Friday, August 29, 2008

Unintended Consequences

I'm late to the Scott Boras-Pedro Alvarez party, but Neyer and others hit it pretty hard and pretty good already, so my two cents on the incident itself isn't worth all that much. I will say, however, that while some may paint the Alvarez gambit as classic Boras a la the J.D. Drew and Travis Lee business from years past, this strikes me as a somewhat desperate and ultimately self-defeating move on the uber-agent's part.

Desperate because, let's face it, Boras has had a bad year. He bungled the A-Rod opt-out situation, and was basically cast into the wilderness by his biggest client. As the year has gone on, more and more pre-arb players are signing big deals that, on the whole, are probably going to benefit clubs more than they do players, and that's bad for Boras. Maybe worse for Boras than other agents, in that a lot of the guys signing these deals are exactly the types who abandon their original agents for Boras as they approach free agency. Now that they won't be approaching free agency for a long time, Boras has lost both dollars and potential new clients. In the face of his veterans spurning him and his young players bypassing him, Boras, like a wounded predator, feels the need to go after younger, more vulnerable prey: the newly drafted.

But such a move may may be self-defeating in that, as this Forbes piece notes, if Boras is successful in making Alvarez and maybe even Eric Hosmer free agents, ownership is likely to make the draft issue #1 in 2011 when the CBA is up for renegotiation. Sure, they should do that anyway because the draft is kind of broken, but rather than approach it from a "how shall we fix this?" perspective, ownership will no doubt attempt to target Boras as personally as the CBA process will allow.

How? How about by pressing for a strict NBA-syle slotting system, complete with bonus caps and other draconian measures for minor league and younger major league players? You laugh, of course, because rarely in recent history have the owners ever been able to truly get tough. They wanted contraction and didn't get it. They wanted salary caps and didn't get it. There are tons of other things they never bothered trying, because hell, what's the point?

But this time they may have an unexpected ally in the players. Maybe not the union leadership itself, which is duty-bound to oppose the owners at almost every turn, but by the rank and file who has never really had a hard time bargaining away the rights of minor leaguers who aren't at the negotiating table. If you think that veterans who got $50,000 signing bonuses back in the day wouldn't like to reign in those given out today, you're crazy. What's more, you can bet that ownership would be willing to give away some concessions that would largely benefit vetarans if it meant getting the players' agreement on some Boras-screwing measures related to how the draft is conducted.

If such a thing were to occur, everyone would cloak their positions in the language of preserving competitive balance and "saving the draft." And there would be some truth to that. But the fact of the matter is that spite is a powerful motivator. The owners want to spite Boras. I'm sure a lot of players want to spite the young guys whom they feel haven't "earned it" yet. If those two impulses can get together, Scott Boras may rue the day he tried to mess with the draft.


Daniel said...

Shyster, I've been waiting to hear your take as the legal expert. What do you think the outcome of the arbitration will be? Any legal issues here that will affect the ruling?

Craig Calcaterra said...

I really don't have a clue, Daniel. This sort of thing all comes down to interpretation of the agreement and rules at issue, and I frankly don't know enough about them to have any idea. It's an arbitration, so the intrustion of broader legal precedent, etc. isn't terribly relevent. They'll mostly look at the CBA/whatever elese governs the draft and how such things had been handled in the past.

Peter said...

I've never really bought into the conventional wisdom that Boras lost in the ARod negotiations.

Boras and ARod couldn't have played it better than they did. They got to explore the market and ended up with the biggest contract in baseball history, with Boras taking the PR hit and ARod looking like he really does want to be a Yankee.

One of the things Boras does best is take the PR hit for his clients, making it look like he's the money-grubber and the player just wants to play ball and, in my view, that's exactly what happened.

mooseinohio said...

Personally I think Boras' draft loophole expeditions that have shown success in the past coupled with the contract skimming exploitation of Latino ballplayers will force baseball to seriously address the draft - both in developing a real, not wished for, slotting system and the inclusion of Latino players in the draft.

It's pretty obvious that team that attempted to adhere to Selig's fictional slotting system hurt themselves in regards to developing the best farm system they could while those who overpaided for talent have strong farm systems (see Gammons' for supportive argument). Teams such as Kansas City and Pittsburgh that cannot compete financially with the NY, Chicago, Boston and LA teams and who adhered to Selig's dream of slotting created self-inflected wounds as they also stopped competing for the best developmental talent (a real double whammy).

As for the exploitation of Latino signees baseball had best be real careful in how it handles such a case because if it gets enough press it could be another unneeded blackeye. I know that as a person committed to social justice issues I will be doing what I can to address the situation and attempting to bring spotlight to the problem. If the union attempts to claim it will lead to a salary cap I point out that hockey had foreign players in their draft well before a cap was introduced into their CBA. Of course the other effect of the FA signings of Latinos is big spenders win again as low revenue teams cannot afford to overpay for talented 16 or 17 year olds that may never develop past AA.

Pete Toms said...

Hey Powder, nice to have you around again. Have you considered wearing an asbestos suit to the beach? ( This from a pure 100% white trash WASP. My tanning cycle; white, pink, red, noxzema. I empathize )

I don't know if Boras had a bad year either. According to SBJ, Boras "led baseball’s amateur draft with five first-round selections."

Following is the end of Jim Callis' piece on this subject from yesterday.

Mandated Slotting Ahead?

In the end, this controversy could be most notable as another step that leads to formal draft slotting in the next Collective Bargaining Agreement. After eight drafts of recommending slots and trying to arm-twist owners into complying, MLB took a different approach in 2008.

The commissioner's office realized that there was a limit to how much it could keep bonuses in check without actual rules in place, and that its efforts to rig the market were driving high-priced talent to a select few teams. So before this year's draft, MLB encouraged clubs to worry more about ability than signability.

As a result, draft spending rose to an estimated $175 million, which would be a record, including an average of $2.48 million per first-round pick, which set a new standard. All but four clubs signed at least one player for more than slot money, and Coonelly went from trying to enforce the recommendations as a senior vice president with MLB in 2007 to presiding over one of the biggest-spending clubs this summer.

MLB's helplessness, rising bonuses and now this deadline grievance are making slotting a high priority for the owners once the current CBA expires in December 2011. The union always has been adamant that it won't accept a salary cap on major league payrolls, and is philosophically opposed to putting a ceiling on the earning power of draftees, who aren't members of the MLBPA. But if the owners are determined to have slotting and are willing to give up something significant in exchange, the union could sign off on it.

Craig Calcaterra said...

Callis is a bright guy! Wish I had said it before him!

Here's an idea for that "something of value": An extra Major League roster spot. $175M in bonuses to draftees diveded by 30 teams is $5.8M a team. By installing mandatory slot bonuses for draftees, a healthy portion of that number could be funneled into paying an extra veteran for the roster.

Larry said...

We met at the SABR convention. My brother wrote “The Spitball/Knuckleball Book”. Hope you tried the ice espresso.

Getting tough on the draft won’t help the Rank and File, no matter their glee in screwing the unrepresented. Those dollars won’t flow to them. They’ll flow upwards to the top players, if anyone. But just like anyone who is losing out in the economy, they may want some Old Testament justice. Hey, and if America does anything well, we look for easy targets, whether relevant or not, when we gotta have some red meat. Fewer years to free agency is the best thing they could fight for, but oh what a fight they’d have. The game is recognizing that younger players (before age 32?) are not only more efficient performers dollar-for-dollar (which we knew), but may be more effective performers absolutely. Buster Olney recently reported that front office personnel are noting a significant downturn in mid-30’s player performance since more rigorous drug testing. That will also squeeze veterans. Of course, managers and Ned Coletti will always need their gritty gamers, but that is not where market efficiencies will lead most GMs.

Iridescence said...

I'm all for mandated slotting. The whole concept of multi-million dollar bonuses for guys who may never play a major league inning strikes me as ridiculous in the first place. At least free agenct salaries can be viewed as a reward for proven major league ability but the draft is always trumpeted as the way small market franchises can improve and the "signability issues" mess is turning the draft into yet another way for the rich franchises to get richer; The exact opposite of what the draft is supposed to be.

I really hope the owners do stick to their guns on this one. These kids and their agents should be happy just to be given a high draft pick and not expect a major league level salary bonus before they prove they're actually major league players.