T10YL - Dodgers Receive Fraudulent Fausto Carmona
Somehow, our first post about the Dodgers or the Phillies
August 7, 2014
The Names: Los Angeles Dodgers receive: Roberto Hernandez (formerly known as Fausto Carmona). Philadelphia Phillies receive: Two players to be named later (Jesmuel Valentin and Victor Arano).
The Team Context: This is weird. We’ve covered several months worth of baseball transactions and I thought for sure that we had gotten through every team at least once. Clearly I was mistaken, as the Phillies and Dodgers each make their Substack debuts with this trade.
We’ll start with the depressing. The Phillies entered the decade as a dominant force with a five-year streak of NL East division titles. The team won the World Series in 2008, captured another pennant in 2009, and were poised to be even better thanks to the starting pitchers they had recruited. Roy Halladay and then Roy Oswalt joined the team in 2010, followed by a return of Cliff Lee ahead of the 2011 season. Along with homegrown star Cole Hamels, the Phillies’ 2011 rotation was said to feature Four Aces (and also Joe Blanton until he was replaced by Vance Worley). That team set a franchise record with 102 victories, but were bounced in the first round of the playoffs by the always annoying St. Louis Cardinals. On the final play of the decisive Game 5, injury was added to insult when star first baseman Ryan Howard tore his Achilles tendon as he tried to run out a ground ball.
Howard’s injury was the most visceral illustration of a common phenomenon among the Phillies entering the 2012 season; everybody was a year older and most were at the age where that begins to be a problem. Halladay went from a Cy Young winner in 2011 to a below-average pitcher in 2012. Oswalt left as a free agent and closed out his career with forgettable stints in Texas and Colorado. Howard ended a six-year streak of receiving MVP votes and spent the rest of his career as an albatross contract. There was still enough talent to keep the team competitive, but their 81-81 record in 2012 wasn’t good enough to make the playoffs and signaled the beginning of the end. The Phillies began to embrace their rebuild at that deadline, sending Hunter Pence to San Francisco and Shane Victorino to Los Angeles to supplement a tattered farm system.
By 2014, the competitive Phillies were a distant memory. The team went 73-89 in 2013 and was going to finish with the same record in 2014. Cliff Lee had battled the first arm injuries of his career and made his final MLB start on July 31, though we were still quite a ways from knowing that this was his final start. The team drew more than a million fewer fans than they had in 2012 as it became clear that the organizational present was substantially worse than its past or hopeful future.
We can linger in this negative headspace as we transition to the Dodgers. In 2004, a Boston real estate developer named Frank McCourt bought the Dodgers from Rupert Murdoch for $430 million. Frank McCourt did not necessarily have $430 million, but no big deal – he had sufficient collateral from his Boston properties (mainly parking lots) to finance the purchase and covered his costs by simply raising ticket and concession prices in each year of his ownership. The parking lots were sold to Murdoch by January of 2006. McCourt’s wife Jamie became the team’s president and CEO. There were minor frauds and regrettable personnel decisions in the early McCourt years, but sometimes that’s the rub of privately-owned sports franchises. The McCourts were hardly unique among American sports owners in trying to maximize the revenue they could extract from their fans, even if they seemed to be especially brazen about it.
After the 2009 season, the McCourts became pejoratively unique among American sports owners. Jamie McCourt filed for divorce as Frank fired her from her position as CEO, alleging that she had an affair with a team-employed driver and charged the team for a three week European vacation the two took together. The incredibly acrimonious marital dispute played out publicly, with each side lobbing attacks at the other as they fought over the question as to who owned the Los Angeles Dodgers. Frank pointed to a 2004 postnuptial document that purportedly assigned sole title in the Dodgers to him, while Jamie pointed out she signed the agreement without assistance of counsel and later came to an agreement to make all their assets community property. It took until December of 2010 for a judge to rule in Jamie’s favor, during which time the extent to which the McCourts had leveraged the Dodgers’ finances to facilitate their personal luxurious spending became clear. Court documents revealed that the two had loaned themselves $145 million from Dodgers-related assets, which led the IRS to investigate why the two didn’t pay any taxes on that money. It’s impossible to overstate what a debacle this was.
By the beginning of the 2011 season, Frank McCourt was desperate. It was never clear that he had enough money to operate the Dodgers even when things were going well and he certainly didn’t have enough to run the team while paying an army of divorce lawyers. The team had accumulated so much debt that it was unclear whether they’d be able to meet their player payroll obligations. Shortly after the start of the 2011 season, McCourt reached an agreement with Fox on a new broadcasting deal for the team that was reportedly worth up to $3 billion over 17 years. The deal included several features that were inconsistent with good long-term stewardship, including an immediate $30 million loan from Fox to help cover payroll obligations and $385 million in cash up-front to be used in the settlement of divorce proceedings.
It’s fair to say that MLB was not thrilled with this proposed television contract and the amount of money it diverted from the baseball team. A couple of weeks after the structure was submitted to the league for approval, commissioner Bud Selig took the unprecedented step of taking control of the Dodgers and appointing a trustee to oversee business operations. On June 20, Selig rejected the proposed television deal, effectively scuttling the agreed divorce settlement between the McCourts and ending any hope that the team would meet its looming payroll obligations. On June 27, three days before player paychecks were due, the Los Angeles Dodgers filed for bankruptcy.
The Dodgers were ultimately able to make payroll, first by taking a loan from Highbridge Capital Management and then by loaning from MLB after the bankruptcy judge told them to stop taking more external debt. Eventually, the agonizing McCourt experience began to draw to a close in October when Frank and Jamie reached a settlement that would pay Jamie $130 million to cede any claim to ownership of the Dodgers. A couple weeks later and with clear(ish) title secured, McCourt agreed to sell the team prior to the start of the 2012 season. On March 27, an affiliate of Guggenheim Partners agreed to pay $2 billion for control of the Dodgers, a sum that shattered the previous record for sale price of a sports franchise and came in 30% higher than the next-closest bid. The shockingly high sales price led Jamie to sue Frank again, but that was no longer the Dodgers’ problem. I don’t know how that litigation resolved and I don’t care, but hopefully the legal fees were outrageously high for both of them.
The record-setting sale ushered in a new and improved era of Dodgers baseball. In August of 2012, the team demonstrated its opulence through an absurd waivers trade where they acquired a few superstars (Adrian Gonzalez, Josh Beckett, Carl Crawford, and of course Nick Punto) who were owed about $260 million in collective future contract obligations. The Dodgers started their 2012 season with a player payroll of $114 million and started their 2013 season with a payroll of about $239 million. This wasn’t just spending for spending’s sake, these were calculated actions from financial professionals who thought they would get return on investment from positioning the Dodgers to the upper echelon of baseball franchises. They proved this point through the announcement of a new TV deal that would launch a dedicated regional sports network called SportsNet LA. The SportsNet deal was worth $8.35 billion to the Dodgers, nearly triple the face value of McCourt’s TV deal and with much less money siphoned off to divorce lawyers. It runs through 2039 and is generally seen as “the most team-friendly pact in baseball” today.
The breakneck shift between two incredibly different ownership groups had Dodgers fans delirious with hope (well, at least among fans who could actually watch them). The team was three years removed from literal bankruptcy but had transformed into a financial juggernaut, with a 2014 payroll that exceeded every other team in the sport (pushing the New York Yankees out of the top spot they had occupied since 1998). Los Angeles began its streak of consecutive NL West division titles in 2013 and was poised to continue that streak in 2014, with a three-game lead at the time of this trade
If you click that link to team payrolls, you’ll note that the Philadelphia Phillies had the 3rd-highest 2014 payroll in baseball, a decidedly sub-optimal placement for a team on its way to a second consecutive 73-89 finish. The team still featured many of the veterans from their early-decade competitiveness, all of whom earned significant salaries. “The good news, if you can call it that, is that many of these players are also locked up for the 2015 year,” said Chuck Booth, describing something that was horrible news for the Phillies.
The Player Context: Fausto Carmona was born in the Dominican Republic on December 7, 1983, about one month after still-active MLB pitcher Charlie Morton. He signed a professional contract with Cleveland shortly after his 17th birthday and was a well-regarded prospect by 2003, when he won the organization’s Minor League Player of the Year award. The 22-year-old Carmona debuted in 2006, when he gave up just one run in six innings to earn a victory over the Detroit Tigers. “It’s always tough when you don’t even have tape of a pitcher, but this kid’s different,” said then-Tigers manager Jim Leyland. “I was very impressed. He’s the real deal.”
Leyland was wrong about Carmona being the “real deal,” as we would eventually learn, and he also seemed to be wrong from a baseball perspective through the 2006 season. Carmona was blown up in his next two starts and sent back to the minors with a 7.94 ERA. He mostly worked from the bullpen when he returned to the majors and finished the season with an unsightly 1-10 record, failing to record a win in any game after his debut against Detroit. Carmona may not have gotten another opportunity to start in MLB, but a spring training injury to future Phillie Cliff Lee opened up a rotation spot in 2007. He made a poor start to open the season, allowing six runs to the White Sox, but then went on a tear. By May 17, when he pitched a complete game shutout against the Twins, Carmona’s ERA was down to 2.55 and he was well on his way to the best season of his career. He finished 4th in AL Cy Young voting as a 23-year-old and may have gotten even more attention if he weren’t teammates with 1st-place finisher CC Sabathia.
Fresh off a breakout season, Carmona signed an extension that guaranteed him $15 million over the next four seasons and included three club options that could pay him up to $48 million. From a 2024 perspective, this seems like a cut-rate deal for a talented young pitcher – a similarly-situated Spencer Strider received $75 million guaranteed over six years after his 2022 rookie season. The modern social media apparatus would have roasted Carmona and his agent for accepting such a lowball offer. Maybe they had more information than the general public. Carmona’s 2008 and 2009 seasons were defined by poor results, injuries, and demotions to the minors that limited him to 246 innings combined. By January of 2010, Carmona’s cheap contract looked regrettable and there were rumors that Cleveland would try to trade him to reallocate his money to better players.
In 2010, Carmona pitched to his prior standards and made his first and only All-Star team. He still had three club options on his once-onerous contract, making him an attractive trade target at the 2010 and 2011 deadlines even as he pitched poorly again in the latter year. At the conclusion of the 2011 season, Carmona had pitched through the guaranteed seasons of his contract and left Cleveland with a confusing body of evidence to analyze as they decided whether to exercise the first of three club options. He would turn 28 over the offseason and was coming off one of four seasons where he finished with an ERA higher than 5.20. In his other two seasons, he had pitched like a borderline ace. Still, Carmona would only cost $7 million in 2012 and keeping him would allow Cleveland to make year-by-year decisions as to whether they wanted to exercise the next season’s option. They confirmed that Carmona would stay in the fold for the 2012 season on Halloween of 2011.
On January 19, 2012, Carmona went to the U.S. consulate in the Dominican Republic to renew his visa for the next season. As he left his appointment, the Dominican police arrested him for identity fraud. The arrested man had been applying for a U.S. visa under the name and identity of “Fausto Carmona,” as he had done throughout his professional baseball career using a doctored birth certificate. As it turned out, the pitcher known to all as Fausto Carmona was actually named Roberto Hernandez and had failed to pay an alleged $26,000 debt to the man who had produced his doctored birth certificate, causing the man’s daughter to tip police off to Hernandez’s true identity. This was devastating news for a number of reasons. Most generally, the baseball public lost the incredible name of “Fausto Carmona” and had it replaced with the store brand “Roberto Hernandez,” a name so generic that there had already been a different Roberto Hernandez on Cleveland’s 2007 roster. More problematically for Cleveland, Roberto Hernandez was born in August of 1980 rather than December of 1983, making him “older than Hank Blalock” instead of “younger than Charlie Morton.”
With the Fausto Carmona ruse exposed, Roberto Hernandez had a new problem – he still needed to get a visa to work in the United States, but now needed to grapple with the identity fraud on his record. Hernandez was placed on the restricted list, which prevented him from earning salary, and it took him until July of 2012 to receive his visa. When he was finally able to report to the team, he immediately served a three-week suspension for his identity fraud, which is apparently against MLB’s rules too. The suddenly-aged Hernandez pitched poorly in the three starts he made for Cleveland, all of which were losses, and the team declined his club option after the season.
The Carmona/Hernandez story gets substantially more boring from here. With any perception of upside removed from his equation, Hernandez assumed a new identity within MLB as a backend starter. He signed a one-year contract with Tampa Bay for the 2013 season, led the team in losses that year with 13, and then signed a one-year deal with Philadelphia in 2014. Pitching in the National League was more pleasant for Hernandez, whose final start as a Phillie was an 8-inning gem against the Washington Nationals.
The Trade: As we discussed in our last post, waiver trades come with a unique set of rules. Once a player is claimed, the two teams only have 48 hours to work out a trade before the player needs to either be surrendered or revoked from waivers. There is no second chance if the teams miss that 48-hour window.
Sometimes you need more than 48 hours. When the trade of Hernandez was announced on August 7, the reported return was two “lower-level minor leaguers” as players to be named later. This was confirmed by Phillies GM Ruben Amaro Jr., who said the Phillies would select from a “pool” of younger prospects. It took nine days for the first prospect to be named: the Phillies acquired second baseman Jesmuel Valentin. Valentin was the 51st player selected in the 2012 MLB Draft and the second selected from Puerto Rico Baseball Academy (after first overall pick Carlos Correa). In his short professional career thus far, Valentin had demonstrated an ability to do everything except hit for power. Twelve days after Valentin’s announcement, the Phillies completed the transaction by identifying Victor Arano as the second player. The Dodgers had signed Arano as an amateur free agent out of Mexico in 2013 and he had performed pretty well as a 19-year-old in A-ball, splitting time between the rotation and the bullpen.
Neither Valentin nor Arano were seen as gems within the Dodgers’ system; both were ranked near the bottom of the team’s top-20 prospects. This is what waivers trades are all about!
The Results: Hernandez made nine serviceable starts for the Dodgers in the stead of an injured Josh Beckett before he became a free agent at the end of the season. His first start with the team was one day after the trade and was also his best start with the team. In September, he gave up at least one home run in every start, including a tough start against the Nationals where he gave up four home runs one month after shutting them out in his final Philadelphia start. The Dodgers had no intention of using Hernandez in the postseason and successfully avoided doing so.
The Phillies got back two major leaguers in exchange for Hernandez, though that overstates things somewhat. Jesmuel Valentin had a leisurely cup of coffee in 2018, tallying 14 hits in 89 plate appearances that constituted the entirety of his MLB career. Victor Arano made his debut in 2017 and pitched out of the bullpen for most of the 2018 season, starting his year by making seven perfect appearances. His ERA only got as high as 3.00 once during the season and, because the 2018 Phillies were so thoroughly mediocre, Arano ranked as the team’s 6th-best player by rWAR. The success was short-lived – Arano pitched in three games in 2019 before his season ended due to an elbow surgery that effectively ended his time in Philadelphia.
It would be reasonable to conclude that the Phillies won this trade thanks to a full season of strong pitching from Arano. It would be far more reasonable to shrug your shoulders at the question.
The Aftermath: Jesmuel Valentin was seemingly out of affiliated baseball after the 2018 season, eventually settling for a contract with the Atlantic League’s High Point Rockers on April 11, 2019. One day later, and two weeks before the Rockers were scheduled to begin play, the Orioles noticed that Valentin existed and signed him to a minor league contract. He spent that season in AA and then actually was out of affiliated baseball. Valentin was limited to playing in the Puerto Rican winter league until 2023, when he signed a contract with the Quebec Capitales towards the end of the Frontier League season. That went well enough for the team to exercise their contract option for the 2024 season. Valentin was playing pretty well by Frontier League standards this season, but was placed on the 60-day injured list on August 20.
Victor Arano was designated for assignment after the 2020 season and was claimed by the Atlanta Braves. He threw 36 effective innings for the AAA Gwinnett Stripers in 2021, but never got a call back to the big leagues. Arano signed a minor league contract with the Nationals that offseason, though he ended up making the Opening Day roster after some spring training injuries. The underlying numbers suggest that Arano was about as good in 2022 as he had been in 2018, but his results were worse, with a 4.50 ERA across 42 MLB innings. Arano was set to return to the Nationals in 2023, but was shut down in spring training with a shoulder strain that eventually required surgery over the summer. After the season, Arano rejected a minors assignment from the Nationals, choosing to opt out and become a free agent instead. That might have been the wrong move, as Arano has not signed with a team this year.
Roberto Hernandez transitioned to the “minor league contract” portion of his career after leaving Los Angeles. The first of those, signed with the Astros in 2015, was pretty favorable in that it paid him $2.65 million if he actually made the majors. He did, but when the Astros were surprisingly competitive in 2015, they wanted to upgrade their rotation and designated Hernandez for assignment just before the MLB trade deadline. Hernandez didn’t pitch for the rest of the year and started the 2016 season pitching at AAA for the Buffalo Bisons (I thought “bison” was already plural?). He was able to make it back to MLB to make two final starts with the Atlanta Braves, winning the first and losing the second. Hernandez’s last act in MLB was to get Manny Pina to strike out looking.
Frank McCourt has waded back into the world of sports ownership. In 2016, McCourt bought the French soccer team Olympique de Marseille (OM) from a member of the Louis-Dreyfus family (not Julia), spending 45 million euros and pledging to invest an additional 200 million into the playing squad. To McCourt’s credit, he actually did invest that money. Unfortunately, it was tough timing to invest big money into a French soccer team, with Paris Saint-Germain’s backers at Qatar Sports Investments dwarfing McCourt’s spending with their 222 million euro fee for Neymar alone. Fans questioned whether McCourt knew what he was doing or cared about soccer, and tensions boiled over until 2021, when angry OM fans stormed the training ground and set a stunning amount of fires:
Apparently that insurrection somehow had the intended effect, as OM finished near the top of the table the next two seasons and qualified for the Champions League. Last season’s 8th-place finish was their worst in the McCourt era, but McCourt has continued to bat away rumors that he would consider selling the team. Somehow, Frank is the McCourt with the least involvement in French affairs. In 2017, then-President Trump appointed Jamie McCourt as the United States’ Ambassador to France and Monaco. It’s a minor miracle that we’ve avoided war with this country.
Miscellaneous: The McCourts paid a 71-year-old psychic to think positive thoughts about the Dodgers. Carlos Beltran paid for Jon Niese to get a nose job? A “born on this date” website still includes Fausto Carmona as a famous birthday. Only 5% of the bison (which IS the plural form) in North America are genetically pure bison.