The Houston Astros fired two team executives Monday after Major League Baseball Commissioner Robert Manfred levied a hefty fine and other punishments to the club for violating league rules in a cheating scheme used during the 2017 playoffs and 2018 season.
The Astros, which won the World Series in 2017, will pay a $5 million fine and forfeit its first- and second-round draft selections for the next two seasons, Manfred said in his nine-page decision. General Manager Jeff Luhnow and team manager A.J. Hinch were both suspended without pay for the 2020 season and fired by the team about an hour after the MLB released its ruling.
Although Luhnow and Hinch weren't directly involved in the elaborate scheme to steal signs from competing teams — Hinch even tried to undermine it at least twice — they were both aware of it and did nothing to stop it, Manfred said in explaining the harsh disciplinary action.
Astros owner Jim Crane said he was "very upset" when he found out.
"If you read the report, neither one of those guys implemented this or pushed it from the system," Crane said at a press conference. "It came from the bottom up ... but neither one did anything about it and the consequences are severe."
The fine is the highest allowable under MLB rules.
Manfred said the team's conduct "caused fans, players, executives at other MLB clubs, and members of the media to raise questions about the integrity of games in which the Astros participated." It's impossible to know whether the cheating helped the Astros win, he said, but "the perception of some that it did causes significant harm to the game."
The league said the team recorded and replayed video of an opposing catcher's hand signals to decode the upcoming pitches, using a "runner" from a video replay room to relay the information to the dugout, and then another player to signal to the batter which kind of pitch to expect. The Astros later installed a video monitor close to the dugout, saving time by eliminating the need for a runner.
Catchers use hand signals to tell pitchers whether to throw a fast ball, curve ball, or another type of pitch. While players and coaches are allowed to decode hand signals, it's a violation of MLB rules to use electronics to steal those signs.
The league said most of the team's players on its 2017 roster either received sign information or somehow participated in the scheme by helping to decode the signs.
"Although the Astros' players did not attempt to hide what they were doing from Hinch or other Astros employees, they were concerned about getting caught by players from other teams," Manfred said in his report. "Several players told my investigators that there was a sense of 'panic' in the Astros' dugout after White Sox pitcher Danny Farquhar appeared to notice the trash can bangs."
Manfred said he wasn't going to penalize individual players, opting instead to hold team executives responsible. He said the general manager and field manager are responsible for ensuring that players adhere to MLB rules.
"Although Luhnow denies having any awareness that his replay review room staff was decoding and transmitting signs, there is both documentary and testimonial evidence that indicates Luhnow had some knowledge of those efforts, but he did not give it much attention," Manfred said.
Hinch didn't approve of the sign-stealing scheme, Manfred said, and even damaged the monitor used for it on two separate occasions. However, he admitted that he didn't do anything to stop it.
The MLB withheld discipline for bench coach Alex Cora, who Manfred said helped develop the scheme. The league is investigating whether the Red Sox used a similar scheme while Cora was that team's manager in 2018, and will hold any potential disciplinary action until that investigation is complete.
Crane said the Astros will put in place a new compliance system to prevent cheating in the future.
"I'm optimistic. This thing is deep here. This is a tough day, but can we recover? Absolutely. We'll have a great team next year," he said.
Former assistant general manager Brandon Taubman was fired in October after a separate incident in which Taubman verbally harassed a female reporter. He was barred from the MLB over that conduct through the 2020 World Series, Manfred said Monday. The league threatened to permanently ban Taubman, who will be able to apply for reinstatement if he's found in violation of any MLB rules.
CORRECTION: This story has been updated to correct the spelling of Jeff Luhnow's name.
—CNBC's Sunny Kim contributed to this report.