In less than a month, Minor League Baseball will host its annual Winter Meetings.  This year, the four day event will be held at the Hilton Anatole in Dallas, Texas.  As always, not all activities are open to the general public.  The PBEO Job Fair and the Baseball Trade Show tend to be the main attractions for the majority of attendees.  This is the 18th year that the Job Fair is occurring, and it appears to be an excellent venue for those looking to break into the baseball industry.  Roughly 300 companies will be in attendance at the Baseball Trade Show, including manufacturers and distributors of apparel, caps, gift items, on-field suppliers, and player equipment.

December 5, 2011:

• Bob Freitas Business Seminar (8:15 a.m. – 4:15 p.m.)
• PBEO Job Fair (9:00 a.m. – 5:00 p.m.)
• Opening Session (11:00 a.m. – 12:00 p.m.)
• Awards Luncheon (12:30 p.m. – 2:30 p.m.)
• Last time for MLB clubs to outright a player prior to the Rule 5 Draft (5:00 p.m.)
• Opening Night at the Baseball Trade Show (5:00 p.m. – 8:00 p.m.)

December 7, 2011:

• PBEO Job Fair (9:00 a.m. – 5:00 p.m.)
• Baseball Trade Show (10:00 a.m. – 6:00 p.m.)
• Presidential Election (4:00 p.m. – 5 p.m.)
• Gala (7:00 p.m. – 11:00 p.m.)
• Last day for a player who declared for free agency to accept an arbitration offer from his former club (midnight deadline)

December 8, 2011:

• Closing Session (3:00 p.m. – 4 p.m.)
• Banquet (6:00 p.m. – 8:30 p.m.)
• Major League Rule 5 Draft.

110th Annual Baseball Winter Meetings In Dallas, Texas from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

First Round

1. Gerrit Cole (Pittsburgh Pirates) – Boras Corp. – I assume this negotiation was not as brutal as Pedro Alvarez’s?
2. Danny Hultzen (Seattle Mariners) – Creative Artists Agency
   
3. Trevor Bauer (Arizona Diamondbacks) – Wasserman Media Group
   
4. Dylan Bundy (Baltimore Orioles) – Jay Franklin (BBI Sports Group) – I hope he will look as good in Oriole Orange as he would have looked in Royal Blue.
   
5. Bubba Starling (Kansas City Royals) – Boras Corp. – He had the opportunity to be a quarterback at Nebraska.
   
6. Anthony Rendon (Washington Nationals – Boras Corp. – The Nationals love them some Boras.
7. Archie Bradley (Arizona Diamondbacks) - Jay Franklin (BBI Sports Group) - Lots of happiness at BBI Sports Group by this point of the draft.
8. Francisco Lindor (Cleveland Indians) – Sportsmeter
9. Javier Baez (Chicago Cubs) – Jet Sports Management
10. Cory Spangenberg (San Diego Padres) - Jet Sports Management
11. George Springer (Houston Astros) – Greg Genske (Legacy Sports Group)
12. Taylor Jungmann (Milwaukee Brewers) – Hendricks Sports
13. Brandon Nimmo (New York Mets) – SFX
14. Jose Fernandez (Florida Marlins) – Ken Turkel and John Agliano (Team One Management)
15. Jed Bradley (Milwaukee Brewers) - Greg Genske (Legacy Sports Group)
16. Chris Reed (Los Angeles Dodgers) – Boras Corp.
17. C.J. Cron (LA Angels of Anaheim) - Moye Sports Associates
18. Sonny Gray (Oakland Athletics) – Bo McKinnis
19. Matt Barnes (Boston Red Sox) – SFX
20. Tyler Anderson (Colorado Rockies) - Greg Genske (Legacy Sports Group)
21. Tyler Beede - Octagon (unsigned – will be attending Vanderbilt)
22. Kolten Wong (St. Louis Cardinals) – PSI Sports Management
23. Alex Meyer (Washington Nationals) – Boras Corp.
24. Taylor Guerrieri (Tampa Bay Rays) - Greg Genske (Legacy Sports Group)
25. Joe Ross (San Diego Padres) - Wasserman Media Group
26. Blake Swihart (Boston Red Sox) - Greg Genske (Legacy Sports Group)
27. Robert Stephenson (Cincinnati Reds) – Matt Sosnick (Sosnick/Cobbe)
28. Sean Gilmartin (Atlanta Braves) – No advisor?
29. Joe Panik (San Francisco Giants) – Andrew Lowenthal (Proformance)
30. Levi Michael (Minnesota Twins) – Creative Artists Agency
31. Mikie Mahtook (Tampa Bay Rays) - Creative Artists Agency
32. Jake Hager (Tampa Bay Rays) – Paragon
33. Kevin Matthews (Texas Rangers) – Bobby Barad

Notes:

• Greg Genske and Legacy Sports Group had the same amount of clients taken in the first round (5) as Scott Boras.  The two of them account for almost one-third of all players selected in the first round (both companies also had superb offseasons).  Creative Artists Agency was next in line with a total of 3 clients selected, followed by Wasserman Media Group, SFX, Jet Sports Management, and Franklin-Frye Sports, each with 2 advisees drafted in the top 33 picks.
• Speaking of Creative Artists Agency - the company does not seem to be taking a hit in recruiting after the departure of Casey Close…or is it too soon to make such a statement?  No one knows just how much of an influence Close had in recruiting Mikie Mahtook, Levi Michael, and/or Danny Hultzen over the years, but they all have  stayed with CAA.
• Back to Genske vs. Boras.  While Genske tied Boras with regards to the number of clients selected in the first round, no one compared to Boras when it came down to signing bonuses negotiated.  Combined, Gerrit Cole ($8 million), Bubba Starling ($7.5 million), Anthony Rendon ($7.2 million), Chris Reed ($1.589 million), and Alex Meyer ($2 million) received a total of $26.289 million.  Genske’s clients – George Springer ($2.525 million), Jed Bradley ($2 million), Tyler Anderson ($1.4 million), Taylor Guerrieri ($1.6 million), and Blake Swihart ($2.5 million) – received a total of $10.025 million, which is absolutely nothing to scoff at.

2011 MLB Draft Round 1 Advisors/Players List from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

When I first heard that Francisco (K-Rod) Rodriguez was switching agents from Paul Kinzer of Wasserman Media Group to Scott Boras of Boras Corp., I praised Kinzer for a job well done in his representation of the former New York Mets closer.  After all, Kinzer helped Rodriguez negotiate a 3-year, $37 million deal, which included a very impressive $17.5 million for an additional year had Rodriguez closed 55 or more games this season.  But as of late, most people are talking about a mistake Kinzer may have made, which could have negatively affected his former client.

I linked to a HardballTalk article in last week’s Shabbat Shalom: Friday Wrap-Up, which brought up a New York Times report about Kinzer failing to submit Rodriguez’s no-trade list to the Mets prior to his trade to the Milwaukee Brewers.  Rodriguez could have provided a 10-team no-trade list roughly 2.5 years ago, but Sandy Alderson of the Mets stated that the organization never received said list from Major League Baseball and/or the MLBPA.  Further, Rodriguez seemed to be under the impression that the list was effective and that the Brewers were a team on that list.  And apparently, Alderson recently told Kinzer and Arn Tellem of Wasserman Media Group that the Mets never received the no-trade list.  Boras says that Alderson’s message was never relayed to Rodriguez.

Luckily for Rodriguez and Kinzer, the only reason Rodriguez had not wanted to go to the Brewers was because back in 2008, Trevor Hoffman had the closer position on lock.  Unfortunately for Kinzer, even if Rodriguez closes at least 55 games this season, he will not be earning any commission on the closer’s 2012 salary.

Late last week, K-Rod and Boras agreed to turn Rodriguez’s $17.5 million vesting option into a mutual option in exchange for changing K-Rod’s buyout from $3.5 million to $4 million.  It is almost certain that Rodriguez will in fact become a free agent next season at the ripe age of 29 and command a large multi-year deal based on his final numbers from this season and past seasons combined.  Scott Boras will negotiate that contract, which means Kinzer will take no part of it.

But maybe Kinzer should just be thankful that K-Rod ended up on a team that he no longer wanted on his no-trade list and that Boras was able to structure a deal with the Brewers that makes Rodriguez happy.  In a different situation, where K-Rod would have been traded to a team that he wanted on his original no-trade list and continued to want to block from attaining his services, he could have been taken the issue up with the MLBPA by filing a grievance.  David Waldstein of the New York Times thinks that Rodriguez may still argue for damages based on Kinzer’s alleged failure to submit a no-trade clause.  Waldstein states,

It could be argued, and most likely will be, that his rights under his original contract were compromised and he lost something of value.

I happen to believe that after Boras accomplished a re-structuring of Rodriguez’s deal, he will not suggest to his client that a grievance be filed for any damages resulting from Kinzer’s apparent lack of providing the no-trade list to the Mets.  Damages would be particularly hard to prove.

Navigating Francisco Rodriguez’s No-Trade Clause from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Jose Valverde is in the midst of one of his best seasons in his 8 year Major League career.  His ERA is below 3.00 and he is a perfect 17-for-17 in save opportunities.  He will need to continue to be Mr. Reliable in the 2nd half of the season if the Detroit Tigers hope to hold on to any chance of making the playoffs in 2011.

At 33-years-old, the always animated Valverde should still have many years left in him.  His 2011 salary is $7 million and he is hoping that he will make a lot more of that kind of money before he has to retire.  To that end, Valverde has picked up new representation, switching from Praver Shapiro Sports Management to Proformance, Inc.

The last time we covered Proformance, Inc. we discussed Barry Enright’s switch from Legacy Sports to Proformance.

On To The Next One: Jose Valverde from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Not everyone bought what Bell/Boras was selling.  Cameron Smith of Yahoo! Sports believes that it was a negotiating ploy developed by Boras to drive up the price for Bell’s services.  While Bell did fall out of the first round, he was still selected rather early, and is likely to command first round money (if he ends up signing with the Pirates).  But maybe Boras’ master plan did not work so well after all.  If he was trying to dissuade small budget teams from taking him, he did not do a great job; I do not think anyone would consider the Pirates to be a team looking to create a robust payroll.

Senior Vice President & General Counsel for the Pirates, Larry Silverman, is going to have a fun couple of months dealing with Mr. Boras.

2011 MLB Draft: Pittsburgh Pirates Bargaining With Boras from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The Pittsburgh Pirates will have their hands full negotiating with Gerritt Cole.  In 2008, the Pirates had fun dealing with Pedro Alvarez, also a Boras client, who was selected #2 overall.  Initial reports indicated that the Pirates signed Alvarez for a $6 million bonus, but Boras claimed that Alvarez refused to sign the deal with the Pirates until 45 minutes after the signing deadline, which would have made the deal null and void.  The Major League Baseball Players Association looked into the matter and found that the rules were violated by the signing which apparently took place post-deadline.  Later, Alvarez agreed to a 4-year Major League deal with the Pirates that included a $6.355 million bonus.

Stories like this give us an idea of what it must be like to negotiate with Scott Boras, but nothing is as good as hearing it straight from someone who has a past of negotiating with the head of Boras Corp.  A few days ago, Jim Bowden provided everybody with a treat by going there – writing a breakdown of Boras’ negotiating style.  Bowden starts with the pre-draft process.

Boras will talk to all 30 scouting directors, general managers and owners (if they’ll take the phone call). He will give him his expectations for his client list — how he values them (not in terms of specific dollars but against previously signed talent) and reminds clubs that his player could re-enter the draft or go to college. If he’s talking with a small-market club whose history includes not paying over recommended slot, Boras might suggest that they pass on that player because he probably won’t sign with them and then will suggest maybe they draft one of his second-round type players in the first round because they could afford him. He also will look at an organization’s depth chart from the major leagues to the minor leagues. If a team has an All-Star catcher in the major leagues and a top catching prospect at Double-A, he might advise a team not to draft his catcher, realizing it might take his client longer to get to the major league team in that organization, thus delaying arbitration and free agency — where the real money is. He wants clubs to be prepared to pay the price if you draft one of his players.

It sounds like a very strong and effective strategy.  However, Bowden probably did not realize nor intend it when he wrote the piece for ESPN, but stating that Boras has direct communications with all 30 scouting directors, general managers and owners is the same as saying that Boras violates NCAA Bylaw 12.3.2.1 in the advising process for each of his clients.  NCAA Bylaw 12.3.2.1 reads as follows:

12.3.2.1 Presence of a Lawyer at Negotiations. A lawyer may not be present during discussions of a contract offer with a professional organization or have any direct contact (i.e., in person, by telephone or by mail) with a professional sports organization on behalf of the individual. A lawyer’s presence during such discussions is considered representation by an agent.

Boras advised former University of Kentucky baseball player James Paxton, who was suspended after he would not cooperate with NCAA investigators who wanted to question him about Boras supposedly having direct communication with a Blue Jays front office member after Paxton was drafted.  Between the Paxton controversy and Bowden’s piece, I assume the NCAA will be keeping a close eye on Boras Corp. employees.

NCAA Bylaws aside, the Bowden piece is a great read.  It includes Boras’ great leverage game, how he employs his own slotting system, and the record-breaking Boras draft deals he has negotiated.

Jim Bowden Discusses Boras’ Negotiating Power; Disregard For NCAA Rules? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Another tactic that the Rays use to avoid spending time and money on arbitration is to lock up young pre-arbitration eligible players into long-term contracts, effectively buying itself out of the arbitration process itself.  Whether you think it was a good idea or not, the team used this tactic to sign James Shields to a 4-year, $11.25 million contract in 2008, when he was only 26-years-old and had less than 2 full seasons of MLB service.  The deal included 3 separate team options, which allows the Rays to extend that 4-year deal to up to a 7-year deal, paying Shields over $25 million more over those 3 extra years.

Rays executive vice president of baseball operations Andrew Friedman has decided to put that tactic to test again by signing unproven Wade Davis to a very similar deal that Shields signed 3 years prior.  Davis will make $12.6 million over 4 years, but the Rays also have 3 separate team options to extend the deal to a total of 7 years.  Interestingly, using the 3 extensions would pay David a little less than $25 million more over those 3 extra years.  Shields got better teams regarding the options.

Davis is a 25-year-old pitcher, and had 35 starts going into the 2011 season.  Signing this kind of deal is a great strategy for a player who is more conservative about his finances.  $12.6 million is no small chunk of change, and if invested properly, could be enough money for Davis to live on for quite some time.  He and his agent may be leaving money on the table by signing the deal now, but they could also be protecting Davis in case of poor performance, an injury, or some other event that would limit his earning potential.  Signing this type of deal at this stage of one’s career is a personal decision, and is not right for everyone.  That’s why it is important for an agent to understand his clients and give them advice on a case-by-case basis.

I am sure that Davis’ agent, B.B. Abbott of Jet Sports Management knows his client quite well and advised him accordingly.  He recently stated, “I don’t think anyone can definitively tell you that it’s the wrong deal or a bad deal or a good deal. It was just the right deal for Wade and the right deal for the team.” It was a good deal for Davis, which could have been a wrong deal for a similarly situated player with a different mindset and circumstances.

Wade Davis’ $12.6 Million Pre-Arbitration Contract With The Tampa Bay Rays from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

College baseball season officially began this month, which means it is not too early to start talking about who current college baseball players have chosen as their advisors for the upcoming 2011 MLB First-Year Player Draft.

Most MLB Mock Drafts (there are not nearly as many on the internet as what exists for the NFL, followed by the NBA) have the Pittsburgh Pirates selecting Rice University third baseman Anthony Rendon.  Scouts are obsessed with his plate presence more than his skill on defense, although it is not as if he is a below average third baseman.  Rendon has also caught the eye of super-agent Scott Boras, who Rendon has tapped to be his advisor leading up to the 2011 Draft.  If Rendon is selected #1 overall, it will be the third consecutive year that Boras advises the 1st selection of the Draft.

The last time the Pirates negotiated with a top Boras advised MLB Draft pick was in 2008 when the Pirates selected Pedro Alvarez 2nd overall.  Alvarez negotiated (with Boras’ help) a $6 million bonus, but Boras, apparently upset with the deal, notified the MLB Players Association that the $6 million deal was actually signed 45 minutes after the signing deadline, thus violating the rule and voiding the Alvarez contract.  Alvarez ended up sitting out the remainder of his Rookie Ball campaign once the MLBPA filed a grievance against Major League Baseball.  The Pirates folded under pressure and ended up signing Alvarez to a 4-year, major league contract with a $6.355 million bonus.

That incident might be in the back of the Pirates executives minds come draft day.

Scott Boras Is Advising Future Potential #1 Overall Draft Pick, Anthony Rendon from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Most recently, Rubin assisted Brian Grieper of GPR Sports Management regarding Mike Napoli’s contract.  Napoli was an interesting case; he asked for $6.1 million and the Los Angeles Angels of Anaheim asked for $5.3 million.  Thereafter, Napoli was traded to the Blue Jays and finally ended up with the Rangers, before the Rangers and Grieper settled, preventing an arbitration hearing from occurring.  And they settled at a figure above the midpoint.  The midpoint would have been $5.7 million.  Napoli, with the help of Marc Rubin, signed a $5.8 million deal, $100,000 above the midpoint.  Another player who signed for $100,000 over the midpoint was Miguel Montero, who signed a $3.2 million deal with the Diamondbacks.

It is no easy feat to convince a club to settle for a value above the midpoint.  As points of reference, Kameron Loe signed for $1.25 million (midpoint of $1,352,500), Kevin Slowey signed for $2.7 million (same as midpoint), and Andres Torres signed for $2.1 million (midpoint of $2.2 million).  Sometimes players and agents realize that they threw out a high-ball number and acquiesce on signing at the midpoint or just below the midpoint.  Other times, they just do not have the best resources to prove their cases.  That’s where a guy like Marc Rubin comes in hand.

The Man Who Helped Mike Napoli Sign For Above Midpoint from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The Chicago White Sox signed their 3 players:

• John Danks signed a 1-year, $6,000,000 deal.
• Tony Pena signed a 1-year, $1,600,000 deal.
• Carlos Quentin signed a 1-year, $5,050,000 deal.

The Florida Marlins signed their 6 players:

• Burke Badenhop signed a 1-year, $750,000 deal.
• Clay Hensley signed a 1-year, $1,400,000 deal.
• Edward Mujica signed a 1-year, $800,000 deal.
• Ricky Nolasco signed a 3-year, $26,500,000 deal.
• Leo Nunez signed a 1-year, $3,650,000 deal.
• Anibal Sanchez signed a 1-year, $3,700,000 deal.

The Tampa Bay Rays signed their 3 players:

• Dan Johnson signed a 1-year, $1,000,000 deal.
• Andy Sonnanstine signed a 1-year, $912,500 deal.
• B.J. Upton signed a 1-year, $4,825,000 deal.

Does this tell us that the file-and-trial strategy is an excellent deterrent to drawn out negotiations between team and player?  There are still plenty of teams and agents who will negotiate right up to the day of players’ scheduled arbitration hearings.  The White Sox, Marlins, and Rays do not have to spend resources and time building up their cases in anticipation of a hearing.  My most recent count tells me that over 30 players are currently headed on the path towards a hearing.  While we know that a majority of these cases will settle, time is money!

My guy to watch = Josh Hamilton.  His salary figure is $12,000,000.  The Texas Rangers submitted a figure of $8,700,000.  Since Major League Baseball uses a final offer arbitration system, should the case go to a hearing, the arbitrators would have to pick one number or the other – no middle ground.

The File-And-Trial Arbitration Teams Sign Their Players from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules