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taiwan flagMore good news from the international amateur front: today, Jesse Sanchez reports that the Cubs have signed 18-year-old pitching prospect Jen-Ho Tseng for $1.625 million. The Taiwanese righty has a great deal of experience already (he was on Chinese Taipei’s WBC roster this year), and will be eligible to start pitching in Arizona immediately, if the Cubs want him to.

The Cubs have been connected to Tseng for a while now, in their quest to go nuts internationally this year. Tseng has been written up here twice before (here and here), and those are worth checking out for more background on the prospect.

The Cubs are also expected to officially ink top Dominican prospect Eloy Jimenez next week.

Once all deals are final and in place, we’ll dig into the financial implications – which are explored in those two earlier Tseng articles. The short version? If all deals are correctly reported, the Cubs will slide into the maximum penalty range for their international signings, at which point it might make sense to go after a couple more top prospects.

  • Fishin Phil

    SIGN ALL THE INTERNATIONAL PROSPECTS!!!

    • ETS

      Sign MAG!

  • ETS

    “Once all deals are final and in place, we’ll dig into the financial implications – which are explored in those two earlier Tseng articles. The short version? If all deals are correctly reported, the Cubs will slide into the maximum penalty range for their international signings, at which point it might make sense to go after a couple more top prospects.”

    What doesn’t make sense is the Torreyes trade. If this is the case then somebody dropped the ball somewhere.

    • http://www.bleachernation.com Brett

      Even if they blow the budget, that trade saved them $800,000 in actual cash. At the time of the deal, they couldn’t have known for sure that they’d be able to land Tseng (no pre-arranged deal).

      • ETS

        It feels like at the time of the Torreyes trade they felt they could get the int’l pool money needed to make the signings that were expected, but quickly they realized that they could not (either it became harder to trade for pool money than expected or the signings went better than expected). Is it the worst trade ever to trade Torreyes for 800k? No. (although if he turns into the next pedroia then people will argue yes, ha). I just think in hindsight they would have waited to pull the trigger on the Torreyes deal. Who knows, maybe this was the plan all along.

    • Timothy Scarbrough

      I think the Torreyes deal was a calculated risk on their part. Worst case scenario they saved 800k for a prospect who was about to get squeezed out of a position, best case, for the trade to the Astros at least, is that the trade keeps them under the maximum penalty if some of the deals with Tseng or Jimenez fell through.

    • ssckelley

      I don’t think anybody dropped the ball with the Torreyes trade. I think that deal was made because they wanted to promote Baez and there was no place to put Torreyes. I think this is one of those deals where the Cubs did what was best for the player and found another home for him. He is only 20 years old and still could turn out to be a nice middle infielder for somebody, the Cubs are full of good middle infielders.

    • Kyle

      I don’t think they so much dropped the ball as they changed strategies midway through. That’s a good thing.

      • Coop

        I agree with Kyle here – I think they were going one direction (stockpile IFA pool money to stay under penalties), but then when the markey shifted, they changed course and went to “damn the torpedoes, full speed ahead!”

      • cms0101

        Exactly. They traded a decent prospect, but one from a position of strength that probably wasn’t the 5th best middle infielder in the system. They probably didn’t count on signing some of the pitchers they were able to grab in the international market, so trading Torreyes was probably calculated based on what they thought they might spend. As Brett stated, they’ve at least saved themselves a big chunk, via the tax they’ll have to pay for going over their limit. And the rest of the tax should be offset by the money saved on Marmol’s, Garza’s and Soriano’s contracts this season, so the budget is still in tact. The Mets just traded 2 lesser prospects to the Angels to get $460k of international money, so maybe this was a good value play by the Cubs in this new market.

    • jt

      Could it be that they no longer considered Torreyes to be a long term asset and decided to cut bait and use that spot for other prospects?

    • IlliniBone

      Torreyes is .214/.267/.250 since the trade…I dont get all the love for him. He’s just another guy and the Cubs middle infield prospect list is stacked the way it is.

      • Jon

        Couldn’t agree more. Torreyes stinks.

  • JUICED1

    I still think they manage to stay under budget. it would be a pretty big mistake to completely take yourself out of next year’s picks. we can all assume the cubs well be a bottom six team in the league all said and done. rather then blow all next year’s cash, I think they come right under the penalty. you can go nutz and over sign everyone the year you start competing and already know your pool money will be less relevant.

    • TulaneCubs

      I think it’s basically a lock they go way over budget. Hard to see where they can come up with all that international pool money.

      I don’t think their signings are over. I think what we can expect is Jimenez, obviously, but then at least 1 maybe more of the guys ranked 4-6 on this list.

      http://www.baseballamerica.com/international/where-the-top-30-international-prospects-have-signed/

      I think their strategy is: We can sign more guys that we want this year and go over the budget than we can this year and next year if we stick to the budgets in each year.

    • RoughRiider

      JUICED1
      That boat has already sailed. They will be over the limit.

    • cms0101

      I don’t think there is any way they stay under the 15% overage penalty. But I think that it will be ok. There are still a few 15 years and guys who were banned to sign right away that they may go after later in the signing period, so why worry about the penalty at this point. They may not be able to zero in on any top-30 guys next season, but they can flood the team with $250k signings. Guys like Castro signed for $50k once upon a time. Next year will be all about finding diamonds in the rough in the international market. If it were me, I’d take an approach that they seem to favor in the draft. Flood the system with projectable pitchers that will sign for those dollar amounts. If they miss on a few offensive prospects, so be it. That’s where the system is strongest anyway. Also, given their strategy this season was to draft college arms so that they would progress faster and flood the upper levels, maybe next season’s draft strategy will focus more on high school talent.

  • Corey

    Off all the players we have now, I think we should keep Dejesus. We can’t field a team with only players aged from 20 to 25, no leadership. We gotta keep atleast Schierholtz, or Dejesus here.

    • willis

      Keep both. There’s no one pushing them for playing time.

  • Fastball

    Are we the Dodgers of the IFA market? I love this. Sign All The Players! Who really cares about next year. Blow it out big time and get them all. Ricketts just saved enough money paying Sori the rest of this year to pay for all these guys and some more including penalties. So spend spend spend. We need to stock pile all the talent and sort it out later. If we end up with so many players we don’t know what to do with all of them, can we start up another Minor League franchise so we have places for everyone to play?

    • JUICED1

      how many stud players are even left? I’d rather have a shot at some of next year’s players with the pool money we get next year. blow it out the year we start competing and you know we won’t get any big time pool money. that way when you finally do get the penalties it won’t matter much

      • ssckelley

        But the rumor is the penalties will get much steeper next season, so the Cubs are taking advantage of the market now and look to trade the pool money next year.

        • Szatty

          It seems like the Cubs’ aggressive spending this year may also have the effect of inflating the market next year. There’s a good chance other teams were caught off guard and will be valuing their international dollars more highly in the future (beyond the inflation created by the stricter penalties next year). So the Cubs buy players low this year, increase the value of the future pool in the process, and sell their international pool space high next year.

          • Eternal Pessimist

            But don’t the Cubs loose the pool money that goes with the higher picks (for the worse teams)?

            • DarthHater

              They can’t spend it, but they can trade it (at least, that’s what Brett says).

              • nkniacc13

                they don’t lose it they just cant spend more than 250k to sign a player next year.

                • Eternal Pessimist

                  Nice! so the Cubs will pick-up every 250K player out there or trade away valuable cap space. Well done Theo, well done.

              • http://www.bleachernation.com Brett

                There’s no such thing as “at least, that’s what Brett says.” If Brett says it, it’s unequivocally true.

                In this case, you can trade bonus slots regardless of your penalty status from the prior year. The penalty that will be imposed will not preclude the Cubs from spending all of their pool, they just can’t spend more than $250,000 on any individual player.

              • Eternal Pessimist

                Very nicely played Theo!!!

      • TulaneCubs

        4 of the top 5 players in Baseball America’s list are unsigned. The Cubs expect to sign the #1 guy in Jimenez. My guess is they’re targeting 1 or 2 of the other 3.

  • WELP

    Anyone know what happens when you don’t spend any of your international bonus pool? Do we have to trade it next year? Or can we hold on to it for another year?

    • ssckelley

      It is a use it or lose it deal. A theory flying around is a big reason why the Cubs are blowing out the cap this year is because the penalties are going to be much steeper next year and there might be more trade value for the Cubs to trade the pool it.

      • WELP

        Smart. However, when you have a ton of supply of bonus pool money and other teams know you “must” trade it, the value of that pool money goes down…a lot. imo

        • Bilbo161

          There is also the possibility of an international draft being instituted. That would presumably make the restrictions moot.

        • TheDondino

          The Cubs don’t have to trade it next year, they just won’t be able to spend it all in one big chunk. They’ll be limited to no more than $250,000 per signing. You can still get some decent prospects at that rate. So if they don’t get the value for their slots that they feel they warrant, they’ll just spend it on a slew of lower tier guys…or not. They can just save the money as well.

        • ssckelley

          WELP I disagree, if they do move on to harsher penalities (all signs say they will) then that pool money will be extremely valuable. All you need is 2 teams bidding on the same prospect and you got the Cubs dangling penalty free pool money in front of both of them. This is a classic “money ball” move by taking advantage of the weaknesses in the market. If this was their plan it was brilliant.

          • WELP

            Sure, the increase in demand due to the (potential )harsher penalties will be good for the cubs. but that doesn’t change the fact that the supply of pool money that they own is not very valuable for themselves.

            I would compare it to owning 10 concert tickets that you can’t go to. Sure you might be able to sell these tickets to people desperate to go to the concert, maybe even for a good profit. On the other hand, savvy ticket buyers will know that you will REALLY want to unload these tickets, especially as the deadline nears.

            Of course, pool money can still be spent just not in as big of chunks, where as concert tickets cannot be partially spent or spent in smaller denominations. The example is not perfect. But i think it illustrates the situation the cubs will be in next year.

            • ssckelley

              The concert tickets is a bad example, you even explain why it is. These pool slots are not the same size across the board, depending where the Cubs finish at the end of the season the largest slot could be worth more than a million dollars. To your ticket analogy the Cubs is the broker who went out and bought an entire lot of tickets to a sold out event but he only has 1 front row ticket, a couple of middle row tickets, a handful of nose bleed seats, oh and this backstage pass that everyone covets. By purchasing these tickets the broker created a market for himself and all it takes is 2 people bidding against each other to drive the price up.

              I doubt the Cubs will sell off all of their pool space next season, I am sure they will sign a few players under their 250K max but their top pool slots will draw plenty of interest.

              • WELP

                While we agree it is not a perfect example. I’m not sure any of the point you made, negate the point i was trying to make with the example.

                Let me try to make my point in a different way.

                Let us say that if the cubs had x money and could to spend it freely. Let’s assign the value of that pool money = 100

                All i am saying is that if you had x money and were NOT able to spend it freely, then it is worth something less than 100. I don’t really know how much less than 100, but it must be some amount less.

                • scorecardpaul

                  WELP, any cash that you have I will gladly buy from you. I don’t care if you can spend it or not, I will still be able to get full value out of it??? It has definate value because it is a very limited comodity. If I have the most pool cash, I get the best players.

                  • WELP

                    scorcardpaul, cash is exactly what the cubs do not have. A liquid commodity that they can spend and use freely. If you want to pay me full “price” for all the things in my life that has less utility to me then full value, than i will sell it to you gladly.

                    I’m actually serious…

                • ssckelley

                  Again it does not matter if the other teams know the Cubs will be looking to trade their pool money, honestly I think it helps. When teams get into a bidding war over a player and they are out of money the first call they make is to the Cubs. The Cubs do not have to trade it, if they want they can spend it all buying fringy 16 year olds for 250k each. Unless there are other teams not wanting to use their pool money the Cubs will own the market.

                  • WELP

                    ssckelley, i don’t disagree with any of the points that you’ve made. Except that you are not considering all the scenarios. In any competitive market or game (i happen to work professionally in the financial markets,) you can’t assume that the other players will not trade optimally for themselves. Game theory WILL apply.

                    Of course, you are correct, in a bidding war (high demand environment for pool money) the cubs will be sitting pretty with a lot of leverage. But you can’t assume that is necessarily the market environment next year.

                    you are only correct in the scenarios and examples you have given. but those don’t account for the full set of probabilities. the full set of probabilities should lower the total expected value of the cubs pool money.

                    • Eternal Pessimist

                      WELP, the difference is that higher penalties kick in next year which makes the Cubs international pool money have significant potential value beyond a normal year.

                      Like any market, there can be surprises up or down, but the potential, given the artificial rules imposed by MLP, puts the Cubs in a potentially advantageous situation. They spend like drunken sailors this year (hopefully not really drunk…more an educated buzz) and next year are willing to be the power brokers of a limited commodity. If the marketplace is hot they make out well. if not, they paid whatever excess/penalties they incurred this year.

                  • WELP

                    just think of everything in supply and demand. I think you have only considered the implications the “demand” side will have in the value of the cubs pool money. And yes, there **might** be a lot of demand. But there might be a lot of supply too. You just don’t know for sure. You can only try to assign probabilities to various scenarios and then think in terms of expected value.

                    • cms0101

                      If you’re just thinking in supply and demand, the supply is going to be non-existent. Looking at this season, you’ll see there were only a few teams willing to even move their pool money. Instinct tells me that will be the same again. Should the Cubs decide to trade pool money, they’ll have 4 slots with which to make something happen. If not, they’ll be able to spend $250k per player. There are plenty of talented players for them to spend that amount of money on. I just don’t see how they will lose out under the penalties next year. They won’t sign the big name guys like this season, but they will have plenty of ability to trade for players or sign lesser hyped guys. Starlin Castro signed for $50k. They may not be ranked by prognosticators when they’re done, but I have faith their scouts will do the job.

                    • WELP

                      Interesting. That definitely bodes well for the cubs…

        • Eternal Pessimist

          Nope, the market is influenced by how many teams need that money. With the stiffer penalties next year, teams may be willing to sacrifice significantly to get into the market for bigger international prospects.

  • Believe in 2015

    Cubs Den gave a minor league recap and for those interested Javy Baez was 6 feet away from a grand slam in his last at bat from yesterday’s game.

    • http://JUICEDMOTORSPORTS.COM JUICED1

      Didn’t homer twice yesterday too? That guy is turning into the craziest two outcome player ever. Homer or strike out

  • pete

    Brett – if they deceide to utterly destroy their international cap, is there any idea after whom the Cubs would go? It seemed a number of parties knew the FO was targetting Torres, Jiminez and Tseng – any word on secondary/back-up targets? I presume that there is still quite a bit of unsigned talent out there.

    • cms0101

      There are a ton of lower ranked guys available. There are also a few 15 year olds that can’t sign until they turn 16 in a few months. One strategy might be to just sign all of htose guys and treat them like next year’s crop. And there are a few guys that were banned from signing until April because they gave false info to MLB. The beauty of not having to worry about the penalty is they’ll have the freedom to go after whoever they want, up to the limit they want to spend and pay tax for. Plus, some guys who maybe haven’t had a good showing to this point may pop up between now and June. At 16, guys could grow 2-3 inches, increase velocity on their fastballs 2-3mph, or just figure something out.

      • Eternal Pessimist

        Is the tax dollar for dollar in real money? More? If so each 1.8 million dollar signing costs them 3.6 millions. These are real expensive players, many of whom are so young, I’m not sure if they fit the “prospects” label.

  • JUICED1

    could they do a sign and trade? since technically we can only add 50% of our current pool… could we have another team sign one of the players for us and then send them over In a trade instead odd just sending the pool money/slots to us? or do they follow the same rule as a draft pick that can’t be traded for the first year?

  • cubsin

    There are two prospects who will turn 16 in the next two weeks that were ranked in the top five by Baseball America, Molina and Encarnation. And, of course, there may well be other lower-ranked youngsters the Cubs have signed or will sign.

    • cms0101

      I’ve read Encarnacion is going to sign with the Phillies and Molina with the Yankees. The one 15 year old that I’ve found any info on that doesn’t appear to be attached to any team is OF Jeramias Portorreal. Not highly ranked, but he’s the youngest of the bunch. But there are still plenty of guys 16 and older unsigned.

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