The Last Time Scott Boras Screwed Up
(Photo: Cathy T)
As has been documented in some depth this offseason, the new collective bargaining agreement is bringing about consequences that might not have been fully understood — by the players, at least — at the time both sides were celebrating labor peace.
These latest developments weren’t entirely unexpected, however. Consider, for example, some previous statements by Scott Boras on the matter.
“The integrity of the game is at hand here,” Boras said. “Clubs are refusing to employ premium free agents for their true market value because of an artificial, collectively bargained process that does not help the game or the fans’ perception of the game. These players earned their free agency and played at very high levels to get it.
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“Like any players, they want to play baseball. But they’re also looking at the long-term aspect of their careers. This system has placed them not in free agency, but it’s placed them in a jail.”
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“The system they’ve been dealt has basically prevented them from free agency,” Boras said.
Notably, these comments weren’t uttered by Boras during this slow-moving winter. While they ring similarly to complaints about baseball’s “non-competitive cancer,” the words above are from four years ago. When multiple Boras clients got well under what was perceived to be their market value in 2014, changes to the CBA were blamed then, too. At the end of the 2011, the players and owners got together on a new CBA, valid through the 2016 season. Two big changes dealt with the MLB Draft, as follow.
MLB Draft Bonus Pools
Prior to 2012, MLB had recommended values for picks in the draft, but teams were allowed to pay players any amount they chose. That meant that top picks might be more likely to hold out and also that some of the best players might fall in the draft due to signability concerns. The worst teams weren’t necessarily getting the best players. Owners wanted to spend less and gain more certainty in the draft, and the players were willing to concede spending limits for players who weren’t even in the union yet.
The resulting agreement created the current system, where every pick in the first 10 rounds is assigned a slotted bonus. Teams are allowed to spread around their total bonus pool any way they deem fit, but harsh penalties ensure that teams won’t spend more than 5% above their allotment. On its own, the adjustment seemed like a minor one as it related to current major leaguers. When paired with another change to the draft, however, the new CBA severely hurt some free agents.
Free-Agent Compensation
Before 2012, the process for losing a free agent and gaining a draft pick was done in a complicated, arcane manner using Type-A and Type-B free agents who might have been with their teams only a few months. The rating system was also not a reliable barometer of how good or sought after those players might be.
The solution was relatively simple: teams could make a qualifying offer to a player who had been with the team at least one year. If the player declined the offer and signed with another team, the team losing the player would receive a draft pick at the end of the first round. The team signing the player would lose their first pick in the draft so long as it wasn’t a top-10 selection. Like the bonus-pool provisions, the changes appeared to be a simplification of the existing rules, but in concert, these alterations caused some free agents to lose considerable value in the open market.
Prior to 2012, if a team lost a draft pick, nothing would prevent that team from spending more money on later, harder-to-sign picks. In the last CBA, losing a first-round pick meant not only losing the opportunity to select in the first round; it also removed the financial firepower to sign other top-level talents. It wasn’t just a pick that was being lost. It was an entire draft strategy. As that bonus-pool money became more valuable, there was a large cost in signing a free agent with a qualifying offer — as well as a big disincentive for teams to bring back their own free agents.
In 2012, specifically, the ramifications of the new CBA weren’t felt by players very keenly. The top free agent, Zack Greinke, had no compensation tied to him. Josh Hamilton had no problem getting a big contract from the Angels, who’d shown their disregard for draft picks the season before when they signed Albert Pujols and C.J. Wilson. The Braves signed B.J. Upton but weren’t docked a pick because they were losing Michael Bourn at the same time. Boras was able to steer both Bourn and Nick Swisher to Cleveland because Cleveland’s first-round pick was protected.
There were a few warning signs that winter, however. Kyle Lohse received a solid $33 million guarantee from the Brewers, but he had to wait until the end of March to find that deal. Adam LaRoche had to settle for a two-year contract with the Nationals, and Rafael Soriano received only a two-year pact after a very good year with the Yankees. It was the next year the market crashed.
Thirteen players received qualifying offers in the 2013-14 offseason, including three Yankees players: Robinson Cano, Curtis Granderson, and Hiroki Kuroda. Unlike the present-day Yankees, the 2014 version abandoned any pretense of getting under the competitive-balance tax. After missing the playoffs, New York was happy to only lose one draft pick, bringing back Kuroda while signing Carlos Beltran, Jacoby Ellsbury,and Brian McCann despite the qualifying offers attached to each. The team also brought in Masahiro Tanaka to ensure they would not miss the playoffs again. Robinson Cano signed with the Mariners and Granderson went to the Mets, both of which clubs had protected first-round picks protected. The Rangers swapped out Nelson Cruz for Shin-Soo Choo. Mike Napoli returned to the Red Sox.
Cruz, Stephen Drew, Ubaldo Jimenez, Kendrys Morales, and Ervin Santana all remained unsigned and attached to draft-pick compensation into mid-February. Jimenez took around $50 million from the Orioles in late-February. Baltimore also signed Cruz to just a one-year deal around the same time for well below the qualifying offer of $14.1 million. Ervin Santana waited until mid-March and took a one-year deal for roughly the qualifying-offer amount. Drew and Morales kept holding out so Boras could work his magic. The trick never came.
Drew signed a prorated version of the qualifying offer with Boston in May, receiving about $10 million for his services. He had a terrible season with the Red Sox and Yankees, and has earned about $12 million on one-year deals in the three years since. Morales agreed with the Twins for about $7.5 million after the 2014 draft, when no compensation was required to sign him. Like Drew, he was also terrible in 2014, but he signed a two-year deal with the Royals followed by a three-year deal with the Blue Jays, earning around $50 million after that lost season. Both Drew and Morales were hurt by the new system of free-agent draft-pick compensation, hard draft bonus-pool caps, and Boras’s inability to see it coming. They all took a risk, and it backfired in each case.
The following year saw more of the same. The pick-protected Red Sox were the big spenders — on Hanley Ramirez and Pablo Sandoval, in this case. In 2015, we actually saw three players accept qualifying offers for the first time, including Boras client Matt Wieters.
Given the problems these provisions created for players, changing the rules was a big deal for players. As a result of the most recent CBA, penalties have been softened for signing free agents with qualifying offers; the gains for losing a free agent have been lessened, as well. In order to receive a pick after the first round, a team would need to be a revenue-sharing receiver and lose a player signed for more than $50 million. Most other teams receive a pick after round two, with teams over the competitive-balance tax amount receiving a pick after round four. In no situation can a team lose their first-round pick. In addition, players cannot receive a qualifying offer more than once. The slotted bonuses were smoothed out so earlier picks weren’t quite as valuable.
The new rules have done a pretty good job of lessening the damage to players in free agency on that issue, it seems. This year, meanwhile, it appears as though a different, slightly altered provision is wreaking havoc on free agency. The competitive-balance tax seems to have taken out two of the biggest spenders in free agency, and little has been done to encourage teams to accelerate the rebuilding process. The growth of the tax threshold has been very slow over the years compared to revenue, while greater penalties for transcending that threshold incentivize organizations to “reset” their payroll — which is what the Dodgers and Yankees have done this offseason. If, for example, those two teams had pursued Yu Darvish, then Darvish himself would have benefited from the competition, also leaving behind more competitors for other free-agent pitchers. With those teams out, however, there has been decidedly less competition for free agents.
Four years ago, two Scott Boras clients were left without a spot when the season arrived. This year, there are a lot more players waiting for the offer they will accept — and a lot of those players are Scott Boras clients. Maybe Boras needs to adjust to the market, as Travis Sawchik has suggested. Maybe, if he continues to hold his ground, teams will give in. We don’t yet know how things will play out as winter turns to spring. Hopefully, for everyone involved, this year goes better than it did four years ago — and hopefully, four years from now, we aren’t spending a lot of time discussing how a few changed provisions in the next CBA are slowing down the marketplace.
Craig Edwards can be found on twitter @craigjedwards.
Good article. I think the Dodgers could have been “in” on Darvish by trading players like Ryu and Forsythe (Forsythe’s option could have been declined as well) to clear more salary for a bid. After all, Barnes, Utley and Kike could share second base nicely almost for free. Moving Kemp was not the only route to freeing up money.
I don’t think they felt like they really needed him with their three lefties and KM, plus some high ceiling prospects, to use as playoff starters. Blaming the salary cap for their lukewarm interest, especially since he was likely to go to arch-rival Chicago, may simply have been the polite thing to say.
For all the talk of the Dodgers being among the big spenders, they really have not signed any big dollar MLB FAs in recent years. They signed Greinke after 2012 (then passed when he opted out) and subsequently extended Kershaw and Kemp, but that is about it. As you point out, there is no reason to assume that they would have been heavy in on Darvish.
They did sign Kenley Jansen, Justin Turner and Rich Hill last offseason didn’t they?
True, but all three were returning players and none signed for more than $80 million.
the dodgers have always opted more towards depth in their spending since Friedman got here.
I’m not sure you appreciate how angry Dodger fan is (still) with Darvish. The were absolutely PISSED at his playoff performance, and they remain so. I don’t know how much that factored into the Dodgers’ failure to sign him, but I have to think it mattered.
Rumor has it ownership was lukewarm on him, but likely the bigger issue is that they couldn’t move Kemp in time and were counting on re-setting the tax.
This is an interesting thought.
“In the last CBA, losing a first-round pick meant not only losing the opportunity to select in the first round; it also removed the financial firepower to sign other top-level talents.”
So the idea is that you couldn’t do an overslot deal with a 2nd rounder if you signed a compensation-pick free agent. But then again, if you had not signed a compensation-pick free agent you also could have taken that guy you were going to sign to an overslot deal in the 2nd round during the 1st round.
I think Craig might be underselling the importance of the changes to the draft here, since the compensation pick system wasn’t that different than how Type A free agents used to work. Perhaps a better way of thinking about is just that first round picks became much more valuable, since they were cost-controlled and more likely to yield a top talent (and also gave you the flexibility to design overslot deals, if that was what you wanted to do).
Also, it’s not entirely fair to say Boras has screwed up yet. Except for Moustakas, who apparently scared away all of his potential suitors, there’s been no suggestion that the Padres or Royals have moved off of Hosmer, or that the Red Sox have moved off of Martinez. If teams aren’t pulling their offers it really doesn’t hurt to wait. (The Cubs apparently were willing to give Arrieta a contract similar to the Darvish contract, so maybe he screwed up there.)
The qualifying offer was a real decision point. It looks now like the Reds goofed by not giving one to Cozart (this was deeply puzzling to me), and also that Holland will regret declining his. I would guess that Moustakas will also regret not accepting his offer but we cannot say for sure. It was clear during the time window of that decision that most teams were not going to go all out to try to chase down any of the the division leaders, and that there would be a flood of infielders on the free agent and trade markets.
Man, I forgot about Holland. I think there’s a case that he should have taken the QO, but according to Bob Nightengale Holland turned down the 3/$52 million offer they gave to Wade Davis. If that was anywhere near what the Rockies offered, that was a colossal misstep. And yes, Boras would have screwed up there big time.
We’ll never really know on Moustakas because apparently teams that were interested in him early on moved on once they saw his price tag. Unlikely we’ll find out what they were willing to spend on him.
I think these QO decisions are relevant to the discussion on ‘opt outs.’
Moustakas essentially had an opt out (i.e. to decline the QO) and took it, thinking that his market would pay him more. A few months later, it appears that the market likely will pay him the same or less. The ‘opt outs are always bad for team’ argument assumes that players will never make a mistake opting out- but in reality the odds of player making mistake and opting out must be greater than 0%, perhaps 10-20% by my rough count of bad QO, draft bonus, and similar decisions.
Further, the ‘opt outs always bad for club’ argument assumes that- since ‘players only opt out when the market will pay them more’- it must follow that, had the player not opted out his club would be able to trade him for surplus value. But of course this ‘lost trade value’argument depends entirely on the idea that players never misread their value and opt out of a deal that pays them more than the market would- as there is no trade value unless the player is underpaid.
With Moustakas, we can see both these assumptions fail. The market isn’t likely to pay him $17m this year, and it isn’t likely that a club would give KC significant trade value if KC had Moustakas on the books at that price.
On top of that, most players with enough leverage to bargain for opt outs are likely to also have no trade clauses (as shown with Stanton for example). Accordingly, the argument that ‘if a player opts out, the club has lost what they could have traded him for’ has less impact given the reduced returns for players with no trade clauses.
The ‘opt outs are always bad for player’ argument is wrong in one more way- players care about total money moreso than AAV, whereas front offices are more focused on AAV. As an unlikely hypothetical, let’s say Moustakas declined his QO full well knowing that the market was going to offer him only $14m AAV (or around $6m/WAR, which is near the peak value of an added win). He may still rationally prefer a 3/42 deal over a 1/17 deal. KC may well benefit if the market proves correct and Moustakas is only worth $14m (avoiding having to overpay him by $3), Moustakas may benefit from option out, and the acquiring club may get a decent deal. No ‘greater fool’ mechanism needed, no trade value lost, etc. Opt outs can work well for all parties involves, the dynamic involved is not necessarily zero-sum.
The closer an opt out is towards the end of a contract, the more the ‘total value’ dynamic might come into play for the player; whereas the earlier the opt out is in a contract, the more the ‘mistaken calculation’ dynamic might come into play. The percent of players who will misread their market 3 quality years into a monster 8-10 year deal is not 0%.
Similarly, a lot of teams kick themselves when they decline their team option and the player bounces back to have a monster year for someone else. Which is why almost no teams demand option years on the end of pre-arb extensions anymore.
If Cozart declines the QO, does he get a 3 year/38 million dollar deal? And if he doesn’t think he can get a 3 year/38 million dollar deal, maybe he takes the QO.
Tyler Chatwood received a similar deal to Cozart, while Lance Lynn and Alex Cobb remained unsigned. I think of the 9 players offered a QO, we will see that Cobb, Lynn, Holland, and Moustakas may regret it.
I think that Cobb and Lynn will ultimately be happy with what they get relative to a QO. The QO for 2018 was $17.4 million.
Cobb and Lynn look unlikely to match that AAV, but there are rumors of each having 3 year offers somewhere in the $40+ million range. For a pitcher, that’s understandably better than taking one year at the QO salary, even if the AAV is lower.
I think that Cobb and Lynn won’t be happy with what they get relative to their original expectations, because each reportedly had an initial asking price of $80+ million of guaranteed money, but there’s a lot of room between that and thinking that they should have taken a QO.
I do agree that Cozart looks like he would have been a candidate to accept a QO. Knock his 3/$38 million down $5 million or so for the value of the draft pick that a team is losing, and that is getting down to the range where accepting a QO looks viable. That’s particularly the case now that a player can only receive a QO once in his career, so Cozart could make $17.4 million for one year and then be available as a free agent without a QO attached.
Cozart signed for less than $50M, so the Reds wouldn’t have gained a draft pick, anyway.
“If teams aren’t pulling their offers it really doesn’t hurt to wait.”
From a strictly financial standpoint, no. From family-management, peace-of-mind, public-image angles, spending months in limbo only to sign for the same amount you could have had in November will sure look/feel like a defeat.
If Boras cares so much about the players, maybe he should offer to be head of MLBPA and negotiate the next CBA for them.
He can scare the owners with a “mystery league” who is ready to swoop in and employ all the players at the last minute at top dollar salaries.
Forming a “League of Their Own” is definitely something the players should prepare to do before the expiration of the current CBA. Boras may be able to assist there.
However, the points in the above article are a regurgitation of a myth created by the offseason rumor mill guys (Ken, Buster, Heyman, Nightengale etc) that free agents were hurt by the draft pick compensation. That had some effect, but no great impact. That’s why the alterations have left the market a sea of floating corpses.
The issue is the defacto seven years of control before reaching free agency. During the PED era this was not a problem since guys were peaking at 35, 36, 37years old (the most infamous abuser at age 39). Teams were ready to give big bucks to 30 year old free agents because they looked like they could produce big for seven or more years. Now with PEDS driven to the far fringe the seven years of control is still there and a 30 year old free agent is perceived to be good for no more than a three year contract rather than seven.
The only solution is to cut at least three years off that seven years of control. The owners are not going to agree to that so the players must prepare to strike for at least a season and a half. It would also make good sense to correct other issues like the minimum salary which needs to be raised to at least $4 million. The players should simply give up on arbitration as it has benefited the owners overwhelmingly. $16 million for four years of service time is a nice chunk of change for any player and no player is worth less than that. This also takes care of the minimum spending idea raising a minimum payroll to $100 million and making tanking for draft picks an expensive proposition to undertake.
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The problem with reducing the time of team control is that you’ll be cutting off the small market teams from any decent window of contention. They can’t afford to spend huge in free agency anyway, so the only consistent means they have to compete is to build through the draft and develop young stars while they’re still under team control or signed to early career extensions. In short, competitive balance would be absolutely ruined if you made that change!
I agree that a salary floor is a really good idea, although I think it would be better to raise the wages of minor league players over handing out $4M to unproven rookies.
Boras would almost certainly be a better MLBPA executive director than Tony Clark.
No way- Boras is very likely leading the campaign against Clark.
CBA negotiations pit big-money corporate interests (rich owners, rich agents, rich players, big media, big sponsors) against smaller interests (less wealth owners, common agents, common players, under represented players, staff, fans). Boras would exacerbate all the game’s problems as MLBPA chief.
Honest Question, what if Yu Darvish sought the best 3 year deal he could get instead of a 6 year contract? The deal he signed pays him 25 million the first year and 18 million in the 6th year with an average salary of 21 million.
Could he have received 75, 80 or even 90 million on a three year deal? He already received 25 million for the first year, so is 30 million a year on a shorter term crazy? Even small market teams might take a chance if the number of years weren’t so high.
That is a large percentage increase to yearly salary. If all free agents did that the mlb average salary would be higher. Would arbitration awards increase if the average salary is higher?
Players would lose the safety of long term deals but gain larger guaranteed money right now. If his arm still functions after 3 years he can get another contract then. Even Drew Smyly received a 10 million dollar contract for the chance he might recover from Tommy John. Even with 15 million a year 1 year contracts those last 3 years his total earned would be higher than the 6 year deal he just signed.
To add to this – I don’t understand for these top level contracts why we even talk about more years in the context of ‘safety’.
If you sign a three year $90 million contract, you are effectively equally ‘safe’ as someone who signs for 6/$125, in the sense that you will never have money problems again. The extra $30 million is probably going to have marginal impact on the fates of you or your progeny.
If I’m a competitor I’d hate the idea of being permanently stuck with a team that’s going nowhere, or that I’m universally derided for playing out the string on an albatross contract.
It might make more and more sense for agents to go this way. There aren’t going to be a lot of teams in the $500 million stratosphere that Harper or Machado could demand, which is why I would bet they end up signing next year for substantially less than you might project, but there’d be quite a bidding war if you tried to max out 2 years, more teams would be willing to float a huge salary for a couple years if they know they’re in a competitive window.
I have strong doubts that the organizations are as willing to boost the AAV as is often suggested they would be here, especially at the top of the market.
I feel like 3 years 25 million is the base. Cubs, Brewers even the Twins would have no problem with that.
That alone is almost a 20% increase in AAV over the contract he received. 21 to 25 million.
From there it is just a simple bidding war. 5 million more to 80 is a no brainer. Each of those teams has solid hitters right now and just needs more pitching to win, getting a 10 million signing bonus from one of those teams is attainable. That is 90 million total and 30 a year AAV. Almost a 40% increase in AAV.
The way that I look at it, the Cubs signed Darvish to a five year contract at $25M/year with the payments spread out over six years … and a team option for the sixth year for zero dollars.
Naturally spending fifteen million dollars of somebody else’s money is a no-brainer.
But I suspect ownership knows that if they start handing out $30m/year on three-year deals today Harper and Kershaw are going to expect $35m/yr for eight next year. And someone very well might give it to them.
Keeping the highest AAV down makes sense long-term even if it would make a little more sense right now.
So you are agreeing with my point then.
Shorter term deals where you have multiple bidders is better for the players and worse for the owners.
Having the Cubs reluctantly agree to a 6 year deal but only at a significant discount in the later years is bad for players and good for owners.
Short term contracts should always result in larger yearly dollars because in a short term contract the risk of injury/underperformance is assumed by the player. In a multi year contract this risk is assumed by the owner.
Alternative interpretation of events: Boras has the right to complain about it. Just because he complained about it in the past, and those anti-competitive measures may have been removed, that doesn’t mean there aren’t any existing anti-competitive aspects.
When you read public comments from Scott Boras, it’s clear that he, more than anyone involved with free agent decision making, is out of touch. The current systems has “placed players in a jail”? Give me a break. Teams have every right to choose how much they wish to spend on a free agent, and live with the consequences. It’s not up to Scott Boras to decide how others spend their (not his) money. Sorry Scott that you can’t align your expectations with realism.
Uh, he’s an agent. What do you expect him to say? “Teams should pay my client less money!” He’s trying to sell his clients, and if it requires some hyperbolic comments to shame a team or two he’s happy to take the guffaws for saying silly things.
“Shame teams into signing players” might have been a sound strategy when you had ex-player GMs and win-now fanbases inclined to think that last year’s 70-win team could be an instant contender with one key signing.
Nowadays, you have analytical GMs that are more inclined to set their price and stick to it, and fans that understand and support that. Times have changed, and Boras is still running his original schtick.
Good piece. What it really shows is the amateurish Union negotiating strategy in the last round of CBA negotiations. They just couldn’t see the big picture—which did not include a comparative handful of QO players. MLB expected to have a higher CBT level, but the Union, not thinking it was as important, didn’t push for it. And the Union, once again, did nothing for its younger players.
Boras perhaps (maybe, we haven’t seen the end of this) misjudged. But his misjudgment isn’t nearly as important as the Union’s failure to adequately represent membership’s interests.
Couldn’t be more wrong- record breaking spend in 2016, records lined up to be smashed in 2019, and steady growth in all the other years (including this year by projections).
The 13/14 FA market that the author complains of ‘crashing,’ actually set the prior all time high for market spend- exceeding the previous record by 10%.
The union didn’t do anything amateurish, it is merely these anti-union talking points coupled with fact-less analysis that is failing to process what has happened.
MLBPA whiffed on the CBT, but I don’t think the Yankees (who did acquire $300M man Stanton) and Dodgers were going to blow it out on FA’s anyway. The sea change is that Boras can’t circumvent intelligent GM’s to sell the owner on idiotic FA contracts anymore. Teams are shifting away from exorbitant FA contracts and moving more toward developing their farm systems.
Moreover, this seems easy to fix in the next CBA. If FA’s take, say, a 30% haircut, bump up all pre-FA players by n% to make up the difference and keep the players’ share of revenue constant. This could even make for an article since if you know the distribution of 900 or so MLB players by years-of-experience, it doesn’t seem too difficult to calculate.
Finally, though a lot of readers and Fangraphs authors seem to align with the MLBPA, I don’t think there’s any alignment of MLBPA’s interests with fan interests. Neither is there one between fans and owners, fans should want no play stoppage and cheaper FA’s so small market teams can access them.
Isn’t this an issue with all unions—unions don’t serve all members equally. It’s very common in unions that the rights of current more senior members are entrenched at the expense of junior or future members. Advanced analytics has focused on pay for performance. While baseball salaries would be fairer if all minor leaguers received a livable wage and the MLB minimum was $4 million, I would be surprised if the MLBPA negotiated away salaries of their senior members so that junior members and IFA would be better off.
Similarly, the umpires union faces similar challenges. Advanced analytics is quantifying the deficiencies of certain umpires. Either the union adjusts by moving to a performance based system or balls and strikes will be called by robots.
This is a smart point, although traditional unions don’t have talent/compensation levels with this type of both absolute and percentage difference. The Union probably been thinking that a rising tide lifts all boats, but there weren’t expecting that tethering the younger players, along with a de facto ceiling, undermines that strategy.
IMO this series is still so poor and badly suffering from a lack of balance and data analysis.
The author writes that the ‘market crashed’ during the 2013-14 offseason, but provides nothing but anecdotal examples of delayed signings. In reality, the market did not crash- just the opposite- MLB spent the largest amount in FA history at that time with $1.8b.
http://bleacherreport.com/articles/2338773-does-the-2014-2015-mlb-offseason-rank-as-baseballs-wildest-ever
OFFSEASON TOTAL $ SPENT ON FAs
2013-14: $1,861,775,000
2006-07: $1,655,595,000
2014-15: $1,616,100,000
2011-12: $1,362,938,058
2012-13: $1,335,525,000
2010-11: $1,305,955,000
2008-09: $1,162,507,500
2007-08: $1,159,100,000
2009-10: $846,795,000
This is really very poor analysis. The 2013-14 offseason was a record-breaking robust FA market, breaking the prior record FA spend by 10%, yet the author calls it a crash. After studying the figures these past several months: how does the author get the information so backwards? Does this poor analysis come from the habit of not consulting the data or is it disingenuous agenda-pushing? It’s hard to imagine that anyone studying these markets could honestly believe the FA market crashed in the winter of 13-14.
This narrative-driven analysis focuses too much on anecdotes like Stephen Drew and Kendry Morales taking 1 year deals.
During the ’14 offseason, Drew was projected around 2 WAR, having averaged 1.6 WAR the three seasons prior and being 4 years removed from his big (4.8) 2010 campaign. Similarly, Morales was projected around 1.4 WAR- that being his average in the 4 years prior, omitting 2011 which he missed entirely. Both players were 30, with Morales trending towards DH-only and with Drew showing the negative baserunning scores that are often leading signals for a decline in fielding. Since that offseason, Drew has produced 0.0 WAR and has earned roughly $25m, Morales has produced 0.4 WAR, has earned about $35m and still has $22m more coming from this season and next (Moralex projects to be worth 0.0 WAR total in 18 & 19). That’s about $82m for 0.4 WAR, or about $205m/WAR. Boras hardly screwed up, nor did the CBA cause a sea-change that crashed the market and caused the players mentioned to miss a pay-day: the only thing that happened is Boras delayed their signing and made a big PR campaign of the matter.
So the author says 13/14 offseason FA market was a big crash- but it actually broke the record spend by 10%. He singles out Drew and Morales as guys who suffered because Boras’ allegedly didn’t get them paid: yet they have been paid each year, to the tune of $205m/WAR. This is some up-is-down analysis.
Further, this serious of articles has failed to assess the significance of both 2016 and 2019: which IMO is disingenuous given the repeated argument that FA spending has been ruined by Tony Clark and the union.
2016 FA market was the all-time, gold-standard by-a-mile for MLB compensation, but it almost never gets mentioned in these articles save only to complain that there has been a decline since. MLB teams spent $2.4b in total contracts (all years) in the 2016 FA market.
The second highest spend to that point (and now the normal level of spend on a rolling 3 year average basis) was the 1.8b from 13/14: meaning that 2016 blew away the 2nd most expensive FA market by 33%!
2019 is primed to challenge 2016 as the record high offseason spend, as Harper/Machado are likely to make ~$1b themselves. A 2019 record FA spend would be quite notable given that 2016 broke the record by a whopping 33%, and might be topped within only 3 years: well above 5% growth.
This article is simply a lot of prose following a narrative with a pre-set conclusion that cannot possibly withstand any serious analysis. The conclusion demonstrates the typical bias and anti-factual content that the whole series of ‘FA market’ articles has come to represent IMO:
“Hopefully, for everyone involved, this year goes better than it did four years ago — and hopefully, four years from now, we aren’t spending a lot of time discussing how a few changed provisions in the next CBA are slowing down the marketplace.”
Why does the author ‘hope’ that this FA market goes “better” (i.e. more spend) than 13/14 when the all-time FA spend was exceeded by 10%? Why is the focus still on the CBA? We all understand that CBA terms affect contracts- but it is very poor analysis to disregard the data, get caught up in narrative and anecdotes, and get almost all of it backwards, while still somehow being convinced that the union has botched the CBA.
No offense, but total spend is a terrible number. It’s essentially meaningless. It doesn’t take into account the number/quality of players on the market, or the number/quality of open roster spots, or even the number of years contracted for, all of which will vary hugely from year to year and have little to do with the strength or weakness of the market.
Not that I’m really expecting you to do all the work necessary to get a better one, though maybe you could for the amount of time you’ve put into these comments. But the number you’re using really doesn’t support – I was going to say your point, but really any point at all.
Saying the FA ‘market crashed’ when in reality the amount spent on the FA market set a new all-time record high, exceeding prior record by 10%, is not accurate.
Average player wages rose 9% from 2013 to 2014- so again, strong evidence against a market crash.
The total number of free agents in any given year is around 150, the SD is relatively small (i.e. under 20), so focus on total spend has some purpose even if not controlled for the projected WAR of each FA.
There is no evidence at all to support the idea that the FA market crashed in the winter of 13-14, citing the Drew/Morales antidotes as the only evidence is very poor and typical of this article series.
I’m a bit surprised private equity hasn’t developed a model to disrupt the monopoly. It seems like it wouldn’t be hard to build an 8-12 team league with good ballparks in major cities. They could set it all up and go the MLB and demand a ransom not to do it.
If that doesn’t work, 95% of ML and minor league players are underpaid. How hard would it be to get the year 1-6 players to jump ship for a market salary?
Majors would be left with stars and scrubs.
It’s also a little weird that Russia hasn’t tried it.
The chance of commercial success is minimal, if not outright nonexistent. MLB is the only baseball league in the world that is consistently profitable.
There are examples from other sports showing that the math is unlikely to be nearly as easy as you propose.
Look at the history of sports leagues in North America trying to challenge established incumbents. It’s almost entirely one of financial failures such as the USFL. The AFL is an exception that can be counted as a success, and that occurred in the era before big TV contracts were a huge revenue driver for professional sports leagues. The ABA and the World Hockey Association at a a glance appear successful because some of their teams merged with the NBA and NHL, respectively, but half or more of the original teams in each league folded before that occurred.
The revenue and salary math of a start-up league is a lot more challenging than you apparently assume. It would take years of building before a rival league could generate revenue that would support paying salaries competitive with major league arbitration salaries, which is (at least) the salary level that would be required to draw a lot of quality players away from major league baseball.
It wouldn’t work. Much easier to buy in into existing league.
First of all, there are the matter of the contracts. I suspect the MLB has learned their lessons and it is going to be difficult to break an existing contract. The new league would have to fill rosters with free agents, unsigned prospects, and castoffs. Everyone else is going to be stuck in court and not getting paid.
Second, while things certainly have changed since then, the only successful upstart major league in baseball history is the American League. (I suppose the National League may also count, but the National Association was a mess so it barely counts.) Running a major sports league is a difficult task! Really, the last open window for this to work was pre-expansion when the United States had grown and there were many un-serviced cities that could conceivably support a major league team. But even if you look at the Continental League’s suggested team roster, one team was in Buffalo, which is where major league teams go to die.
I am not saying that this option is off the table, but it would take some extreme circumstances to make it viable.
They don’t need to break contracts. Almost All the players below free agency are essentially on one year contracts. All minor leaguers are one year contracts. That’s probably 90% of the leagues present and future talent. You could field teams with 75 million payrolls that would essentially pay everyone more than what they earn today ( until the mlb fought back ) and filling 10-12 teams is a lot easier than 30.
In the present MLB there are only 15 competitive teams anyhow.
The money in the game right now is enormous. Far greater than when the USFL or ABA tried it and the Federal League was reasonably successful in its attempt 100 years ago
Finally, there are plenty of television outlets looking for content. Most of the leagues money now comes from their own pay per view or television rights. Attendance is not critical to success (although reasonable threshold levels are important).
It’s not that hard to build a stadium. The real issue is running the league in a way that would attract staying power. Co-ordinating a 12 team startup would be tricky but private equity has owned a lot of sports related franchises. This is by far the biggest challenge.
The money in the game is enormous because MLB and its franchises have been building their brands for 150 years. The money in your new league is not going to be enormous.
Do you think minor league teams would be financially viable without funding from a parent team? How have the last few attempts to field an independent football league worked? Is the money in football not enormous?
There is a reason why NPB teams carry the names of their parent companies.
The Federal League folded after just two seasons. How is that considered anything other than a complete failure?!
Anyway, while pre free agency players are technically under one year contracts, their teams still maintain control over them through the means of a binding contract known as the Collective Bargaining Agreement. Any such players who tried to jump ship could easily be sued. There’s also precedent for this, as players need their teams to agree to release them if they wish to play in Japan, Korea, or Mexico. Why would a new start-up league be any different just because it’s in the same country?
So the union screwing over its own *future* members at the behest of some combination of incompetent leadershipr and apathy of the *current* members has been going on for at least a decade.
Or at least that’s my takeaway from this. Free agents are way overvalued, and that’s only because young guys without any say in the CBAs are extremely undervalued. The union needs to recognize this and start playing the long game. They’re already a decade late.
Boras’ game has always been one of high risk and high reward, at least among the population of MLB agents. It’s not really surprising that every once in a while he gets hosed. Sometimes things are just going to line up so his marketing methodology isn’t particularly effective, and since he tends to decline early offers on the assumption it will be, when it goes bad it can go quite bad.
Signing a flawed player to a long term deal might be a thing of the past now that GMs have so much information to work with. Why pay hundreds of millions of dollars to a guy you think will be a small upgrade today, and a huge liability halfway through his contract?
I think a strength of boras is that he is willing to take some individual losses to maintain his overall strategy and while there are some failures mostly it has worked.
That strength could turn into a weakness if he doesn’t react to the market but I could see him using this season as an experiment really riding it out till the end. So far he has enough standing with the players to do that although of course that won’t last forever. We will see how that plays out.
Except ‘his’ individual losses are REAL HUMAN BEINGS. But I suppose if you trust the snake, you shall occasionally get bit.
Since they’re real human beings who might end up with eighty million dollars instead of a hundred twenty, I’m pretty much ok with that.
If somebody ends up managing a Cinnabon, I might reconsider.
Tim: you’re ignoring the fact that Boras’s strategy is based on maximizing his own income, not his clients’ at an individual level.
Exactly. Nobody’s forcing players to sign with Boras. Volunti non fit iniuria.
I have often said that Boras is willing to make many of his clients hold out, even when he knows it may cost them money. This allows him to use his own reputation as leverage in negotiations with his high profile clients.
An aspect of the free agency glut that I haven’t seen mentioned is the impact of the new aging curves in the drug testing era. The useful life of each player is now much shorter, meaning that 30 year old free agents aren’t going to get longer terms deals anymore. The Cubs had to bite the bullet and give Darvish a 6 year deal that no one else would offer in order to get him, knowing that it’s pretty unlikely that he is going to be a useful pitcher in the last year of that deal because he’ll be 37.
the Cubs gave him a 6 year deal to lower the AAV, not because he wanted to be signed for that sixth year. The sixth year was a *team friendly factor*
In ‘old man shakes fist at clouds’ vain, MLB is the only major US sport that assigns competitive imbalance based on geography. A whole lot of these FA/tanking problems go away with full revenue sharing leveling the financial landscape allowing all 30 GMs to conduct business from an even financial approach. The NFL has a similar structure that rewards older declining players and that hasn’t stopped those guys from getting contracts when 32 teams are available to spend money. The big problem is that half of the league lacks financial means or incentive to justify adding 2 win players. Of course, this is all just a pipe dream for MLB where the owners have never understood that the leagues health should be more important than their own franchise. After all, the Yankees and Dodgers need other teams to play to make their money.
Must be a slow news week at FG as both this article and the one about Manfred are horrible and innacurate. I’m not a huge fan of Boras but this article is so poorly written, you can’t really draw any conclusion other than the writer just doesn’t like Boras and wanted to bash him. The “quality” of the recent articles perhaps explains why Dave and Eno left: the quality of this site is heading for the shitter. If you don’t have a good or unique take on a subject, probably better not to write about it. Unless you just want a couple thousand words about nothing. Like this piece of garbage article.
“transcending” the threshold?
I agree with the guys saying why not seek 3yr/30 million type deals. As a Twins fan that works we can win now and in three years evaluate the team and sign some of good young guys still. What MLBPA needs to look at is a team payroll minimum, for two reasons to ensure the players get there fair share of the revenue and to encourage teams to keep there fan favorites. Fans only like the dump and pump strategy when they are the Astros or the Royals and that’s not going to work for everyone, fans like to keep there favorites in town and this is one way owners could be encouraged to keep them and the players could spin it as sticking up for the fans.