You are an MLBPA licensed agent. You finally have a guy listed on a 40-man roster. In fact, he has been playing so well lately that his club wants to lock him up in a long-term deal. Do you sign your player to the deal or hold off and hope that your client continues his success, allowing you to get him even more money through arbitration or once his current contract expires? Bob Nightengale of USA TODAY ponders the same question.
An agent like Scott Boras may think that the recent deal signed by Evan Longoria for six years and a total of $17.5 million is a bad deal. But then there are agents like Paul Cohen, who just secured his client, Troy Tulowitzki a six-year, $30 million contract with the Rockies. Longoria is also a client of Cohen’s. The Tampa Bay Rays may have gotten a steal with Longoria’s contract, but Tulowitzki has a chance to receive a lot more money over the next few years than he would have received without the long term contract. Take a look at his current numbers in this young season.
So the question is, should the agent in the hypothetical presented at the beginning of this post take the Scott Boras approach and not lock up a young player to a long-term deal or take the safe route like Cohen advises? Obviously, there is no answer. It all depends on your style, which will be the reason that a certain type of player selects you to be his agent. Most likely, Boras and Cohen have very different clients. They probably recruit different types of players and players understand what kind of agent they are getting before they sign their name on a representation agreement.
Cohen’s theory is, “Unless you want to live in the middle of Beverly Hills or Fifth Avenue, you’re set for life. If you just get 5% of your investment, you never have to work another day in your life.” While Cohen’s clients may give up the grandeur of Beverly Hills, Boras’ players may want nothing less than a mansion on Miami’s Star Island.
The best comment was made by agent Tom O’Connell: Anybody can play Monday morning quarterback. As an agent you should fully research the situation and then do what you feel is best for your client. No reason to doubt yourself after that decision is made. Hindsight is 20/20. O’Connell may look like a genius for getting his client, Manny Corpas, a four-year, $8 million contract last off-season, but did he really know that in that time period Corpas would lose his closing job and face a potential designation to a Minor League affiliate? This is an example of where the safe route paid off. But what if Corpas was leading the league in saves right now with a 0.53 ERA. Everyone would be jumping on O’Connell for signing the safe deal. The important thing is to be on the same page with your client so that no matter how things turn out, he was buying into your theory before any contract was signed. The rest, you should leave up to fate.
3 replies on “Take The Money And Run Or Walk Hard And Wait?”
One word: Bonuses.
Even the Longoria deal was a good deal for both parties. The max Longoria can make is around around $30 mill. but he is guaranteed $17.5mill. That may seem a little dumb on both parts. Longoria is a can’ tmiss prospect that would fetch $80 plus million if he lives up to his potential. Also, to invest a guaranteed $17.5mill in a player that only had 2 weeks of big league experience is a little risky. Lightening in a bottle or an injury could dethrone his career. They could look on their own roster at Eric Hinske or a Hank Blalock that had monster rookie years they tailed off quickly. However, I think the way to look at the situation is like this. At worst, Longoria is a gold-glove calibar thrid baseman that will hit for decent power (20 hr. range), so that alone is worth $17 mill over 6 years, thats not even 3 mill a year from the Rays perspective.
From Longoria’s perspective, he will still be 27-28 years when this contract expires. That is the prime of his career. If he outperforms his contract and lives up to his vast potential, he will command $130mill plus when you factor in inflation, the market in 2014, and numerous other factors. He will be in the prime of his careeer and be able to demand anything he wants. For now he gets security and the chance to recieve $30 mill over the next 6 years regardless.
I feel as though you should make these decisions based on a case-by-case basis. However, locking up a big-time prospect early on by small market teams is the only way to compete. The investment is small relative to the free agency market and potential for a high-reward.
[…] is not the first time that I am giving Paul Cohen props on this blog for his negotiating skills. On May 8, 2008 I praised Cohen for securing his client, Troy Tulowitzki, a six-year, $30 million contract with the Rockies. […]