Last Monday, I wrote on this very site about both the lawsuit Indians uberprospect Francisco Mejia has filed against Big League Advance (“BLA”) and also BLA’s counterclaim. With the rise of branding contracts in professional sports, Mejia’s lawsuit likely represent a harbinger of things to come — rather than an aberration unlikely to be repeated — as a new frontier in sports litigation develops.

Shortly after publishing that piece, I spoke with BLA Chief Executive Officer Michael Schwimer about his company, the Mejia lawsuit, and what the future might hold. Schwimer, it should be noted, was good enough to spend a full hour being grilled by an attorney while simultaneously fathering his two young children, an arrangement most reasonable people would consider to be less than ideal.

Big League Advance

Schwimer himself is a former major-league pitcher, owner of an abbreviated 48-inning career with the Philadelphia Phillies marked by a lot of strikeouts (9.62 K/9) and a lot of walks (4.25 BB/9). After leaving the game, he started Big League Advance. Schwimer said he started BLA because of his own experience in the minor leagues. “I was reffing basketball games [to make ends meet],” Schwimer told me. “I was babysitting.” Schwimer believed there was a better way, and BLA was born.

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The Major League Baseball Players Association has its offices on the 24th floor of a gleaming glass skyscraper at 12 E. 49th Street, in the heart of midtown Manhattan, just around the corner from the Commissioner’s offices on bustling Park Avenue. Spend some time lingering outside the Association’s steel-columned steps, and you’re likely as not to see just the folks you expect to see heading in and out of the building: old labor hands raised on tales tall and short of Marvin Miller’s legendary two decades as union boss, hard-bitten union attorneys trained in every detail of employee-side labor law brought on board during the Don Fehr era, and maybe even a few folks who joined the Association during Michael Weiner’s tragically short tenure at the top of the org chart.

What you won’t see, though, is much sign of Tony Clark’s signature hires as executive director of the Association. That’s because they’re at the ballpark.

The Association has always heavily involved players in its governance, of course — it is, after all, their union — but generally speaking only through the old player-representative/executive-subcommittee structure established in the 1960s, and not in the form of retired players actually on staff. Marvin Miller came from steel organizing, and the resumes of staff at the Association have, until recently, been populated heavily by previous work in the world of organized labor — folks coming out of the National Labor Relations Board or from other unions — and not necessarily work in baseball itself. Only in the waning days of Weiner’s leadership (with Clark as his deputy) did the Association really begin to seek out and hire former players to help advance and shape its work.

That process has accelerated significantly under Clark’s directorship. He is himself a former player, of course. If you glance around pretty much any spring-training camp these days — and a fair number of regular-season clubhouses besides — you may well see a broad-chested baseball man there off to the side, perhaps graying at the temples a little, taking some 23-year-old kid under his wing and teaching him the ways of the union. Bobby Bonilla. José Cruz. Steve Rogers. Javier Vázquez for international work. Phil Bradley, Jeffrey Hammonds, and Mike Myers, too. These are the men Clark has tasked with serving as the Association’s primary faces on the field, and its principal communicators with and to a membership that seems increasingly to have reason to be restive.

“They act kind of like a field organizer would in a typical union,” said a Players Association spokesman who declined to be named for this story. “Their job is to stay close in contact with all the guys on the 25-man roster [of the teams to which they’re assigned], and keep a constant communication going with them.” That’s an especially critical task for this union at this moment, because unlike most labor unions, this one doesn’t have a single factory floor or break room upon which to fall back as a natural meeting ground or organizing space. It just has its members, scattered far and wide at ballparks around the country. That presents obvious logistical difficulties.

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Back in 2016, Phillies third baseman Maikel Franco signed a contract with a company called Fantex. The terms were fairly simple: for a payment of $4.35 million, Franco agreed to pay Fantex 10% of all of his future earnings. Fantex would also be allowed to sell its “share” of Franco to investors, thereby generating additional revenues. Franco and Andrew Heaney were the pioneers, signing “brand” contracts with Fantex back before they were fashionable.

At the time, a friend of mine asked me what I thought of the deal, and I surprised him by panning it. “Just wait for the lawsuit this type of deal will generate,” I said. Evidently, that wait is now over.

On February 21, 2018, Indians catcher (and potentially third baseman and left fielder) of the future Francisco Mejia filed a lawsuit against a company called Big League Advance Fund I, LP. You can read the complaint here, plus BLA’s answer and counterclaim here.

So what is this about? Evidently, Mejia signed three contracts with BLA, which guaranteed him a $360,000 payment in exchange for 10% of his career earnings. If this sounds like Franco’s Fantex deal, you’re mostly right — but Mejia says there were some red flags with BLA which make this contract unconscionable.

According to Mejia’s Complaint,

Defendant BLA’s business plan involves utilizing various “runners” who approach up and coming baseball players in areas such as the Dominican Republic. These runners (usually former baseball players) advise prospects that Defendant BLA will advance them considerable sums of money, to be repaid by a percentage of the player’s future earnings. The prospects are generally young, uneducated and unsophisticated. Few speak English. Most, if not all, come from very modest families who are struggling financially.

According to Mejia, BLA approached him when his mother was very ill and struggling with medical bills. The contracts were signed, says Mejia, without a translator, and BLA even paid for Mejia’s lawyer just so the contract could state Mejia had the advice of counsel. Mejia says that BLA employees showed up at his house unannounced to collect a payment of about $10,000 after Mejia made the big leagues and threatened to bar him from playing if he didn’t pay. And, according to the Complaint, given Mejia is projected to earn over $100 million in the major leagues, BLA stands to recover over $10,000,000 against a $360,000 investment, which Mejia says is unconscionable.

If you’re interested in seeing the contract, it’s available here. That’s the third one Mejia signed — the one that’s the subject of the lawsuit.

So what does “unconscionable” mean, anyway?

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I love the Miami Marlins. I love them because I love baseball and thinking about baseball. I also love them, though, because I love the law and thinking about the law. At this moment in history, no source is more dependable for simultaneously providing raw material on both fronts — baseball and the law — than the Miami Marlins. Whatever that organization’s flaws, they are not uninteresting.

I’ve written here on multiple occasions about the lawsuit the City of Miami and County of Miami-Dade has filed against Jeffrey Loria for purportedly denying them what they believe they are due of the net proceeds from the $1.2 billion sale of the Miami Marlins to the Derek Jeter/Bruce Sherman ownership group.

Surprisingly, the case now offers a new twist — specifically, the Marlins have suggested that the dispute should be heard by an arbitrator, not state court. And to do that, the Marlins are claiming to be a citizen of… the British Virgin Islands.

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On Thursday, a company called Sports Media Technology (“SMT”) sued MLB Advanced Media (“MLBAM”) over Statcast. The complaint in the lawsuit is 92 pages long, and I read it so you don’t have to. But if you did want to, here it is.

According to the lawsuit, in 2006, MLB and MLBAM entered into a contract with SMT to develop PITCHf/x. However, according to SMT’s lawsuit, MLBAM then breached that contract, poached at least one key engineer from SMT, then used SMT’s PITCHf/x technology to create Statcast.

According to SMT, Sportvision and MLBAM signed a contract before SMT purchased the company that gave Sportvision exclusive rights to provide use of their PITCHf/xpitch-tracking system for three full MLB seasons. However, SMT now alleges that MLBAM has not only failed to live up to that agreement but they’ve also been working with third parties to emulate that technology. Per SMT, that not only fails to fulfill the contractual obligations of their agreement but also is a misuse of their patented technology.

Now let’s make one thing clear at the outset: the Complaint represents only one side of the story. We don’t know if it’s true or not, and SMT’s case has real problems. We’ll get to those in a second.

Some reports have pegged this as a simple breach-of-contract suit, framing it as SMT suing MLBAM for prematurely terminating the deal in 2016 so as to proceed with developing Statcast. But that’s not really accurate.

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Sometime late in the afternoon of March 11, word broke on Twitter that the Phillies were “moving close” to a deal with then-free agent Jake Arrieta. In the hours that followed, several national and local writers confirmed that the two sides had reached a verbal agreement on a complex multi-year contract, though all involved cautioned that no deal was official yet.

And indeed it wasn’t. Before any major- or minor-league transaction can become officially official—before, indeed, a player can appear on a team’s roster or begin receiving paychecks from said team for their services—team, league, and (mostly in the case of free agent signings) agency officials have to work together to confirm each and every minute detail of the transaction in baseball’s system of record: the Electronic Baseball Information System (eBIS).

The gap between when verbal agreement is reached and when a deal is finalized in eBIS is most familiar to us as the interstitial period that comes between word of a big deal breaking in public and the team making that deal official. But the same process applies to thousands of transactions every year, big and small, and when we speak of a deal becoming Official—or, for that matter, a player being placed on waivers or reassigned to the minor leagues or drafted—what we really mean is that that transaction has been recorded and approved in eBIS.

It’s possible that the details of how this system works are only interesting to me, A Known Process Nerd. But on the off chance that might also be interesting to you, I spent some time talking about how the system works with Morgan Sword, the league’s Senior Vice President for League Economics & Operations, and Ned Rice, one of three Assistant General Managers for the Phillies, and the man mostly responsible for that team’s eBIS interactions (you may also recognize him as one of the men who greeted Arrieta’s plane on the tarmac in Florida on the evening of March 13th—the two men have known each other since their time in Baltimore).

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Now that real baseball has finally started, we are very likely going to spend a lot more time here at FanGraphs discussing the game on the field. That’s a very good thing for all of us who love the sport. Before wading too deeply into the new season, however, let’s take one more look at how this offseason affected payrolls.

This past winter was an unusual one, with a number of free agents receiving significantly less than expected, and players and teams holding out for contracts all the way until the season’s start. Most of our pieces contained a general caveat that we would need to wait until all players had signed to really determine the effects of this offseason. I even spent some time wondering if we would have to wait until after next offseason to determine the longer-term effects of this past winter.

As we have now reached Opening Day, we have the opportunity to look at current payrolls and compare them to the same point last year. Here’s where we sit on Opening Day, per Cot’s Contracts.

The Boston Red Sox are well out in front of all teams, followed by the San Francisco Giants, Los Angeles Dodgers, Chicago Cubs, and Washington Nationals. Notable by their omission, the New York Yankees don’t appear among the top five. This is notable for several reasons.

• The Yankees haven’t placed outside the top three in MLB payroll since 1992, the year Marlins owner Derek Jeter was drafted. Melido Perez and Danny Tartabull were the team’s top-two players.
• The Yankees haven’t been outside the top two in MLB payroll since 1994, the last time a baseball season ended without a World Series.
• The last time the franchise had an Opening Day payroll lower than $167 million before this season was 2003, before Alex Rodriguez had ever played a game for the club.

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Last week, Congress passed — and President Trump’s signed into law — the Save America’s Pastime Act as part of the omnibus spending bill funding the operation of the federal government for the foreseeable future. As Sheryl Ring and I each noted last week, the act created a new exemption to the federal minimum-wage and maximum-hour laws applying to minor-league baseball players.

Specifically, under the new provision that went into effect on Friday, so long as Major League Baseball pays its minor leaguers the federal minimum wage for 40 hours per week during the regular season, the players will not be entitled to any additional pay for overtime or offseason work under federal law.

Although most commentators initially focused on the effect the provision is likely to have on those playing for one of MLB’s affiliated minor-league teams, Baseball America’s J.J. Cooper noted last week that the new exemption could have dire implications for teams belonging to non-MLB-affiliated, so-called independent minor leagues (such as the American Association, Atlantic League, Frontier League, and Pacific Association). Yahoo’s Jeff Passan expressed a similar concern on Monday, while SB Nation’s Marc Normandin argued that these independent teams deserve to go out of business if they cannot afford to pay their most important employees the minimum wage.

Undoubtedly, the obligation to pay players the minimum wage would likely impose a financial hardship on many independent-league teams. But it’s not at all clear that that will actually be the end result of the Save America’s Pastime Act.

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As this offseason confirms, the way in which clubs spend their money has changed perceptibly over the last decade or so. Where it used to be commonplace for an organization to pay a player for what he had already done, teams have increasingly begun to compensate players for what they’re likely to do in the future. We see the emergence of this trend most clearly in long-term extensions for younger players, a development that has led to missing free-agent classes.

Of course, that doesn’t mean clubs have stopped signing free agents altogether or stopped exposing themselves to risk of any kind. Teams still need to address weaknesses, and one means to do that is by way of the open market. In some cases, the performances they expect fail to materialize. In some of those cases, teams decide they’re better off paying someone else to take care of the problem. This is how teams end up with dead money on their payroll.

Dead money is generally any money a team is paying out to a player who no longer appears on their 40-man roster. There are three types of dead money:

1. Money paid to players who have been released. Those players are free to sign with other teams, but the team releasing the player still owes the money remaining on the contract.
2. Money paid to other teams as compensation for players who have been traded. Generally, we see teams cover a portion of a contract to receive a better return in trade.
3. Money paid to players who are still in the organization, but who have been removed from the 40-man roster. Any team could have claimed these players if they were willing to take on the contract, and the player probably could have elected fee agency, but then he would forfeit his right to the guaranteed money.

Last season, nearly $300 million of MLB payroll was of the deceased variety, a sum that was double the amount of the prior campaign. Over the past year, we’ve seen the contracts of Carl Crawford, Josh Hamilton, Jose Reyes, and Alex Rodriguez all come off the books. The result is a $100 million decrease in the amount of dead money from last year. The graph below shows the teams who are paying the most money this season to pay players not on their roster.

Boston takes the top spot this year thanks entirely to Rusney Castillo and Pablo Sandoval. The Los Angeles Dodgers’ dead money, meanwhile, is spread out over seven players. Because of their original trade with the Padres that removed Matt Kemp from their roster, they are actually paying an amount higher than his current salary after having reacquired him. And the Dodgers would actually place higher on this list if they had released Adrian Gonzalez instead of taking on Matt Kemp’s contract when their former first baseman was dealt to the Braves and then released. The team could also still increase its total if the front office decides Kemp is not a fit for the current roster.

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­On Sunday, the Washington Post reported that the omnibus spending bill currently being considered by Congress may include statutory language insulating Major League Baseball from liability for not paying minor leaguers minimum wage. This may be the first time on FanGraphs that we are going to be discussing an omnibus spending bill. But it’s relevant in this case.

Readers are likely familiar with the lawsuits filed by Minor League Baseball players alleging that their pay — generally around $1,100 per month for first-year players, with no pay for spring training — is a violation of a law called the Fair Labor Standards Act because it failed to pay minor leaguers even minimum wage. Thus far, the suits have had mixed results: one suit that attacked Major League Baseball’s antitrust exemption was dismissed last summer, but another suit, which has been pending for over three years now, remains extant. Paying minor leaguers minimum wage would cost MLB franchises an extra $5.5 million per year. Minor leaguers are not members of the MLBPA.

Nathaniel Grow already covered the problems these suits face in a pair of excellent articles I recommend highly. My own take, as someone who has personally litigated about two dozen class actions in one form or another, is that one suit, in particular, has a shot. (The reasons why are complex enough to deserve their own article, but if you’re curious, that case is Senne et al. v. Office of the Commissioner of Baseball et al., and I think that Garrett Broshuis, the plaintiffs’ lead attorney, had the right idea in the very clever way he pleaded his complaint.) That said, even if none of the lawsuits had any legal merit whatsoever — which is not, I believe, the case — defending such suits is expensive, and there is always risk inherent to any contested litigation.

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