The Pirates parted ways with Rene Gayo last week, after MLB concluded that Gayo had received kickbacks from a Mexican team for previous signings. The Latin American market has long been the wild west, but MLB is beginning to crack down heavily on illegal and unethical activity.

The decision by the Pirates to part ways with Gayo leads to a lot of questions about the future of the Pirates’ international signings, along with the chance to recap Gayo’s results with the team. I wanted to break all of those categories down, and look at what to expect from the international market going forward.

Gayo’s History of Finding Talent

There has been a growing sentiment that the Pirates haven’t been successful in the international markets in recent years. They had a very promising group coming through the lower levels around 2012, led by Gregory Polanco, Alen Hanson, Jose Osuna, Willy Garcia, and Elias Diaz in West Virginia. Those guys paired with Starling Marte in the upper levels, and all of their low bonus totals gave Gayo a lot of recognition as a guy who could find value.

That wasn’t the only track record that Gayo had. He was the Latin American scouting director for the Indians from 1999-2003, and during that time he signed Fausto Carmona/Roberto Hernandez, Jhonny Peralta, Danys Baez, Edward Mujica, Willy Taveras, and Rafael Perez.

However, most grading and evaluating isn’t on the basis of what has gone right. It’s on what went wrong.

Gayo should be known in Pittsburgh as the guy who found Starling Marte for $85,000. Instead, he’s more known for the Miguel Sano situation, where the Pirates came up short on the top international player, in large part due to Sano’s agent having personal issues with Gayo that stemmed from the negotiation process with Sano. Half of that story was made very public in the documentary “Pelotero”, which put Gayo in a bad light. That’s not to say that Gayo was completely innocent in his handling of the Sano negotiations. But as we’re now learning, the Latin American market has been the wild west for some time, and negotiations weren’t straight forward on either side.

The Pirates also had a rough stretch during the previous Collective Bargaining Agreement, seeing their budget cut by a third, or sometimes by almost half of what it used to be. That didn’t pair well with some poor signings like Michael De La Cruz and Julio De La Cruz in 2012. They did get Dario Agrazal and Eduardo Vera in that class, but that’s not enough to carry a group. It also didn’t help that their biggest signings of 2011 — Harold Ramirez, Cesar Lopez, and Elvis Escobar — all saw their stock fall before or around the time they arrive in Double-A. The same happened with their big signing in 2010 of Luis Heredia.

Gayo has still managed to find international talent. The 2013 class was highlighted by Adrian Valerio and Luis Escobar, with Escobar recently making the top 10 in Baseball America’s rankings. That group also included Edgar Santana and Yeudy Garcia.

The 2014 class hasn’t been as strong, due to the struggles from Yondry Contreras. Domingo Robles provides the most promise from that group.

Things got back on track in 2015 when they signed Lolo Sanchez, who had a breakout year this year in the GCL. They also added Oddy Nunez, Rodolfo Castro, Samuel Inoa, and a few other promising prospects who have shown potential in the lower levels.

The combination of those classes has the lower levels with another strong international group, possibly rivaling that 2012 lower level group.

Gayo has still had success on the international side. Most of the struggles came around the time the Collective Bargaining Agreement came into place, restricting what teams could spend. That, combined with the Pirates becoming a contender, led to a budget that was cut by a third, and sometimes closer to half.

There were calls for the Pirates to spend more and take on penalties during this time, allowing them to go for higher priced targets. The irony of that is Gayo didn’t see results with the higher priced signings, and performed best with the lower cost options.

Overall, Gayo was a good evaluator of talent, showing a consistent history of being able to find inexpensive talent. He probably wasn’t as flawless as his biggest supporters would argue, since he was prone to some bad calls. That’s a normal thing in talent evaluation, even with the best scouts. But the Pirates need help from the draft and international markets, which means any miss in talent evaluation is going to be magnified in a big way. For that reason, Gayo isn’t nearly as bad as his biggest critics would claim. He was a good talent evaluator, and continued to find talent for the Pirates, although he did have some notable misses.

The New Latin American Market

MLB has been increasingly cracking down on people who break the rules in Latin America. The ethics issues are widespread, and have been going on for some time. They range from kickbacks, skimming bonus totals, under the table deals, handshake agreements well before a player is eligible to sign, and so on.

Unfortunately, Gayo received kickbacks, and was caught during MLB’s efforts to clean up the market. The kickbacks create an issue, because it’s impossible to say whether the scout signed the player because he was a legitimately good option, or if he signed the player for personal financial incentives. You’d want to think the best and assume the kickbacks were an added bonus to signing a good player, but it’s impossible to avoid the doubt and assumptions of the worst.

I’d expect this crackdown to continue across baseball. I’m not sure how much more the Pirates would be impacted, although they’ve clearly seen their biggest impact by losing Gayo.

How Will the Approach Change?

The Pirates will now look for a new director of Latin American scouting. I don’t know who could take over that responsibility, whether it’s someone internal, or someone from the outside.

What I do know is that there will inevitably be changes to the approach, as there is when anyone new takes over. The question is how much will things change?

Will we see the Pirates make more of an effort to sign big bonus players, especially now that the most recent CBA gives them the most money to spend? Will we continue to see signings from places like Curacao, or will it be mostly the usual places? And most importantly, will the Pirates continue to be able to bring in talent, especially at low bonus totals?

I’d think that last question wouldn’t be much of an issue. Gayo always gave credit to his entire scouting team for finding those discount players. That team is still in place. Gayo had a hand in every signing, and it all went through him, but the Pirates still have some good scouts on the international side who contributed in a big way to some of their best signings.

Summary

The Pirates will be hurt by the loss of Gayo. Anyone who says otherwise is over-reacting to the bad signings, or ignoring the good results that have continued in recent years. But while they will be hurt by losing him, parting with him is justified, as it follows the trend that MLB is setting to clean up the Latin American market.

The question is whether they can find someone who can continue producing results in the international market. It’s not impossible for them to find a good scouting director and continue getting good results. It’s just going to be a new challenge, and one that is necessary to be successful with, since the Pirates still need to be getting talent from the international side.

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66 COMMENTS

  1. Cleaning up the international market, while commendable, won’t be an easy task. This is how business is done in those nations from first hand knowledge. The MLB will need to differentially compensate these guys as they will all lose a tremendous amount of income/perks/benes. I predict the cheating will just get more creative.

  2. Off topic, but I wonder if the Pirates will go after any of the Braves prospects just released from their contracts. They do still have some money.

  3. Hopefully the Braves’ loss will be the Pirates gain. Can they hire someone from the Cubs to replace Gayo? They’ve had success in that area…..perhaps it could offset Jim Benedict joining them.

    • Well some teams have to get the 12 braves prospects released, the Cuban outfielder Martinez that defected, the Twins SS Marte who just had his 3 million dollar contract voided and that Ohtani guy. Pretty sure Pirates are one of only 6 or 7 teams left with more than 1 million in international bonus money to spend too…

      • Well, as they say about the lottery – you have to play to win. Will the Pirates actually get serious and actively involved in the pursuit of any of these prospects and take advantage of a very unusual set of circumstances? Time will tell, but I won’t hold my breath.

  4. If the Pirates are penalized for Gay o misbehavior I doubt they will lose much as there is not much to lose. Other than Lo Lo Sanchez mlb will have to go back years for them to lose anyone of true value.

  5. The biggest issue for me is that people believe that Gayo is the only guy in the LA market capable of finding players for bonuses less than 6 figures. I don’t believe that he has found more players than his fair share over the years. As I posted here last week, the Phillies have 3 pitchers in their Top 10 that were signed for less than $100k. The Braves signed Ronald Acuna, one of the top prospects in baseball, signed for $300k. Add in the kickback that he received, I don’t think that he will be missed.

      • The Pirates had the highest pool allotment for the current signing period and still have over 2 million to spend but so far they are not spending that money.

  6. Maybe I’m in the minority, but I liked Gayo and the Pirates FO approach in the Latin American market (not the kickback part). Signing a bunch of potential Marte and Polanco types at a lower cost just seems like common sense. A single large bonus failure could have ruined the entire international signing class for that year. Admittedly, I don’t know enough about other team’s international signings to compare, but I’m not as down on the current crop as many others.

  7. John, Passan’s article says teams ‘will be able to use leftover money from the current international signing period or dip into their 2017-18 bonus pools to sign the ex-Braves’. (I think 2017-18 is a typo?) So this means… we have less advantage regarding this incident? Since the teams can now use next year’s bonus pool as well?

  8. I’m sorry we can’t get a Latin America draft. That would really help clear things up but I don’t think MLB is anywhere near that now.

    • Feels like there should be a happy medium between “pimps who exploit kids for profit” and “arbitrarily limiting kid’s earning power”.

      • Something like one universal draft for American and international talent? Would make rounds 12-76 or whatever in the draft more fruitful, presumably.

        • Abolish the draft, centralize media revenue, and institute a cap/floor if we’re really gonna do this thing right.

          • Even if this were a good idea, which it isn’t, it will never happen. MLB is a regional sport, while the NFL/NBA is much more a national game.

            To think the Yankees would willingly work hard to negotiate the largest local media deal they possibly can just to strengthen their competition, is laughably naive.

            The NFL has sacrificed greatness at the alter of fairness. As a result we have a sport void of great teams. And the goal of fairness is to ensure all will have their proverbial bite at the apple, yet the same few teams seem to almost always be standing at the end of the season.

            What you’re proposing is fools gold.

            • You mean to tell me you’re opposed to a system that pays players fairly so that owners can make even higher profits? Why I’m shocked, Scott. 😉

              Your media market argument is also about ten years out of date. Mind telling me what happens to those “hard earned” cable deals when bundled packages finally explode?

              • Pays players fairly? I’m very much in favor of players getting paid what the market will bear. What you’re proposing stifles the market.

                I personally believe MLB does a better job than the NFL & NBA to create a system where teams are able to compete with traditional powerhouses.

                As for what the future holds in terms of cable deals, I don’t presume to know. But I do know fans will continue to want to watch, and they will be willing to pay to do so. And for that privilege, MLB will certainly charge a fee.

                • Eliminating the draft in favor of pure free agency stifles the market?

                  That is exactly opposite of the truth, Scott. Nobody believes this but you.

                  • You said “institute a cap/floor.” This is the definition of stifling the market!

                    You have zero understanding of business sense if you believe it’s wise to place no limits on paying unproven amateurs, while restricting the pay of proven professionals.

                • “And for that privilege, MLB will certainly charge a fee.”

                  You mean centralize media revenue?

                  Like I said, yes, this is the future. This is *literally* what they’re preparing for with MLBAM. You agree with me.

                  • Let’s agree for arguments sake this is true. If NY market has 5 million subscribers and Pittsburgh has 500,000, do you expect MLB is going to share revenue equally?

    • Not having a Latin American/International draft to me would be like the NCAA telling universities and colleges they can recruit international talent however they see fit, just because they’re international. Having two sets of rules because “that’s how it’s always been” blows my mind anytime the conversation is brought up.

  9. Tim, I heard a rumor that the Pirates may be facing similar punishment from MLB that the Braves are facing. Possible loss of international signings could be coming. From my understanding, the MLB has Gayo on taking a kickback from a Mexican league, and I don’t seem to recall anyone other than Heredia coming out of Mexico recently. If that is the case, could they end up losing a player that may not even be related to the Mexican kickback?

    • If we are facing punishment anything near braces…

      The braves had A system overflowing with elite talent while Gayo gave us ???

      • “The braves had A system overflowing with elite talent…”

        I read Keith Law’s write up of the guys released. Only one was on his top 100, Maintan, and Law trashed his swing. He had nothing good to say about any of the other guys either.

        And they paid these guys over $10m in bonuses.

    • Where did you hear this rumor? I have seen nothing other than just Gayo will be punished. The Pirates did nothing wrong, from what I’ve read.

      • It was mentioned on a card collecting forum that I’m on. Someone mentioned that with all of the sanctions the Braves are facing that he had read that the Buc’s might get hit too because of Gayo’s indiscretions.

          • The national media specifically reported that the Pirates won’t face sanctions. The reports on the Braves right from the start said the Braves were in serious trouble.

    • Pirates signed plenty of players out of Mexico in that “a few years back” timeframe. Heredia was just the biggest name, but they also signed Carlos Munoz, Eduardo Vera, Mikell Granberry, Armando Bustamante, Eumir Sepulveda, Jherson Esqueda, Gerardo Navarro, Julio Perez and Omar Basulto. They didn’t sign any from October 2013 until this July.

  10. With the news that the Braves are about to loose SS Maitan there 4 million dollar signee are the Pirates in the best shape to sign him going forward and if so does this make up fr the total lack off effort this signing period?

    • International signings confuse me all the time but I think I remember John mentioning that the Pirates weren’t aware of this much increase for their bonus pool so they weren’t able to plan accordingly. Also top players would have an agreement beforehand so the Pirates had no chance of negotiating with them.

      While this Braves incident is unfortunate for them, this is great for us as we have one of the bigger pools. Also it helps that Yankees and other teams seem to be really into Ohtani.

      Edit: According to BA (Ben Badler), the Braves are going to lose their top 4 2016 signings. That means Kevin Maitan (SS), Abrahan Gutierrez (C), Yunior Severino (2B), Juan Contrares (RHP).

      Also, Passan says they’re going to lose total of 12 and ‘will not be allowed to sign 14-year-old shortstop Robert Puason, the top player in the class of 2019’.

      • Between these kids and Julio Pablo Martinez defecting it seems like the Pirates might just have lucked into a hell of a situation.

        • Only if they actually DO SOMETHING and try to sign one of these now available free agents….my guess, based on their history, they don’t even seriously pursue any of them.

        • It is a helluva position – I hope they throw caution to the wind and get as much as possible. Breaks like this are rare.

        • Forgot to mention Abe Gutierrez, 18, 6’2″ 210 Catcher from Venezuela, same country of origin as Cervelli. Could be the best C in the lower minors of MLB.

  11. I do believe Gayo will be missed in that he was an important cog n the international scene and it likely will provide a disruption of sorts. That said I think its an opportunity to do a whole lot better than what we have in recent years. I would look at the Braves group of scouts who all may be without jobs no matter what they may have known or did. I would look at this as an opportunity to spend whatever it takes on a top flight director with all the connections. The Pirates need a couple of Acuna type players. We don’t need anymore Diaz’s to brag about

  12. I will say, his success has seemed to wane more recently (or maybe that’s just my distorted perception of things), which leads to my next point. If something obviously isn’t working, try something different! So him getting let go is a blessing in that respect anyway.

  13. There once was a coach who was great in drafting terrific players. Great at drafting in both the higher and lower rounds. Then the rules changed on the draft date which was pushed back and the hidden talent was not so hidden any more partially due to the fact that most of the great young Black players were now encouraged to attend major programs. Guess what? The great drafting genius was not a genius any more.

    His name? Chuck Noll.

    • It’s a decent analogy but I can’t let this go by without saying Rene Gayo couldn’t hold Chuck Noll’s jockstrap in terms of accomplishment(prior to rule change).

      He can’t measure up in other ways either but that is besides the point.

    • How would someone still not be considered a genius by using tools at their disposal that others weren’t? Noll’s accomplishments shouldn’t be diminished because of rule changes. Is Thomas Edison not a genius anymore because we use better lightbulbs than he did?

      Ok…not a football thread, my bad.

  14. Check what Carlos Salas has done for the Philies recently and get back to me on this statement:

    “The Pirates will be hurt by the loss of Gayo. Anyone who says otherwise is over-reacting to the bad signings, or ignoring the good results that have continued in recent years. ”

    Luis Ecobar, Agrazal, Lolo aren’t even close to enough talent over the last couple years to define Gayo’s work as “good”. Marte and Polanco were a lifetime ago in baseball years.

    • Oscar Taveras, Alex Reyes, Sandy Alcantera, Magneurius Sierra, Jose Adolis Garcia.

      I just don’t have the stomach to memorialize a guy who profited off the exploitation of minors, particularly when the argument isn’t persuasive.

      • When you factor in Gayo’s recent work the argument Tim is basically making is “it’s not true that Gayo has been horrible or particularly bad at his job(same logic which is applied to NH and the FO)”. Ok fine… why is that the yardstick? Everyone knows the PIrates need to be very good(if not excel) in this area and they are nowhere close to doing that under Gayo. If we are going to struggle to replace him we have more problems than I realized.

        • And I’m not even convinced the Pirates will miss anything.

          The picture coming into view isn’t one of Gayo tirelessly scouring ballfields for diamonds in the rough. It’s one of him as the broker of children scouted by his staff. The dealmaker skimming his cut off the top in return for access to talent that isn’t even at all clear has been an advantage over the competition.

          I preferred the Pirates took a balanced approach to LA, making plays for top talent while also loading up on the <$300k players that make up the overwhelming majority of their signings in the first place. However, I've also said many times that if staying out of the top end kids kept them above the fray of this godawful system then I could at least sleep a bit better as a fan knowing my club didn't contribute.

          I always figured that was fairly naive, but I sure as hell will no longer go out of my way to glorify Gayo now that it's fact.

          • The picture of Gayo seems to suggest he hasn’t been doing anything tirelessly besides living off the fat of the lamb.

    • Agreed – anyone who says otherwise is just a kool-aid drinker and Nutting/NH apologist. Their recent track record in LA has been a joke…which results from bottom feeding and signing a lot of suspects who never became prospects….

  15. I’m not at all convinced this recollection of Gayo’s success holds up to historical scrutiny, at least not in the current era.

    Gayo was in the door early, without question. He established himself as a player in the market at a time when most teams were barely paying attention and the competition wasn’t anywhere near what it is today. This period also happens to be easily his most successful. This is when he made a name for himself.

    The difficulty in clearly defining Gayo’s inherent ability to find talent is with the Pirate’s strategy. This is an organization that signs upwards of 30 low-dollar, mostly indistinguishable prospects every period. The successes of finding a Marte or a Polanco have to be judged in the context of literally hundreds of similar players throughout the last 12 years who’ve failed without as much as a peep. It’s easy to cherry pick the handful – okay, literally one hand’s worth – of relatively high-dollar signings as failures, but this is an incomplete picture. It also begs the question of how one could have an inherent ability to successfully identify lower-regarded prospects than those highly sought-after.

    As for his “consistent” performance, Starling Marte was signed in 2007, debuted in 2012. Greg Polanco was signed in 2009, debuted in 2014. The next prospect with a chance to make an impact, Luis Escobar, signed in 2013 and will likely debut in 2020 at the earliest. Lolo signed in 2015 and will be at least one year later in debut. Maybe you argue it’s actually the Pirate’s *development* staff that has failed, but the actual results of Gayo’s work matriculating to Pittsburgh in the better part of the last decade simply do not hold up against the rest of the league.

    Times have changed. Gayo was a grifter profiting off this atrocious Latin American market. He won’t be missed.

  16. The fact that Gayo didn’t perform well with high cost signings was just another reason to part ways. His recent “success” with low cost signing wasn’t nearly enough to warrant him sticking around. Throw in the unethical factor… good riddance.

    The bottom line is the Pirates have a middling collection of young talent. Some of that is meh drafting but a lot of it is mediocre International talent.

    The aim should be to significantly improve upon the job Gayo has been doing recently, not simply matching it. Because simply maintaining our recent performance on the International side won’t nearly be enough.

  17. It may be better for the Pirates to lose Gayo now. He really has not signed an impactful player for several years. Good time to start a fresh approach.

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