Our correspondent @SocraticGadfly noted yesterday that the Obama administration issued new guidelines that pertain to Cuban baseball players coming to the US to play in MLB. I’d like to unpack that a little and look at what’s going on here.
First, let’s go back to the post @scoutsaysweitersisabust wrote a couple of weeks ago about MLB wanting to set up a partnership with Cuban entrepreneurs and the MLBPA that would basically create something like a baseball academy system in Cuba. Why Cuba — which produces baseball players of superior talent on its own — would need MLB’s assistance in training youngsters is unclear (and not a believable cover), but the key here is that a percentage of the salaries paid to players going into MLB from Cuba would be skimmed off to go to this nonprofit body. Ostensibly, this was an obvious subterfuge to get around the US embargo against Cuba while still offering a way to funnel money to the Cuban government indirectly for letting players leave to come play baseball in the US. Does this make sense? No, unless you dig into the background a little.
As Reuters reported back in 2014, the Cuban government made an agreement with the NPB in Japan — and then with its equivalent in South Korea — to allow Cubans to play for those leagues. In return for letting the players go to Asia to earn bigger salaries, the Cuban government receives a 20% cut of each player’s salary (for sharing the rights to them with teams) plus whatever income tax the players would owe. Essentially, Japanese and South Korean teams are paying kickbacks to the Cuban government in order to sign players, who benefit from making more (even with the cut for the government) than they would back home. Through this arrangement, the Japanese and South Koreans shut MLB out of access to Cuban talent.
Some Cuban players, however, would still prefer to come to the US to play because the salaries are so great here. Despite the fact that they can safely go to Asia, players are still trying to come to America — and American handlers with Cuban ties are eager to see them make it to the US instead (earning a cut for themselves, of course). Defecting to come and play in the US is riskier than going to Japan or South Korea, but it offers a great payday.
Part of the danger of defecting for players like Yasiel Puig actually lies at the feet of MLB. Those of us of a certain age well remember a number of Cold War defectors who have come to the US to work. One of the most famous sports figures from my youth was Martina Navratilova, who defected to play tennis. Cuban players could take the same route to attempt to defect (showing up at a US embassy when traveling abroad to play) or they could make the dangerous journey to Florida directly. It almost never happens that Cuban players come to the US this way. Why? Because of the terms of MLB’s collective bargaining agreement with the player’s association. If defectors come directly to the US, as resident aliens, they would be subject to the draft and would have left their homes and their families behind to be (relatively) underpaid like American draftees. If, however, they go to another country first, they can establish themselves as free agents right away — and then they can sign for the big bucks.
Now, if you’re a poor Cuban player who wants to make it to MLB, how are you going to make that happen? You can’t exactly book a ticket to the US (and you might not be able to afford it anyway). Handlers (often Americans acting illegally) are willing to front the money to have smugglers move players out of Cuba in order to get to the US, but they want the biggest cut for that they can get. It benefits them financially (as well as Cuban players) to take the more complicated and dangerous route of smuggling Cubans to another country to set up as free agents first. Since these handlers are acting illegally, they put the defectors in the hands of often-dangerous criminals in the process.
MLB gets no benefit from that arrangement, which was tolerable for the league as long as that was the case for all baseball leagues. Now that Cuban players can go to Japan or South Korea without danger involved like coming to the US, though, more of them could opt to go there instead (or perhaps use the NPB or KBO to set themselves up to come to the US with free agency). In light of the new arrangement, MLB lobbied the Obama administration to change the embargo regulations so they could set up a similar deal to bring players here. There was no way that the US government was going to agree to the terms that the Japanese and South Koreans did with Cuba, however, because money would be going to the Cuban government directly. Hence, MLB came up with the convoluted “academy” plan, which is obviously a cover for funneling money to the Castro government — and conveniently brings MLB and the MLBPA a cut as well (at the expense of the players).
As Gadfly observed, however, the new guidelines the Obama administration issued specifically state that payments cannot go to the Cuban government in return for players coming here. Should the US government determine that MLB’s plan is just a shell for paying off its counterpart in Cuba, it could nix the plan. It’s unclear at this point what Obama’s end game is in issuing the new regulations then. Is he trying to help players come to the US but in a way that will not let MLB, the MLBPA and the Castro government make money off of Cuban defectors? Is he trying to force their hand so as to get a better arrangement for players without benefiting the Cuban government or MLB? Or, is he trying to help facilitate the cause of big business (and unions) by helping MLB (and the MLBPA) circumvent the embargo so Japan and South Korea don’t gain the market advantage? It’s anyone’s guess at this point. We’ll have to see how things develop to know Obama’s game plan. For now, we just know that Raul Castro is at the plate, and there’s a lot of excitement to see if he puts something in play.