Last week, Jayson Stark of ESPN.com wrote the following:

Scott Boras’ latest attempt to free-agent-nap another marquee player — in this case, as first reported by Fox’s Ken Rosenthal, Mets dynamo Jose Reyes — was nothing new, other agents say.

Now, technically, there is nothing illegal about it, as long as Boras reports all contact with other agents’ clients to the players’ association, as required by the new agent rules. But it serves as more evidence that it isn’t just happenstance when high-profile free agents (such as Rafael Soriano and Jayson Werth this past winter) abruptly switch to Boras on the verge of their free agency. True, it’s only business — but that doesn’t mean it’s a particularly pretty part of the business.

Interesting choice of words with “free-agent-nap.”  Further, it is interesting that Stark included Jayson Werth’s name amongst those who have been “free-agent-napped” by Boras, since Werth has stated, after Stark’s story was published, that he was never solicited by Boras.  In fact, Werth first reached out to Boras after his friends and former teammates told him good things about the agent.

Prior to signing with Boras, Werth was represented by Jeff Borris (try not to get confused by the similar pronunciation of last names) at Beverly Hills Sports Council.  Werth was “shopping” for a new agent and certainly did not use any coupons in his selection of Boras.  I expect that Boras took a fair commission on the fantastic 7-year, $126 million contract he negotiated for his client.

Jayson Werth Was Not Free-Agent-Napped By Scott Boras from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Now that you are all prepped for next week’s Rule 5 Draft, let’s discuss what recently transpired between arbitration eligible players and their teams.  This year, 27 players were offered arbitration (4 more than last year), and only 2 players accepted (1 less than last year).  Last year’s players to accept were Rafael Betancourt, Rafael Soriano, and Carl Pavano.  This year, the two players to accept were relief pitchers Frank Francisco (Rangers) and Jason Frasor (Blue Jays).  They were both labeled Type A free agents.

There is nothing shocking about the low number of acceptances nor the fact that both acceptances came from relievers.  Historically, most arbitration eligible players decide to test the market, and those who choose arbitration over free agency are often the coveted relief pitchers, as the risk of hitting the free agent market may not justify the potential reward of a nice offer.  It is doubtful that had Francisco and/or Frasor declined arbitration, we would be oohing and aahing at the record breaking contracts they ended up signing.  Instead, it is likely that they will earn more through arbitration than they had if they offered themselves up on the free market.

The fact that Francisco and Frasor were designated Type A would also not help in their free agent campaigns.  A team that signed a Type A free agent must give up a draft pick to the player’s former team.  Depending on how the signing team fared the previous season, they might have to give up their first round or second round pick.  However, if a team was interested in either Francisco or Frasor and signed another Type A player, signing one of the aforementioned names would not affect the signing team’s number of draft picks.

Taking In The Arbitration Offers And Acceptances from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Major League Baseball is very reluctant to change.  That was evident when Armando Galarraga deserved a Perfect Game, but was robbed by a bad call made by the first-base umpire, which could have been corrected, had the MLB instituted a replay system.  Even since that error, it seems as though instant replay is still far from certain to be implemented in America’s Past Time.

Along with a hesitance to change stemming on the owners/execs side is the fact that changes that they do wish to bring about are often disputed by the strong MLB Players Association.  The MLBPA is not a pushover, whatsoever, and there may be factions within the MLBPA that are not interested in bringing about any changes at all to the MLB Rule 4 Draft.  With signing bonuses likely to be at all time highs (we will not know the actual numbers until the August signing deadline), this is understandable.  There is no way that the MLBPA would be interested in a slotting system.  But what about teams possibly having the right to trade picks?

The NBA and NFL allows its teams to trade picks prior to the teams actually submitting their picks.  The MLB stands alone in preventing that from occurring within its league, and actually continues to prevent teams from trading the players they select until 1 year after those players are drafted.  This forces a team like the Toronto Blue Jays to select a kid like Noah Syndergaard with the 6th pick in Comp Round A.  I have been told that Syndergaard signed for $600,000, which is roughly $300,000 under slot.  No one that I know projected the player to go that high, and Toronto probably figured they could get away spending much less on him than they would with another player that they would have rather taken at that position.  A team like Toronto, with 10 picks in the first 4 rounds, could have traded some picks to a team that needed more picks, in return for an option to move up, not break the bank on multiple high picks, and get someone that they wanted a lot.

It may not dramatically affect negotiations between players selected and the teams that select them.  After all, a lot of the signability concerns are hammered out prior to a player hearing his name called on the conference call (or now on MLB Network on Day 1).  However, perhaps a system that allows for trades will create signing bonus round charts that look more consistent – where the best players are taken at the top and paid by the teams that really want them.

I’m not even sure where I stand on the whole idea, but I think it would be an interesting experiment.

An MLB Where Draft Picks Could Be Traded from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

In the recent week since the downfall of the Kentucky Wildcats in the NCAA Tourney, speculation has arisen about the status of John Wall, the Kentucky point guard, who by most analysts is expected to be the number one overall pick in the 2010 NBA Draft.

There are reports that Wall is having second thoughts about an early entry into the NBA, which is understandable – he is nineteen years old, where most like he, are enjoying some of the greatest years of their lives, in college.

So, what is more important — another year in college or a fast break into one of the most unforgiving leagues in professional sports? One route almost guarantees lifelong success, while the other only dazzles dollars in exchange for a shortcut, which could inevitably be fateful in the worst possible way.

I could cite ridiculous examples of failures and successes until I’m blue in the face, but the fact is – getting to the league early only guarantees one thing – money.

David Stern had a plan when he conceived the ‘one-in-done’ rule. After all, John Wall is quoted saying that college has been more fun than he could have ever imagined.

So if you’re that agent looking at him as merely a business proposition, I challenge you to forget about your cut of the monetary gain and think about the person before the player. I challenge you to become an advisor before a business partner (for lack of a better word, an agent).

I expect Mr. Wall will have heard and will see nearly every voice and face in the sports industry. For him I would advise three things:

1. Ask yourself; what do you want your legacy to be in the next 10, 15, or 20 years?
2. How important is money to your short-term and long-term happiness?
3. What would it mean to win an NCAA National Title and share this with your friends, family, and peers?

The glitz and excitement of what lies ahead will always be there – cheap and opportunitistic people will come and go, the draft will be there next year (if not, then in 2012), but your image and more importantly your legacy will live forever.

John Wall – I challenge you to define yourself before others define you.

Why John Wall Should Not Go Pro…This Year from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

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 and serves as the Chair of the Sports Law Society’s National Baseball Arbitration Competition.

Understanding Major League Baseball’s Salary Arbitration System from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

In 2008, 24 players were offered arbitration.  This year’s landscape is quite similar, with 23 players receiving offers.  10 of the players are Type A free agents and 13 are Type B.

Ed Price of AOL Fanhouse describes what the Type distinctions mean in a succinct manner.

If a team signs a Type A free agent, its first-round pick goes to the former team — unless that pick is in the top 15, in which case a second-round pick goes to the former team. The former team also gets an extra pick between the first and second rounds.

If a team loses a Type B free agent, it gets an extra “sandwich” pick.

One more thing to add: The team that signs a Type B free agent does not lose a pick, whereas if that same team signed a Type A free agent, the team would lose a pick as stated above.

Twenty Three MLB Players Receive Offers Of Arbitration from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Football

• The St. Louis experiment is failing while the Cowboys investment in their big boys is working well [Under the Cap: Top Ten Guards and Centers].
• A look at just how competitive recruiting college football players is for agencies of various sizes [The race to sign college prospects].

Baseball

• Could they have found a worse picture of Hendry? [Unloading Milton Bradley without paying steep price won't be easy for Chicago Cubs GM Jim Hendry]
• NY Yankees GM taking a hard-line approach to impending contract discussions with Matsui and Damon [Yanks’ Cashman Won’t Be Swayed].
• Clocked as high as 98.75 mph, but he is 30-years-old (due to Japan’s rules regarding free agency) [Hard-throwing reliever aims to leave Japan].
• Arn Tellem gets in on the blogging action [Hideki Matsui: An Ageless Talent].
• A lot more young players about to get cut? [The Changing Landscape of Salary Arbitration-Eligible Players and Free Agents in Baseball]

Sports Agent

• Some great advice for agents who might not be as involved as they need to be [The Proverbial, I Don’t Know].

Shabbat Shalom: Friday Wrap-Up (11/13/09) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Starting in 2009, there are two classes of free agents: international and domestic.  Domestic free agents can only sign with other NPB teams while international free agents are free to try their luck overseas as well as sign domestically.

In order to qualify as an international free agent, players must play nine seasons in the NPB.  To qualify as a domestic free agent, players drafted before 2007 must wait eight seasons.  Players drafted after 2007 are only required to wait seven seasons before being declared domestic free agents.  This is a much longer period than in MLB.  Can you imagine an MLB superstar having to wait eight seasons before signing with a big market club?

Also, in contrast to MLB regulations, players must be on the team’s top roster for 145 days in order for it to count as a “year” for free agency purposes.  Time spent injured or in the minors does not count.  Therefore, it can take much longer than eight or nine years for a player to be eligible for free agency in Japan.

Further, teams that sign a domestic free agent in Japan are required to compensate the player’s former team with either money or players.  Many players decline free agency and remain with their teams.  This basically means that Japanese free agency is almost non-existent compared to MLB.  For example, after the 2008 season, 83 players qualified for free agency.  Only 7 actually filed.

This year, roughly the same amount of players are eligible.  One Japanese player has already filed: Ryota Igarashi of the Yakult Swallows. Igarashi is a 30-year-old right-handed relief pitcher.  He went 3-2 with three saves and a 3.19 ERA in 56 games last season.  His best season was 2004 when he had 37 saves and 86 strikeouts in 66 games.  It will be interesting to see how many more actually file.

Japanese Free Agency from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

This is my first post on Sports Agent Blog after getting my start at Entertainment Agent Blog.  Being from outside the Philadelphia area, I’m heartbroken the Phillies lost to the Yankees.  But now that the season is over, the Phillies should reflect on their season and think about who will be returning next year.  The Phils got Cliff Lee along with Ben Francisco on July 29^th, in a trade for SS Jason Donald, P Jason Knapp, P Carlos Carrasco, and C Lou Marson in no doubt the best bargain of the season.  Without question, the trade paid immediate dividends for the Phils and at a bargain price.

The Phils didn’t give up that much in return for Lee.  None of the prospects did much of anything this year.  Carrasco went 0-4 for the Indians with an ERA close to 9.00.  Lou Marson batted .250 in 14 games, Knapp went 0-0 with an ERA of 5.40 in the minors and struggled with injuries, and Donald batted .257 with one R.B.I.  In 10 games for the Indians AAA affiliate. While some of these prospects may make it to the Majors, none of them have really shown potential to be everyday players.  On the other hand, Lee had a stellar second half with the Phillies and arguably one of the best postseasons in recent memory, all for a bargain price of their share of the $5.75 million he was due this year.

What makes the deal even sweeter for Philadelphia is that Lee also has an $8 million club option for 2010.  That means the Phillies could have at least one more year with Lee before he becomes a free agent.  The club option is relatively cheap for someone who went 7-4 with a 3.39 ERA in the regular season and 4-0 with a 1.56 ERA in the postseason.  Management would be stupid to not pick up the option.  Letting Lee become a free agent will almost assuredly mean that he can command big money in the free agent market.

I think it is inevitable that the Phils will pick up the club option for next season.  The real concern for management is locking him into a long-term deal with the club.  If he performs next year like he did during the later part of this season and postseason, there is no telling what kind of price he is likely to demand in free agency.  He could demand a contract similar to what C.C. Sabbathia received from the Yankees.  There are only a handful of teams able to dish out that kind of cash.  If it comes to that, I hope the Phillies are one of them.

Cliff Lee: The Phillies Bargain Ace from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Baseball

• Some interesting ideas include: increase scholarships, bring back the one-time transfer rule, make a switch to wooden bats, and push the MLB Draft to after the CWS [College baseball still needs major changes].
• Big ATL agents (France – football and Abbott – baseball) will be in attendance [First Ever Brian McCann Celebrity Softball Game Set for 11/13].
• Quite a line from Boras: “If stem-cell research were around, you’d want to tap into that gene pool.” [Scott Boras is making pitch for Johnny Damon's free agency this winter]
• The Arizona Fall League has produced a lot of very successful Major League players [Scout's Diary: AFL Still A Great Secret].

Football

• Surprised that Antonio Gates is not in the top 10 paid TEs? [Under the Cap: Top Ten Tight Ends]
• I also hate the uniforms, but glad to see that NFL execs are taking a peek at the talent [Don't discount the UFL].
• Josh Morgan seems to be taking the news pretty well [Report: Crabtree likely to start for 49ers].

Sports Agents

• Former sports agent, Alonzo “Lon” Monk, was up to some shady business [Ex-Blagojevich aide pleads guilty to corruption].

Shabbat Shalom: Friday Wrap-Up (10/23/09) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules