Sheffield and Hunter expose Baseball NAFTA
Posted by: Richie Rich in Baseball Business, Baseball Law
Gary Sheffield’s been in the news for this statement about the declining percentage of African-American Players in MLB:
I called it years ago. What I called is that you’re going to see more black faces, but there ain’t no English going to be coming out …
[It's about] being able to tell [Latin players] what to do — being able to control them …
And now Torii Hunter has raised the bar on Fox Sports Radio today:
You go over to Latin America and you could buy a guy for $5,000. That’s the same guy from Compton, who you get in first round for a million dollars out of high school.
I think that it’s a business thing, not a race thing. Because it happens to African Americans, then it becomes a racial thing. I do agree that 10 years from now you are going to see no blacks (in MLB).
Sheffield and especially Hunter seem to understand how Baseball has paralleled the North American Free Trade Agreement (NAFTA) signed into law by President Clinton in 1993. One of the results of NAFTA was that it opened the borders of Latin American countries to US Businesses looking to reduce their labor costs by opening factories in low-wage nations like Mexico.
It’s also Business 101. Reducing your costs while maximizing your returns is good for the bottom line. And MLB teams are no stranger to that philosophy.
Entry level employees, whether at a Factory or at Law Firm, typically are paid the lowest salaries. However, some entry level employees are recruited out of college or grad school (akin to the MLB draft) and paid big signing bonuses because they’ve shown a propensity to be able to contribute to the Firm quickly and also significantly over time. At the same time, if a company feels that it can get the same return on labor that costs less, they’ll often do it – the recent outsourcing of US jobs to India springs to mind.
Part of the reason players from America garner higher price tags than Latin American players is because the US players have typically had more experience and near-pro training (in High School or College) than their Latin American counterparts – and they’re closer to making the show. Also, let’s talk economies – a miniscule signing bonus by US standards might be more money than some Latin players could ever realistically earn over years in their native countries.
US and Canadian Citizens are also subject to the MLB Draft, whereas Latin American players are not.
If the Latin players were subject to the draft instead of being signed off the calle (street), I think you’d see higher signing bonuses, but possibly fewer Latin players signed.
MLB has recognized the change in its player population and their foreign fans (and their Pesos and Yen) by trying to expand its influence beyond the United States.
Playing recent regular season games in Puerto Rico and Mexico and by sponsoring events like the World Baseball Classic in 2006 are some of the more recognizable efforts.
It’s Globalization. Baseball is not immune.
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