, so we’ll go with that.
**More on him later.

There are obviously positives and negatives to such aggressive spending. On the plus side, since international prospects — thanks to their age and unrefined skill-sets — often take five-plus years to develop, getting more of them in the system now rather than later is always a good strategy. Further, since the Yankees would likely only be allotted somewhere in the neighborhood of $6-8 million total over the next three years in the international market (including this year), by blowing away their spending limit they’ve already invested well beyond that figure this year alone. They can now spend the next two years taking flyers on $300,000-and-under prospects and trading away valuable international pool dollars to other teams looking to spend big.

On the other hand, spending $25-30 million on a group of primarily 16- and 17-year-old lightly scouted foreign prospects is always a risky strategy. It’s one that the Yankees, among other teams, can afford to gamble with, but it’s nonetheless akin to buying lottery tickets at above market value prices. Not to mention, the Yankees have now limited themselves to any of the elite prospects for the next two years. If a generational talent emerges during that period, the Yankees, despite their financial muscle, will be forced to watch the bidding war from the dugout. (All of baseball would surely shed a tear for the Yanks if that were to occur.)

Padres nab a quartet of international signees

The Padres (shockingly!) haven’t received the national attention that they Yankees have garnered, but they did sign four international prospects on July 2nd, led by Baseball America’s 21st ranked prospect Ricardo Rodriguez:

Player Position Country Signing Bonus BA Rank
Ricardo Rodriguez C Venezuela NA* 21
Elvis Zabalo SS Dominican Republic $500K  NA
Eduardo Solano LHP Dominican Republic NA*  NA
Pedro Beltran RHP Dominican Republic NA*  NA

*The dollar figures for Rodriguez, Solano, and Beltran apparently have not yet been reported.

Rodriguez:

At 5-foot-10, 180 pounds, Rodriguez is a righthanded hitter who projects to stick behind the plate thanks to his solid catch-and-throw skills, a tick above-average arm strength and good field awareness. Among catchers who project to stick at the position (Miguel Flames of Venezuela is still fairly new to the position), Rodriguez was the best catcher on the market. He trained with Ciro Barrios.

MLB.com scouting report/video

Zabalo:

The Padres have signed 16-year-old shortstop Elvis Sabala out of the Dominican Republic for $500,000. Sabala, who has also spent time living in the United States is 6-foot-1, 180 pounds with a strong, accurate arm and a quick release. He has a quick bat from the right side and is still working to make more consistent contact in games, but he shows ability to use the whole field with gap power. Sabala played in the International Prospect League and trained with Edgar Mercedes.

Solano:

Dominican lefthander Eduardo Solano has signed with the Padres. Solano turned 17 last month, so while he became eligible to sign last year, he started popping up more recently and waited until the 2014-15 signing period to open today to officially sign. He has a projectable 6-foot-4 frame with a loose arm and good, deceptive angle on a fastball up to the low-90s, with feel to spin a breaking ball.

Beltran:

Dominican righthander Pedro Beltran has signed with the Padres. At 16, Beltran’s 6-foot-4, 180-pound frame oozes projection and he’s fairly coordinated given his long, lanky frame. He has touched the low-90s and should be throwing in the mid-90s once he adds some size, with feel to spin a curveball.

It’s ultimately tough to make any kind of serious judgment on an international class, especially without the benefit of hindsight. Major league organizations that do this stuff 24/7 , have a team of professional scouts at their disposal, and offer out multi-million deals miss more than they hit; bloggers do considerably worse. At first blush, though, both pitchers have solid frames and are already touching 90-plus with the heater, making you dream of a frontline starter … if everything goes right. Both Rodriguez and Zabalo appear to be defense-first position players with work-in-progress bats. We’ll see.

Right now, regardless of the specific players, the question with the Padres revolves more around development than anything else. As you know, the Padres have struggled in the draft going back to the Kevin Towers era (and beyond), and they haven’t fared much better internationally. The highly-touted 2008 class hasn’t produced a major leaguer yet and the closest thing the Padres have had to an international success, Rymer Liriano, still hasn’t cracked Triple-A. Tack on apparent “big questions” about the Padres approach to player development and, well, you probably don’t want to pencil in any of these guys on your 2020 starting lineup.

The one that might get away

Bryan Emery, an outfielder from Colombia who trains in the Dominican Republic, might be one of the most intriguing international prospects from this class. He’s a wiry 6-3, 190 and plays all over the diamond, though his likely destination is probably an outfield corner.  His trainer/agent in the DR, Ivan Noboa, doesn’t allow his prospects to play in many games, however, making it difficult to estimate how Emery’s tools will translate into in-game performance. According to Baseball America, he has an easy (albeit inconsistent) lefty stroke that could generate plus-power. He also possesses quick-twitch athleticism, above-average arm strength, and average running speed. BA notes that, thanks to the swing and tool package, he offers breakout potential in an unrefined package.

Emery is being mentioned here because, according to Kiley McDaniel, he was rumored to be signing with the Padres right up until Josh Byrnes got the ax. Both in a previously linked article and on Baseball Prospectus’ Effectively Wild podcast, McDaniel mentions the Padres interest in Emery. Rumors now have Emery headed to, you guessed it, the Yankees.

On Effectively Wild (paraphrased):

I think the most interesting guy in this class is Bryan Emery. His agent is notorious for two things: 1) getting players crazy deals and 2) not letting them play in games … This guy (Emery) is the classic huge upside, huge risk, but if he had those 100 at-bats and was performing pretty well he might get the highest bonus in this class. As is, it looks like he’s in line for about $2 million. He was rumored to have a deal done with the Padres about a month ago, before Josh Byrnes got fired, but now it’s looking like he might sign with the Yankees.

While it’s not clear how close the Padres were to signing Emery or how much Byrnes’ dismissal affected the negotiations, this (likely) missed opportunity potentially shows another side-effect of firing a GM mid-season, right around important events like the amateur draft, the July 2nd international signing period, and the trade deadline. While the success rate for a prospect like Emery is low, especially for the Padres given their recent track-record, the best way to hit the jackpot is to stock up on as many talented youngsters as possible.

The international signing period runs all the way through mid-June of next year, so if they haven’t already used their entire spending budget (and don’t plan to go over), hopefully the Padres are able to continue to add high upside at the lower levels of their system to complement the four players they signed on July 2nd .

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