Have you heard anything about Casey Close leaving CAA to start up his own company with David Falk?

Apparently, the rumor had been floating around for a month or so, but after doing some research, I had no way to confirm it.  Thus, I never ran the story.  Now, I come to find out that Liz Mullen of SportsBusiness Journal reported yesterday that Casey Close may, in fact, leave juggernaut Creative Artists Agency (CAA), and may be considering either starting up his own practice, or joining David Falk at FAME.

Casey Close used to be the captain of the CAA Baseball ship, but as of roughly nine months ago, five different CAA baseball agents began splitting the responsibilities of division director.  Those agents are: Nez Balelo, Brodie Van Wagenen, Jeff Berry, Joe Urbon and Greg Landry.  I find that interesting, since Casey Close is still with CAA, has not officially announced that he will be leaving, yet CAA changed the structure of the baseball division.

Here are some of the names you have heard of that are currently represented by Casey Close (some are split between Close and another agent): Ben Sheets, Jason Jennings, Aaron Hill, Derrick Lee, Josh Vitters, Connor Jackson, Buster Posey, Jeremy Sowers, Jamey Wright, Ryan Zimmerman, Justin Maxwell, John Lannan, Jeremy Guthrie, Chris Lambert, John Mayberry Jr., Jeff Clement, Jeff Niemann, Gil Meche, Alex Gordon, Josh Fields, Michael Cuddyer, and some guys named Ryan Howard and Derek Jeter.

Talk about a client list.  It will be interesting to see which players stay with CAA and which ones leave with Casey Close, and if any battle ensues between the entities prior to or after Close leaves the agency (if he leaves at the culmination of his current contract).  Time to pull out the employment contracts!

Ready for a new feature?  I was listening to the radio yesterday and on comes Jay-Z’s, On To The Next One.  For some reason I start to think how I can incorporate the song’s title into SportsAgentBlog.com.  And then it strikes me – Whenever a player drops his agent for a new one, we will title our post “On To The Next One: [Athlete's Name Here].”  The athlete with the honor of being the first person to participate in our new column is Dayan Viciedo.

Dayan Viciedo is on the 40-man roster in the Chicago White Sox organization.  He turned 21-years-old yesterday, and decided to get himself a gift in the form of a new agent.  He recently dropped Jaime Torres for Scott Boras.  Dayan was born in Cuba, and some people refer to him as the position-player version of Aroldis Chapman (whatever that is supposed to mean).  Torres negotiated the 4-year contract that Dayan is currently playing under with the White Sox.  That 4-year deal is for a whopping total of $10 million.  It’s nice to get paid that amount of money based on potential, alone.  He played all of last year in Double A.  As Dayan’s new agent, Boras is counting down the days until he is able to negotiate Dayan’s next deal…if Dayan makes it to the big leagues sometime soon.

Here is a little bit about Johnny Lujan’s past in MLB-affiliated baseball.  Lujan was selected by the Texas Rangers in the 15th round of the 2004 First-Year Player Draft.  In 2007, he move to the Chicago White Sox organization after being traded for catcher Chris Stewart.  He spent the past three years with the White Sox, but the Sox never protected Lujan by putting him on their 40-man roster.  Lujan was eligible in this past year’s Rule 5 Draft, and the New York Mets snagged him in the Triple A phase.  Johnny will be reporting to Major League Spring Training this weekend, a little bit late, due to the birth of his first child as mentioned above.  Without a doubt, though, he is ready to play, and he now has an extra incentive to make it up to the big leagues.

If Johnny can limit his walks and maintain his control on the mound, he will definitely be called up by the end of the year.  From 2008 to 2009, Lujan was able to increase his K/9, decrease his BB/9, and decrease his WHIP to a respectable 1.35.  I was shocked when I read that in 58.2 innings pitched, Lujan only gave up 1 homerun.  We are excited to represent our second player in the Mets organization, and one who is close to the big stage.

This will be the first player that Dynasty represents in conjunction with an outside entity.  Steve Weinberg, who has represented Johnny Lujan in the past, will continue to serve as Johnny Lujan’s primary agent.

In 10 minutes, the St. Louis Cardinals will take the field for their first game of Spring Training vs. the New York Mets.  Pete Parise is not on the traveling roster for today’s game, so he will not be reporting to St. Lucie, but neither are a majority of the Cardinals pitchers.  Parise threw some batting practice yesterday and will use today as a day of rest.  Sometime soon, we will have the opportunity to see Parise face Major League batters.  Based on his Winter experience, there are a lot of people who cannot wait to see Parise’s stuff on the mound against the opposition this Spring.

Earlier today, Dustin Mattison of Scout.com looked at some of the best players in the Cardinals organization that played in the Winter leagues.  Right at the top of his list is Parise.

The player that helped himself the most had to be Pete Parise. Not only was he named to the 2010 Caribbean Series All-Tournament team but reportedly he added velocity to his fastball. His effort has gotten the attention of the team’s front office and he is getting a look this spring.

After a solid Puerto Rican League season, the right-hander saved his best for the Caribbean Series. In six shutout innings, he struck seven while not allowing a walk.

The most interesting part of the settlement is its timing.  As I posed earlier this week, Hendricks Sports Management had found itself in a big mess between dealing with the pending suit brought by Mejia (now settled), coupled with Rodney Fernandez claiming that Hendricks Sports Management was involved in the explanation of why there is money missing from Kendry Morales’ bank account.

To read more about Edwin Mejia’s and Athletes Premier International’s claims against Hendricks Sports Management (prior to settlement), click here.

Super-baseball agent Scott Boras has a new client, Cleveland Indians rising start Shin-Soo Choo.  The right fielder, who hit .300 and 20 homeruns last year is part of the Indians grand scheme for the future…maybe.  The recent change in representation to Boras from Octagon Worldwide’s Al Nero, may throw a curveball at the Indians chances of locking Choo up at the price they want.  Choo is up for arbitration after the 2010 season, and a free agent in 2013.

There is, however, an obstacle standing in Boras’ way to collecting a big payday from Choo.  As a native of South Korea, he must serve two years in the South Korean Army before reaching 30 (two years from this July).  There are two ways he can get out of this: 1) If his team wins the gold in this November’s Asian Games, or 2) he gains his U.S. citizenship, and its been rumored that he’s studying for the test.  Maybe Boras has some pull in the INS?  Boras must see that special something in Choo, because he’s willing to take the risk of what two years away from professional baseball might do to Choo’s game.

Many people speculated that Rodney Fernandez, who was working for Hendricks Sports Management at the time, had a big role in causing Chapman to make the move.  Also, as I mentioned in a post on February 15, when Chapman made the switch, many inferred that Hendricks client, Kendry Morales, played a big role in the change of agents.  But last month, Morales also moved agencies, ditching Hendricks Sports for Scott Boras Corp. Think players only change agents in football?  Think again.

What is interesting is that the man who recruited Kendry Morales to Hendricks Sports and is claimed to be the person to woo Chapman to the same agency, is now being investigated by the MLBPA and the Coral Springs, Florida Police Department based on $300,000 magically disappearing from Morales’ bank account.  The article linked above also notes that Fernandez is a former employee of Hendricks Sports and that Fernandez was fired a couple of days after Aroldis Chapman signed that lucrative contract with the Cincinnati Reds.  The termination letter consisted of no more than three lines of ink.

Is the first word that comes to your mind after reading thus far, “shady”?

“From June 2008 until December 2009 [approximately 18 months], Rodney had been requesting PMR [Pro Management Resources] to wire money via Western Union to certain people without Kendry’s knowledge,” the report said.

Reisinger told investigators that Morales discovered the unauthorized transactions in mid-December.

So if Kendry Morales knew about this back in December, was the recent firing of Hendricks Sports unrelated?  If it was based on the unauthorized transactions, what took him so long to make the move?

In an interview Monday with ESPN The Magazine, Fernandez said that money taken out of Morales’ bank account was used for expenses related to Hendricks Sports Management, all of which was done with the approval of firm co-founders Randy and Alan Hendricks. Fernandez also said that the Hendrickses were supposed to reimburse Morales for the money but never did.

“If I’m supposedly the person who took all that money, then how come now I don’t have anything?” he said. “I don’t deserve what is happening.”

Fernandez said he was told by members of the Hendricks agency to keep quiet about rumors of financial indiscretions in December and January so it would not adversely affect Chapman’s free-agent contract negotiations with the Reds.

It looks like Fernandez is going to try to take down Hendricks Sports with him, and whether Hendricks Sports is guilty of anything or not, this is not something that the agency needs while it deals with a pending lawsuit brought by Edwin Mejia and Athletes Premier International.

Is Hendricks Sports concerned that Chapman may be the next client to leave?  Whether Chapman stays a client or not, Hendricks Sports will make nice commissions on Chapman’s first contract, since they are the agency of record when Chapman agreed to the deal’s terms.

At the time salary arbitration was first implemented in 1973, Charlie Finley, a former owner of the Oakland A’s, said: “We’ll be the nation’s biggest assholes if we do this.” Citing Charlie Finley’s disapproval and the massive pay increases of first-year salary arbitration eligible players, many sports writers, such as Maury Brown, the founder and president of the Business of Sports Network, have concluded that “salary arbitration almost exclusively benefits the players.” See Breaking Down How Salary Arbitration Functions in MLB.

In his recent blog entry, Debunking Salary Arbitration Myths – Part 1, Jay Reisinger, a partner at Farrell, Reisinger & Stallings and manager of the firm’s sports law practice, discredited the notion that MLB’s salary arbitration system favors players and hurts owners. Mr. Reisinger revealed that, by focusing on the huge raises of first-year salary arbitration eligible players, that position is misleading. According to Mr. Reisinger, an accurate understanding of the salary arbitration system also acknowledges the equally significant benefits conferred upon clubs.

For instance, clubs exercise a certain amount of control over arbitration eligible players. Clubs can tender or non-tender the player, at their discretion, depending on the player’s expected salary in the arbitration system. If the player’s expected salary in arbitration is higher than his value to the club, the club can non-tender the player and make him a free-agent. If, on the other hand, the player’s expected salary in arbitration is roughly equal or lower than his value to the club, the club can tender the player a contract. If the player is unsatisfied with the offer, his only recourse is to submit his salary to final and binding arbitration. Basically, from a club’s perspective, arbitration is a low risk affair because the club has already determined that the player’s expected salary in arbitration is roughly equal or lower than his value to the club.

Another major benefit discussed by Mr. Reisinger is that clubs are protected. The key criterion in salary arbitration proceedings is the comparative baseball salaries of players “with Major League service not exceeding one annual service group” above that of the player going to arbitration. In essence, the arbitration panel tries to determine where the particular player fits within a very narrow market of players which does not include players who have accrued significant raises through free agency. Clubs, therefore, are shielded from free market forces and their inflationary effect.

Rather than a system that benefits players and hurts owners, Mr. Reisinger sees the arbitration system as a necessary compromise between two parties pursuing divergent interests through collective bargaining. Generally clubs want competitive balance and bargain for a protectionist regime that includes more restrictions on player mobility and player compensation. Players want to increase their earning capacity and bargain for a laissez faire approach. Ultimately, how good or bad the salary arbitration system is depends on your point of view, and on how well you deem the system to be protecting your specific interests as a club owner or a player. As a baseball fan, one can only hope the league and the players union avoid a strike or lockout by reaching an agreement once the current CBA expires.

In order to truly understand the salary arbitration system, it helps to look at its role as part of MLB’s larger monetary structure. Ed Edmonds, the Associate Dean for Library and Information Technology at Notre Dame Law School, explains the impact of salary arbitration on a MLB player’s salary life cycle and, consequently, on a team’s roster in his Marquette Sports Law Review article A Most Interesting Part of Baseball’s Monetary Structure – Salary Arbitration in its Thirty-Fifth Year (Fall 2009 Volume).

As Mr. Edmonds points out, the current CBA divides all players into three groups: 1) players controlled under the reserve clause, 2) players eligible for salary arbitration prior to free agency, and 3) free agents. What sets each group apart is the amount of leverage each group has with respect to their employer or potential employers. Players controlled under the reserve clause have no leverage. They are bound to one team and play for around the league minimum. That player’s salary bears no resemblance to the player’s market value. Mr. Edmonds offers Tim Lincecum as an example. Lincecum received $405,000 in 2008, his first year in the majors (the league minimum was $390,000). After putting up dazzling numbers (18-5 record with a 2.62 ERA and 265 strikeouts in 227 innings pitched), Lincecum only managed to increase his salary to $650,000 in 2009.

Free agents are on the opposite side of the spectrum. Being able to consider multiple offers gives free agents substantial leverage, which they can use to drive up their price tag. To illustrate the effect of free agency status on a player’s salary, Mr. Reisinger compares C.C. Sabathia to Tim Lincecum in his blog entry. Even though Lincecum is statistically similar to Sabathia, Lincecum recently signed a two-year, $23 million contract that will cover his first two arbitration eligible years, meanwhile Sabathia will make $23 million in the 2010 season alone.

Salary arbitration eligible players “occupy the middle group between players with no leverage and those . . . with substantial leverage.” The arbitration process offers them an opportunity to earn a significant raise yet their compensation remains below market value. One example Mr. Edmonds uses is Prince Fielder. In 2007, his second year of Major League service, Fielder was 3rd in the MVP race. Fielder earned salary of $670,000 in 2008. After another outstanding campaign in 2008 and armed with the leverage of salary arbitration, Fielder signed an $18 million, two-year contract prior to the 2009 season.

It’s true, the salary arbitration process usually results in substantial raises for first year eligible players (e.g., Fielder received $6.5 million in 2009 – a 870% raise). However, the substantial raise a player experiences once he is eligible for salary arbitration is a function of the suppressed salaries he received in his first 3 seasons without leverage. In 1973, Charlie Finley and other owners enjoyed considerable restraints on player mobility and player compensation. Then the time to compromise arrived. The current arbitration system is a result of that compromise.

Armando Velasco is a second year law student at Tulane Law School, where he is pursuing a certificate of specialization in sports law. He is the Chair of the Tulane Sports Law Society’s National Baseball Arbitration Competition and a Junior Member of the Sports Lawyers Journal, volume 17. This upcoming summer he will be a summer associate at Goldman, Antonetti & Córdova, PSC.

With his fighting mentality, it wouldn’t be shocking to see Parise in St. Louis at some point this year. He will continue to develop and could be a candidate for the closer’s role when Ryan Franklin is gone. Whenever Parise makes the majors, few will be as proud as Heitner.

From a no-name company to representing Major League talent, it has been quite a journey thus far for Darren Heitner. And this is only the beginning. He will likely be in this industry for a very long time.

“I love every minute of my work,” Heitner said.

Arbitration season is now officially over.  Overall, the teams were victorious in 5 of the 8 arbitration hearings.  The teams won in the following hearings: Ryan Theriot (Cubs), Wandy Rodriguez (Astros), B.J. Upton (Rays), Brian Bruney (Nationals), and Sean Burnett (Nationals).  You read that correct; the Nationals had two hearings and won both of them (saving the team a total of $500,000 before attorney costs).  But in the end, who really wins from the hearings?  I think the following statement (from MLB.com) is very important to read.

[Sean] Burnett said Thursday night he was not upset about the arbitration process but wished he had come to an agreement with the team. He declined to say what the Nationals said about him during the hearing.

“It was interesting,” Burnett said by phone. “I learned a lesson. I don’t want to deal with it again.”

The three players who won their hearings were Cody Ross (Marlins), Corey Hart (Brewers), and Jeff Mathis (Angels).  Corey Hart’s win surprised some, but after he won, most people predicted that Cody Ross would have an easier job proving his case by just comparing his numbers with Hart’s.  Mathis is an interesting win.  His win proves that the arbitrators do not look only at a player’s main offensive categories.  For them to choose his $1.3 million offer, they had to look more at his defense and clutch hitting.

So let’s take a quick look back at the whole process.  128 players filed for arbitration, 44 players exchanged figures with their organizations, and only 8 went to hearing.  History suggested that the teams would have a narrow margin of victory vs. the players.  This turned out to be true.

The biggest win for the players was Corey Hart ($4.8 million vs. team’s offer of $4.15 million).  The biggest win for the teams was Wandy Rodriguez ($5 million vs. player’s offer of $7 million).

Last year, only 3 players went to a hearing.  In 2008, 8 players went to hearing (the same as this year).  In 2008, the clubs had a slightly better record (6-2).