[BreachExchange] Cardinals To Pay Two Draft Picks, $2MM To Astros As Fine In Data Breach Scandal

[Audrey McNeil]

http://www.mlbtraderumors.com/2017/01/cardinals-to-send-two-
draft-picks-to-astros-pay-2mm-fine-for-data-breach-scandal.html

Major League Baseball has concluded its investigation into the Cardinals’
illegal accessing of the Astros’ proprietary database, ruling that St.
Louis will have to send two draft picks to the Astros and pay a $2MM fine
to the Astros as punishment, Major League Baseball commissioner Rob Manfred
announced on Monday. The Cardinals will lose their top two picks, Nos. 56
and 75 overall, as punishment. Manfred also announced that former Cardinals
scouting director Chris Correa, who was fired and sentenced to prison time
for accessing the Astros’ database, has been placed on the “permanently
ineligible” list. thus banning him from baseball.

The Cardinals had already forfeited their top pick in the 2017 draft in
order to sign Dexter Fowler to a five-year contract, and they’ll now be
left without any selections in the top two rounds of the draft as a result
of commissioner Manfred’s ruling. (The second pick they’re forfeiting is a
Competitive Balance, Round B selection.) In addition to losing those two
draft picks, the Cardinals will also lost the bonus slots that are
associated with those selections.

Via the announcement on the matter, the league’s investigation “did not
establish that any Cardinals’ employee other than Mr. Correa (who was the
only individual charged by the federal government) was responsible for the
intrusions into the Astros’ electronic systems.” As such, there are no
penalties to further Cardinals employees (either current or former).
Manfred continues to state that he holds the Cardinals organization
“vicariously liable for [Correa’s] misconduct,” adding that the Astros
“suffered material harm as a result of Mr. Correa’s conduct.” Beyond the
loss of proprietary knowledge that Manfred terms “not amenable to precise
quantification,” he adds that the Astros “suffered substantial negative
publicity and had to endure the time, expense and distraction of both a
lengthy government investigation and an MLB investigation.”

Over the weekend, David Barron and Jake Kaplan of the Houston Chronicle
reported that documents which were recently unsealed by a federal judge had
expedited the investigation and brought the commissioner’s office to the
verge of a conclusion. Per the Chronicle duo, Correa accessed the Astros’
“Ground Control” database on 48 instances over a span of two and a half
years and also accessed Houston GM Jeff Luhnow’s trade notes on 14
occasions. Beyond that, assistant U.S. attorney Michael Chu believes Correa
to have been the responsible party for leaking 10 months’ worth of private
trade notes to Deadspin — all of which became available for public
consumption back in 2013.

The penalty is certainly not inconsequential for the Cardinals, but it’s
already drawn mixed reviews and assuredly will continue to do so. Ben
Badler of Baseball America, for instance, tweets that the league stripped
the Red Sox of five prospects and imposed a two-year ban on Boston’s
ability to sign international prospects last year due to their efforts to
circumvent international signing restrictions by signing multiple players
in package deals. Meanwhile, the Cardinals will not forfeit so much as a
top 50 overall pick in the upcoming 2017 draft.

Nonetheless, the Cardinals will feel the punishment in this summer’s draft.
St. Louis already had he second-lowest overall draft bonus pool, checking
in at $3,925,500 this year, as Baseball America’s Hudson Belinsky recently
reported. Now, they’ll lose pick No. 56 ($1,122,400) and No. 75 ($730,800),
thereby dropping their overall pool to $2,072,300 — far and away the lowest
in the league. (Cleveland’s $3,646,100 pool is the next-lowest, for
context.)

And the Astros, meanwhile, stand to benefit from today’s ruling as well.
Houston had a $6,755,100 bonus pool that will now rise to $8,608,300 (also
via Belinsky’s figures). That’s certainly a far cry from the 2014 draft,
when Houston had two of the top five picks (and three of the top 37) and a
whopping $13,362,200 pool. But, the bump to just over $8.6MM does give the
Astros the 11th-largest pool in the 2017 amateur draft — a notable bump up
from their previous standing of 18th.
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