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Latin American signees, bonus skimming, and the draft

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Kat O'Brien has a piece in New York Newsday today about the practice of buscons skimming money from the bonuses paid to Latin American signees, along with allegations that the type of kickbacks that the Nats are being investigated about are commonplace:

The Dominican Republic is not subject to MLB's amateur draft, and the only real rule is that players cannot sign until July 2 the year they turn 16. A buscon is an unofficial scout/agent who finds players before they are old enough to sign with major-league teams, then works out an agreement with the player's family to prepare him to sign in return for a portion of his signing bonus. He'll get the teenager tryouts, watch his development, and perhaps even buy him food and equipment.


In theory, it's just exchanging services for money. In reality, though, many buscones take a huge cut of the player's bonus, perhaps 50 percent or more. Often, the player doesn't even know just how much money he should be receiving.

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A longtime scout in the Dominican estimated that half the teams have similar problems. "There's a lot of shady doings - sign a player for $100,000 and $40,000 is going back to the scout who signed him," he said. "Stuff like that. All of that's been going on for years."

The scout described scenarios in which a buscon might tell a player to sign with one team in exchange for a kickback from that club. He might never tell the player that another club had offered more money.

Yankees second baseman Robinson Cano said most players fork over a huge portion of their bonus to their buscon. Cano lucked out in that he never used one. His father, who played briefly for the Astros, helped him get noticed.

Now, the buscons are simply the Latin American version of the American "street agent" who helps steer highly regarded high school basketball players to certain colleges, the guys that were so prominent on the high school basketball scene in the 90s, such as Rob Johnson.  It isn't as if this is anything terribly unique to the Dominican Republic.  And it isn't even new.  It is just something that is now starting to get an awful lot more attention.

But MLB has enabled this sort of sleazy behavior by not being more involved in what goes on in Latin America with the amateur signings, and not taking a more active role in making sure things are done right.  There was the rule implemented that you can't sign a player until the year he turns 16 that was put into place after some team -- I can't remember who -- signed a 14 year old, I think.

But that's been about it. 

And while the focus has long been on Latin America, it isn't just about kids there any more...the Indians just signed a 16 year old from the Czech Republic.  As scouting gets more global, you are going to see teenagers from all over being scooped up.

And as the money continues to increase, there are going to be more and more middle-men and unscrupulous types willing to take advantage of a poor kid and his family in order to make a few thousand, or tens of thousands, of illicit bucks.

What is so ironic is that there are all these stringent rules in place with MLB and the NCAA regarding how much contact an American player can have with an agent, what constitutes representation, what they are allowed to do and how much of a cut the agent can get.  American amateurs can be duped or get bad advice by an agent, but there are structures in place to make sure that they aren't taken advantage of.  Nothing like that exists in Latin America.

And of course, there's the whole dichotomy as to how foreign players and American and Canadians players are treated.  If you are an American or Canadian, you are subject to the draft.  You go to the team that picks you, and you either sign for what they are willing to pay or you go do something else for a year.  There's a recommended slotting system, so players and agents have a pretty transparent process as to what is to be expected.

With Latin America, though, it is a free-for-all.  Players can sign anywhere, they often have a limited amount of information available as to what is fair and what they can reasonably ask for, and they are really dependent on what the buscon tells them the options are and the choices available to them.

What would make the most sense, it would seem, would be to include international players in the amateur draft at age 17 or 18.  I'm really surprised that MLB hasn't done that already...for all the talk about the draft being about competitive balance, it is really a mechanism for artificially depressing prices, and incorporating international players in the draft would eliminate the bidding wars that go on right now for the top international guys.

In fact, I wouldn't be surprised if Selig & Co. end up using this as an excuse to push to incorporate international players in the draft once the next CBA goes into place.  You're going to get some pushback from certain teams -- the Yankees and Boston, for example, who see the international arena as a mechanism to pick up the sort of high ceiling talent that usually doesn't drop to them in the draft, along with teams like the Rangers who have significant investments in their international operations and who feel like they have a leg up there.

But having two separate systems really seems awfully pointless, and since we know MLB isn't going to eliminate the draft in America, and we know that MLB is going to feel pressured to take steps to try to clean up the sordidness going on with Latin American signees right now, it seems likely that this could usher in a worldwide draft.