This story has been updated.
The agreement, the result of years of negotiations between MLB, the MLB Players Association and the Cuban Baseball Federation (FCB), is designed to end decades of fraught relations between MLB and Cuba and eliminate the need for Cuban players to defect. The new system wouldn’t change how Cuban players are compensated by MLB teams, but would result in “release” fees being paid to the FCB for those players’ services.
However, the Trump administration has signaled it has problems with a business relationship in which the Cuban government profits from a U.S. company.
The agreement “would institutionalize a system by which a Cuban body garnishes the wages of hard-working athletes who simply seek to live and compete in a free society,” a senior administration official said Wednesday night, several hours after MLB’s announcement. “... Parties seeking to benefit from business opportunities in Cuba are on notice that the Administration will continue to take actions to support human rights and restrict the Cuban regime’s ability to profit from U.S. business.”
In 2016, under the Obama administration, MLB obtained a license from the Office of Foreign Assets Control (OFAC) of the Treasury Department to enter into a business arrangement with the FCB much like the one outlined in Wednesday’s agreement, according to two MLB officials. League officials were in frequent contact with the Trump administration in the weeks and months leading up to Wednesday’s announcement, and confirmed with OFAC that the license was still valid. Despite the administration’s pushback, the league believes the humanitarian benefits of the new agreement were worth moving forward.
Under the new agreement, Cuban players would be signed out of Cuba and, subject to U.S. government approval, granted a work visa. However, a State Department spokesman said that players will have to travel to a third country to apply for a visa, like other Cuban nationals, per current U.S. policy.
The U.S. Embassy in Havana has had minimal staff and have transferred most consular business to third countries following the mysterious health issues developed by more than 20 U.S. diplomats and their family members in May. The Trump administration has claimed it was the result of a purposeful attack.
In MLB’s view, the agreement with Cuba was motivated by humanitarian concerns to halt the influence of smugglers and traffickers who have preyed upon Cuban defectors in the past. Many top Cuban professionals, such as Los Angeles Dodgers outfielder Yasiel Puig — who left the island to come to the U.S. under the previous MLB rules requiring players to establish residency in another country — have endured harrowing episodes involving smugglers and human traffickers.
In Puig’s case, smugglers affiliated with the notorious Mexican crime syndicate Los Zetas allegedly facilitated his escape from Cuba, then held Puig and others with him on a small island off the Yucatán Peninsula until his representatives produced $250,000 for his freedom. He signed a seven-year contract with the Dodgers for $42 million in June 2012, but was still allegedly pursued by smugglers seeking payment.
“Cuban players coming to MLB have been smuggled out by human trafficking organizations that are often tied to other criminal organizations, and often they lose a big chunk of their bonus to pay for their passage out of Cuba,” Dan Halem, MLB’s deputy commissioner and chief legal officer, said in a telephone interview. “And often, some unsavory characters continue to harass the player or their family if they believe they weren’t given the full amount.”
Under the terms of the new agreement, Cuban players can still elect to leave the island, establish residency elsewhere and join MLB, but they would be subject to a waiting period of as long as two years, and the MLB team that signs him would still have to pay a release fee to his former Cuban club.
“We have to see how it works, but it should be great for the players,” said former big league pitcher Livan Hernandez, who defected to the U.S. in 1995 and pitched in the majors from 1996-2012. “Players will be happy to play in the best league in the world and show their skills. There’s a lot of talent in that country.”
Though the U.S. has had an embargo against Cuba in place since 1962 after diplomatic relations were severed two years earlier, the softening of sanctions under President Obama in 2015 gave MLB the opening to initiate talks toward an agreement. Despite the sanctions being tightened again by President Trump in 2017, negotiations had reached a point earlier this month that MLB presented the proposed agreement to teams at the annual winter meetings in Las Vegas.
However, the Trump administration “is actively assessing the Obama-era policies that Major League Baseball appears to have leveraged to enter into this arrangement with the Cuban Baseball Federation,” according to the senior administration official. “... We do not condone the actions of any person or entity that contribute to the violation of human rights of Cuban citizens and the Cuban regime’s schemes to profit from the labor of its people abroad while keeping them in thrall to an oppressive political system.”
Joe Kehoskie, a sports consultant and former baseball agent who has represented Cuban players, doubted that the agreement could work in practice under current U.S. policy.
“I don’t see how this proposal could be implemented while the U.S. embargo is in place,” said “ … . I don’t see any way that MLB paying the Cuban government would be allowed under current U.S. law."
On its surface, the new agreement, according to Kehoskie, is “a home run” for both MLB and Cuba. “Cuba would get a financial windfall,” he said, “while MLB would get an end to the smuggling-related headlines as well as a much more structured signing process and additional cost controls.”
As for Cuban players, he said, “While the end of the illegalities would be good for them, they’d likely end up worse off financially.” A cut of 15 to 25 percent going to the FCB is “roughly the same percentage Cuban players are currently paying to smugglers,” he said, “and they’d likely be signing less-valuable contracts, since they’d be negotiating within a more restrictive [release] system, or draft, rather than as free agents.”
Halem, however, said the agreement “provides no economic or commercial benefit” to MLB or team owners. “There’s absolutely no change in terms of what a Cuban player can receive from a major league club,” he said. “Literally the only reason we are doing this agreement is to try to end the trafficking of Cuban players.”
Cuba has long prevented its players from leaving legally to play in the U.S., but after more than three years of negotiating, the sides finally negotiated a financial structure acceptable to the FCB. Under the new agreement, teams signing those qualifying Cuban professionals would have to pay a release fee to the players’ Cuban team, similar to the fee-structures governing MLB’s agreements with the Korean and Japanese professional leagues.
The fees would be between 15 and 20 percent of total guaranteed value for players signing major league contacts, or 25 percent of the signing bonus for minor league deals. Cuba already has a similar agreement with Japan’s Nippon Professional Baseball (NPB).
Cuban amateurs are subject to the same international bonus-pool earnings as amateurs coming out of the Dominican Republic and Venezuela, while Cuban professionals 25 or older with at least six years of service in the Serie Nacional are considered free agents and not subject to the bonus-pool limitations.
As recently as this summer, highly regarded brothers Victor Victor Mesa, 22, and Victor Mesa Jr., 16, defected from Cuba, established residency in the Dominican Republic and signed in October with the Miami Marlins out of their international bonus-pool money for a total of $6.25 million.
Chicago White Sox first baseman Jose Abreu, in 2013, is an example of an older professional who came to the U.S. as a free agent. He was 26 when he defected via the Dominican Republic and signed a deal with the White Sox worth $68 million, just behind Rusney Castillo’s 2014 deal with the Boston Red Sox, worth $72.5 million, as the biggest for a Cuban player in baseball history.
“Dealing with the exploitation of smugglers and unscrupulous agencies will finally come to an end for the Cuban baseball player,” Abreu said in a statement released through MLB. “To this date, I am still harassed. The next generation of Cuban baseball players will be able . . . to play the sport they love against the best players in the world without fear and trepidation. Great day for Cuban baseball players.”
Rep. Mario Diaz-Balart (R-Fla.), a vocal critic of the U.S. government’s more open policy toward Cuba, blasted the agreement in a tweet Wednesday, equating the movement of Cuban players to the U.S. with human trafficking and saying it was “shameful” that MLB “would consider joining with the Cuban regime to exploit Cuban baseball players.”
MLB has been seeking a solution to the messy process of bringing Cuban talent to the U.S. for years. Commissioner Rob Manfred, during an in-game interview on ESPN during an exhibition game in Havana between the Tampa Bay Rays and the Cuban national team in March 2016, touted those efforts, saying, “The key for us is to get out of a situation where we have human trafficking and people taking risks that simply are not acceptable to us.”