MLB Built Baseball Castles in the Dominican Republic, and Also Grew the Lenders
MLB spends as much as $400 million a year in the Dominican Republic, but there is no draft and teams may sign players privately before they turn 16 — spawning a shadow industry of high-interest loans to players' families, with David Ortiz alleged to be part of it.
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MLB built 30 baseball castles in the Dominican Republic
MLB has built a talent pipeline in the Dominican Republic: all 30 teams have physical facilities near Santo Domingo, and a 20-minute drive from the airport brings you to gleaming complexes bearing Yankees and Mariners logos, which the show calls ‘baseball castles.’ The system generates as much as $400 million a year locally, and roughly 10% of current MLB players come from this Caribbean island. The castles are where the most promising prospects live and train; for an ambitious Dominican boy, getting in is the whole goal.
You can't sign until 16, but you can agree at 14
MLB rules say teams cannot sign players under 16, but when Belfi was 14, his coach pulled him and his parents into a video call, and on the screen was a representative of the Arizona Diamondbacks saying they wanted to make Belfi part of their family. In the Dominican Republic this practice is called an ‘early agreement,’ and all 30 teams do it. One MLB scout told the reporter that if you don't do early agreements, you'll be eaten alive and won't sign a single player you want. The United States has a draft; the Dominican Republic does not, so teams can only compete by locking up prospects earlier and earlier.
80% of Dominican signing bonuses are tied to loans
Early agreements create an awkward time gap: Belfi's family knows $1.8 million is coming, but they won't see a cent for two years. The reporter describes these families as being in a state of mental whiplash — ‘about to be rich, but not rich yet’ — and some people saw a business in that. One lawyer estimates that 80% of MLB signing bonuses paid to Dominican prospects come with loans attached. The reporter found lenders on WhatsApp openly advertising to families with early agreements. Caraballo's first loan to Belfi's family was $25,000 in cash in exchange for $180,000 down the road; the second was $70,000 at 7% monthly interest, roughly 84% annualized — an illegal rate in most U.S. states, but nothing in Dominican law prohibits it.
On signing day they went to the bank, and Belfi left empty-handed
The signing bonus was paid in two installments, the first $900,000. When Belfi and his family got to the bank, Caraballo and the coaches were all there waiting for their cut: the coaches ultimately took $720,000, and Caraballo took the $180,000 he claimed he was owed. On his first trip to the bank, Belfi got nothing. Asked whether he realized it would go that way, he said he was somewhat disappointed but had more or less expected it — he trusted that his parents needed the loan, and trusted even more that the man who treated him like a mentor wouldn't take advantage of him.
The second payment was talked into ‘a fund with Ortiz’
Four months later the second payment arrived. Caraballo picked them up in a parking lot and told Belfi's parents on the way: you're poor, you don't know how to manage money, I can put the rest into a fund together with David Ortiz that pays you a monthly dividend, so you won't have to manage it yourselves. In a private room, Belfi watched in silence as his parents signed, handing over nearly the entire second installment. Then the scene at the bank spun out of control: a family friend and former coach publicly called Caraballo a ladrone (thief) and chased him around the bank, while Caraballo shot back that the coach just wanted a cut for himself. In the chaos Belfi put $196,000 into his personal account, and Caraballo left with the rest of the money and his bodyguards — without even leaving the family a car, after having driven them there.
A company co-owned by Ortiz and Caraballo
The reporter obtained more than a dozen of Caraballo's contracts, signed by players' parents, with children as young as 10, handing Caraballo control over the child's finances and baseball career decisions. Nearly everyone interviewed said Caraballo told them Ortiz was his business partner. The reporter found registration records for a Florida company called Big Poppy Sports Group listing both men; what the company did is unclear, and it was dissolved about a year later. Around the same time, Ortiz and Caraballo signed a contract with the parents of a 13-year-old Dominican prospect, promising training, housing and meals in exchange for 35% of a future signing bonus, and barring the child from leaving the baseball academy while securing his representation rights. The family later sued, saying the two failed to perform and the child never signed; the case was dismissed on procedural grounds.
One Ortiz voice memo killed the international draft
MLB has long wanted an international draft, so that players from the Dominican Republic, Venezuela and elsewhere would be picked in order like American players, with signing bonuses determined by draft position rather than private deals struck years in advance with the families of teenagers. In 2022, during contract negotiations between MLB and the players' union, the international draft was an issue close to being settled. But a retired player sent a voice memo to a group of Dominican players and coaches, claiming in his usual hyperbolic style that more than 40% of the Dominican population depends on baseball for a living and that a draft would destroy the income of future generations. That man was David Ortiz. The day after the voice memo went out, the league and the union reached a contract, and the international draft idea was abandoned.
Ortiz called the reporter himself, then hung up
Before the reporter had even contacted Ortiz, Ortiz heard about the reporting and called him unprompted, but would not allow recording. It started friendly; he admitted he had invested in Caraballo's business, to the tune of millions of dollars, but wouldn't say how much or which business. He said he doesn't deal directly with players, and that if anyone says otherwise, he has no idea what they're talking about. When the reporter asked whether he opposed the international draft because he holds previously unreported stakes in the Dominican baseball industry and a draft would destroy that business model, the friendly atmosphere ended and he hung up quickly. In a statement sent through his lawyer, Ortiz said his opposition to the draft was not out of personal interest but based on what he believes a draft would do to Dominican baseball; he confirmed a close friendship with Caraballo and a business relationship involving lending to coaches, but said he never knew about the investment fund and never agreed to take part in Caraballo's other businesses.
Dropping the charges: put in a car, and signed
Belfi's parents hired a lawyer and filed a complaint with prosecutors, saying Caraballo's promised investment was in fact fraud and that he exploited Belfi's vulnerability as a minor. But according to Belfi, Caraballo had an arrangement for that too: one day after training he sent a driver to pick Belfi up, a man with a gun on his hip, and Belfi got in when told to. Caraballo told Belfi that as long as he had an open case, he wouldn't be allowed to go play baseball in the United States — which isn't true, but it scared Belfi, so he signed the document withdrawing the complaint. Belfi is now 19, still in the Arizona Diamondbacks system, playing in the Dominican Summer League; the game the reporter attended had no spectators, only scouts, staff and family, and he waited the whole game without seeing Belfi take the field.
In their own words · checked verbatim
I spoke to a Major League Baseball scout who said, if you don't do an early agreement, you'll get eaten. You won't be able to sign any desirable players.
a lawyer gus talked to estimated that 80 percent of major league bonuses paid to dominican prospects have a loan attached
he loans them seventy thousand dollars at a seven percent interest monthly which is you know equated to roughly eighty four percent annual interest
we catch people, but we don't catch everybody. And there's probably more that goes on that we don't catch than we do.
Rob Manfred33:38
I never authorized Santo Caraballo to use my name or reputation to gain the trust of young baseball players or their families, to promote loans or investments, or to represent financial transactions as being personally backed or endorsed by me.
David Ortiz38:46
At 19, I think a lot of us, we feel like we haven't even had the opportunity to make any mistakes, and our whole trajectory is in front of us.
Why keep working, he says. If everything you earn, you lose.
Figures
| Scale of MLB's annual revenue in the Dominican Republic | as much as $400 million | 3:07 |
| Share of MLB players from the Dominican Republic | about 10% | 3:07 |
| Size of the Diamondbacks' early agreement with Belfi | $1.8 million | 11:31 |
| Caraballo's first loan | $25,000 given, $180,000 to be collected later | 16:47 |
| Caraballo's second loan | $70,000, 7% monthly interest, roughly 84% annualized | 17:53 |
| Amount Ortiz said he invested in Caraballo's business | millions of dollars | 36:41 |
Glossary
- early agreement
- A signing arrangement MLB teams negotiate privately with a player's family before he turns 16; it does not exist in the United States.
- international draft
- A draft system that would have foreign players from the Dominican Republic and elsewhere picked in order like American players; it was abandoned in the 2022 negotiations.
- signing bonus
- The lump sum a team pays when it signs a prospect; Dominican players' bonuses are often carved up by coaches and lenders.
- Dominican Summer League
- The lowest-level league MLB teams run in the Dominican Republic, where most signed players' careers stop.
How to listen
Investors, founders and journalists watching the sports industry, platform governance, and emerging-market arbitrage structures; anyone who wants to know how a seemingly successful youth-development system grows shadow finance.
The opening setup about the Red Sox comeback can be fast-forwarded; start at 3:07 with the baseball castles.