The buzz around Yoan Moncada is increasing as the 19-year old Cuban infielder continues to wait for his unblocking license from OFAC. He’s already received free agent status from Major League Baseball, but he cannot sign or agree to terms with a team without clearance from the government (OFAC).
Yoan Moncada started holding private workouts for teams in Florida. According to a report from Jesse Sanchez, Moncada held private workouts for the Yankees, Red Sox, Brewers, Rangers, Giants and Padres. Baseball America’s Ben Badler has also reported Moncada held private workouts for the Giants and Yankees.
The Yankees are considered the favorite, at this point in the process, to sign Moncada. And the Dodgers are all in on Moncada as well.
The level of the Cubs interest in Yoan Moncada is unknown at this point. Ben Badler reiterated Wednesday the Cubs are “pushing hard for Moncada.” But the Cubs cannot sign him, under International signing rules, until July 2.
Jason McLeod was asked about Yoan Moncada during Sunday’s ‘Down on the Farm’ session at the Cubs Convention. McLeod said he would not comment publicly about the team’s possible interest in Moncada, those discussions will take place internally.
According to a report Wednesday from Sahadev Sharma, the Cubs are very interested in Moncada. And the Cubs private workout with Yoan Moncada could be this weekend.
Ben Badler provided an excellent update on the financial side of signing Moncada. It’s understood that any team that signs the 19-year will pay a heavy, 100 percent tax and will be limited to signing an International signing-pool free agent to no more than $300,000 for two International signing periods.
Due to the International signing rules any team that exceeds its International signing bonus pool by more than 15 percent cannot sign a player for more than $300,000 for two signing periods and is taxed 100 percent on the overage. In Moncada’s case, reports and estimates have suggested it will take at least a $30 million bonus to sign him. And if Moncada signs for $30 million it will actually cost a team $60 million to add him to its organization.
Badler reported the “payment structure required to sign Moncada” benefits the big-market, high-revenue clubs.
Badler reiterated the Yankees are the favorite and are already over its International signing bonus pool by 15 percent, so if Moncada signs with the Yankees by June 15, there would not be an additional penalty, and the same goes for the Red Sox. Badler explained how the signing bonus can be structured and when the tax on the overage has to be paid to the commissioner’s office.
According to the report from Baseball America, “teams can split the bonus payment into multiple installments.” If a player signs a bonus for less than $1 million, the team has to pay the player “by the end of the next calendar year.” If the signing bonus is for more than $1 million, the team “has until the end of the third calendar year following the signing to pay the bonus.” Teams are not restricted to a certain number of installments. The team and the player can agree to the payment schedule of the bonus.
A team that signs Moncada “could work out an agreement to spread out his bonus payments over the next three years” but his entire bonus counts against the team’s bonus pool during the period in which he signs.
Badler also explained when teams must pay ‘the tax man’. Any overage during the signing period that ends on June 15 is due, in full, one month later on July 15. In other words, if a team signs Moncada for $30 million and it costs the team $30 million in tax, the team must pay the $30 million in full by July 15. But if a team signed him on or around July 2, when the new signing period begins, the tax payment is not due for a little more than a calendar year.
While the Cubs appear to be a longshot to sign Yoan Moncada due to the restriction on the team that will not be lifted until June 15, Ben Badler pointed to the delay with OFAC benefitting the Cubs. Badler explained, “The longer the government drags its feet, the better off things are for the Cubs. Even if he gets cleared soon, there’s nothing preventing Moncada from agreeing to sign with the Cubs, then waiting until July 2 to sign the official contract.”