Fernando Tatis Jr. Just Got PAID - But There's Some Shady Deals Going On In The Background
Fernando Tatis Jr. just got PAID. The 22 year old from San Pedro de Macoris, Dominican Republic just signed the third-biggest contract in MLB history at $340M over 14 years. Looks like the Padres are looking to give Los Angeles a run for the NL West this year. But this post isn't really about baseball on the field. It's about money.
Four years ago Fernando Tatis Jr. was 18 years old and he was grinding it out in the minors. For those unfamiliar with the inner working of professional baseball's farm system, the minor leagues are the MLB equivalent to the mail room and/or shoveling shit. You know that the players on your favorite team get paid millions, but you might not know that a few years ago they were really struggling to get by. Young players in baseball's farm systems have historically earned less than $10K for an entire season. Here's the breakdown of average salaries for minor leaguers by level:
Now it's easy to look forward to the money they'll be earning when they sign their big league contract, but the reality is that less than 1 out of every 5 players selected in the annual MLB Draft ever make it to the big league level. The exact percentage of players who were drafted and signed from 1981-2010 who made it to big leagues was just 17.6% (and that number drops significantly for every round that a player drops):
So that argument doesn't really hold up so well when you take those figures into account. Minor league pay has been a topic of debate for a long time. In fact just 2 days ago Major League Baseball announced that they would be raising salaries for minor leaguers effective this year. Here is the weekly break down of the changes:
It's definitely a step in the right direction, but it's still very little for the amount of work they put in. Remember that players only get paid for the season, which is roughly 5 months of work. However, they are expected to continue to workout, improve their skills and maintain a certain level of fitness in order to be able to perform at a high level the next season. This is 7 months that they will not be compensated for, but it's necessary if they want a chance at achieving their dream. So for the highest level Triple-A players, we are looking at a salary total of $14.7K...$4.8K for the poor rookies in short-season.
That is no bueno. Here's how MiLB salaries compare to that of basketball players (G-League) and hockey players (AHL):
Now this is not to say that every minor leaguer is taking it in the teeth. Players drafted in the higher rounds are often compensated with signing bonuses. For example last year's first overall pick, Spencer Torkelson from Arizona State, was given a $8.4M signing bonus by the Detroit Tigers. Signing bonus past the earlier rounds are uncommon and get smaller in size, naturally. Players at the higher levels can also earn more if they make a spot on the 40-man roster.
Fernando Tatis Jr. doesn't exactly fall into that category of the oppressed minor leaguer who's splitting a 2 bedroom apartment with 5 other teammates for the season, though. Tatis was a highly touted prospect and received a $700K signing bonus from the Chicago White Sox in 2015 (at the age of 16). He's also the son of Fernando Tatis Sr. who had a respectable 11 year MLB career.
That's why I can't understand the reasoning behind the decision he made 4 years ago when he was 18 years old. Back then Tatis signed an unusual contract with Big League Advance.
In exchange for a share of his future earnings, the fund, which functions a lot like a venture capital fund, paid Tatis an unknown sum upfront. It's not a loan because Tatis never has to pay it back, it's an equity stake in him, basically.
The amount that Tatis was paid back then and the equity he gave up in himself is unknown. But we do know that BLA has proprietary algorithms that they claim can reasonably forecasts a players performance and earnings potential, and they use it to assign future values. Basically - if they offer you $1,000 for 1% of your future earnings, they've valued you at $100K (ever watch Sharktank?).
I really, truly don't get why the fuck Tatis decided to make that deal 4 years ago. It's a real head scratcher. But anyway...
That is why I spent time at the top talking about minor league salaries. It's easy to see how one of those low level ball players could get suckered into signing one of these types of deals. It wouldn't be that hard to convince a kid that's got to catch 9 innings, hop on an 8 hour bus trip to a motel in Fayetteville, SC where he sleeps on the pullout couch to wake up early the next morning to catch another 9 against the Woodpeckers that he could really use a cool $50K in his pocket.
The truth is for most players that is the reality, and it makes them more susceptible to these shady deals. This is especially true for young Latin American players who have grown up in poverty and may not understand fully the consequences of such a deal.
The minor league system is very flawed, and it leaves players vulnerable to businesses like Big League Advance. But in a weird way I can see this ultimately helping the players in the long run. The MLB Players Association has been against the practices of BLA from the beginning, issuing this memo to agents:
Many of you have asked whether the Association has endorsed or otherwise approved BLA and its products. The answer is categorically ‘no.’
MLB Players association
If they are serious about it then they will take measures to significantly improve how minor leaguers are compensated. Until then they may be forced to do things they shouldn't have to, like this, to make ends meet.
But for now here's 16 minutes of Tatis Jr. absolutely SMOKING baseballs and generally being a stud: