Go Inside The Yankees' Int'l Spending Spree

Kiley shares the updated list of 27 players the Yankees have signed so far, with reports, videos, bonuses, analysis, thoughts from the industry and implications for the Yankees and MLB going forward.

International Content

July 2nd Analysis (July 2014): Projections Notebook & Inside NYY Spending Spree ($)

July 2nd Reports/Video (June 2014): 1-5 ($), 6-10 ($), 11-20 ($) & 21-50 ($)

July 2nd Strategies Come Into Focus (Feb 2014)

How Game Theory Explains Int'l Bonuses (Jan 2014)

Yankees Plan To Shatter Int'l Spending Record (Jan 2014)

Puig Stories Shed Light On Ugly Process (April 2014)

MLB Draft Coverage

2014 MLB Draft Reactions: Day One Live Blog

2014 MLB Draft Rankings: The Draft Board

2014 MLB Draft Podcast: Jim Callis

2015/2016 MLB Draft Rankings: 2015 College, 2016 College & 2015-16 High School

What's Went Down Yesterday

Per myself, Baseball America's Ben Badler and MLB.com's Jesse Sanchez, here's what we can confirm the Yankees did the last two days, with all players 16 years old and signed to 2015 contracts*, unless otherwise indicated, all of them counting towards the 2014 international pool and links to video/reports included:

1. Dermis Garcia, 3B, Dominican Republic: $3.0 million** REPORT/VIDEO

2. Nelson Gomez, 3B, Dominican Republic: $2.25 million REPORT/VIDEO

3. Juan De Leon, OF, Dominican Republic: $2.0 million REPORT/VIDEO

4. Jonathan Amundaray, RF, Venezuela: $1.5 million REPORT/VIDEO

5. Wilkerman Garcia, SS, Dominican Republic: $1.35 million REPORT/VIDEO

6. Hyo-Joon Park, SS, South Korea: $1.1 million (18 years old) REPORT

7. Miguel Flames, C, Venezuela: $1.0 million REPORT

8. Antonio Arias, CF, Dominican Republic: $800,000 REPORT/VIDEO

9. Diego Castillo, SS, Venezuela: $750,000 REPORT

10. Frederick Cuevas, OF, Dominican Republic: $300,000

11. Griffin Garabito, SS, Dominican Republic: $225,000 (signed 2014 deal*)

12. Servando Hernandez, RHP, Venezuela: $200,000

13. Alexander Vargas, RHP, Dominican Republic (voided contract 9/2013 with Twins***, signed 2014 deal*) VIDEO

14. Leobaldo Cabrera, OF, Venezuela

15. Jason Lopez, C, Venezuela

16. Raymundo Moreno, OF, Venezuela

17. Adolfo Morillo, OF, Dominican Republic

18. Pablo Olivares, OF, Venezuela

19. Lisandro Blanco, OF, Dominican Republic (17 years old)

20. Danienger Perez, SS, Venezuela (17 years old)

21. Gilmael Troya, RHP, Venezuela (17 years old)

22. Jose Polonia, SS, Dominican Republic (18 years old, 2014 deal)

23. Erick Mendez, OF, Dominican Republic (18 years old, voided deal 7/2/2013 with Royals, 2014 deal*)

24. Wander Hernandez, IF, Dominican Republic (19 years old)

25. Yossty Vargas, RHP, Dominican Republic (19 years old)

26. Bismar Nunez, C, Dominican Republic (19 years old)

27. Luis Pache, LHP, Dominican Republic (20 years old)

* Note: 2015 contract means their first appearance in scout-able games would be in Sept/Oct 2014 instructional league, with their first official competition likely after the 2015 draft in the GCL or DSL, with their 6 year minor league contract clock starting in 2015, as is typical with high dollar July 2nd signees. Players with previously voided deals can only sign contracts for the present year and to make 2014 roster numbers work (and other considerations), some lower bonus players sign 2014 deals as well. I don't know the reasons these deals were previously voided, but it's normally an identity situation (false or vague enough that the club is uncomfortable with the current contract terms) or a negative physical.

** Note: this bonus was mentioned as $3.2 million from a Dominican media outlet yesterday, though Sanchez confirms it as $3.0 million and that's the number I've heard on Garcia for months, so we'll go with that for now. Also, a source confirms the deal still isn't officially processed (as the other confirmed deals above are), but an agreement has been struck, so it's likely just a paperwork/physical situation that only becomes worrisome if it takes weeks to process the contract. (EDIT: Deal is confirmed done & processed.)

*** Note: Vargas is aged like a July 2nd eligible player but signed last year, so his voided deal is likely due to his age incorrectly being presented as too old after an investigation, proving that some identity situations are mistakes/oversights in a third world country, rather than fraud. I scouted Vargas at a workout last January as a 2013 July 2nd eligible player (which is where the video comes from) and his deal with the Twins was for around $200,000, which is what I'd estimate he got from the Yankees, as he's still the same age as scouts thought he was back then. At that workout, he was a big 6'4 righty sitting 84-88 that had touched 91 at other events and shows some feel for three pitches.

I don't have bonus figures for the bottom group of players, but some of them aren't first-time-eligible 16-year-olds (noted in parentheses next to their names) and none of them were prospects we heard about before July 2nd. What this means is the Yankees targeted them at some point in the last year and needed to wait until July 2nd when bonus pools reset to sign them. It's fair to assume most of that group got five figure bonuses and that whole group got $400,000 to $800,000.

What Could Still Happen

While it sounds like a long-rumored deal with Dominican SS Chris Torres fell apart late (with the Mariners now in the lead), it also sounds like a rumored Padres deal with Colombian OF Bryan Emery (REPORT/VIDEO) also fell apart late (around the time they fired GM Josh Byrnes) and now the Yankees are rumored to be the front-runner for Emery. Emery is a divisive prospect whose trainer doesn't allow him to play in games, so clubs' opinions vary wildly, but rumors had the aggressive teams on him bidding around $2 million.

There aren't really any other top prospects on the market that don't appear to have a deal cut already, with some having deals that will be announced any day while other have to wait until they turn 16 in the coming weeks to sign their contract. There aren't any Cuban defectors that are subject to international bonus pools (under 23 or with under 5 years of pro experience) that will command a big bonus, but with the Yankees being one of a few teams that are already paying penalties, they would be one of the favorites should one of those players emerge.

The top unsigned Cuban player is OF Yasmani Tomas (REPORT/VIDEO), who won't be able to sign for months and will be a free-and-clear free agent like Jose Abreu or Yasiel Puig that any club can bid on with no restrictions. With good workouts, his price could approach $50 million in a multi-year deal.

Financial Ramifications

I broke this down in detail back in January when I broke news of the Yankees plan to blow past their bonus pool, which they planned last August. Here's the short version: the Yankees have to pay a 100% tax on every dollar spent more than 5% over their bonus pool of $2.19 million. Once they go over 15% over their pool, a club can't sign a player for over a $300,000 bonus for the next two more years.

So, the confirmed Yankee signings plus an estimation of the bonuses to the additional signees adds up to $15.075 million, which would trigger penalties of $12.772 million for a total outlay on July 2nd of $27.847 million. That also means adding a $2 million bonus for a potential Emery signing would have a marginal cost of $4 million at this point, pushing the total outlay to $31.847 million.

Big, round numbers were tossed around as the potential cap for Yankees July 2nd spending, with the highest being total bonuses of $20 million (not including penalties), which seems unlikely now. It would appear that, if there is a hard cap for what the international department can spend, that it may be $30 million total, which would explain the delay on a potential Emery signing. Negotiating a good number with Emery's reps while also waiting to see if any existing deals fall apart for medical/identity reasons would explain a lot of what's going on, along with the Chris Torres deal suddenly coming into question about a month ago, when teams were figuring out what would happen on July 2nd.

There's much more on the strategy and context for this move here and here, but, for context, the previous highest one-year international amateur bonus spending by another club was about $15 million by the Rangers the year before the rules shifted from no limits on July 2nd spending to the current bonus pool system.

How Good Are These Players?

I have reports for the big bonus player linked above, but I'll run down each one quickly:

Dermis Garcia, 3B: Has the flashiest tool in the Yankee class, with power that could generate 30 homers and simple swing mechanics but he can get out of control at times and some scouts wonder if his swing is loose enough to hit elite pitching.

Nelson Gomez, 3B: Most mature frame in the Yankees' class looks physically like 1B but might be able to play 3B, with advanced hit tool and above average power.

Juan De Leon, RF: Most well rounded kid in the Yankees' class has a chance to play center field with projectable power that would fit in right field.

Jonathan Amundaray, RF: Athletic, projectable kid that could develop plus power but swing needs some tweaks.

Wilkerman Garcia, SS: Solid tools and size that fit in the middle infield with advanced lefty stick, but more of a solid player than the huge upside type.

Hyo-Joon Park, SS: Korean shortstop often compared to Rays prospect Hak-Ju Lee with four above average tools (all but power). Since he's two years older than the other prospects in this group (Korean prospects don't sign until they finish high school) he's the most advanced of the group.

Miguel Flames, 3B/C: Big kid has a chance to catch but fits better at 3B or RF while bat is the separator, with chance for 20 homers and some feel to hit.

Antonio Arias, CF: Lanky plus runner fits in center field with solid bat potential that could improve a lot as he fills out his frame.

Diego Castillo, SS: Smaller guy that fits in a middle infield position, has an advanced bat and gets the most out of modest tools that could improve with a growth spurt.

Each fan has his own idea of what type of player(s) their team should sign, so I'm sure there's a couple descriptions above you really like and a couple you don't. The industry reaction is that this is a solid crop, although nearly every scout thinks they could pick better players with this kind of budget and wonder why the Yankees didn't get either of the consensus top talents (SS Adrian Rondon, who will sign with the Rays and 3B Gilbert Lara who signed with the Brewers, both for over $3.0 million). That said, this year lacks the impact generational talent and the Yankees have said privately they think they got the best players in the class, though they made those decisions last fall and players have developed since then.

The Yankees have two DSL and two GCL teams so you shouldn't worry as a fan about who goes to which affiliate and how they will split up playing time as young players often split at bats as they need more rest and the Yankees made room for all these new players. The typical team signs about 12-15 players, maybe into the 20's in a year-long cycle and 4-6 in and around July 2nd, as most have one DSL team, one GCL/AZL team and one short-season team, with the draft and players signed in previous years filling almost every hole on the two stateside short-season clubs.

Yankee-Specific Implications

Again, you can go back to my original story for more about the logic behind this strategy, but suffice it to say it was a last-ditch effort from some embattled scouting/development executives to prove their mettle. The problem with getting your big shot to prove you deserve your job with a bunch of someone else's money is that it's basically impossible to pick players with any accuracy when they're 14 or 15, as the Yankees were forced to do (for reasons I explain in that original story).

The narrative of whether this group is worth the money and if the executives earned some job security won't be told by scouts because these players won't play in full-season leagues (the lowest level where scouts can regularly see them) for 3 years in most cases. That means stats from lowly complex leagues, the stray short look from a scout and media accounts will tell the story for the next three years of if this group was worth the money. And by the time pro scouts get to weigh in, these Yankee executives will already have contract extensions or be fired, according to the narrative.

Luckily, I live in Tampa near the Yankee complex and can go watch as many GCL, extended spring training and instructional league games as I want, but we basically need to wait at least 3-4 years until this group can be judged alongside their similarly-aged high school peers in pro ball to really have a sense of where they all stand, but the decisions will likely be made before then.

MLB-Wide Implications

While you can quibble with the players they picked, the consensus around MLB is that this is logically the best way to flex financial muscle. With big league free agency nothing close to a good value on the whole, the draft essentially instituting hard caps on spending and pick acquisition and while premium Japanese free agents are paid like domestic free agents now, the only places to spend money and get some sort of reasonable ROI is extending young players (if you have them), signing Cuban free agents (if there are any, and that value is quickly evaporating anyway) or the July 2nd market.

I still don't completely understand why a club didn't do in the past exactly what the Yankees did this year, although I tried to explain the game theory reasons of that a few months ago. Essentially, clubs don't go all out to the logical extreme of a strategy until 1) it's clear or formally announced the rules are about to get more strict, so there's nothing to lose as there can't be a punishment of new and stricter rules in response to a spending spree or 2) you're desperate to keep your job and your boss will give you $30 million. It sounds like the Yankees' logic was a little of both, with an international draft seeming inevitable within 5 years and probably even sooner after they pulled something like this, so it's likely a one-shot deal given the two-year ban on big signings.

Most international scouts I've talked to think this Yankees' July 2nd spree wasn't good for the game, as it further separates the haves from have nots and speeds up the timetable for an international draft. Nearly everyone involved in the July 2nd market thinks an international draft would be a death blow to tradition scouting in Latin America (for a number of reasons that is its own article) and while the draft seemed inevitably coming before what the Yankees did, the only known way to speed up a guillotine is to mock the executioner.

Follow Kiley McDaniel on Twitter for more baseball news on the draft, the minor leagues, the big leagues and July 2nd.

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