A deal that let Cuban baseball stars play for American teams is cancelled because Trump doesn't want to give money to Cuba’s communist government.
Plenty of businesses see huge benefits in hiring foreign workers, but few are as keen on international talent as professional sports teams. It’s easy to see why. Employing superstar players is necessary in order to win trophies, sell tickets/merch and attract corporate sponsorship, all of which translates into more money. But the odds that the world’s best players will all be from your local area are miniscule.
That’s why American Major League Baseball (MLB) teams often want to hire players who were born outside the States. In particular, they often want to hire Cubans. That’s partly because being a baseball-mad nation means Cuba has a lot of talented players. And it’s partly because Cuban players are often super keen to play in the States. Cuba is a communist country where the government frowns on individuals collecting lots of wealth. A baseball superstar who plays in Cuban leagues earns about £4,000-£6,000 a year. The average annual salary for MLB players is about £3.5 million.
In a completely free labour market (i.e. one with no government interference) most of the top Cuban players would therefore be hired by the MLB. But because neither America nor Cuba operate a free labour market, this doesn’t happen. For a long time, the Cuban government forbid its citizens from going to the US to play baseball. But many of them illegally snuck off to the MLB anyway, risking crime and danger en route.
So last December, the MLB struck a bargain with Cuba. Cuban players could freely join the MLB, and in return Cuba would get lots of money: both income tax on Cuban players' earnings and a fee from the MLB worth 15-20 percent of each player’s contract. But the US government has just squashed this plan, because they think the Cuban government is “brutal” and therefore don’t want American sports teams giving it any money.
Read our explainer on: labour markets.
