Dan Lozano and the Contract Rumor Mill

This offseason was supposed to be a spending bonanza that would see teams throwing money at generational talents like Bryce Harper and Manny Machado, rotation stalwarts like Dallas Keuchel, and bullpen anchors like Craig Kimbrel. Instead, that quartet, along with among many others, remains unsigned as yet another slow winter drags on. It turns out that last offseason, to that point the slowest offseason ever, wasn’t unique. It may have been, instead, a harbinger of the new normal.

The Major League Baseball Players Association’s new chief negotiator, Bruce Meyer, told the Wall Street Journal that teams’ inactivity was among the biggest threats facing the game.

And it’s not just the union. That trend hasn’t gone unnoticed by the players, whose frustration with owners’ unwillingness to spend is spilling into public forums. Players are now using social media to engage with fans, and each other, about the stagnant market.

The war of words was elevated to a new level last Wednesday, when Dan Lozano, the agent who represents Machado, took to twitter to strongly admonish Bob Nightengale and Buster Olney for their recent reporting.

Here’s his statement in full:

I have known Bob Nightengale and Buster Olney for many years and have always had a good professional relationship with both. But their recent reporting, like many other rumors in the past several months, have been inaccurate and reckless when it comes to Manny Machado. I don’t know if their sources are blatantly violating the Collective Bargaining Agreement by intentionally misleading them to try and affect negotiations through the public or are just flat out lying to them for other reasons. But the truth is that their reports on the details of the White Sox level of interest in Manny are completely wrong.

I am well aware that the entire baseball universe; fans, players, teams, and media members alike; are starved for information about this free agent market for all players, including Manny. But I am not going to continue to watch the press be manipulated into tampering with, not just with my client, but all of these players’ livelihoods as they have been doing this entire offseason. The absence of new information to report is no excuse to fabricate “news” or regurgitate falsehoods without even attempting to confirm their validity and it is a disservice to baseball fans everywhere when the media does just that.

Moving forward, I will continue to respect the CBA’s prohibition on negotiations through the media, and hope that others would do the same.

Lozano was referring to an offer reportedly made to Machado by the Chicago White Sox, which the Nightengale and Olney had reported was in the range of seven years and $175 million.

Lozano’s frustration is easily understood. The White Sox’s purported offer is an impressive sum, to be sure, but it’s also essentially the same deal that the Yankees offered 31-year-old Robinson Cano back in 2013. It’s also far short of where we projected Machado’s contract to land when we ranked the top 50 free agents, and of the $300 million deal many observers were expecting of the 26-year-old phenom. That Machado, reaching free agency much earlier in his career than Cano did, was reportedly offered the same sum in 2019 dollars is even more irksome, one imagines, upon the realization that teams are evidently planning to negotiate for Machado’s services through the media.

At the same time, this might be a more multi-faceted issue than it first appears. The body of the Collective Bargaining Agreement itself doesn’t actually prohibit teams or player representatives from talking to the media, except as it concerns arbitration proceedings and medical information. But the CBA doesn’t just consist of the language of the primary agreement; attached, and incorporated into the CBA by reference, are several exhibits and side agreements. Many of those you’ve heard of before: the Joint Drug Prevention and Treatment Program and the Joint Domestic Violence, Sexual Assault and Child Abuse Policy are two such agreements. In this particular instance, the relevant document is Exhibit 49.

Exhibit 49 is a letter from MLB Chief Legal Officer Daniel Halem to MLBPA Senior Advisor Rick Shapiro, with the simple memo line “Use of Media.” As Halem explains it, the purpose of the letter is to “confirm our agreement regarding certain prohibited conduct by the Office of the Commissioner, the Players Association, Clubs, players, and player representatives (collectively, the “Covered Parties”) with respect to public comments about free agents[.]” It states:

(1) The Covered Parties may not (i) disclose to the media the substance of contract discussions between a player and a Club (including but not limited to the facts of offers, the substance of offers, or decisions not to make offers or to withdraw offers) until after terms on the contract have been confirmed by the Office of the Commissioner and the Players Association; or (ii) announce an agreement on a contract that is contingent on the player passing a Club-administered physical examination until after the player has passed that physical examination.

(2) Similarly, none of the Covered Parties may make comments to the media about the value of an unsigned free agent, or about possible or contemplated terms for an unsigned free agent, regardless of whether discussions have occurred. The prohibitions apply equally to comments that are on and off the record, as well as to comments that are provided on the condition of anonymity or published without identifying the source (e.g., “an industry source”).

This means that technically speaking, every “industry source” in a team front office or player agency who talks to a reporter about ongoing negotiations is in violation of Exhibit 49. Helpfully, this provision also includes a non-exhaustive list of prohibited comments to the media.

  • “Player X won’t receive anything longer than a one-year deal.”
  • “Player X is seeking more than Player Y received.”
  • “We are out on Player X.”
  • “Player X is worth at least $Ymillion.”
  • “Player X has contract offers from multiple Clubs.”
  • “We are unwilling to forfeit a draft selection to sign Player X.”
  • “We have concerns about Player X’s physical condition.”
  • “Player X is not worth more than $Y million, nor should he receive a contract greater than Z years.”

Lozano is technically correct here: leaking free agent offers to the media is against the rules. And he is arguably right to point out the seriousness of the issue. After all, the rule exists for a reason: to prevent teams – and agents, for that matter – from negotiating through the media, thereby artificially depressing or inflating a free agent’s market. The list of possible reasons for a team to leak such a proposal are hardly to Machado’s benefit. Perhaps it is to drive down Machado’s market. Perhaps this offer was really made, and teams have just decided not to make ten-year offers any more. Perhaps teams know that fans are likely to cast a sideways glance at a player for turning down a life-changing amount of money, whether or not it reflects the player’s actual value. Perhaps teams want cover in case Machado signs elsewhere. Perhaps teams know something we don’t. We simply don’t have those answers, but there’s no way under Exhibit 49 of the CBA to say that a team source can permissibly discuss negotiations with a free agent with a member of the press.

At the same time, Lozano has an uphill fight. The provision is very difficult to enforce:

A violation of this agreement will be established only if the grieving party identifies the specific individual at the Club, Commissioner’s Office, Players Association, or the specific player agent or player who was the source of the comment.

Often, enforcement would depend on media members revealing their sources, though it should be noted that the Rule doesn’t make members of the media themselves covered parties. It’s technically a violation of the CBA for Executive X to tell Ken Rosenthal that his team made an offer to a certain free agent; it’s not a violation of the CBA for Rosenthal to publish that tidbit. The trouble is that if you’ve ever read MLB Trade Rumors, ESPN, The Sporting News, the Athletic, or even this very site, you know that comments of this type are routinely made to members of the media, by front office sources and other team personnel, usually anonymously. Even the provision of Exhibit 49 that provides a sort of safe harbor to discuss already-reported negotiations has been disregarded, as reports now go way beyond mere confirmations or denials, and no one ever seems to use what is the explicitly required language: “No Comment.” In practice, Exhibit 49 is largely disregarded, both on and off the record, as evidenced by just few selected tweets from this offseason.

So what do we actually have here? Assuming everyone is telling the truth in this cast of characters, we have a team, the White Sox, that told two baseball scribes that they’d made an offer to Manny Machado, knowing the offer would be reported, and presumably aware they weren’t technically allowed to do so. We have Ken Rosenthal and Bob Nightengale reporting what they’d been told by the White Sox. We have Dan Lozano, who says that reporting is untrue, and was a violation of the CBA, which it technically was. (It is perhaps worth noting that Lozano, who represents some of baseball’s biggest names but whose professional history is littered with allegations of serious misconduct, including accusations of violating MLBPA rules and sexual harassment, is something of an imperfect messenger for concerns over ethical dealing, though how familiar the average fan is with his past is unclear.) In the face of growing labor strife, this won’t be the last time we see a player or their representative grapple with the public rumor mill, where some fans are already hostile to the idea of players making tens of millions of dollars, making these public statements all the more important. Lozano may be right, but he’s also swimming upstream.

We hoped you liked reading Dan Lozano and the Contract Rumor Mill by Sheryl Ring!

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Sheryl Ring is a litigation attorney and General Counsel at Open Communities, a non-profit legal aid agency in the Chicago suburbs. You can reach her on twitter at @Ring_Sheryl. The opinions expressed here are solely the author's. This post is intended for informational purposes only and is not intended as legal advice.

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Ryan DC
Ryan DC

So could the MLBPA file a grievance against Joe Maddon for saying that Bryce Harper isn’t coming to the Cubs?

Pwn Shop
Pwn Shop

Kris Bryant?