Yankees Plan To Incur 2014-15 Int’l Spending Penalties

The Yankees plan to spend $12MM-$15MM on the 2014-15 international amateur free agent market, incurring $10MM-$12MM in penalties, Kiley McDaniel of Scout.com reports. That $12MM-$15MM figure would not include potential spending for Masahiro Tanaka, who is not subject to international bonus pools that govern spending for most Latin American amateurs.

2014-2015 international bonus pools have not yet been set, but the Yankees' figures to be about $2MM to $2.5MM, according to McDaniel. The Yankees would have to pay a 100 percent tax on any spending past 10 percent higher than their bonus pool. If they go more than 15 percent above their bonus pool, they would also lose their ability to sign any international amateur for more than $300K in the 2015-16 or 2016-17 signing seasons. Greatly exceeding their bonus pool could also cause the Yankees to lose top picks in an international draft, if MLB decides to institute one. Obviously, by spending $12MM-$15MM, the Yankees would blow way past those penalties, incurring around $10MM in taxes and spending a total somewhere near $25MM.

In 2013, the Cubs spent heavily on international prospects Eloy Jimenez, Gleyber Torres, Erling Moreno, Jen-Ho Tseng, Jefferson Mejia, and Johan Matos. That gave the Cubs the two top international prospects on the market (Jimenez and Torres), plus two more in the top 30 (Moreno and Tseng). That spending cost the Cubs $7.895MM. It appears the Yankees plan to spend far more, which would potentially allow them to dominate the international market, unless other teams ignore their bonus pools as well.

For the Yankees, one positive in making their plan public, as McDaniel points out, is that agents will not assume the Yankees are making offers in bad faith. McDaniel reports that an executive from a team that has exceeded its bonus pool in the past said the team had trouble getting agents to believe its offers were sincere. The Yankees should not have that problem if agents believe the Yanks are willing to exceed their bonus pool.


85 Responses to Yankees Plan To Incur 2014-15 Int’l Spending Penalties Leave a Reply

  1. Riaaaaaa 2 years ago

    I dont get it… Does this just mean they plan on buying players from other countries instead of drafting?

    • livestrong77nyyankz 2 years ago

      Probably since a good chunk of our valuable draft picks have been lost through free agent signings.

      • Riaaaaaa 2 years ago

        Hopefully we will end up with some good young talent next year then

        • livestrong77nyyankz 2 years ago

          With that kind of money being used I would think there will be some talent replenishing our farm system.

          • jjs91 2 years ago

            Potentially but the yankees need AA players to rebound. The people they signed probably won’t be in the systems top 30 for another year.

          • livestrong77nyyankz 2 years ago

            I expect some of them to rebound and hopefully Manban shows some positives after having tjs

        • livestrong77nyyankz 2 years ago

          Preferably infielders and starting pitchers that are left-handed please.

    • chris hines 2 years ago

      Because when other teams do it they are “signing prospects” but the Yankees are “buying players from other countries”. You’d almost think that the majority of players in the MLB were latin born kids signed as IFAs… probably because they are.

  2. ceraunograph 2 years ago

    Good. Every team should do this every season.

  3. I believe this was reported some time ago and could be easily understood since they will lose just about all of their meaningful picks for the upcoming draft. They should go hard internationally, but they are seriously 3 years late to this party.

  4. mstrchef13 2 years ago

    And this is why the Yankees and Dodgers (and to a lesser extent the Red Sox) will always have a major financial advantage over all other MLB teams. They can afford to ignore the massive penalties that would at least hinder and in some cases cripple other teams.

    • Runtime 2 years ago

      I still don’t understand why they haven’t implemented a hard cap…

      • MB923 2 years ago

        You do realize what caused the 94 strike don’t you? The players union will never agree to it.

        • Runtime 2 years ago

          I do understand that…
          Same issue that caused the 2004 NHL lockout.

          There needs to be either a hard cap or a stupid insane luxury tax (900% or something stupid)

          • MB923 2 years ago

            I think there should be a hard cap too. But I don’t see the players union ever agreeing to it.

          • Jeff 2 years ago

            It would take the full breaking of the union- and baseball players are smart enough to stick together unlike the other pro sports.

      • RIYankeeGuy 2 years ago

        They already have a “soft” cap, which is where the luxury tax comes into play. If you institute a hard cap like the NFL, then teams would also have a hard salary floor. In which case, the Astros, Marlins, Pirates, etc would be pressured to reinvest a vast majority of their revenue into payroll and in down years would be assuredly operating in the red.

        Your best bet is faster luxury tax accelerators and/or a stiffer LT %. All a hard cap accomplishes is making big market owners extremely rich without ever having to justify their actions to a fanbase.

    • Karkat 2 years ago

      But if they spend even close to what’s reported, they’re also restricted from signing anyone in 2015 for more than $300K. So they can ignore the taxation one year, but then they’re completely hamstrung the next.

      • RIYankeeGuy 2 years ago

        Well considering they’re planning on going 500-600% over the cap, they should be able to sign a number of the top 10 players available.

        Why compete for one big arm or bat with 29 other teams each year when you can net 6-8 players every other season.

      • jjs91 2 years ago

        They think a draft is coming so they would lose two ifa picks. Under a drat they would never get top talent they have to this now.

        • RIYankeeGuy 2 years ago

          An international draft might be a ways away as the KBO and NPB are hesitant to allow their talent to enter such a draft, but it only makes sense to start including Asian players early, before they are team controlled with awful long term contracts at 18.

          • jjs91 2 years ago

            It only be for latin american players.

          • RIYankeeGuy 2 years ago

            Certainly more likely, but MLB has long discussed a world-wide international draft.

      • East Coast Bias 2 years ago

        This is true. They must think it’s worth it to incur the penalties for the following year. Cubs did something similar. I think it’s a good idea to study the market and if you think there is a weak class approaching, go all in the prior year.

    • Chase Johnston 2 years ago

      The Rangers actually did it first last season.

      • jjs91 2 years ago

        The rays did it first actually. (to a much smaller extent).

    • johnsilver 2 years ago

      That does not hold water. NY could have had a better farm system, had they spent more and made a fewer wise choices with their drafting. LA? They could have had a decent system as well, if not for spending terribly on both IFA and rule 4 talent for several years and Boston didn’t spend nearly as much as did some teams named KC, Pittsburgh who were ravaged by the rule changes.

      Small market teams, like TB even got hurt, it even forced some like Houston to finally spend. Ones like NY were used to not paying attention to the draft/ignoring it until it’s roster got ancient and they found themselves with nothing finally. Don’t blame the teams that properly used the old system (KC, TB, Pittsburgh, STL and Boston) for other teams that ignored what was plain and simple for anyone who cared to see it.

      • jjs91 2 years ago

        The sox did go overslot with the old system. They also had a lot more picks than the yankees and lower picks than the yankees.

        • johnsilver 2 years ago

          Don’t just pick out Boston from the post, but small market teams KC, Pittsburgh and TB.

          The supposed goal of the slotting system was to even the odds from large market teams if over spending, but of the large market teams? Only Boston spent much of amateur talent (not as much as above named small market teams) and mid market Cardinals spent wisely on amateur talent. The other large market teams fettered away what they wasted on 1 fringe FA that would have been better spent each year on the rule 4 draft.

          For what? To force non spending teams, like Houston and Minnesota, that were habitual gripers of “large market teams make it so unfair” to spend in the long run.

          Had those teams (and others like them) spent wisely all along? Small market teams with excellent scouting and R&D staffs, like TB that can only compete in the dog eat dog east WITH excellent scouting of amateur talent wouldn’t have found themselves in need to cry wolf, when they were the ones at fault for their own problems and issues all along.

          It’s going to take several years to finally filter out, but if the Rays ML system falls flat? It’s going to be plain why.

    • DMoney1184 2 years ago

      Are you pleading poverty for small market baseball owners? Because to suggest people like Jeffrey Loria don’t have the money is simply not true. They’re just not willing to spend it.

  5. Tigers72 2 years ago

    Does this mean next years international market is going to be much better than the one after.

    • Wags71 2 years ago

      It just means the Yankees are desperate now that they realized how bad their farm system is.

    • Spencer James 2 years ago

      I hope so.

    • BlueCatuli 2 years ago

      My understanding is it is not going to be as strong as this year’s, which is why the Cubs chose to spend over the allotment and take the penalty. Only time will tell.

  6. sourbob 2 years ago

    This is essentially what the Cubs did in 2013. They decided the year’s crop was very much to their liking and they ended up signing… what was it?…. six of the top ten available players?

  7. Frittoman626 2 years ago

    Are there supposed to be a lot of legit talent in next years international pool? Just asking.

  8. Adam Bomb 2 years ago

    As a Boston fan, I’ve come to respect the Yankees for the insane amount of championships. Having a large payroll doesn’t necessarily mean much, as many teams have failed with big money guys, including the Red Sox in 2011.

    • TFF17 2 years ago

      Spending money on IFAs is a much better strategy than spending it on 35 year old veterans. They can spend $15M, pay another $15M in penalties, and still come in at a fraction of what it would cost to sign Carlos Beltran or Ricky Nolasco. Prospects are a gamble, but if you sign enough top prospects you are likely to hit on one or two.

  9. skandy1 2 years ago

    It would be nice to know what all of the players mentioned, that the Cubs signed, have done. Anyone know?

    • jjs91 2 years ago

      Nothing. They can’t play until 2014.It be much more helpful to look what the rangers did in 2011. Odor becomming a top 50 prospect is one of the major things. Beras still has time as well, and Martin looks to have some major league role.

  10. Kevin Wisla 2 years ago

    With the Yankees ability to develop talent, they’ll probably spend all this money and not produce any major leaguers.

    • Vmmercan 2 years ago

      It’s true, Cano was a terrible waste. As was Melky, Soriano, Wang (for his spell) and all the other names they’ve acquired internationally.

      • Riaaaaaa 2 years ago

        took the words right out of my mouth.

      • therealprof 2 years ago

        Melky was a borderline player for us. Didnt become good until the juice. Soriano came with a the same birth certificate as the guy from Benchwarmers but turned out pretty good. Any combination of 3-4 names can be put together to prove a point, but the fact remains that the vast majority of the Yankees recent prized prospects fall flat on their faces.

        • jjs91 2 years ago

          More than half of all top prospect fail… Melky was a .750 ops guy at age 21.

          • LordOfTheSwings 2 years ago

            Objectively though, the Yankees have been one of the worst team at developing young talent in the past 10 years.

            Cano is obviously a superstar, Wang gave the Yankees two good years, Soriano gave them 2+ good years (and gave them A-Rod of course, the greatest gift of all),

            Melky was pretty good for his age, but his (fangraphs) WAR was 3.0 over his 569 games during his time with the Yanks (which is a 0.854 per 162 games)… which is awful.

            There have been a few others such as Clippard, A. Jackson and Melancon that have succeeded to some degree only after leaving the Yanks (which could support the fact that they’re bad at developing young players) but overall, they have been very unsuccesful.

          • MB923 2 years ago

            As a Yankees fan, I completely agree with this

          • Lionel Bossman Craft 2 years ago

            Products of the Yankees farm from the last 10 years: Austin Jackson, Ian Kennedy, Tyler Clippard, Chien Ming Wang, Robinson Cano, Brett Gardner, David Robertson, Phil Hughes, Ivan Nova, Mark Melancon, Edurado Nunez, Melky Cabrera, Phil Coke, etc etc

          • OldHaus 2 years ago

            Some good players you mention there. It would be better to compare this list to others in baseball during this time period. Compared to Boston and Tampa Bay or any of a dozen other teams, the Yankees don’t look so good.

            Maybe the Yankees should have used their financial advantage when they could in the June draft? Internationally they have always spent, but they always looked like they were fighting with one hand tide; but not now.

          • Lionel Bossman Craft 2 years ago

            Compare it to another team, why not your favorite? Even if it’s not fair comparison, it shows the Yankees are able to draft somewhat well since they usually draft last or close to it. But as far as developing talent goes, Yankee Stadium isn’t the best stage. When most teams convert a reliver into a starter it’s no big deal. When Joba made the conversion it was like international headlines, even the term ‘Joba Rules’ was coined. Everything is under a magnifying glass so developing a young player I would say is not as easy as in Tampa for example. Not to mention the expectations in NY are much higher then elsewhere also.

        • Kevin Wisla 2 years ago

          ^^^ Exactly. A guy who is 30 years old headlining the top of the list of prospects they’ve developed shows that its been a while. There are always going to be exceptions but time and time again the Yankees prospects have stalled out. You want to put a list together a list of players they’ve developed in a 12 year span to make your point sound impressive, ill put together a longer list of failed prospects thats just as impressive.

          • jjs91 2 years ago

            And I’ll put a list of failed royal prospects together, which will tell me nothing about their skills of developing players. Prospects that make the big leagues are the exceptions.

        • Vmmercan 2 years ago

          Except the point I’m arguing is they won’t produce any major leaguers. They have done pretty well for themselves in the international market when they pursue it. So the joke doesn’t make sense and is wrong. I could produce one name to disprove it, I humored you with multiple and I’m sure if I actually looked into it, I can produce more.

      • Kevin Wisla 2 years ago

        Sweet, I forgot that were still in 2005 and all the failed prospects since then dont matter.

    • therealprof 2 years ago

      You read my mind. The pain of Hughes and Joba, sprinkled with a pinch of Betances and Brackman is far too much to forget. I am optimistic about ManBan and even a little about Pineda because of past pitching ability, but a whole crop of 15 year olds is begging for a reality show about failure in about 10 years.

  11. UltimateYankeeFan 2 years ago

    “The Yankees plan to spend $12MM-$15MM on the 2014-15 international amateur free agent market..” I would love to see the Yankees do it.

  12. DerekJeterDan 2 years ago

    The Yankees are very committed to winning a World Series in the near future.
    I for one would love to see it happen. We need a Canyon of Heroes parade in NY
    Bring in all the international talent you can and reap the benefits later on. Good plan.

    • Riaaaaaa 2 years ago

      *cue the negative comments about how yankees buy championships & have aged players with no farm*

      • livestrong77nyyankz 2 years ago

        Well the Yankees do have a roster of veterans and our farm system is really nothing to write home about, although that is in part due to an unusual occurrence in which all of our prospects had down years, the same ones that were praised the years prior.

      • UltimateYankeeFan 2 years ago

        What were the Cubs trying to do when they spent $7.9MM on international signings in 2013?

        What were and are the Rangers trying to do when they signed Darvish at a total cost of over $100MM and just now trading for Fielder and signing Choo for $130MM. Not to mention signing Beltre in 2011.

        …and there are other teams that do exactly the same thing.

        • Croagnut 2 years ago

          Cubs spent 7.9m, which is way more than any other team, so its only fair the Yankees spend 12-15mil.

          “other teams that do exactly the same thing” – Noone does what the Yankees do money wise.

          • UltimateYankeeFan 2 years ago

            I guess you missed what the Dodgers did, then just to name one. Please take the blinders off when it comes to other teams.

          • Croagnut 2 years ago

            Ok, lets look at the Dodgers, if you want. Dodgers spent 12.7mil LESS than Yankees. And that was only because the new ownership wanted to make a splash. Over the past five years, Yankees (1.037billion) spent close to 400mil more than Dodgers (611.4million).

            Any other teams you want to compare? Or we just going to look at the one over-spender each year? You know only compare the two highest payrolled teams each year, without any context or history.

            I’m the one with blinders on? Ironic and Laughable.

          • UltimateYankeeFan 2 years ago

            As soon as the Dodgers got an owner that had enough money to rub 2 nickels together they started exerting their financial might and the same applies to the Rangers as soon as Hicks got out and the NEW Rangers ownership got their TV deal they did the same thing. Including this year. Listen I understand haters and non Yankee fans gravitating towards the “soap box”. but to stick your collective heads in the sand and make believe the Yankees are the only team that spends money and uses their monetary advantage is clearly looking at the issue with blinders on. But have it your way.

          • Croagnut 2 years ago

            ” soap box”, “head in the sand”, “make believe”, “blinders” You’re like a cliche machine. How about a little substance.

            There are lots of examples of new ownerships overspending when they first buy a team (Huizenga, John Henry). Whats that prove? Look at the payrolls over the last 5, 10 or 20 years. Yankees have outspent every other team easily.

            BTW, 2013 payrolls: Rangers 114.0m, Yankees 228.8m.
            More than double. Thats the entire Rangers roster two-times over to get to Yankees payroll, and you think thats a good example of “other teams that do the exact same thing”.

    • Cubstein 2 years ago

      These kids won’t be signed until next July at the earliest and most of them will be 16. Then most of them won’t play professional baseball until the 2015 season for your international rookie leagues. The earliest you’d probably see any of those kids would be about 2019 maybe 2018. Not exactly “near future” plan.

  13. Ley_Z 2 years ago

    This is an interesting, very Yankee-like way to reload the farm system in one fell swoop

    • Wags71 2 years ago

      These are 16 year olds (so they say). Don’t get your hopes up.

      • Ley_Z 2 years ago

        I’m just saying, typical Yankees trying to undo a decade of poor drafting and development all at once by throwing a bunch of cash at it

  14. OldHaus 2 years ago

    “An executive from a team that has exceeded its bonus pool in the past said that team had trouble getting agents to believe its offers were sincere.”

    Is Charlie talking the Cubs? Last year, the Cubs never declared they were going over in advance. In fact, the Cubs made deals to expand their available money, they went over afterward. Did the Cubs miss out on any player because their agent didn’t buy into the Cub’s commitment to go over the limit?

    Isn’t more likely the reason the Yankees are declaring early is to attract the best prospects?

    • Cubstein 2 years ago

      I don’t know a little disappointing the Cubs didn’t go way over since there is no more penalty other than tax from here until the new international signing period. Although they also didn’t report how the Cubs supposedly have signed Wladimir Galindo a few days ago.

      Interesting that the Yankees plan to do this next year given how this will now affect the next two periods not just one like this year’s class will.

  15. WazBazbo 2 years ago

    So wait… the Yankees are willing to incur $10-$12 million in penalties for signing prospects? You’d have to think that makes any and all talk about staying under the “189” threshold irrelevant… I’m mainly unfamiliar with the International prospects out there. Is this year’s crop SO amazing that it’s worth losing any chance of getting anything good for the next year or two?

    • Revery 2 years ago

      Different systems.

      • WazBazbo 2 years ago

        I understand, but paying out cash as a penalty is paying out cash, regardless of what system it comes under… and according to the article, the penalties last for more than the one year’s penalty being paid. It actually looks harsher in many ways than exceeding the 189 limit… and again, it’s all for prospects. Seems odd to me.

        • Revery 2 years ago

          Gotcha. Good point, but it is probably the reset issue. Yanks paid 29M luxury tax last year and can be expected to be the same/raise with additional salaries (such as Tanaka). Getting under luxury cap just once resets the tax and allows for future ML level expenditures above cap. The reset is built into the IFA system by the hard restrictions in the following year.

          • WazBazbo 2 years ago

            That also is a good point. Man, if they made the luxury tax penalties as harsh as the International spending penalties, that might change some thinking! Those are some severe penalties…

          • Cubstein 2 years ago

            I agree, I don’t think its no that they don’t want to spend that money but that they save a lot of money just by resetting their payroll next year and these signing bonuses do not go against payroll penalties so any money saved by not going over can go into other spending.

  16. WhoKilledTheRallyMonkey 2 years ago

    Breaking News: NYY still willing to spend a boatload of cash after BOS won the WS!

    • Cubstein 2 years ago

      A lot of teams would be willing to spend it. They just need to be willing to incur the cost of being handicapped the next two international signing periods. Penalties are more strict next year.

  17. bernbabybern 2 years ago

    Interesting. Theoretically, three teams with deep pockets and willing to do this could take turns every 3 years and control the international market forever. I think a hard cap may be coming.

  18. troche565 2 years ago

    In recent years the Yankees have not done well and it is time to start changing their approach about doing business. The A Rod situation have taught them a valuable lesson and focusing their effort to drafting and developing young talent in their farm system may be a good beginning to changing their approach, with the fusion of some established players. I’m sure this will be hard to do since they look for immediate results but patience is a virtue and investing hundreds of millions of dollars in certain player may not always be the correct approach to doing business, lately their record proves what I have just said.

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