The following is the Abstract from the article:

This article argues that the Major League Baseball Players Association (MLBPA) Regulations Governing Player Agents (as Amended Effective October 1, 2010) are well intentioned, but unenforceable and not in the best interests of MLB players.  Part I of this article discusses the evolution of MLBPA Regulations Governing Player Agents.  Part II discusses the justification for establishing new Regulations in 2010.  Part III examines the new provisions written into the 2010 Regulations.  Part IV explains why many new provisions will be largely unenforceable by the MLBPA.  Part V discusses whether the 2010 Regulations are in the best interests of MLB players.  Part VI proposes a new set of provisions for the MLBPA to consider for future amended Regulations, how they should be enforced, and why they are more aligned with MLB players’ interests.

And this is the final paragraph:

We have no doubt in our minds that the MLBPA had good intentions when it drafted the 2010 Regulations, and we certainly believe that the MLBPA considered the best interest of the Players it has a duty of protecting. However, the Regulations themselves must strike a balance between expanding, to encompass all actors “representing” and “recruiting” Players, and ensuring that it has enough manpower to enforce the Regulations it promulgates. A piecemeal solution that does not cover all bases is no solution at all, and is not in the best interest of baseball.

A Discussion Of The October 2010 MLBPA Regulations Governing Player Agents from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Five years have passed, and according to multiple reports, it appears that Gus Dominguez is back to representing baseball players.  His name has been attached to Garcia Speck, a lefthanded pitcher who, not surprisingly, defected from Cuba, and is looked upon as a very intriguing prospect.  Speck was formerly represented by Carlos Perez and Lazaro Collazo of Miami Sports Consulting.  BaseballAmerica reports that Dominguez also represents two players who were selected in the 2011 MLB Draft – Yordanys Perez (taken in the 28th round by the Cincinnati Reds) and Alfredo Unzue (taken in the 35th round by the Oakland Athletics).

According to the BaseballAmerica article, Dominguez said he is working as a “consultant” for a new Los Angeles agency, but can it really be distinguished from representation?  In fact, BaseballAmerica even states that Dominguez “represents” Perez and Unzue.  If/when Dominguez applies for MLBPA certification as a Player Agent, it will be interesting to see the MLBPA’s response.  According to Section 4(M) of the MLBPA Regulations Governing Player Agents (As Amended Effective October 1, 2010), the MLBPA may deny certification as a Player Agent to any applicant, or may impose limits or conditions on the certification granted to any applicant on certain grounds.  Of note is Section 4(M)(9).

One does not need to be a licensed Player Agent to advise players for the MLB Draft; however, if Dominguez hopes to represent players when they are added to their teams’ 40-man rosters, he will have to be cleared by the MLBPA.  As of now, there is no indication to believe the MLBPA will rule a certain way with respect to this matter.

Gus Dominguez Out Of Jail, Working With MLB Players from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Last week, San Francisco Giants catcher Buster Posey broke a bone in his lower left leg when he was hit by Florida Marlins’ Scott Cousins at home plate.  Posey was blocking the plate in the 12th inning as Cousins reached home, hoping to score the go-ahead run and earn a victory for his team.  In the process, Posey suffered the aforementioned injury, which will likely keep him out of the remainder of the 2011 Major League Baseball season.

Posey’s agent, Jeff Berry of Creative Artists Agency (CAA), was quick to attack MLB rules that allow for such contact.  Following Posey’s injury, Berry stated,

“You leave players way too vulnerable.  I can tell you Major League Baseball is less than it was before [Posey's injury]. It’s stupid.  I don’t know if this ends up leading to a rule change, but it should. The guy [at the plate] is too exposed.

If you go helmet to helmet in the NFL, it’s a $100,000 fine, but in baseball, you have a situation in which runners are [slamming into] fielders.  It’s brutal.  It’s borderline shocking.  It just stinks for baseball.  I’m going to call Major League Baseball and put this on the radar.  Because it’s just wrong.”

We should expect nothing less from someone who advocates on behalf of his clients.  Furthermore, Berry is a former catcher himself, and knows well about the risk that catchers take by placing their body in front of a player coming full speed toward home plate.  Berry caught at the University of North Carolina Charlotte before playing a year in the Boston Red Sox minor league system.  He later earned a law degree at Oklahoma City University, which additionally helps with his ability to negotiate effectively.  With Casey Close’s departure from CAA, Berry became one of the co-head’s of CAA’s large baseball division.

Jeff Berry Wants An MLB Rule Change After Buster Posey Hit from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Article VI of the 2007-2011 MLB Collective Bargaining Agreement (referred to as the “Basic Agreement”) deals with player salaries.  Specifically, Section B of the Article contemplates Minimum Salary.  The 2011 season is the last one that will be governed under the current Basic Agreement.  Section B calls for a minimum salary “at the 2010 rate per season plus a cost of living adjustment, rounded to the nearest $500, provided that the cost of living adjustment shall not reduce the minimum salary below $400,000.”  Later in Section B, the Basic Agreement explains how the new number is computed.

Cost of living adjustments for the Major League minimum salary described above in paragraph (1) shall be computed as follows: To determine the 2011 salary rate, $400,000 shall be multiplied by a fraction, the numerator of which is the Consumer Price Index for Urban Wage Earners and Clerical Workers published by the Bureau of Labor Statistics (CPIW) for November 2010 and the denominator of which is the CPIW for November 2008.

Based on my understanding of the CPIW, the numerator should be 214.750 and the denominator 207.296.  That fraction, multiplied by $400,000, comes out to $414,383.30, which rounded to the nearest $500, actually equals $414,500.  Was it just lazy reporting, or did the MLB actually make an error in its rounding, because every report I have read says that next year’s minimum will be $414,000.

Minor League minimum salary for players on their clubs’ 40-man rosters is set at $67,300 (up from 2010′s $65,000), but only players who have at least one year of being on the 40-man under their belt or at least one day of MLB service will be bound by the salary floor.  For Minor League players on the 40-man roster who do not fit into either category (i.e. players just named to their teams’ 40-man rosters and without any MLB service), their minimum salary will be $33,700 (up from 2010′s $32,500).

Discussion Of 2011 Major League And Minor League Minimum Salaries from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Scott Boras

But what we really care about here is that these disbursements might contravene MLB Players Association Rules and Regulations.  If the loans were registered with the union, then the MLBPA would move on.  But if Boras Corp. did not first consult with the union regarding these loans, there could be consequences for the company’s prior actions.

As always, my colleague Gabe Feldman, head of the sports law department at Tulane Law School, has some insightful comments on the matter.

“You worry that these agents are gaining ownership over these prospects.  And the prospects then feel so indebted to the agents that the prospects feel that they cannot leave the agent for another.”

And I agree.  But instead of talking too much about the exploitation of innocent Dominican players, let’s stay focused on the MLBPA Rules and Regulations, which Boras and his team of lawyers should be combing over a few times this holiday weekend.

The MLBPA Regulations Governing Player Agents were amended as of October 1, 2010.  Unfortunately, I do not have a good uploaded copy of the old Regulations, which would have been the regulations that Boras Corp. was operating under when it provided any money to Dominican prospects.  The new Regs may be found at the end of this post.  Pay specific attention to Pages 20 and 21.

These rules state that no money or other thing of value may be provided to a player, or any person related to the player, for the purpose of inducing or encouraging the player to use or continue to use any person’s or firm’s services as a Player Agent, Representative, or Draft Advisor.  Read everything that follows that statement and quickly see that this issue could become one of interpretation.  My money is on Boras coming out of this unscathed.

Looking Into Potential Improper Inducements By Boras Corp. from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Please find a copy of the amendment summary that was approved by the Board, below.  The Regulations still must be approved by the MLBPA’s legal staff before they become effective on the proposed date of October 1, 2010.  A complete copy will be distributed shortly, but for now, the summary sufficiently describes some of the interesting changes to the rules.

Player Agents who were certified under the pre-amendment Regulations, will have 90 days after the effective date (that is, until December 30, 2010) to file new Applications for Certification in accordance with the amended Regulations.

Here are some of the highlights of the summary:

• In addition to people who negotiate MLB contract terms on behalf of their clients, recruiters and people who provide “Client Maintenance Services” must apply for limited MLBPA certification.
• Agents who communicate with players that they do not represent must disclose those communications to the MLBPA.  If the communication is planned ahead of time, the agent must give the MLBPA 48 hours advance notice.  If the player initiates the communication or it occurs spontaneously, the agent must disclose the communication to the MLBPA 24 hours after it occurs.
• Agents cannot provide or promise anything of value to players not already represented by them and agents may not provide over $1,500 of free baseball equipment per year to a client.
• Upcoming off-season free agency and arbitration eligible players must consult with the MLBPA before making a switch of representation in the off-season.
• An agency may attempt to restrict its employees from departing and immediately competing with the agency in signed employment contracts, however, such restrictive covenants must be deemed “reasonable.”
• All disputes between agents about player representation are to be submitted to the MLBPA’s arbitration procedure.

MLBPA New Agent Regulations

Amendments To The MLBPA Regulations Governing Player Agents from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

I want to start this article by stressing that the point of this article has nothing to do with getting any player in trouble.  The reason that I wrote this post is to once again try to point out how ludicrous the NCAA’s no-agent rule continues to be.  It was struck down by a court of law, only to be re-instated after a player (Andrew Oliver) settled with the NCAA so that he could move on to focus on becoming a Major League baseball player (which he did very fast!).  Even since the rule’s was re-established (the NCAA would like you to believe that it was never actually off the books), it has proved to be nearly impossible to enforce, yet the NCAA continues to try to find ways to use it.  I know that because advisors tell me about some of the questions the NCAA has asked the players they are advising over the past year.

Yesterday, I talked about The Continuance Of Advisor/Club Communication.  I discussed James Paxton’s punishment for not complying with NCAA demands after the NCAA had reason to believe that his advisor had direct communication with the Blue Jays, the likelihood that the same could have happened to Jameson Taillon, had he not signed with the Pirates, based on what was said in the Pittsburgh Post-Gazette, and concluded with the statement that advisors are going to continue to talk directly to teams, no-agent rule or not.

While Taillon is immune from the NCAA coming down on him for what was written in the Pittsburgh Post-Gazette, might Karsten Whitson not be as lucky after he failed to sign with the San Diego Padres?  The tall right-hander from Chipley, Florida could not come to terms with the Padres, and will instead play at least three years at the University of Florida.  People are already clamoring about how college hitters will have no chance against his slider.  But a couple of articles mention that Whitson might not have been doing his own negotiating, having his advisor, Troy Caradonna of SFX Baseball do the talking.

From Corey Brock of MLB.com,

“San Diego owner Jeff Moorad, a former agent himself, said he was disappointed that the first number presented to the team by Caradonna was just 15 minutes before the deadline and was $2.7 million, and that he felt sorry for Whitson in the end.”

And from Nick Canepa of the San Diego Union-Tribune,

Moorad: “… We feel were misled by the agent, and it’s something we won’t forget. Lesson learned.”

If Caradonna was not doing the negotiating, Moorad should have known better than to say those words to a reporter, since it was not all that long ago that Moorad was in Caradonna’s shoes.  The NCAA follow up on this with some questions for Whitson.  I am hoping that Moorad’s statements do not end up hurting Whitson, though, and not only because he is committed to play at my alma mater.

Will Advisor Communication Hurt Karsten Whitson? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The NCAA became interested in the matter.  A University of Kentucky employee basically told Paxton that he would have to sit out from playing and would lose his financial aid if he refused to meet with NCAA investigators for a violation that the NCAA would not disclose.  Paxton held his ground, and ended up playing a year of Independent Baseball prior to being selected by the Seattle Mariners in the 2010 First-Year Player Draft.  Paxton still has not signed with the Mariners, but he is unaffected by the August 16 deadline, and has until a week prior to next year’s draft to come to an agreement with the club.

The main reason that I am discussing this matter is because of something I recently read in the Pittsburgh Post-Gazette.

Pirates general manager Neal Huntington and scouting director Greg Smith were among the Pirates representatives expected to sit down with agents Randy and Alan Hendricks in Houston to work toward a deal to sign second-overall selection Jameson Taillon. The Hendricks brothers are based in Houston, and Taillon comes from The Woodlands about 25 miles north.

Internet reports intimated that a deal was reached already, but the parties involved wouldn’t attempt to meet in private if such reports were based in fact.

Does it not sound as if the Post-Gazette is implying that the Hendricks brothers negotiated directly with the Pirates?  How is this any less conclusive than what The Globe and Mail wrote about Boras and Beeston?  The fact of the matter is that in this case, it has no consequence.  Tallion signed for a $6.5 million bonus, so it does not matter whether the Hendricks brothers were considered advisors or agents – Tallion is skipping school for the time being and will never attempt to play college baseball.

But what if the Pirates had caught wind of the article?  Might the club have used it against Tallion as leverage in their negotiation?  That is probably a stretch, and way too competitive of a negotiation style to use against someone you want to be the future face of your franchise.

Another point to note is that just because a couple papers have reported about two distinct events does not mean that advisors talking to club personnel is a rarity.  It is just rarely reported.  My guess is that a majority, if not all advisors of players selected in the first round of the 2010 First-Year Player Draft, had some sort of direct communication with the teams that selected their clients.  The NCAA might want to think otherwise and continue to threaten its antiquated “no-agent” rule, but in the end, the players need competent assistance, and there are very few advisors who would deny that to them.

The Continuance Of Advisor/Club Communication from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Prior to August 16, this year’s deadline day, only 15 players selected in the first round had signed a contract.  That left a whopping 17 players still negotiating deals at some point yesterday.  In 2007, the first year that the signing deadline was moved up to August 15, changing the previous deadline of a week prior to the following draft, only 7 players had not signed when deadline day began.  It is safe to assume that players and their savvy advisors have adapted to the nature of the beast and learned how to most effectively find the best agreement possible.

If you are interested in seeing which picks have signed and which ones have not, round by round, MLB.com has done a fantastic job organizing it and providing the date of when the player signed.  Unfortunately, the site does not include signing bonuses, but that information, at least for the top 10 rounds, is available elsewhere.

An interesting point that has been raised by various agents and sports law scholars is based on the strong possibility that baseball’s new collective bargaining agreement, likely to begin after the 2011 championship season, will include a mandatory (instead of the current “recommended”) slotting system, similar to what is used in the NBA and is currently being considered by the NFL.  That point is that some of the big spending teams (i.e. Red Sox, Yankees) will be more willing to dish out cash to its top picks now and take chances later in the draft on players passed up by the smaller market/more stingy teams, while they still have the opportunity to pay the best players the money they deserve (or claim they deserve).  This can be a nice short term gain for the players’ advisors, but in the long run, advisors representing top picks under a slotting system have a lot to lose if you take into consideration their large compensation under the status quo.

Sports Law Blog’s Michael McCann gives some good insight as to how an advisor’s role may change in a world where baseball is bound by a slotting system:

In that setting, the goal of the agent would clearly be to have his or her player drafted as high as possible. So agents could still play a role — they could tell teams that unless a represented player who has remaining college eligibility is drafted in the first round (or by whatever threshold), teams would be better off drafting other players since the represented player will attend college or in some cases continue to play college baseball. The slotted money has to be good enough to turn pro.

And perhaps there will be a lot of advisors, who oftentimes are also attorneys, charging a flat fee or by the hour for their services instead of invoicing a player for a particular commission of the signing bonus.  This would seem like almost a must for a college senior looking to have assistance in a draft bound by a slotting system.

The 2010 MLB Draft And Possible Future Changes from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The MLB players union wants to start penalizing certified agents that violate their non-compete and non-solicitation agreements with their former employers.  Everyone remembers the scene from Jerry Maguire where Tom Cruise and Jay Mohr hit the phones to entice Maguire’s clients to stay at Maguire’s former employer, or join Maguire at his new start up agency.  The MLBPA may implement new measures with the intention that such a scenario would no longer be in a issue in baseball player representation.

The proposed rule change would allow agent employment contracts to contain a one-year no-solicitation clause, and a one-year no-competition clause.  Remedies proposed for agents who breach these contract clauses include a 50 percent fee split between the agent and his former employer, and an option for the players association to impose disciplinary action on the agent.

Central oversight by the players association will help create a more even level playing field for agents.  Currently agencies only have state contract law as recourse against employees leaving with clients, and some states, like California, do not recognize non-compete and non-solicitation clauses in contracts.

Want to Go Out on Your Own?…Then Start From Scratch from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules