July 22, 2008

HAINA, Dominican Republic -- Edgar Mercedes has made a fortune taking bets. So when the bookie saw 13-year-old Michel Inoa throw 78 mph off a mound in 2005 he knew that the lanky, 6-foot-3 right-hander was worth the wager. He's workable. He's workable, Mercedes kept saying to himself as he thought of the adjustments he would make to Inoa's delivery: the flick of his wrist, the angle of his waist. Mercedes, whose own career as a catcher had been derailed by injuries, had found the next best thing to being a professional ballplayer -- developing them.

Now, after three years under Mercedes' tutelage, Inoa and Mercedes sidled up to one another for a photo-op at the press conference that the Oakland Athletics hosted on July 2 to announce that they had just bestowed a record $4.25 million signing bonus upon the 16-year-old Inoa. The amount nearly doubled the largest bonus ever issued to a Latin American amateur not from Cuba and signaled the increasing dependence that major league teams have on Latino prospects.

But just as Inoa represents the face of a new generation of players, so too does Mercedes, 39, mark a new breed of buscones. Once marginalized, often poor, has-been (or never-were) baseball players looking to latch on to -- and profit from -- the island's national sport by training and then marketing promising prospects to major league teams, buscones have gone mainstream.

Mercedes is emblematic of the new buscon: educated, wealthy and savvy. More agent than coach, more administrator than fungoes-hitter, he and other well-heeled Dominicans have seen the tremendous business opportunities in developing baseball players for profit. Using his financial muscle, Mercedes has established Born to Play, a baseball academy that lures some of the best amateur coaches, nutritionists and English teachers from the island with the promise of a steady, healthy paycheck. Amenities like these help attract top prospects, who pledge buscones such as Mercedes a percentage of their future signing bonuses.

In 2006 Dominican president Leonel Fernandez signed legislation called the General Law of Sports, which included a section capping the amount that a buscon could claim from a player's signing bonus to 15 percent for a buscon who invests two years training a player and 10 percent for a year or less of work. In 2007 one high-ranking Dominican government official told SI.com that the limits were law in theory but a suggestion in reality, because there were no means to enforce them. Sources say many buscones take anywhere from 10 to 40 percent for providing a player with coaching, equipment and food. But supplying these services requires seed money -- something that most buscones do not have. So today's smaller, less-financially solvent buscones usually sell their prospects to a larger operation or player academy, adding another layer to a complex, informal and unregulated player development process. With unofficial estimates placing the number of buscones anywhere from 300 to 1,300, one agent representing Dominican prospects says, "The players are now traded like cattle."


In the town of Haina, just 10 miles west of Santo Domingo, down a narrow road and behind a towering gate, sits a tree-lined baseball diamond that Mercedes leases. He is able to afford the cost of operating Born to Play -- which also includes a three-story townhouse filled with bunk beds to accommodate most of the 25 prospects in his program -- in part because of his success owning and operating Out 27, a sports book in the Dominican Republic. With a swanky sports book bar in Santiago (the sort of place where most wagers are made) and 45 branches around the island, Mercedes won't say how much he has made off his sports books other than to admit that he's done well. Sports books are legal in the Dominican Republic and are licensed and regulated by the country's State Secretary of Sports, Physical Education and Recreation (or SEDEFIR, as it's known by its Spanish-language acronym in the Dominican). Since Major League Baseball does not employ, sanction or in any way oversee buscones, it has no rules to bar a bookmaker such as Mercedes, who sets the local betting lines on professional baseball games played both in the Dominican Republic and the U.S. and commutes two days a week from his Out 27 office in Santiago to Haina to supervise his academy.

Inoa, Mercedes and the Athletics have not been accused of any wrongdoing. But that a bookmaker has a cozy relationship with MLB-bound players -- and particularly a high-profile prospect like Inoa, described by various scouts as a once-in-a-generation talent -- is enough to make some in the game wince. "It's something we considered," says one scouting director whose team pursued Inoa, "because you also consider the character of the kid." A's spokesman Bob Rose told SI.com in an email last week, "[General manager] Billy [Beane] told me that the negotiations were handled solely through Inoa's agent, Adam Katz, not Mercedes. Beyond that, we don't have anything to add."

In many cases buscones broker deals with major league teams directly, but Mercedes says he retained Katz, a U.S.-based agent who is well-versed in large contracts, about a year before negotiations for Inoa began, "because Michel was a special case."

"I could not have done this without [Mercedes]. He was an outstanding partner. He was outstanding to work with," Katz told SI.com on Tuesday, stressing that Mercedes is not an employee of Katz's agency and that their relationship is informal. "I don't know the nature of the [Mercedes sports book] business. It's my understanding that everything he does is legal but I don't have comment on it."

When asked about the potential problems caused by his work as a bookie and (as he prefers to consider himself) an agent, Mercedes is adamant that there is no wrongdoing on his part. "There's no way I can have any influence whatsoever in any major league game with any kid," says Mercedes, who points to European soccer teams with gaming house logos on their jerseys as evidence that sports and betting are not necessarily like church and state. "I'm just working with 16-year-old kids. It's legal in this country. It has never been an issue. It has never come up. People who know me know that would never happen. We [sports book owners] have no need to even go down that path. It's no way we could even fathom going down that path. There's an association that watches for those things. You can't even think of it. You don't need to own a sports book to try and talk someone to do something wrong. We're totally against that because it hurts the business. Anyone that is licensed, that's the most stupid thing anyone could do. You would automatically know when someone would do that."

According to figures provided by SEDEFIR, in 2007 there were more than 1,300 sports books in the Dominican Republic. With that many sports books, Mercedes notes, "everyone here knows someone who owns a sports book." Mercedes, who is bilingual and attended U.S. schools growing up, also cites a cultural divide when it comes to gambling. "It's just normal for us here," he says. "It's just not viewed here the way it's viewed in the States. Here it's a business. It's viewed more as it is in Europe."

Major League Baseball historically has acted with an iron hand when dealing with gambling, banning the 1919 Black Sox and alltime hits leader Pete Rose for their roles in betting scandals. Current rules deem any player who throws a game to be permanently ineligible. So is MLB concerned about the close ties between prospects and a bookie? "We are unaware of any gambling connection but are always concerned about this and will be looking into the allegation," Pat Courtney, MLB's vice president of public affairs, said in an email to SI.com on Monday.

That Mercedes, a baseball aficionado and a prosperous business man, would enter the buscon business makes sense on its face. The academy was born out of his love for the game and of his family. A cousin asked Mercedes to train him in 2003 for big league tryouts. "I didn't know it was a business then," says Mercedes, chewing on the end of a cigar before one of Inoa's workouts at the end of June. Mercedes says his cousin received a $70,000 signing bonus from the Los Angeles Dodgers -- a respectable deal then but a pittance now. The money, however, was enough to convince Mercedes of the business possibilities, and he opened his own academy shortly after his cousin signed.

At Born to Play, Mercedes can afford to offer better amenities, and thus, bring in better prospects. Better prospects mean richer contracts, and richer contracts mean a larger windfall that Mercedes can reap from the prospect's signing. Mercedes wouldn't discuss the percentage that he receives from his players' contracts except to say, "It varies. It just depends on how long a kid is going to be with us. We've been not making money, just doing it for the fun of it. Now this year with Michel and all these kids, it's just exploded. It's become a business."

MLB estimated that its clubs paid $16 million dollars in signing bonuses to Dominican prospects in 2006. Just two years later that number had swelled to $26.7 million from July 2 through July 10 alone, according to an internal MLB memo obtained by SI.com. Various sources on the ground who have requested anonymity due to the sensitive nature of the topic insist that the drastic inflation of bonus money has less to do with traditional market forces and more to do with the recruiting culture in which alleged skimming by buscones and MLB scouts has driven up prices. (Those sources, however, were speaking of the system in general and not of Mercedes in particular.) In cases of corrupt signings, usually the buscon and the scout will collude to overvalue a player's skills -- and hence, his worth -- so that a player who would normally command a $100,000 signing bonus is paid, say, $700,000. The player still receives his $100,000, but the scout and the buscon and whoever else may have helped broker the deal will pocket the other $600,000. The player market then adjusts to these inflated numbers. Complains one international scout, "Now what happens is when I go out and try to do an honest job and offer $60,000 to a kid who's worth $60,000, he wants $100,000."

Few in the industry, however, doubt that Inoa was worth the hefty signing bonus. With a smile that clocks in quicker than his fastball and a pitch-perfect combination of humility and confidence, Inoa patiently and politely answers a slew of questions ranging from his goals ("to be in the Hall of Fame"), to his idol ("Josh Beckett. He knows what pitch to throw when"), to what he intends to do with his bonus ("build a house for my family and give money to the poor"), before dazzling a handful of scouts hanging out behind the backstop at the Born to Play academy with an assortment of mid-90s fastballs, curves and changeups. He looks those who approach him in the eye, a skill he says he learned from Mercedes. As Mercedes prepares to showcase Inoa to the scouts lined up with their radar guns behind home plate, he contemplates what he would do should a conflict arise between his book-making business and his player development academy.

"If it ever became a problem," Mercedes says, "I'd have to make a decision and sell the business." But which business? With players such as Inoa signing multi-million-dollar deals, the over-under on which venture would be more profitable in the future is a gamble.

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