Archive for November 18th, 2010

Most of the news coverage emanating from MLB’s General Managers meetings in Orlando has centered on proposals for adding more teams to the playoffs, but another very significant topic has gone relatively unnoticed: expanding the Rule IV amateur draft to include international players like those from the Dominican Republic.

In the Dominican Republic, the game of baseball is so popular, even the lifestock can't help, but join the action (Photo: mopupduty.com).

As I suggested back in April, the Rule IV draft is as responsible for the decline in domestic talent as any other development in the sport. Not only do the restrictive bonds of the draft make playing baseball less appealing to American athletes, but it also significantly reduces the incentive for major league teams to cultivate young talent. The simple response to leveling the playing field between American and international athletes has been to propose extending the scope of Rule IV requirements. Instead, baseball should not only resist such a change, but go even further and eliminate the Rule IV draft altogether.

In yesterday’s New York Times, Michael S. Schmidt wrote an interesting article about a growing investment opportunity in the Dominican Republic: young baseball players. Basically, individual investors (including professionals from across a wide spectrum of industries, including finance, politics, diplomacy and even major league baseball) have been establishing baseball academies in the Dominican Republic (video of one such establishment is presented below), much like major league teams have been doing for almost 30 years.

Schmidt’s reporting includes obligatory concern from MLB in the voice of Sandy Alderson, who before taking over as the Mets GM was in charge of overseeing baseball’s operations in the Dominican Republic, but the response seems rather transparent. After all, if private academies uncover players, it prevents major league teams from building an early relationship that can often lead to a favorable contract. Besides, the reason Sandy Alderson was working in the Dominican Republic was because major league baseball wasn’t exactly conducting itself in the most upstanding manner.

Also included in the report were objections from Indiana University professor David P. Fidler, who stated that the academies, which turn a profit by taking a percentage of bonuses given to their players, were basically “selling children”. Of course, that notion is absurd. The academies aren’t selling children. Instead, they are selling the talent that the academies helped develop. Again, it really isn’t any different from what the clubs have been doing for years. The only difference is the players now have an advocate with a direct incentive to negotiate as large a contract as possible.

Make no mistake about it. Not every academy is going to be reputable. Some players will likely be exploited. However, that’s always been the case. Ultimately, the number of opportunities provided to those without comparable alternatives well outweighs the potential for harm.

Coming full circle, one wonders if the impetus to expand the Rule IV draft stems from baseball’s desire to nip these private academies in the bud. If they aren’t able to negotiate large free agent bonuses, the economics of their business model becomes less compelling. In addition, the major league clubs would longer have to worry about bidding against each other for high profile talent. Instead, they could simply draft the international player and then exert the tremendous force of the reserve rules upon them. No longer free agents, how many young, impoverished players from Latin American will be able, much less willing, to sit out a year if they aren’t happy with the contract being offered?

Hopefully, the player’s union does not abandon their international brethren. Even though the current system does put American-born players at a disadvantage, evening the playing field shouldn’t be about two wrongs making a right. Instead, the MLBPA should be pushing for abolition of the draft altogether. Just think about how much private and team investment would take place in U.S. cities if there was economic advantage to finding and developing talent at such an early age.

The best way to reinvigorate the American athlete’s participation in baseball is to remove the restrictions. Unfortunately, that isn’t likely to happen. Hopefully, baseball doesn’t compound its mistake at home by making the same one all around the world.

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