Boras Blog

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.

Trying Something Unusual

Last week, Ben McDonald mentioned that Boras said to him that they were going to try something unusual with the Strasburg negotiations.  We got some attention when we suggested that he might be looking for a way to create free agency for Strasburg.  Well, the Washington Post may have  nailed it more directly:

Boras was dropping hints privately that he is preparing to explore a new frontier in his ongoing draft-busting crusade: Japan.

"If a [contract agreement] does not happen," Boras said during a conference call with reporters following the draft, "obviously you then look to all the available resources that one would have to evaluate what the next step is, whether it's to re-enter the draft, or alternative choices."

[snip]

According to Major League Rule 4(a), draft eligibility is limited to players who are "resident[s] of the United States or Canada and who [have] not previously contracted with a Major League or minor league club." Under Rule 3, which governs contracts, a player is considered a resident of the United States if he "enrolls in a United States high school or college or establishes a legal residence in the U.S. on the date of the player's contract or within one year prior to that date."

However, there is enough gray area within the issue of "residency" -- a notion Boras first explored in Drew's case in 1997, threatening at one point to take him to Costa Rica to establish residency -- that baseball has seen fit to publish a handbook, distributed to scouting directors and other executives before each year's draft, that clarifies what residency means.

At worst, the threat of Japan should give (even) more leverage to Boras over the Nationals.  At best, he will be able to pull it off.  The Japanese teams stand to gain a tremendous amount themselves, but as the article notes, it may be a complicated issue:

"This will do more harm than good to the NPB club. [Strasburg] will not be welcomed, neither by the teammates or the media," Kobayashi said. "It is not easy to sympathize with a guy who comes to Japan just as [part of] a negotiation process to squeeze more millions out of [an MLB] club."

According to Kobayashi, NPB officials are still perturbed about the Boston Red Sox' signing last winter of amateur pitcher Junichi Tazawa, violating what is seen as a "gentlemen's agreement" between the leagues that neither would pluck away the best amateur talent from the other.

"We would not do what we do not want others to do to us," Kobayashi said, "unless we really have to do so."

At the end of the day, if this is the desired avenue of the Boras/Strasburg team, it will probably end up in the courts.  MLB has too much to loose by allowing this precedent, and I imagine they will fight Boras on this, even if they will ultimately lose.  The legal clean-up that will likely follow - from CBA amendments to an eventual agreement between MLB and their oversees counterparts - will be quite significant.

Similar to the tax code, it seems that the more restrictive rules that MLB tries to put in place, the larger the advantage to those clever enough to find ways to challenge the system.  The fact is, only a true free market economy will level the playing field among all players/agents and teams.

I Wasn't Going Back to That Farm

Esquire is republishing a fantastic article that originally appeared after the initial A-Rod/Rangers deal.  It is really a well written article that provides insight into all of the players - Scott Boras, Alex Rodriguez & Tom Hicks, and gives a good sense of just how things went down.  Given how the relationship between ARod and the Rangers soured, and the news about ARod's positive steroid test, the article is even more interesting to look back on.

The article kicks off with a bang.  This is like the literary version of the opening to Like a Rolling Stone:

Scott Boras -- Scott Freakin' Boras, the Most Hated Man in Baseball, the heartless bastard hell-bent on destroying our National Pastime, the keen-eyed pimp of ball-hogging, bat-whipping, splitter-hurling youth -- he walks among us, here in the lobby of the elephantine Wyndham Anatole Hotel in Dallas, during the long December weekend of the game's annual winter meetings, in his blue sweater-vest, blue denim shirt, and jeans, his cloven hooves hidden in soft brown shoes, toting a tan leather satchel as battered as Yogi's old catcher's mitt. Boras has a suite upstairs, but nowhere does he ride -- not even the elevator down to the hotel café -- without the satchel. The satchel doesn't touch the floor, either: It gets a chair all to itself.

Is that great or what? Devil in a sweater vest!  Love it!  Here is his take on what makes Scott Boras so effective:

Owners dread him because he shapes his monster deals and arbitration battles with a database that includes every pitch thrown in every major league game since 1979 and because when an owner says, "Well, those are some impressive numbers, Scott, but the truth is I just can't afford to pay that much for this player," Boras will say, "Then let's take a peek at your balance sheet and see how we might make it work."

Lets hear from A-Rod.  Does this sound like a guy who wouldnt want an extra edge?

"I've got a lot of work to do," he says, "a lot of motivation. I'm chasing all those things -- internally. It's not good to talk about it. It's hard to compete when you don't have a place in the game now as a shortstop, so you have to look years back to find someone to compete against. That's what I do. I'm playing against guys like Ernie Banks or Hank Aaron or Ozzie Smith."

Tom Hicks.  Hope springs eternal:

"Our model is to keep payroll to 50 to 55 percent of revenue," Hicks says, "real payroll, real cash. We're gonna be a little over $80 million, and our revenue this year will exceed $160 million. Our payroll goin' into free agency was $49 million. Compare that to where the Yankees were, where the Dodgers were, the Mets or Atlanta or Boston. We knew there was a bumper crop of free agents, and we didn't like the team we had. We got cheaper, we got younger, and we put ourselves in a position to have the flexibility to do what we've done."

Hicks opened the A-Rod book and didn't see only the shortstop who'd shatter Henry Aaron's records and deliver another ring or three unto his hammy fist: He saw Tiger, too, and Michael, and ol' Roger Staubach himself, all rolled into one.

"I read in one of the New York papers that I fell in love with Alex. I didn't fall in love. Alex Rodriguez is a good asset, and he's gonna own this city. Traditionally, the marquee athlete here has been a Dallas Cowboy. Alex will wear that cape. At his age, with his success and potential, he deserves to be the highest-paid guy in baseball -- no question. After the first time I met him, I knew he wasn't goin' back to Seattle. I only worried about Atlanta and the Mets."

How it went down:

"Scott's a good negotiator," Hicks grins. "He was tryin' to get a twelve-year contract that could be repriced after three years. If we were gonna invest in Alex, we wanted to give our team a chance to really benefit from what he brings. And if our fans are gonna fall in love with A-Rod, we want him to be here for a while. The most important thing was to lock him in for seven years, particularly in the early years, at reasonable numbers."

What Big Tom did -- "Very smart of the guy," says Boras, "very smart" -- was to jack up the salary, all the way up to $242 million for ten years, with $36 million of it deferred. Slowly they worked out the deferral schedule and interest rates, the option and escalator clauses, and a list of twelve award bonuses so minutely crafted by Boras as to guarantee Rodriguez an extra shiny nickel for each time he appears on camera in uniform without spitting or tugging at himself.

"The last thing he put on the table," says Hicks, "was this signing bonus. He said he talked to Alex and that it was important to Alex -- he needed $10 million to get situated, he wanted to buy a home in Dallas. So we swallowed hard and said yes to the $10 million on the basis that it would be deferred over five years."

Hicks gulped it down, but something still sticks in his craw.

Arod on Scott Boras' recruting tactics:

"A lot of Latin kids have nothing," he says. "They love it. But to me it was insulting. The limos -- they came into my living room trying to wow me with all these things. And Scott never once said anything like that. He was factual: 'Let me tell you why you and I make a great combination. Let me tell you why if you do your job, I can do mine.'

"Those other guys were just a bunch of baloney -- they shot themselves in the foot. I don't want to hear stories. I want to hear facts. I don't need you as a friend. I need you as my attorney. The advantage I have with Scott -- like I already told him, I can fire you now, because you've got your job done for the next ten years -- but seriously, not only do I think that I have the best negotiator in the big leagues, but I have a good human being, a family man who sets a good example for me. The contract's over -- now I'm paying for the advice he can give me on a daily, weekly, yearly basis as I go through my career."

This was pretty ominous:

"Jeter's been blessed with great talent around him," Alex says. "He's never had to lead. He can just go and play and have fun. And he hits second -- that's totally different than third and fourth in a lineup. You go into New York, you wanna stop Bernie and O'Neill. You never say, Don't let Derek beat you. He's never your concern."

Ok, I think I posted more than copyright laws allow, but again, I would highly recommend read the entire article.  Ill drop off with this - from Boras after his failed professional career:

"I wasn't going back to that farm," Boras says. "I hated it. I was in jail. Out on that damned tractor all day long. I didn't mind the cows so much. But I wasn't going back."

The Art of Negotiating From Weakness

I came across a pretty cool article about negotiating "in these troubled times".  The article, by John Holden, traces bits of advice from his conversations with mediators about their views on the tactics of successful negotiation.

It got me thinking that there are two completely different negotiating environments that require completely different approaches: negotiating from strength, and negotiating from weakness.  Even if you are skilled at both approaches, it is vital that you can assess who has the position of strength.

Scott Boras has proven to be off-the-charts at his ability to negotiate from strength. We have been chronicling his achievements here, but you really dont have to look much further than his premium players. He has also been very successful at turning his positions of weakness to positions of strength. Willie Bloomquist is one of a dozen replacement level players who can't get signed?  Nope - not after Boras is able to successfully market him as a must-have clubhouse leader that can mentor any prospect and help turn an entire team into a gritty group of hustling overachievers.  Alex Cora becomes a must have middle infielder capable of playing every day.  Scott Schoenweiss becomes a premium left handed reliever.  And on and on.

But this off-season, Boras is suddenly forced with the uncomfortable task of dealing from weakness, and many times over.  Joe Crede, Eric Gagne, Garret Anderson and Andruw Jones are all finding themselves practically begging for a contract.  And this is most definitely not Scott Boras' sweet spot.

While the article doesnt specify that it is about negotiating from weakness, it emphasizes tactics like empathy and compromise, which I believe are far more relevant when you dont hold the strength. 

Ok, with all that said, lets take a look back at some of the advice provided in the article and see if Boras will be able to adapt, and if he, in fact, should.

In these early stages an appropriate climate for negotiation must be established. “The type of posture you adopt at this stage will influence the climate during the talks,” explains DCU professor of organisational behaviour Patrick Flood. “If you are aggressive in the build-up stages the negotiations tend to be aggressive.”

Uh oh.  But I cant say that I am fully convinced that an aggressive posture is harmful to effectiveness.  It certainly does leave a bitter taste to outsiders, but I am not certain that the other side cant be bullied.

“All talks have timelines,” says John Dunne, former director of the Irish Business and Employers’ Confederation (Ibec). “If you don’t, it takes one of the key pressures off. But if there’s no timeline then there’s no sense of urgency, which makes it very difficult to persuade people to come to decisions.”

In the case of the current round of social partnership talks, everyone knows that the sooner a deal is made, the quicker the country’s economy will be on the road to recovery.

“If you’re on a ship and it’s about to sink, it tends to focus the mind quickly,” says Flood. The timing of addressing issues is critical and there are a number of schools of thought on the matter.

“If you start by putting the least difficult items on the table it helps to create a climate of concession early on,” says Flood. “Others, however, believe dealing with the toughest issue first is the best way forward. It’s really a question of judging the best tactics on the day.”

Great points.  Deadlines are important and it is extremely beneficial to create a sense of urgency. This will almost always work in Boras' favor: pitchers and catchers always meet in February, the season always starts in April, and every team's direct competitors may beat you to the player by acting quicker.  This year, however, those rules have changed.  Teams are starting to believe (correctly) that the longer they wait, the more money they save.  The deadline advantage has shifted from Boras to the teams.

“Essentially, you want everyone to go away from the table with something that they wanted so that all can claim victory,” says Flood. “So it is important to listen extremely carefully. Note-taking is essential as there are always giveaways from the other side, some of which are deliberate, some are hidden.”

Another good point.  I find in my professional experience that this can be the most important piece of the puzzle.  Sure, I fleeced you for $10 million, but you did get me to concede on the lunch tab. Employers do this all the time with TIPS (Titles In Place of Salary).  I havent really been able to find any evidence of Boras throwing a bone at a GM so they can feel better about the deal.  I am sure he does, but probably in ways that dont get published.

There are a few more quotes in the article, but it gets tedious and I have a meeting to get to...  I guess what I am trying to say is that the remainder of this off-season for Scott Boras is going to come down to his ability to deal from weakness.  It should be interesting.

The Mike Fischlin Division

Jerry Crasnick at espn looks at the Manny standoff and does an excellent job summing up the off season so far for Scott Boras:

Things peaked just before Christmas when Boras negotiated an eight-year, $180 million deal for first baseman Mark Teixeira with the Yankees. The process generated hard feelings in Boston and prompted The Boston Globe to write an editorial that equated dealing with Boras to investing in a Bernard Madoff "Ponzi scheme," but Teixeira walked away with the fourth-richest contract in MLB history.

Skeptics who suggested that Boras was blowing smoke on Derek Lowe got a wake-up call two weeks ago. Amid speculation that Lowe was destined to settle for scraps after CC Sabathia and A.J. Burnett ate up all the big starter money in New York, the Atlanta Braves swooped in and signed Lowe, 36, to a four-year, $60 million contract.

Throw in multiyear deals for arbitration-eligibles Prince Fielder and Ryan Madson, and Kyle Lohse's $41 million contract with St. Louis before the market turned ugly, and it makes for a considerable haul. Even some of Boras' lesser lights have fared well. There's a joke in front-office circles that Boras clients who rank down the pecking order are more likely to have their calls returned by one of the agent's lieutenants than the man in charge. One executive calls it being demoted to the "Mike Fischlin division." But you won't hear any complaints from Willie Bloomquist, who parlayed one extra-base hit in 192 plate appearances with Seattle into a two-year, $3 million contract with Kansas City.

Nevertheless, it's been a rough winter all around in baseball, and dozens of agents have taken solace in grousing about collusion and penurious ownership. Boras, for all his resources and strategic vision, isn't immune from market forces, a cratering economy, the perils of overreaching and a trend toward teams' going young at the expense of big outlays on veterans.

Fallout from the Lowe Zone

Scott Boras not only made himself look really good with the Lowe contract, he also made both Frank Wren and Omar Minaya look really bad.  For starters, the Braves simply overpaid.  Not only did they pay for an aging pitcher, they did so in a weak market, and they paid well above the next highest known bidder.

Real GM Baseball sums up how badly they overpaid:

At $15 million per season and 36, 37, 38 and 39, Lowe will be paid handsomely and surely more than he is worth, so credit to Boras for that. Lowe was ranked 50th amongst all players (22nd amongst starters) in FIC in 2008 and had a Reina Value of +25%, 'deserving' to make $12.5 million. 

Another thing to point out is that Lowe's era in 2008 was his lowest since 2002, and 50 points below his career average.  I certainly wouldnt expect him to stay at the $12.5m level he was in 2008 going forward. 

As for how this affects Omar Minaya and the Mets,Fanhouse notes that "Plan B" just got expensive for the Mets.

The dance that the Mets have tried to play with Scott Boras and his clients this winter just got a lot trickier now that Omar Minaya's top option is off to the division rival Braves. Losing out on Derek Lowe leaves Oliver Perez as the best option to fill a top rotation spot for the Mets. And it leaves Boras firmly in the drivers seat.

The Mets, who held firm on their three-year, $36 million offer to him, must have known that Lowe was headed to the Braves. They were losing their grip on him, so they tried to turn the market in their favor by offering Perez three years at $30 million, hoping he would bite quickly. 

But now that Perez stands front and center as the top free-agent starter available, the Mets aren't getting away that cheaply. Nor are they likely to get away with a three-year deal now that Lowe got his four years.

The one thing in the Mets' favor is that the Perez rumors have been completely quiet in terms of other teams. But for the Mets to assume that they're bidding against themselves for Perez would be asinine. They thought they were bidding against themselves for Lowe when they offered him $36 million, and it only gave other teams an opportunity to gather up some money feeling they had a chance to step in. (And, really, the Mets should have known that the Braves, who had a boatload of money earmarked for A.J. Burnett and Rafael Furcal, would spend it on somebody.)

They called Boras' bluff (or what they thought was a bluff), and let him look elsewhere instead of doing everything they could to get Lowe, a mistake for a team with holes in the starting rotation. They basically drove Lowe, a guy who had said that he preferred to pitch in the Northeast, down South and into the arms of the Braves. (Though to be real, if a Scott Boras client got top dollar from Siberia, that's where he'd pitch.)

And I'm sure that if the Mets try to pull the same "take it or leave it" stance on Perez, a team like the Brewers might consider getting some money together and making a more attractive offer to him. So now that they've refused to spend the money on Lowe, they're forced to either overspend on Perez, or look at options like Randy Wolfand Jon Garland, or perhaps hope that Ben Sheets' injuries are behind him, and keep their fingers crossed. If that's the case, that improved bullpen the Mets have might lose its impact this season. And if that's the case, the Mets will have spent responsibly but not necessarily wisely.

As we have been saying here, the Mets lost all bargaining leverage they may have had over Perez, but they can still get it back by showing interest in Sheets.