Posted by John Vrooman on Tuesday, December 23, 2014 in Major League Baseball.

Interview with Pacific Standard. 

I’m writing a story on the future for Cuban baseball, now that the embargo has been lifted. I’m wondering what this will mean for the MLB? Do you foresee a huge influx of Cuban talent now? What about the relocation of a floundering team? And from an economics standpoint, what do you think this news will mean for the MLB?

I am not familiar enough with terms of agreement. The MLB caliber players were being smuggled out any way. MLB will have to decide what to do about drafting and signing Cuban players. Will they be treated the same as dominicans or asian players? This is also not clear.

What is clear is that about 30% of MLB players are now Latin Americans and that percentage is likely to increase and unfortunately Cuban MLB salaries will probably drop because of increased access without restrictive trade embargo.

Before the 1994-95 strike 28% of MLB players were African american and 8% were Latinos  in the current MLB the percentages are reversed largely because Latin talent is cheaper because most Latinos are not eligible for the draft. Most of current MLB are Dominicans…only about 25 or so are Cuban. If all Cuban players become free agents then the glut of talent would lower their salaries.

No one knows what’s the new rules of acquiring Cuban players will be after the embargo is dropped. The Cuban professional league is depleted of top talent smuggled to MLB, but still healthy.

MLB recognizes Cuba’s Serie Nacional  and could establish a posting system like they have with Nippon professional baseball NPB and Korea  where the teams capture a lions share of a players worth.

Alternatively MLB could develop young Cuban talent on their own like they have done throughout Carribean and Latin America. This is the cheapest alternative and players are again paid a fraction of their worth because of the market power of MLB. Teams are currently restricted on bonuses they can pay Latin talent outside PR and many clubs are now maxed out.

The Cubano effect could force MLB to rework its entire player acquisition system.

When you talk about Cuban players’ MLB salaries dropping, is there precedent for that in sports? Has that happened before?

Not really. The rapid rise of the Latino players over the last 20 years is the closest event…from 8% to 28% is a major demographic shift along with the inverse drop in African Americans.

All of the forces at work would depress salaries of Cuban players. The rapid increase in the supply of Cuban talent would exceed current mlb demand.

In either the internal development of Cuban talent by MLB (the Dominican approach) or the posting of  developed talent by Cuban clubs in Series National (NPB approach), most of the financial gains go to the scouts and clubs in MLB. There is a third possibility that MLB could partner with Serie  Nacional as part of its minor league player development system (Mexican League approach) where players are paid modest monthly salaries. Welcome Cuba, to a crash course in baseball capitalism.