Boras Blog

A Day's Work, Part Two

We seemed to have missed first rounder Grant Green (#13 Oak) in our tally below.  Green signed at the deadline for $2.75m.  That brings the total to $36,675,000 for Boras' first rounders this year - and that is guaranteed money only.  5% of that comes in below $2m, which, to be honest, is an underwhelming figure.  I cant imagine what goes in to signing these guys - the traveling, the courting.. Must be a painful and expensive process.  Add in overhead and salaries.. whooda thunk it is a low-margin business?

The USA Today put together an interesting profile of the frenzy leading up to the deadline signings, which as it turns out seems like it was far more calm the frenzied.  An interesting nugget:

 "When we started our negotiations, we started in the low 20s over a longer period of years. We never, ever approached anything like $50 million-some dollars. I think people thought that because I had mentioned foreign players, and we represent Dice-K [Daisuke Matsusaka of the Boston Red Sox.]."

A Day's Work

As you read about the Strasburg deal, seeing it described as a "resonable deal", "fair compromise", etc., consider how Boras was able to completely reset the standards for a free agent contract.  Before the hype machine, before the talk of $50m demands, before the talk of international free agency and the liklihood of missing a year... think back a few months and consider what $15m guaranteed actually means.  Its a phenominal contract.  The best ever.  Outdone, perhaps, by  Dustin Ackley's $7.5m guaranteed.

A summary of the first rounders:

Stephen Strasburg (#1, Nats) - Four-year major league deal, $7.5 million bonus, $7.6 million in salaries ($15.1 m guaranteed).

Dustin Ackley (#2, Mariners) - Five-year major league deal, $6 million bonus, $1.5 million in guaranteed salaries, another $2.5 million possible in salaries depending on how quick he reaches the majors ($7.5m guaranteed).

Donavan Tate (#3, Padres) - $6.25m over five years, permission to play football as well.

Turner (#9, Tigers) - Major league contract with a $4.7 million bonus (over six years) and a guaranteed value of $5.5 million. Incentives up to $7 million.

Washington (#30, TB) - Did not sign.  Keeping them honest, I suppose.

MLB Trade Rumors is the place to go for more draft coverage and to see the rest of the first round contracts.

The Best Just Isnt Good Enough

Big day ahead, to be sure.  First round picks #1 Strasburg (Nats), #2 Ackley (Mariners), #3 Tate (Padres), #9 Turner (Tigers) & #30 Washington (Rays) are ALL going down to the wire.  Jeez, you think Boras is going to get to take a bathroom break today?  I would think he would have gotten one or two of these out of the way just to relieve capacity constraints on the organization.  I have a friend who works for a large online flower store, tells me that everyone from the CEO down delivers flowers on Valentine's day.  So, I have to wonder if the mail room clerks will be negotiating million dollar deals as we approach midnight.

By all accounts, the Nats have offered a deal surpassing Mark Prior's $10.5m deal from 2001.  So the question is, is the biggest contract ever extended through the draft a good enough deal?  Boras points out that revenues in baseball have doubled since the Prior deal, so you have to make that adjustment.  He also points to free agent signings - can you imagine the frenzy if a 21 year old came out of Cuba throwing the gas that Strasburg does?  Surely such a player would command the $50m Boras has reportedly asked for.

The Biz of Baseball does a nice job breaking down Strasburg's projected value and comes away with a 6/30 deal.  Ok, I think Boras would live with that.  I am not sure the Nats would, though.  If the Nats dig in at the $15m range, I dont think the fans will blame them for not completing the deal, and I dont think Boras will take it.  So, while most assume that a deal will go down tonight, I am not so sure.

Finally, the always amusing Kenny Powers - uh, sorry, I mean Rob Dibble, had this to say:

Kid, if you want respect you have to earn it, if you want to be hated as much as your agent Scott Boras, hold out and go pitch in independent league baseball.

The choice is really up to you -- hold out and put your progress towards the big leagues, push back time towards arbitration, and oh yea, risk getting hurt in some independent league game, or how about building on being the richest amateur draft pick to date in the history of MLB.

My Offer Is This: Nothing.

The Nationals Journal blog at the Washington Post catches up with Stephen Strasburg at the Fan Fest.

Strasburg said that "I haven't heard from the Nationals" since he was drafted, other than receiving a minor league contract -- a technicality that prevents him from becoming a free agent.

Strasburg seemed a bit perplexed by the lack of communication since the signing deadline is Aug. 17 and many other Nats draft picks are already under contract. But he probably shouldn't be. Both the Nats and Strasburg are in a stalemate period now because both sides know the long history of negotiations involving clients of Boras. The agent never likes a first offer. Why should he? But, sometimes, those initial offers are also characterized, publicly, as insulting or alienating to the players he represents. This may be a sincere response or feigned, but it is consistent.

I get the feeling that the Nats are in a bit of a deer-in-headlights parralized state about the Strasburg situation.  They have so much to figure out internally - both on the field and behind the scenes - before being prepared to make smart decisions externally, but a deadline is a deadline and they are going to have to be willing to risk losing the deal if they want to effectively negotiate with any leverage.

It's a Rare Case That a Deal Does Not Get Done

I bought a brand new grill the other day.  Spent an hour and a half putting it together - long enough for the clouds to come out.  Ten minutes after I finished, it started to rain.  So the next day, yesterday, I waited all day to break in that grill.  Skipped lunch, bought fresh buns and veggies.. the works.  And I went outside, scooped up a huge mound of beef, and watched my new grill slow-cook that burger to perfection.  Soon I was standing over the table - starving like Marvin - and Im telling you, for a moment, I actually drooled over that burger.  I am glad to have had that experience - not eating or cooking that burger, but the moment before - so now I can feel one-thousandth of what boras must be feeling at this moment.  An interim GM, a bumbling owner, a team in desperate need of igniting a fan base, a beautifully executed hype machine, the possibilities of Strasburg...  Scott, life's just not going to get any better than this.

Ok, here is where we stand:

"I think whenever you're drafted by a Major League team, the focus throughout the negotiations is, 99 percent of the time, to reach an agreement with a Major League affiliate and sign the athlete," Boras said.

"If that does not happen, you then would look to all the available resources one would have to evaluate what the next step is, including another Draft or an alternative place for the player to perform.

"But I would say in our history in the hundreds of entry-level contracts that we've done that it's a rare case that a deal does not get done with a Major League team. I'm sure it's in the 90th percentile."

There it is. Lets make a deal.  I am late to get this post out, so I cant add much beyond what Jon Heyman at SI already had to say.  As summarized at the always-excellent MLB Trade Rumors:

Here are the details:

• The Nationals would receive the second pick in next year's draft if they fail to sign Strasburg, but this would not be an acceptable consolation prize for the team. First, Strasburg is a unique talent. Secondly, the Nats can't afford to keep pushing back their future.
• Strasburg could sit out an entire year as J.D. Drew and Luke Hochevar did, but he'll receive an offer considerably larger than either of those two players, which could be hard to reject.
• Heyman doesn't think it's likely that Strasburg would go to Japan if he fails to sign.  

Well, I cant leave off on such a high note, and at the rate I have been posting lately I might just forget to add to the They Hate Boras bin, so here is one more piece of stupidity until I sign on again:  Boras is Bringing Down Basebal. 

Free Market versus NCAA

Any Free Market Economist has to love what Scott Boras was able to do in 1996.  Typically, amateur baseball players are subject to the rules put in place jointly by the MLB owners and the MLBPA, and are subsequently prevented from getting fair market value compensation for their services.  In 1996, however, Scott Boras found a loophole that granted free agency to four players: Travis Lee, Matt White, John Patterson and Bobby Seay.  What resulted was a fair bidding for their services.

What happened with Andy Oliver may have far more impactful long term ramifications as the NCAA brought upon itself another opportunity for the legalities of their unfair and anti-competitive rules to be questioned in court.

Sports Agent Blog has an excellent post that describes the background of the Andy Oliver Incident.  In the post, they print the following unsourced email that they received:

Andy Oliver’s family had an agent advising them while Andy was in high school leading up to the point he was drafted. His family recently started getting advice from a different agent (Boras) and it ticked the first group off because it became apparent they would not get his signature on a dotted line after his junior year(next year). The first agent firm decided to get even and billed the Oliver’s $90,000 for 300 plus hours of advice. The family told them to shove it because advice is free and that is how all agents get business. In this case the agent firm decided to get real scummy and turned in an allegation to the NCAA in which they alleged Andy accepted small items of value from them.

Surely the NCAA would provide a fair hearing to evaluate the validity of such allegations, right? From the Sandusky Register:

Oliver was ruled ineligible by the NCAA last spring, hours before a tournament game, for violating the NCAA’s rules governing agents and players. His former advisers —  Tim and Robert Baratta —  told the NCAA that Tim Baratta was present when Oliver negotiated a possible contract with the Minnesota Twins after the team drafted him in the 17th round of the 2006 draft. Oliver turned down a contract offer of $390,000 and decided to go to school. NCAA rules forbid agents from being present when money is discussed between players who still have NCAA eligibility and professional teams.

Is it really a surprise that Oliver decided to fight back, and sued the NCAA to become re-instated. From Sports Business Daily:

The lawsuit alleges breach of contract and tortious interference with Oliver’s contract with OSU by the NCAA. The lawsuit alleges the NCAA never gave Oliver due process before suspending him; failed to take into account Oliver’s defenses to charges never presented to him; failed to complete its investigation before suspending him; and used Oliver’s attorney-client privileged information, that was illegally obtained, against him. “We are not aware of the lawsuit and do not have any comment,” an NCAA spokesman said in an e-mail last night. The lawsuit also alleges breach of contract, constructive fraud, negligence and defamation against Oliver’s former advisors -- Baratta and his partner and brother Tim Baratta -- and their company, Baratta Partners. “It is a wholly frivolous piece of litigation,” said Andrew Entwistle, attorney for the Barattas. “The Baratta brothers and Baratta Partners are directly responsible only for Andy Oliver being able to have the opportunity to play professional ball and realize his full potential as an athlete. He does owe them for the time they put in over the years.”

And that brings us to the present.  As summed up, again, in the Sandusky Register:

Erie County Common Pleas Judge Tygh Tone ordered the Vermilion High School graduate be fully reinstated to the Oklahoma State University baseball team and allowed him to compete in the upcoming season, which opens next week.  Tone ruled the NCCA bylaw dealing with agents “void,” saying it was “arbitrary and capricious” and limits a player’s ability to effectively negotiate a contract.

You have to wonder how the NCAA continues to act like a disciplinary school teacher, even when dealing with adults who generate huge revenues to their universities / corporations.  The Oliver lawsuit, for example, was clearly brought upon by the NCAA - how can they think it is ok to suspend a 20 year old from doing his job because he *may* have violated a rule that is designed to prevent him from effectively earning the living to which he is entitled?  There was no due process, no fair hearing, no opportunity for appeal.  So the end result, predictably, is the court interfering and declaring the rules themselves - not just the ruling - to be unfair.

I think that this ruling could lead to more lawsuits against the NCAA's practices.  The idea that players can have an "advisor" but not an "agent" should be the first to go - but certainly not the last.  This was just the first step in the path to get fair market opportunities for amateur players in the future.  What Scott Boras was able to do for four players in 1996 was nothing compared to his role in the Oliver case which helped pave the way for free status of amateur players in the future.

I've Even Heard 103

I love the teams that just wont draft Boras clients.  The business of sports, by nature, is competitive, so it is rare to see someone in sports wave a pre-emptive white flag like that.  To me, it is just an acceptance that the GM can not hold his own in a negotiation with Boras.  So much so that they cant even try.  Well it didnt work out so well for the 2004 Padres who refused to draft Boras clients Stephen Drew, Jered Weaver or Justin Verlander.  Nope - they thought it was in their interest to draft the next best player who was not represented by Scott Boras, who was Matt Bush.  Sign On San Diego provides a nice summary of how that worked out:

Bush, meantime, never advanced past Single-A Lake Elsinore as a shortstop – hitting .219 over parts of his first four seasons in the Padres system. Seven appearances after the Padres converted him into a relief pitcher in 2007, Bush blew out his elbow and had Tommy John surgery.

First-pick busts are as old as the draft.

But Bush became an embarrassment more for his off-the-field behavior than his results as a player. Two weeks after signing with the Padres, Bush was making headlines for being busted for assault and trespassing at a nightspot near the Padres training facility in Peoria, Ariz. He was 18 at the time.

The dam burst Wednesday when Bush allegedly was involved in a drunken assault at Granite Hills High. According to a witness, Bush was drunk, threw a golf club, picked up one freshman lacrosse player at the school and hit another one.

Bush also allegedly yelled: “I'm Matt (expletive) Bush!” and “(expletive) East County!” Bush then allegedly jumped into his Mercedes-Benz and drove over a curb while leaving the campus.

El Cajon police contacted the Padres the next morning trying to locate Bush, but he had failed to appear at Petco Park for a scheduled workout. Later that day, Bush was designated for assignment.

“Matt Bush's days with the Padres are essentially over,” Padres General Manager Kevin Towers said.

Oops.

Ok, that brings us to Stephen Strasburgh.  Strasburg is the consensus top player available in the 2009 amateur draft.  The Washington Nationals have the top pick and Strasburg is being advised by Scott Boras.

And Strasburg's legend is growing.  Check out this article from the Washington Post:

"We've seen him as high as 101 miles per hour," said one of the Nationals' top scouts, Kris Kline.

"I've even heard 103," Strasburg's pitching coach, Rusty Filter, said. "I don't want to be quoted on that, but others have told me."