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U.S. investors are commodifying Dominican ballplayers

Nov 18, 2010, 6:51 AM EDT

Dominican baseball player

In today’s New York Times Michael S. Schmidt  reports that U.S. investors, many of whom are unconnected to Major League Baseball, are setting up training academies in the Dominican Republic with the sole purpose of profiting on draftees’ signing bonuses:

Recognizing that major league teams are offering multimillion-dollar contracts to some teenage prospects, the investors are either financing upstart Dominican trainers, known as buscones, or building their own academies. In exchange, the investors are guaranteed significant returns — sometimes as much as 50 percent of their players’ bonuses — when they sign with major league teams. Agents in the United States typically receive 5 percent.

Some of the investors in this game have some tenuous connection to Major League Baseball, such as former Yankees’ crown prince Steve Swindal,  but Schmidt reports that most are just random profit-seekers, such as “a real estate lawyer from New Jersey, a dentist from California and a computer salesman from upstate New York.”  In essence they’re American buscones who, instead of finding a random kid to flip to a Major League team, are working on a bulk model.

I can put on my commie hat — yes, I own one — and declare, with at least some degree of honesty, that all development of young baseball talent involves exploitation. At least in the way that term is technically defined.  Even a prospect from an upscale Southern California suburb is “exploited” in that his talents are obtained and then used by Major League Baseball so that it might profit off his labors in an amount that exceeds what he is initially paid while he is simultaneously prohibited from taking his labor elsewhere.  On some cold level he is an investment vehicle for agents and teams, and we obviously have no problem with this.

But this is different. Different than Major League teams setting up their own academies. Different than baseball setting up an international draft. At least in those instances baseball is or would have a longer game in mind, in that they would seek to recoup their investments by having players develop into prospects and one day have productive careers. And, even if the vast majority of players don’t make it, there are public relations and regulatory means through which Major League Baseball could be compelled or persuaded to make sure that the circumstances under which they house and train these kids are adequate, safe and ultimately beneficial to even the non-prospects.  I mean, Felipe Alou or someone of his stature could shame baseball into doing the right thing by these kids if it was found that it wasn’t.

But who — besides Michael S. Schmidt — is watching some real estate lawyer from New Jersey, a dentist from California and a computer salesman from upstate New York, none of whom have a reason to care a lick about these kids after they’re signed or, in most cases, passed over?  What motivation do they have beyond maximizing signing bonuses and keeping costs low in the meantime?

None that I can see.  And even if the lawyer, the dentist and the computer salesman Schmidt mentions are running clean tight ships, the nature of investment for investment’s sake is such that, eventually, there will be a race to the bottom in an effort to maximize profits. I mean, the first guy who bundled mortgages was probably pretty prudent about it.  He probably kept good files and made sure that only  top quality paper got sold.  Things, however, eventually got out of hand. Because that’s what happens when the only goal is to turn a profit in the short term.

  1. jdmcmill - Nov 18, 2010 at 8:09 AM

    So they are going to provide some sort of structure to play/practice, that otherwise would not be available for a portion of the signing bonus? And this is bad how? You would rather these kids not be able to play and not be signed by a team? I didn’t read the part where they were chaining them to fences, beating, and forcing them to play, did I miss that? There are probably a lot of people here in the states that would give a portion of their signing bonus if you promised to put them in front of MLB scouts.

    • tomemos - Nov 18, 2010 at 12:33 PM

      They’re not chaining them to the fences, but they are putting up barbed wire to keep them from leaving. The kids are going to these academies instead of going to school; this wouldn’t be a problem if all of the players made it to professional baseball, but of course they don’t. And there’s an incentive to get these kids on steroids, and little oversight to make sure that doesn’t happen. So yes, there are a number of problems. As for kids giving “a portion” of their signing bonus: would that portion be 50%? Because that’s what buscones exact, compared to an agent’s 5%. This whole thing is grossly exploitative.

  2. PanchoHerreraFanClub - Nov 18, 2010 at 8:13 AM

    It sound more like slavery to me.

    • okobojicat - Nov 18, 2010 at 9:08 AM

      Its not slavery. These players freely enter into contract with the buscones. They have the opportunity to go to other buscones.

      That said, I’m with Craig in that it will not turn out well for the majority of players who run into these camps. There will be a push to abuse age and steroids like we already know is happening.

      However, if the investment in these academies produces an economic boost in the DR, that is a great thing. It will provides jobs. Moreover, it will provide financial sophistication and explicit expectation and training to those involved int he academies. None of those things are bad. Perhaps it will help create new businesses and new economic opportunities.

      • Kevin S. - Nov 18, 2010 at 9:14 AM

        Do you really think the players have full knowledge of what they’re signing up for? If they did, this scam wouldn’t even get off the ground.

      • okobojicat - Nov 18, 2010 at 9:51 AM

        @Kevin,

        No I don’t think they have “full knowledge.” But the only way the investors are going to see any of their money is if they have an enforceable contract signed by the player. Now, can those players read? Do they necessarily understand what they are signing away? I don’t know, and would tend to doubt it. That’s why I said above it might lead to bad stuff.

        However, if it provides an economic boost to the entire DR that could be a good thing. These academies aren’t going to be all bad. There’s no reason to expect they’ll be worse than the existing MLB academies (which we know are dirty Reds/Nats) and the existing private DR-ran academies.

      • tomemos - Nov 18, 2010 at 12:30 PM

        The article says that many of the kids can’t read and are not attending school. Wayyy more oversight is needed here.

  3. Old Gator - Nov 18, 2010 at 9:03 AM

    Commodifying.

    Minus two points.

    • Craig Calcaterra - Nov 18, 2010 at 9:06 AM

      Thanks, Gator. That looked wrong either way I wrote it. I suppose, though, I’ll go with the word that actually exists.

      • Old Gator - Nov 18, 2010 at 1:40 PM

        Come to think of it, the next time I write a Marxist-Poststructuralist critique of baseball, I may very well coin the term “commoditizing.” The French do stuff like that all the time. Bricolage. Jouissance. Differance. Decentering. I love it. “Commoditizing” don’t sound half bad.

      • Utley's Hair - Nov 18, 2010 at 2:26 PM

        So do Sarah Palin and Dubya.

  4. Jonny 5 - Nov 18, 2010 at 9:10 AM

    Hey, I don’t know man….. It’s rough in the Dominican and if a kid get’s an opportunity to get out, even at a minor league level, it’s an upgrade. Regardless if people get returns on their investments or not it’ll get some kids some food in their bellies and something to do besides beg from tourists and rummage through the dump for dinners. Not everyone lives that way there, but for the most part it’s life there.

    • pwf207 - Nov 18, 2010 at 10:07 AM

      why oh why are people ok with exploitation as long as the conditions of an area are so bad that even exploitative work is better than the alternative. are human rights relative? would you be ok if your boss found himself in a more favorable bargaining position and told you that he was cutting your pay below minimum wage and you should just be happy you still have a job? if you allow pure power dynamics to determine the rules of the game, do you know what you get? those with power continue to amass more and more and treat those without worse and worse. go look at the history of saipan, http://en.wikipedia.org/wiki/Saipan#Jack_Abramoff_CNMI_scandal to see what happens when you let the “free market” decide things. then go look at the necessary conditions for free markets to function effectively and consider if they are present in this case.

      • Jonny 5 - Nov 18, 2010 at 11:34 AM

        You act as if people don’t have a choice. They do. It’s not exploitation. The fact is this is making some people’s lives better in an area of the world that rarely happens. These people are developing players, feeding them, and giving them something to do, they should get a return on the investment. As for me? And if I did have a pay cut, I have the choice to go find another job or not. Which I would right away. I have never been without a job. not even for a week. Comparing this to Saipan is just ridiculous. These are people trying to develop athletes not run slave colonies….

      • tomemos - Nov 18, 2010 at 12:42 PM

        Jonny, how much of a free choice is it? Would you be comfortable with your 14-year-old signing a contract dictating his future earnings in this way? What if he were illiterate?

        As for it helping people, I mean, a loan shark helps people. That doesn’t make what he does fair or not exploitative. Helping talented baseball players find their way to scouts is a good thing in itself, but there’s so much potential for abuse that it needs to be overseen. And the DR doesn’t have the means to oversee it in the way Major League Baseball does.

      • ta192 - Nov 18, 2010 at 2:02 PM

        pwf: I think you’re wasting your time with this argument. You apparently missed the last election. That sort of behavior seemingly has the electorate’s blessing these days.

        tome: “Loan shark”? Do you mean “credit card issuer”?

  5. Mr. Jason "El Bravo" Heyward - Nov 18, 2010 at 10:20 AM

    This will turn for the worse real fast. I better get in while the gittin’s good.

  6. Jonny 5 - Nov 18, 2010 at 12:53 PM

    Jonny, how much of a free choice is it? Would you be comfortable with your 14-year-old signing a contract dictating his future earnings in this way? What if he were illiterate?

    First of all it doesn’t dictate future earnings, it dictates what cut of future earnings goes to those involved in the investment. And if i was a Dominican and poor, i’d want what’s best for my kid. If that happens to be joining this type of recruitment, even if it costs them at first, i’d say yes, absolutely. And to speculate on literacy is grasping straws, you can’t assume that’s the case. I do agree it needs some sort of watchdog group. My comments were more related to the villifying of the investors themselves. Look at college. It sucks people dry for the future of their children ,and sometimes the children themselves. And that’s just to get a shot out in the big world. Baseball school for dominicans has to be paid by someone, and nobody is doing it without turning a profit. Much like our wonderfully esteemed universities.

    • tomemos - Nov 18, 2010 at 1:13 PM

      “And if i was a Dominican and poor, i’d want what’s best for my kid. If that happens to be joining this type of recruitment, even if it costs them at first, i’d say yes, absolutely.”

      But is it what’s best for the kid? If they make it to the majors, then sure it is, but how many players do? You say it costs them “at first”–meaning, I guess, when they sign their big league contract. But the majority don’t sign, and so it costs them at a later date–when they find themselves in their twenties, in the DR, having skipped out on school and thus having no prospects in a poor country.

      Now, these are problems that aren’t exclusive to private investment, but Craig’s point is that private investment exacerbates them, and I agree.

      “And to speculate on literacy is grasping straws, you can’t assume that’s the case.”

      Well, the article flat-out states that many of the prospects can’t read and don’t attend school. If that means you haven’t read the article, I recommend you do, because it will better explain why we’re having a cow about this.

      “I do agree it needs some sort of watchdog group. My comments were more related to the villifying of the investors themselves.”

      So we’re in agreement there. But Craig’s point wasn’t that these investments are evil (though I do think they’re exploitative). It’s that in an unregulated marketplace there is no incentive to look at anything other than the bottom line. You bring up universities, but universities a) don’t make a profit, they funnel their income back into education, and b) are accredited by groups that have students’ best interests at heart. Those factors don’t apply here.

  7. Jonny 5 - Nov 18, 2010 at 2:32 PM

    ” But the majority don’t sign, and so it costs them at a later date–when they find themselves in their twenties, in the DR, having skipped out on school and thus having no prospects in a poor country. ”

    “Well, the article flat-out states that many of the prospects can’t read and don’t attend school. If that means you haven’t read the article, I recommend you do, because it will better explain why we’re having a cow about this.”

    So they might miss school they weren’t attending anyway??? You’re arguing in circles here.

    “You bring up universities, but universities a) don’t make a profit, they funnel their income back into education, and b) are accredited by groups that have students’ best interests at heart. Those factors don’t apply here.”

    There are for profit “universities” but they are normally not highly “esteemed”. That was sarcasm.

    You’re bitching about the possibilities that could happen, while all that’s coming from this is it’s helping people put their skills to good use and get them into a better situation in life for a price mind you. Cancel all of this interaction in the Dominican then go tell all those people who benefitted from it how much you just helped them. I bet they become your newest best friends. Until I read about the horrible way this “trade” effects people, I’m all for it. Not to say it shouldn’t be watched over by a nonpartisan group.

    • tomemos - Nov 18, 2010 at 3:27 PM

      I think that anything that kids do instead of attending school is a bad thing, particularly in a developing nation.

      • Jonny 5 - Nov 18, 2010 at 3:37 PM

        Agreed! But they aren’t going to school to begin with. And this will bring attention to that and maybe have a positive impact on it. The article did mention they are looking forward to including a terrible version of education for these kids, but still it is better than none.

  8. Jonny 5 - Nov 18, 2010 at 2:42 PM

    “why oh why are people ok with exploitation as long as the conditions of an area are so bad that even exploitative work is better than the alternative. are human rights relative?”

    This BS cracks me up the most. Criticize these things, tell everyone how bad it is. But what have you done to make people who live in the DR better? They are making things better for people there as you talk poorly of it, it’s welcomed there. And here you sit at your computer and criticize it while you do nothing to help them. Just because someone profits doesn’t make it inherently wrong.

    • tomemos - Nov 18, 2010 at 3:29 PM

      We’re saying that they *aren’t* making people’s lives in the DR better, on the whole. That’s the whole point of this argument.

      • Jonny 5 - Nov 18, 2010 at 3:38 PM

        It is though, it’s making these kids lives better. And there’s no denying it.

      • tomemos - Nov 18, 2010 at 3:54 PM

        We’re going around in circles. The one’s whose lives are being made better are the very lucky few who sign with a team. The others get cut off from society and other prospects, and sometimes have steroids pushed on them, for no benefit at all. And now that it’s being done solely for profit it’ll get worse. But I guess there’s no denying that it works out for the best!

      • Jonny 5 - Nov 18, 2010 at 4:14 PM

        “We” don’t have to agree with each other on this, and I’m fine with that. I think that as of now the benefits outweigh the negative aspects, that’s all. It’s not going to go away, and it won’t have any enforcable laws placed on it until the bad outweigh the good aspects. I agree kids should be in school, but when you take this thought to other countries it dosn’t apply the same was as it does here. It’s easy here. When your choice is more like School, and no food on the table, or work and barely eat, or baseball training camp, food, and the possibility (even if it’s the slightest chance) of becoming a baseball star? Which do you think they take? I’m no genius but i tend to think the baseball thing isn’t so bad afterall. But like i said, we don’t need to see eye to eye on this. We just view things differently.

  9. schlom - Nov 18, 2010 at 2:54 PM

    I think the argument boils down to whether you think a bad opportunity is worse than no opportunity at all.

    • Jonny 5 - Nov 18, 2010 at 3:18 PM

      I think you hit the nail right on the head. Now all we need is to find Dominicans who think this is bad……

      • schlom - Nov 18, 2010 at 5:12 PM

        Remember this is just an opportunity to play baseball. No opportunity to do this means that possibly they go to school, etc. Fortunately none of us are in that situation so we can’t really know what the answer is.

    • tomemos - Nov 18, 2010 at 3:30 PM

      Oftentimes it isn’t. I don’t think state lotteries have improved the lives of those who play in them on the whole, even though the winners might disagree.

  10. drbeisbol - Nov 26, 2010 at 1:19 AM

    I have visited the investment camps and, from what I’ve seen, these comments are spot on and highlight the arguments on both sides of this debate. For a great majority of these kids, going to these camps enhances their lives based on the lack of a better alternative. However, from a human rights standpoint, these kids sacrifice education and none of these camps will spend the capital to provide that formal education. Once a child goes through these camps and doesn’t get signed, he is left with zero alternatives. There are also international legal standards that provide for a child’s right of education. I recommend checking out the DRSEA at http://www.DRSEA.org which will offer a happy medium of education and baesball. Also, if you’d like to read more about this issue, I recommend reading Children Left Behind: The Effect of MLB on Education in the Dominican Republic which can be found at http://www.drsea.org/news-articles/Children-Left-Behind-Adam-Wasch-Westlaw.pdf.

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