Sources: Citing 'corruption' and 'fraud,' MLB bans transactions with Mexican League

Major League Baseball banned teams from signing players affiliated with the Mexican League on Tuesday. (Getty Images)
Major League Baseball banned teams from signing players affiliated with the Mexican League on Tuesday. (Getty Images)

Major League Baseball banned teams from signing players affiliated with the Mexican League on Tuesday, alleging that “corruption” and “fraud” have plagued its transactions with the league and that it wants “a fair, organized and transparent system” before resuming its relationship, sources familiar with the policy told Yahoo Sports.

In a letter sent to teams Tuesday and obtained by Yahoo Sports, MLB said it wants to end the process of teams in the Liga Mexicana de Beisbol (LMB) directly negotiating the transfer of players to MLB organizations. Instead, it prefers a system similar to those MLB has with Japanese and Korean leagues, in which players themselves are allowed to negotiate a contract with any of the 30 major league teams and the foreign team that controls his rights receives a fee — typically in the 25 percent range of the deal’s value.

The alleged corruption and fraud mentioned in the letter concern multiple Mexican teams falsely reporting the percentage of a player’s signing bonus that the team kept, sources told Yahoo Sports. Teams take up to 75 percent of a signing bonus, according to sources, and in another letter to LMB, the league said it was particularly concerned with three teams that account for a majority of LMB-to-MLB transactions. The teams, according to sources, are the Toros de Tijuana, the Diablos Rojos del Mexico and the Leones de Yucatan.

Javier Salinas, the CEO of LMB, did not return multiple messages from Yahoo Sports seeking comment.

LMB operates under an unbreakable reserve system, in which a team owns a player’s rights in perpetuity and can sell it. Deals with players are often struck when they are just 15 years old, in hopes that if an MLB team wants to sign them when eligible the next year, teams can position themselves to take a usurious cut. The best Mexican prospect in baseball today, San Diego infielder Luis Urias, was Diablos Rojos property. As was Julio Urias, who ceded most of his bonus from the Los Angeles Dodgers to the team when he signed. It’s an arrangement long loathed by the MLB Players Association, which has stood in lockstep with MLB as it has tried to negotiate a new policy over the last year.

When that failed, MLB opted for the nuclear option: shut down all player transfers immediately – and just before July 2, when the international signing season begins and Mexican teams can reap a majority of their windfalls.

“We are unwilling to continue the current system in light of recent fraud we have discovered in the player transfer process,” said the letter, which was sent to top MLB personnel.

While Mexico isn’t the player-development juggernaut of the Dominican Republic, Venezuela or even Puerto Rico, it is a reasonable talent pipeline and operates a healthy 16-team league. Among the current major leaguers from Mexico are San Diego Padres third baseman Christian Villanueva, who is tied for second in the National League with 16 home runs, as well as relievers Victor Arano, Hector Velazquez and suspended Blue Jays closer Roberto Osuna. Each Urias could prove the best Mexican at his position in a generation.

Additionally, the Mexican League, which plays offense-heavy, Triple-A-level baseball, is the home to dozens of former major leaguers hoping to work their way back into organized baseball. Should the impasse between the sides stand, one unintended consequence for major league teams will be the deprivation of a talent pool that can accentuate their depth. The upshot for the players in Mexico is clear: they’re the unwitting victims of a turf war.

Still, MLB sees LMB as an organization that needs more transparency. During negotiations, MLB proposed additional funding to LMB if it would lessen the opacity of its transactions. On top of that and club-to-player negotiations, MLB has proposed that all Mexican players become unrestricted free agents if they are at least 25 years old with at least six years of professional experience – to essentially blast apart the reserve that has helped Mexican League teams’ bottom lines for years.

Should the LMB not accede, the letter said, MLB already has a Plan B in place.

“We are hopeful that the LMB’s position on the reasonableness of our final proposal will change,” it read, “but if not, we will discuss alternative strategies for developing players in Mexico.”

What that means is unclear. But after a year of fruitless discussions and frustration, this much is clear: MLB showed LMB it wasn’t bluffing.

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