Expect Yankees to go globetrotting

With an international draft possibly on the horizon, industry sources expect the Yankees to spend big this summer on foreign talent. ESPN New York Photo Illustration

The following is the second installment of ESPNNewYork.com's three-part series on the state of the Yankees' farm system.

NEW YORK -- When it comes to player development, there is still one area in which the Yankees can exert their fiscal dominance: the international market.

Unlike the amateur draft, in which a team like the Yankees is often victimized by its own success with a series of low draft picks, the Yankees' dollar is still king in the world of buscones and 14-year-old kids running endless hitting and fielding drills on dusty ground in hopes of someday playing ball in the United States.

And industry sources tell ESPNNewYork.com the Yankees are expected to open their formidable wallet to the international market in a big way this summer in an attempt to reload their farm system and cash in on what many believe is a particularly strong crop of foreign-born talent.

Despite baseball's best attempts to level the playing field by imposing financial penalties on big-market teams -- much as it did in imposing a graduated luxury tax and revenue-sharing on team payrolls over $189 million -- the Yankees are apparently preparing to spend wildly during this year's international signing period, which begins July 2.

Under baseball's new and complex international signing rules, instituted with the adoption of the new CBA in 2012, the Yankees are allotted a little more than $2 million without penalty to spend on international players. (Japan and some other countries are excluded in this arrangement.)

However, according to a baseball insider, the Yankees could spend as much as $18 million this summer on players from Latin America, who already make up more than 27 percent of baseball's 30 active rosters, including some of its biggest stars, such as former Yankees second baseman Robinson Cano.

Such an expenditure would put the Yankees some $16 million over their allotment -- and cost them approximately $12 million in penalties, as well as limiting the amount they can spend next year to just $250,000 per player.

In all, they may spend around $30 million in bonuses and taxes instead of just the $2 million-plus the CBA assigns them.

In 2013, the Chicago Cubs and Texas Rangers both used this strategy, but reportedly spent less than $10 million. The Yankees went slightly over their allotment in '13, but nowhere near the Cubs or Rangers.


The Yankees are apparently willing to take the financial plunge because of fears baseball will soon institute an international draft similar to its amateur domestic draft, an area in which the Yankees have not fared well in recent years.

According to a source in Major League Baseball, the league had discussions earlier this year with the MLB Players Association about starting a draft, but the two sides were unable to reach an agreement.

"I don't see it happening next year," the source said.

Still, many in baseball believe an international draft is coming. The current system, in which teams are awarded "slots" with corresponding monetary values that they are allowed to spend -- in inverse proportion to their winning percentages -- is seen as a precursor to a formal draft and a way to limit the advantages of big-market clubs, such as the Yankees and Los Angeles Dodgers.

Based off the 2012 standings, the Houston Astros, who had the worst winning percentage in baseball, received $4,943,700 in 2013, according to Baseball America. The Washington Nationals, who had the highest winning percentage that year, were allowed $1,846,900. The Yankees, who won 95 games in 2012, were allotted $2,577,900.


Considering the Yankees gave $3 million to Gary Sanchez, their top catching prospect, in 2009, it doesn't seem like much to spend. (By contrast, the Yankees signed Cano for a mere $45,000.) That is why the Yankees are likely to go over their allotment -- and some say way over -- in what could be a last hurrah at raiding the fertile grounds of Latin America.

"It's a fascinating gambit," said one competing scout who has heard rumblings of Yankees wealth about to be spent. "It's one of the last areas where they can really flex their financial muscle."

Yankees general manager Brian Cashman refused to comment on how much the Yankees might spend on international signing this year, but acknowledged, "It's certainly our prerogative [to spend more than the allotment]."

A member of the organization who requested anonymity told ESPNNewYork.com: "We consider it a strategic option. Whether we play it this year hasn't been decided. At some point I would imagine we would. It might make sense. One of the things that is looming is the draft and once that happens, we have the same circumstances as in the U.S."

In theory, the Yankees could use the same strategy in the domestic draft, but the penalties are too great. If a team goes 10 percent over its allotment -- which was nearly $8 million for the Yankees in 2013 -- it loses its first- and second-round picks in the next year, making it too risky a play.


But even with a seemingly limitless checkbook, the Yankees acknowledge that projecting international players might be even more of a crapshoot than projecting U.S.-born players.

"They're not playing in leagues down there," Cashman said. "There's no high school or college league or Little League or anything like that. They're basically taught to be professional tryout players. You scout them off their tools, sign them, and then you have to teach them how to play the game."

Mark Newman, the Yankees' senior vice president of baseball operations and who oversees international scouting, said: "Because most of them are so young, you are kind of dreaming about what kind of power they might have. Especially in Latin America, some of those kids are malnourished, they are very young, like 16 or even 15½, so it requires some projections."

According to Newman, some Latin American prospects, such as Sanchez and catcher Jesus Montero, since traded to the Mariners for pitcher Michael Pineda, are easy to project. "They were mature and better than the kids their age."

Others, like left-hander Manny Banuelos, a mere 5-foot-9 and 155 pounds, are not so easy to gauge.

"Lee Sigman (a Yankees scout based in Mexico) liked his arm stroke and his feel for spin so that was the attraction," Newman said. "We didn't know. Manny is not built like Michael Pineda or [Ivan] Nova or one of those guys. His velocity picked up and that is how he became the high-level prospect. No one could have predicted that. At the time we signed him, we liked him."

Banuelos was given about a $200,000 signing bonus despite only throwing 87-89 mph as a 17-year-old.

"That was a moderate bonus in this day and age," Newman said.

Banuelos' velocity soon increased to 95 mph before he had Tommy John surgery in 2012.

But like all Latin American players, the Yankees had to sign Banuelos -- and Cano, Sanchez, Montero, Nova, Hector Noesi, Francisco Cervelli, even Mariano Rivera (for a mere $3,000) -- without ever having seen any of them play in real games.

"There is an element of hope or wish in it," Newman acknowledged. "But you try to do it, based on some criteria, body type, athleticism, those types of things."

In Latin America, a buscone, or street agent, customarily lines up dozens of kids and works them out daily in the hopes of attracting the attention of someone like Newman, Sigman, or the dozens of other international scouts on the Yankees' payroll.

"They teach them to throw as hard as possible and hit the ball as hard as possible and run as fast as possible," Cashman said. "All you can do is scout them off the tools, and hope."

In the past two decades, the price of signing such raw, untested talent has skyrocketed -- in 1990 Rivera signed for the equivalent of $5,360 (2014 dollars), and in 2008, the Oakland Athletics gave Dominican right-hander Michael Ynoa, who has yet to throw a pitch above Class A ball, $4.25 million, officially the biggest international bonus in MLB history.

Newman could recall being told, "How can you do this? You're killing the market!" when the Yankees signed Dominican infielder D'Angelo Jimenez to a $25,000 bonus in 1994.

In recent years, the Yankees have handed out bonuses of $550,000 to Jose Tabata, who never played for them and was eventually included in a trade for Damaso Marte and Xavier Nady; $150,000 to Noesi, who was included with Montero in the trade for Pineda; $80,000 for Nova, who will likely be their No. 4 starter this season, and $65,000 for Cervelli, who will once again compete for the backup catcher's job after a season marred by injury and a 50-game suspension for his role in the Biogenesis scandal.

In addition to Banuelos, Sanchez and Pineda, the Yankees are currently dreaming on Luis Severino, a 19-year-old Class A right-hander who got a $225,000 signing bonus in 2011.

Not surprisingly, the Yankees refuse to reveal which international players they might be interested in this year, nor how much they plan to spend on youngsters with limitless potential based on very limited information. But clearly, the international market provides an opportunity for a spending spree that might not exist for much longer.

"In the international market, we were always able to be more aggressive and Mr. [George] Steinbrenner always encouraged us to do that," Newman said. "That's how we ended up with the Canos of the world, the Novas, the Noesis."

When asked if the Yankees planned to take that kind of a plunge this year. Newman said, "We're not there yet. We have to go to ownership and say we would like to do this and this. Anyone who is saying we are going to spend X, Y, and Z, it is nothing more than rumor because we don't have ownership approval. We know we can spend our limit. Anything over, we would need ownership approval."

Hal Steinbrenner wrote nearly a half-billion in checks this winter, flexing the Yankees' financial might in free agency and forgetting the $189 million savings.

Now, with the Yankees knowing they need to reload their farm system, they are on the brink of blowing the unsteady international market out of the water, taxes be damned.

Check back Thursday for Part 3 of the series: Which current Yankees prospects, if any, can make an impact?