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MLB, Cuba Reach Signing Agreement

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Major League Baseball and the union have announced a new agreement that would change the way Cuban players are signed.

The new system essentially turns Cuban signings into a hybrid between the Mexican League and Asian professional leagues like Japan's Nippon Professional Baseball and the Korea Baseball Organization.

Rather than having Cuban players leave the country, establish residency in a foreign country and then sign with an MLB team, players would stay in Cuba and the Cuban government would sell their rights to MLB teams. Per the agreement, players who are at least 25 and have played at least six seasons in Serie Nacional—essentially, the players who are exempt from the international bonus pool—would be required to be made available to MLB teams. The Cuban baseball federation can also choose to release younger players, who comprise the bulk of players currently of interest to MLB scouts, available to sign.

When the Cuban baseball federation releases a player, he can sign with any MLB team without leaving Cuba. When an MLB team sign a Cuban player, the club would then pay the Cuban baseball federation a "release fee" the way they do with NPB and KBO players.

In a press release, MLB provided the following summary of the agreement.

"Summary of Key Terms of Agreement with the Cuban Baseball Federation (FCB)

Only Cuban players who have a playing contract with the FCB ("FCB Players") are covered by the Agreement. Any Cuban player who does not have a contract with the FCB is eligible to sign with any MLB Club to the same extent as any other unsigned international amateur.

Under the Agreement, all FCB Players fall into one of two categories: (i) "FCB Professionals," who are FCB Players who meet the definition of a "Foreign Professional" under the Basic Agreement between MLB and the MLBPA (i.e., 25 or older with six or more years of professional experience); and (ii) "FCB Amateurs," who are all other FCB Players who are at least eighteen (18) years old. Each off-season, the FCB must release all FCB Professionals who wish to sign with an MLB Club. The FCB may also release FCB Amateurs to sign with an MLB Club during MLB's international amateur signing period, commencing each July 2nd.

Once released by the FCB, all FCB Players are treated the same as other international players under the Basic Agreement, and may negotiate and sign with any MLB Club that is willing to pay the corresponding Release Fee (see below).

The Release Fee owed to the FCB by the MLB Club that signs an FCB Player is calculated using the same formula embodied in MLB's agreements with the NPB, KBO, and CPBL (i.e., between 15% and 20% of the total guaranteed value for Major League contracts, and 25% of the signing bonus for Minor League contracts). In addition, Supplemental Release Fees may be owed if a contract with an FCB Player contains bonuses, escalators, or options that are later triggered. The Release Fee (and any Supplemental Release Fee) paid by the MLB Club is in addition to the compensation agreed to by the MLB Club to the FCB Player in the player's contract, which will be paid by the MLB Club directly to the FCB Player.

Released FCB Players will be scouted and signed in Cuba by MLB Clubs, and will travel to the United States or Canada (as applicable) to perform services for their MLB Club pursuant to a standard work visa. A former FCB Player signed by an MLB Club may return to Cuba during the off-season, and may play in off-season tournaments or leagues in Cuba with the consent of his MLB Club.

FCB Players may choose to be represented by a player agent or representative when negotiating a contract with an MLB Club.

Any disputes between MLB and the FCB will be resolved through neutral arbitration before the International Chamber of Commerce.

The Agreement will expire on October 31, 2021, unless extended by mutual agreement."

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