The Mexican League Doesn’t Respect Contracts

Jean Machi almost never made it to the Giants (via Michael Marconi).

Editor’s Note: To read this article in Spanish, please click here.

When asked about the season he played for Mexico’s Diablos Rojos in 2011, Jean Machi remembers the thoughts he once had about playing in the Mexican League. “I used to say that I would never play in the Mexican Baseball League.” Yusmeiro Petit, who was sitting next to Machi adds, “Someone should do something. It’s frustrating that the Mexican League does not respect contracts.”

Draft Process

An amateur draft, like those held in the United States, is something that is nonexistent in Mexico. Actually, scouts never seek talent in high schools or colleges due to the lack of baseball teams in schools. In Mexico, baseball is played through “weekend leagues” in which kids and adults alike play for the fun of the sport. It is in the “weekend leagues” where Liga Mexicana de Beisbol (LMB) scouts look to find talent.

The interest process starts with approaching the young kid, followed by getting close to the family. Parents normally are very trusting of scouts and allow their sons to travel to El Carmen, Nuevo Leon for tryouts at the Academia without question.

The Academia complex is designed to develop Mexican talent with the hope that within a year the player is playing rookie ball in one of the two minor leagues, Liga del Norte de Mexico and Liga del Norte Sonora, both affiliated with LMB.  This system is comparable to the relationship between the minor and major leagues in the United States, with LMB obviously being the goal.

A unique aspect of the Mexican league–and one that typically creates controversy–is that if a player is released by an LMB team, the player must return home, but his rights are still owned by the team. If a team within the LMB, or one of the Major League Baseball franchises, is interested in the services of the player, that team must negotiate with the team that holds the player’s rights, normally the team that first signed him.

Selling Process

The problems with the way Mexican league teams go about business comes to light when an MLB team is interested in a player whose rights are owned by a team in the LMB, because the Mexican teams will most likely ask for a fortune for that player’s services. Normally, LMB asks for an amount of money MLB teams could use to sign multiple players from other countries like Venezuela and the Dominican Republic. For example, some Mexican players  have been sold for up to $2 million.

In an interview with Jaime Blancarte, general manager of Toros de Tijuana, he shared that some players are so worried about the situation,  they have started to add a clause that states that, if an outside team is interested in him, the signing team cannot stop him from pursuing the opportunity. However, the Mexican team then starts adding legal clauses that include the right to charge penalties in such situations.

Blancarte also shared with us another aspect of these contracts. If the player is considered “valuable” to the team, the team is within its rights to prolong the selling process so the player is able to finish the LMB season (which runs through the end of August). There currently are no guidelines or regulations set by MLB regarding this process, so neither the player nor MLB teams are protected in these situations.

This is the situation that Jean Machi faced when in 2011 when he was “on loan” to the LMB after not having made his Triple-A team. He became the official closer for the Diablos Rojos de Mexico, finishing with a 3-1 record and an era of 2.31 with 15 saves.

The San Francisco Giants immediately were interested in Machi, but the Diablos Rojos did not want to lose him mid-season. Therefore, Machi was not allowed to leave for the U.S. until the Mexican League was finished. The situation became extremely frustrating for Machi. “I used to say that I would never play for the Mexican League because I knew things like this happened.”

Oscar Daniel Verdugo provides another example of the situations that Mexican talent must endure on their road to the majors.  Currently an active player in the LMB, at age 16 Verdugo was signed by Aguilas de Veracruz to attend la Academia. He started the process to play in LMB successfully, going through the Academia, posting numbers that sent him to rookie ball very quickly.

During that process, two MLB teams showed interest in Verdugo, but negotiations lasted two years due to the absurd sum of money the Veracruz team was asking for, a sum that neither of the MLB teams was willing to pay. Finally, after two years the Mexican team lowered the asking price, and the Pittsburgh Pirates bought him, but not included were his rights. Verdugo was sent to the Venezuelan Summer League, where he had been effective with a 4-0 record and an ERA under 3.00.

In 2010, Verdugo was part of the Gulf Coast League, and though he only played in one game, that was enough for him to sustain an injury. El Aguila de Veracruz took that opportunity to claim their rights over him, and Verdugo was forced to return to Mexico. Currently, he is one of the most promising pitchers in the LMB with a 4-0 record and 4.46 ERA.

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Verdugo ended the interview by saying that he always thinks about what could have been, especially if an agreement had been made two years prior. Though Verdugo is unaware of the sum of money his Mexican team had initially asked for, he wonders, what if his team would have asked for a little less money?  Maybe right now he would be closer to the majors…maybe.

LMB Franchises

The Liga Mexicana de Beisbol is made up of 16 teams in two divisions, North and South. It also includes two rookie leagues, Liga del Norte de Mexico and Liga del Norte Sonora. The rookies leagues are run in smaller cities, where the average attendance is 200 people each game.

In order for a league to be recognized as part of “organized baseball,” the league must be affiliated in some way with MLB.

The Mexican baseball system operates under unwritten rules. There are a lot of creative ways the league dictates how a player can be sold.  None of these rules is regulated in any way by MLB, and that is where many argue the problem lies. The consequence of this structure is that each Mexican league team and its leadership decides what to do with their players, often leaving the player without a voice.

Returning to the interview with Blancarte, he explained the various ways a player can be sold. He explained how those players that stipulated special clauses in their contract to address the issue beforehand normally get to keep 75 percent of the money for their first year of play, while the team gets to keep the remaining 25 percent of that contract. However, the Mexican team selling him maintains the player rights in case the player wants to return.

When percentages are not included in a contract beforehand, it is a given that the sale will take much longer, if it happens at all, and the Mexican team will look for ways to cash in. There are cases when the team has pocketed up to $1.5 million of the offered contract while the player walks away with a mere $500,000 from the MLB deal. Either way, the Mexican team continues to have the player rights within the Mexican league.

Partial Sale

Another selling term is called a partial sale. This is when a player is completely sold to an MLB team only when and if the player reaches the majors in a predetermined amount of time. The player continues to be property of the Mexican league team during the player’s time through the minor league system. If the player does not reach the majors during the predetermined time, the player must report back to his Mexican team.

These types of issues do not exist in other Latin American countries.  Players sign for much less money and without a team in the middle to sabotage their journey. In countries like Venezuela and the Dominican, the winter leagues are the most important, due to the attendance of major league players who use the league to hone their skills or stay in shape leading up to spring training.

Red Numbers

On a good day, ballparks in Mexico reach an attendance total of 6,000-8,000 fans. Most fans, however, do not pay to attend the game; they use comp tickets. Paying fans normally pay a very minimal amount.  Therefore, ticket sales are not a big revenue source for Mexican teams.

Revenue comes in the ways of sponsorships and advertisement sales inside the ballpark. For these teams, every space is available, including player uniforms. Another source of income is television rights. The Mexican league has contracts with TVC Sports, and some games are transmitted by ESPN Latinoamerica.

According to Forbes Mexico, each of the Mexican league teams needs an average of $4 million dollars per year to operate; however, projected revenue makes up only 70 percent of that figure. That is a deficit of $19 million dollars among the 16 teams. This is why teams look to their local government for economic support, and when an MLB team shows interest in one of its players, they seize every single opportunity to make money. However, they often inflate the numbers so high that the U.S. team loses interest in the player.

Mexico has a salary cap in place which limits a player’s salary to $8,000 per month. There was a time when the player was able to earn a bonus as a form of compensation for performance, anything from connecting for X number of home runs, to earn a certain number of wins, to pinch running. There also were allowances and perks that would go toward food, airfare for the player and his family, and other special requests.

All those things have gone away. The player now must ensure that all his contract amount is sufficient to cover his lifestyle without expecting more from the team.

Mexican Students in the United States

Parents worried about the situation with the Mexican league and who are consciously aware of their son’s talent potential to play in the majors some day make an economic sacrifice to send their kids to high school or college in the U.S. with the hopes that their sons are selected in the amateur draft. This would avoid the difficult process of attempting to play in the majors while with a Mexican team. Examples of this situation are Alan Garcia, Alfredo Amezaga, Ali Solis, Xorge Carrillo and Fernando Perez, among others.

Perez is a young man who grew up in Ensenada, Baja California, and showed baseball abilities at a very young age. His parents, aware of the situation with the Mexican baseball league and wanting the best for their son, saved money so that they could send Perez to high school in San Diego and college in Arizona.

Perez was selected in the third round of the 2012 draft by the San Diego Padres. In 2013, his batting average never fell below .400, and he quickly was sent to Class A. He currently is part of the Fort Wayne Tin Caps and continues to demonstrate great fielding and outstanding hitting, which will be what takes him to the majors in a few seasons.

Baseball is a business and though generating revenue is part of that, no business should be able to ignore contracts already in place. The Mexican League is recognized by MLB, and that takes away its independent league status. Therefore, MLB should intervene so that player contracts are fair and regulated. It is apparent that the Mexican League does not go by any type of rules but their own.

Special thanks to Marisol Villagomez for translating this story.