Huge Salaries And A Poverty-Stricken Country: The Economics Of Baseball In The Dominican Republic

When Osvaldo José Pichardo Virgil, better known as Ozzie, took the field for the old New York Giants baseball club in September 1956, the 24-year-old from Monte Cristi in the Dominican Republic probably had no idea he was triggering a revolution that would eventually change the face of America's national pastime.

Of course, this process took a long time to coalesce, with various stops and turns. Virgil himself had a rather tepid career, hitting only .231 over nine seasons as a utility infielder, but he remains a historic figure as the first man from his Caribbean homeland to suit up in the big leagues. Now, almost six decades later, so many Dominicans have flooded into the Major Leagues, that they now account for at least 10 percent of rosters at baseball's highest level. For example, the Toronto Blue Jays (a club that has a long history of signing players from the Dominican Republic) had no less than eight Dominican players on its 2013 roster, including superstar Jose Bautista.

Moreover, at least 25 percent of the upper minor-league rosters and nearly half of the lower minors comprise Dominicans. Indeed, in the last two decades or so, the number of Dominicans on big league clubs has almost tripled. Quite an extraordinary achievement for a poor, tiny country of only 10 million people (1/33rd the size of the United States) whose other principal claim to fame came from its sugar cane industry.

Poverty And Desperate Hopes

How did this strange phenomenon emerge? A complex confluence of factors helped turn the Dominican Republic into a giant incubator for baseball players – rampant poverty, few economic opportunities for its poor and working classes, a deeply entrenched baseball culture and, now, a strong connection to Major League Baseball through an efficient network of training academies across the country.

Baseball first arrived in the Dominican Republic around 1890 as an import from Cuba (another baseball powerhouse). Workers who toiled at the sugar cane plantations that dotted the countryside often formed baseball clubs as a form of much-needed diversion and entertainment. As the quality of local play improved, by the 1930s, the Dominican Republic hosted the top stars from Cuba and the Negro Leagues from the U.S. for all-star and exhibition games.

Adam Katz, co-managing executive director of Wasserman Media Group’s baseball division and a former agent who has represented prominent Dominican players, including Sammy Sosa and Hanley Ramirez, explained to Forbes magazine why the Dominican Republic produces such a rich harvest of Major Leaguers.

“[They] have a well-built baseball infrastructure and some challenging economic conditions,” he said. “Those factors foster an environment for talent. From the infrastructure perspective, they have a rich tradition of ballplayers, fields and instructors, as baseball is their national game. When you put this infrastructure and history in a place with the economic conditions of the Dominican Republic, kids see baseball as hope. There are people they know who have made it in baseball and made it off of the island to do very well financially because of baseball.”

According to the CIA/World Factbook, more than one-third (34.4 percent) of Dominicans lived below the poverty line in 2010. Once largely based on agricultural exports (mostly sugar and coffee), the Dominican Republic's economy has recently transformed itself into one dominated by tourism, communications and the service sector. But these developments have failed to translate into significant numbers of decent-paying jobs for the masses of poor, who remain trapped in unemployment or under-employment (indeed, some 15 percent of Dominicans are jobless). Moreover, the wealthiest 10 percent of the country (who generally shun baseball), control almost 40 percent of annual GDP, a harsh reflection of the country's bitter and intractable social class divisions.

“For most poor and working-class young Dominican men, they can find work as a factory laborer or in hotels or restaurants that serve the tourism industry,” said Dr. Adrian Burgos, director of graduate studies and professor of history at the University of Illinois with a special focus on U.S. Latino history and sports history, in an interview. “But none of these jobs provide instant upward social mobility – only the faint dream of a pro baseball career can do that.”

Dominican Players Come Cheap

Since Dominican players are not subject to the Major League draft, big league teams can sign Dominican teenagers for often absurdly low signing bonuses, although in recent years these payments have been increasing. In 2009-2010, big league clubs spent, on average, about $94,000, for each Dominican player they signed. In addition, all 30 Major League teams now run these "baseball academies," which provide teenage boys with coaching, baseball fundamentals, uniforms, equipment, education, dormitories and even good nutrition. These academies serve as a kind of boot camp for potential Major Leaguers.

“For the U.S. baseball clubs, signing and training Dominican boys generally offers little financial risk,” Burgos explained. “These kids – most of whom are poor and often malnourished – are signed largely on their potential. With American-style coaching and nutrition, they are groomed to become good players, with a hope that a lucky few can make the big leagues, or at least the minors.”

And the payoff is worth it for big league clubs if they can unearth the next Pedro Martinez or Vladimir Guerrero.

“You can develop 30 to 45 players from the Dominican for what it costs to sign a second-round draft pick in the States,” admitted former New York Mets general manager Steve Phillips in the late 1990s.

Moreover, Burgos points out, even if a young Dominican man fails to reach the minor or major leagues, the signing bonus he receives (modest by U.S. standards, but far higher than the average yearly wages possible in the Dominican Republic) can open the door to life-changing events. “He can use that money to buy his family a new home, a car, or even start a new business,” Burgos said.

Rob Ruck, a professor of history at the University of Pittsburgh, who has written extensively about baseball, including the books "Raceball: How the Major Leagues Colonized the Black and Latin Game" and "The Tropic of Baseball: Baseball in the Dominican Republic," said the signing bonuses a young player receives bolster his family. “If he makes it to the majors, that money also makes life more bearable for an extended group of family and friends,” Ruck said.

Rise of Dominican Players

After Virgil's debut in 1956, the number of Dominicans entering the big leagues was a trickle in the 1960s and 1970s, until an explosion of new talent stormed the Major Leagues in the 1980s (coincident with the establishment of training academies in the Dominican Republic). Prior to that period, the majority of Latin American players hailed from Cuba (Tony Perez, Tony Oliva, Luis Tiant, Camilo Pasqual), Puerto Rico (Orlando Cepeda, Roberto Clemente) and Venezuela (Luis Aparicio, Davy Concepcion, Vic Davalillo).

“In the 1960s, when Latinos made their presence known, most big league clubs ignored the Dominican Republic,” Burgos said. One exception: the New York (later San Francisco) Giants, who not only signed and developed the first Dominican, Virgil, but also the high-kicking Hall of Fame pitcher Juan Marichal and the legendary Alou brothers (Felipe, Matty and Jesus), who made history of sorts by patrolling all three outfield posts in one game in 1963. Burgos explained that a scout named Alex Pompez, formerly of the Negro Leagues, played an instrumental role in the signing of a number of Dominican players for the Giants. But the onrush of Dominicans into the big leagues would have to wait until the 1980s.

Dominicans Vs. Other Foreign-Born Players

On Opening Day of 2013, more than one-quarter (28.2 percent) of Major League players came from overseas. Of these 241 players, more than one-third (89) were born in the Dominican Republic, with Venezuela a distant second, with 63 players. “What makes these figures even more amazing is that Venezuela has three times the population of the Dominican Republic,” Burgos said.

Interestingly, Puerto Rico, once a rich vein for baseball players, including the immortal Clemente, has almost dried up, fielding only 13 men on big league rosters on Opening Day 2013. “The popularity of baseball in Puerto Rico has diminished in recent decades, as NBA basketball has ascended in its appeal,” Burgos explained. “It's somewhat analogous to the scenario in the inner cities of the U.S., where young African-Americans now favor NBA and NFL to baseball.”

Money Changes Everything

For young Dominicans who make it, the money they can earn in the big leagues dwarfs their wildest dreams of fame and fortune. In 2012, the average salary in the major leagues amounted to $3.4 million (having about doubled in just 13 years), with a handful of players making $20 million annually or more. Given that there were 89 Dominican players on Opening Day 2013 big league rosters, one could estimate that their aggregate salaries for the prior year totaled some $303 million (give or take $10 million or $20 million).

In stark contrast, Salary Explorer reports, the average monthly salary for workers in the Dominican Republic clocks in at 18,333 Dominican pesos – which translates to an annual income of about 220,000 pesos, or about $5,130. This means that the average Dominican big leaguer in the States earns 660 times as much in wages as his humble compatriot back home.

But has this wealth translated into perceptible economic improvements in the Dominican Republic? A study from 2007 entitled “Effects of Major League Baseball on Economic Development in the Dominican Republic” led by Dr. Carrie A. Meyer, associate professor of economics at George Mason University, determined that the enormous salaries earned by these ballplayers resulted in modest economic benefits to their homeland. “While [Major League Baseball] is certainly having a growing economic impact in the Dominican Republic, it is clearly not the major factor in the rapid economic growth the country has been experiencing,” the Meyer study declared. “The growth in the tourism industry, the communications industry, and the level of worker remittances from Dominicans living abroad have all had a much bigger impact.”

Still, Meyer's survey conceded that the construction and operation of baseball training academies across the Dominican Republic (which cost millions of dollars to build and run) have yielded “real economic effects … on the ground in poor Dominican communities, where jobs are being created in construction and to service the academies.”

Meyer’s study noted that by 2006, the aggregate salary earned by Dominican big leaguers (about $292 million) was double the size of the country's earnings from its sugar exports – quite an astounding development in light of the dominance once enjoyed by sugar in the local economy. “The real question remains, what are the players with mega-salaries doing with their money?” Meyer rhetorically asked.

What frustrates such an analysis is the lack of comprehensive data on investments in the Dominican Republic by Major League stars. But anecdotally, quite a number of Dominican players, including Miguel Tejada, George Bell, Salomon Torres, Melido Pérez and Moises Alou (Felipe’s son), among many others, have poured money into the construction of lavish homes for themselves and their families, as well as baseball stadiums and other projects, like ranches and various other enterprises.

Burgos noted that perhaps the most celebrated Dominican player of the modern era – future Hall of Fame pitcher Pedro Martinez -- has invested huge amounts of money to transform his native town of Manoguayabo. Martinez, who earned in excess of $100 million over his stellar career (an amount of money well beyond the comprehension of the average Dominican), and his brother Ramon (another former big league pitcher) have constructed dozens of homes for family and friends, and built churches and paved roads, among innumerable other projects. The Meyer study noted that Martinez “employs many in [his] neighborhood, whether in the window factory he built, or working as bodyguards, chauffeurs, or public relations staff. There are [also] plans to construct a high school, police station, and health clinic.”

Also, Vladimir Guerrero, the superstar slugger who spent most of his career with the Montreal Expos and Los Angeles Angels, is a virtual one-man business empire in the Dominican Republic. Meyer indicated that Guerrero owns a large portfolio of businesses, including a seafood distributorship, home construction company, concrete firm, trucking business, hardware store, supermarkets, farms and even a propane distributorship, thereby employing hundreds of people. Obviously, Guerrero has made a sizable impact on the local economy – but measuring such efforts proves elusive.

Ruck of the University of Pittsburgh asserted that the success of Dominican ballplayers has “reverberated” on the island. “Some ballplayers have gone well beyond ... personal philanthropy,” he noted. For example, even Junior Noboa, who played sparsely over an eight-year career, has built and rented baseball academies to MLB organizations, employing hundreds and fostering foreign investment in these facilities. “Other ballplayers run their own academies, foundations, and businesses,” Ruck added.

Even Major League Baseball itself said in a report: “Although we do not quantify the economic impact of former players, it is important to mention their investment in real estate and businesses that have a recurring positive impact on the local economy.”

Overall, Burgos asserted, Dominican players, through their investments, contribute to the building up of local communities, economic infrastructure and businesses. Some prominent stars, including Sosa, Martinez and Marichal, have delivered philanthropic endeavors in the aftermath of hurricanes and other major events. Burgos also noted that the ballplayers’ fame generates more publicity for their efforts – but adds that the remittances made by ordinary Dominicans living abroad have a greater economic impact. “In the end, it is a matter of scale (small remittances by a lot of Dominicans versus major investments/entrepreneurial efforts by a few major earners in baseball),” he said.

Indeed, the Sosas, Guerreros and Martinezes come few and far between.

Moreover, the downside for young Dominicans who join the baseball system’s rollercoaster are all too bleak. An estimated 90 to 95 of Dominicans are released from their contracts at the minor league level – usually with no educational degrees for them to fall back upon.

There are also other perplexing and complex issues related to Dominican baseball.

Buscones in the Shadows

One of the fundamental aspects of Dominican Republic's baseball culture is the crucial intervention of the "buscones" – local agents of sorts who link poor young Dominican players with professional organizations. A buscon typically receives a percentage of a player's signing bonus in exchange for various services rendered, including working as scout, trainer, translator, mentor and cheerleader. “A talented Dominican youth is often discovered by a buscon at age 14 or 15,” said the George Mason study. “The prospect often lives and trains with the buscon, who will arrange tryouts for his client upon his turning 16.”

But buscones occupy a nebulous and semi-legal sphere in Dominican society. Many such agents have been accused of corruption, embezzlement and feeding steroid drugs to young prospects. Yet without the presence of buscones, the success of Dominicans in major league baseball would be impossible, and most players are grateful for their efforts.

Racism In Black, White And Other

Dominican players also must wrestle with other issues that have nothing whatsoever to do with the play on the diamond. One contentious subject is racism. In the United States, much debate has surrounded the topic of black Americans vanishing from the baseball diamonds, while the numbers of Latin Americans have soared over the past few decades.

But this raises some thorny issues of race and identity among Latin Americans, many of whom are either mestizo (mixed-race between white and Indian); mulatto (mix of black and white); or of black African descent. Indeed, in the early years of their entry into the U.S., many “Latin” players encountered not only racial bias, but also obstacles of language and culture.

"It was very difficult for them to understand because, first of all, a lot of them were ... light-skinned and didn't consider themselves to be black," a journalist named Mark Kurlansky, who has written about Dominican baseball, told National Public Radio. "So they'd go to minor league teams in the South, even in the early '60s, and they didn't think Jim Crow applied to them and got into a lot of difficulties -- not only with racists, but with the African-American players, who kind of resented this stand of 'I'm not really black.’ … They thought they should have shown more solidarity with the black players, rather than insisting they were distinct from it."

Indeed, many Dominican players who “look black” to American eyes – like Sammy Sosa, David Ortiz, George Bell, Tony Fernandez, Juan Samuel and others – would reject that classification, and even be insulted by it. Burgos explained that in the Dominican Republic, being called “black” is linked to negative feelings towards Haitians, who share the island of Hispaniola with the Dominicans. The Dominican Republic and Haiti have long endured difficult relations, part of which is based on race (Haitians are almost entirely black), but also on issues related to nationalism. “In the Dominican Republic, nationality-ethnicity trumps race,” said Burgos. “In the country, many stress ‘Soy Dominicano’ [‘I am Dominican].” As such, ‘black’ Dominicans who have lived in the country for decades would not call themselves ‘black.’”

Naturally, these attitudes have rankled some African-American ballplayers. One prominent case involved a hard-hitting, poor-fielding, eccentric and very dark-skinned Dominican named Rico Carty (who won the 1970 National League batting title for the Atlanta Braves with an extraordinary .366 average). According to various reports, Carty angered no less a figure than teammate Hank Aaron by referring to the latter by the N-word, precipitating a fight between the two sluggers. Carty (who played 15 seasons and finished with an impressive .299 career average) also reportedly insulted St. Louis Cardinal Hall of Fame outfielder Lou Brock by sneering he was “too black.”

Burgos also laments what he views as a growing schism between Latin American and African-American players. “Back in the 1960s and 1970s, a lot of the top black American players like Frank Robinson, Willie Mays, Willie McCovey and Reggie Jackson, either played or managed baseball in the Caribbean, including the Dominican Republic, during the winter,” he said. “That gave the black Americans a close relationship with the Latin people and culture. But now, players make so much money that they don’t need to – or are actually contractually forbidden – to play winter ball. I think this has severed some once-close relations between players from different cultures.”

Steroids: The Dark Cloud Over The Diamonds

Another issue hanging over Dominican Republic baseball has to do with steroid drugs – a scourge that has, of course, infiltrated virtually all levels of the game across the past two decades, raising serious questions about the validity of statistics accumulated by juiced-up players. Since Major League Baseball under Commissioner Bud Selig finally decided to crack down on steroid users, a disproportionate number of players suspended for such violations have hailed from the Dominican Republic, while some other Dominican players have been linked by suspicion to drugs.

But such drug usage is viewed very differently in the Dominican Republic, where steroids are easily available and some are not even deemed illegal. Erick Almonte, a Dominican ballplayer in the Milwaukee Brewers' minor league system, explained to Fox News-Latino why steroids are widespread in his homeland. "Everyone knows the problem that exists in the Dominican Republic,” he said. “It's not the same there as it is here [in the U.S.]. You can get these substances without a prescription.”

Almonte pointed to the desperation of poor Dominicans seeking any edge in their quest for wealth and success. “I know there aren't that many opportunities in our country and although we know they're [drugs] prohibited, we keep trying to cheat the system,” Almonte admitted. “I hope that our mentality changes, too."

Charles Farrell, a co-founder of the Dominican Republic Sports and Education Academy in San Pedro de Macoris (a city that has literally produced hundreds of professional baseball players), has dedicated his life to helping young Dominicans with their education after their baseball dreams vanish. "Even when I talk to kids – 98 percent will not make it to the majors – but it’s almost like every kid is sitting there saying, well, ‘I’m part of the 2 percent,’" he told Fox. "If they see that baseball is not the only way out, you’ll see a dramatic drop in use of steroids because the win-at-all-cost mentality will disappear."

The Ballad of ‘Esmailyn Gonzalez’

Many of the problems associated with the Dominican Republic’s mania for baseball success may be encapsulated by the sad tale of Esmailyn Gonzalez. In the summer of 2006, the Washington Nationals signed the young (allegedly 16-year-old) pitcher for a signing bonus of $1.4 million. Three years later, it emerged that "Esmailyn Gonzalez" was actually Carlos David Alvarez Lugo, and that he lied about his age, shaving off four years from the true figure.

By the summer of 2013, the Nationals filed various lawsuits over fraud committed by Alvarez Lugo and his associates, including an alleged kickback of some $300,000 that he paid to his "buscon," Jose Rijo, the club’s Latin American scout and special assistant to (now former) general manager Jim Bowden. It later turned out that Rijo had links to one of the Dominican Republic’s biggest drug traffickers. Meanwhile, the Nationals, who had high hopes for "Gonzalez," are still trying to recoup their losses, while the young man’s future has been dashed to pieces.

Future Of Dominicans In The U.S. Game

Nonetheless, Dominicans are likely to continue joining Major League squads in large numbers and make an ever bigger presence in the game. ”From what I see, I don’t see any reason why it’s going to slow down,” Katz concluded to Forbes. “Baseball is intensely popular in the Dominican Republic. On top of that, the country’s economic conditions paired with a strong baseball infrastructure will continue to create interest in the game among youngsters. Pair that with the fact that teams can sign their players for relatively cheap, and we will continue to see many Dominican players rise in Major Leagues."