The Carter Stewart deal should scare MLB

MLB has built its entire financial model around the notion of limiting the bargaining ability of amateurs, keeping minor leaguers under team control and receiving sub-poverty-level wages for as long as six years, keeping players locked to a club through their peak years where they make league minimum for three years and then get limited raises through arbitration, and then hit the market when, most of the time, their best years are behind them.

And why have players put up with it? The same reason the compulsive gambler played poker in a casino he knows is fixed...because its the only game in town.

Carter Stewart might change all this.

Carter Stewart is a 19 year old righthanded pitcher attending junior college in Florida. He was drafted #8 overall in the 2018 draft by the Atlanta Braves, where the slot bonus value was just under $5 million. Unable to reach a deal, he went to junior college, and was expected to be a late first to second round pick in the 2019 draft, likely to get a bonus in the $2-3 million range.

Instead of going through the MLB draft process, however, he has reportedly agreed to a 6 year, $7+ million deal with the Fukuoka Softbank Hawks of the Japanese Professional Baseball League. Assuming this is accurate, Stewart would be 25 when this deal is up, and would then be eligible to sign with any MLB team as a free agent under the current international free agent rules.

Stewart has made an unprecedented, and potentially brilliant, move. If he stays in the United States, he gets a $2-3 million bonus, and then makes, effectively, nothing for the next few years as he toils in the minor leagues. He would be Rule 5 eligible after the 2022 season, and if he is good enough, he’ll be added to the 40 man roster at that point. He’ll make a little bit more money, and if he makes it to the majors for good in 2023 or 2024, he’ll start making league minimum, which as of right now is close to $600,000. At the end of 2024, he’ll have received his bonus, a minimal amount in his time in the minors, maybe a year or two at league minimum, and then will still be under team control for another 4-5 years.

By going this route, Stewart guarantees himself $7 million, and then has the opportunity to go to the highest bidder as a 26 year old.

Stewart almost certainly will make more money no matter how his career progresses. If he flames out, his $7 million deal is much better than whatever bonus he would get in the draft. If he excels, he can command a huge contract when he’s a free agent after his age 25 season, and likely will have made more in Japan than he would have in the States. And if he’s just okay, well, he’ll still have made more in Japan than he would have in the United States, and he’s still in a position to hit the open market, rather than be subject to arbitration and the whims of whatever team happened to acquire his contract.

There’s been increasing attention paid to the inequities of modern baseball finances — how franchises exploit minor leaguers by paying them unconscionably low wages, how they manipulate service time, how they maintain the ability to pay players league minimum their first three seasons, how the arbitration system still generally keeps players earning below market value. And now, teams are — not unreasonably — deciding it isn’t wise to splurge on big money deals for players who, having toiled under team control, are hitting the open market generally on the downside of their career. A new Collective Bargaining Agreement won’t be in place for several more years, but there is a crisis point coming in regards to the leverage and power owners have right now.

And Carter Stewart has just turned it on his head. He’s decided he has a better option that putting himself in the hands of the MLB machine. He’s going to a foreign country, making more money, and structuring his deal so he will be free and eligible to sign with whomever he wants at an age where, if he went the MLB Draft route, he would at best be entering his first or second year of arbitration.

Carter Stewart is willing to leave his home and go to a foreign country and play professional ball in a league that plays baseball at a high level, but not at the level of MLB. And why? Because he can make more money that way. Because he has more control over his career and his destiny that way.

And that should terrify MLB. Think about what it means that the most prestigious baseball league in the richest country in the world, a league that rakes in billions each year, is losing a quality player to another league because he can make more money somewhere else.

Is this going to start a wave of players heading overseas? Probably not. Most draft-eligible players won’t want to commit to spending years in another country. There are a limited number of slots available for foreign players in the JPL, and signing a long-term deal with an American amateur represents a significant commitment, both in terms of dollars and allocation of that foreign player roster spot. We aren’t likely to see dozens of U.S. amateurs head to the Far East to play.

But it has cracked the door open. And what happens when there’s a college player — another J.D. Drew, another Wade Townsend, another player who has made it clear he’s willing to sit out a season rather than sign a pro contract he doesn’t think properly values him — that is willing to go this route? What if Alek Manoah says, I can get high level batters out now, and rather than take a $4.5 million signing bonus and have to toil in the minors and then be stuck in the MLB pre-free-agency compensation system, I’d rather sign a 4 year, $10 million deal with a team in the JPL, make a big guaranteed amount, and be in position to sign anywhere at age 25?

Its a potential nightmare for MLB. And its the type of thing that could catalyze changes in the system, the type of thing that could have future fans talking about Carter Stewart as being in the same category as Curt Flood or Andy Messersmith.