The Texas Rangers selected Kellin Deglan with the #22 overall pick in the 2010 MLB Amateur Draft.  The 6’2 catcher was one of the more intriguing players on the Canadian high school baseball circuit, who was seen as pretty raw, but had quite a bit of potential, especially with a powerful bat.  The fact that he is a left handed hitting catcher also had to improve his draft stock.

Deglan had been committed to play at Florida International University, but ended up choosing to sign out of high school.  Double Diamond Sports Management served as his advisors for the Draft.  Deglan signed for $1 million, and Double Diamond expected to receive its advising commission of 5%, which comes out to $50,000 in fees.

On July 2, 2010, Howard A. Kusnick of Double Diamond Sports Management filed a Complaint against Deglan for failure to pay a 5% commission on the contract Deglan signed with the Rangers (click here for the court docket).  On September 14, 2010, Deglan filed a motion to dismiss and/or for a more definite statement.  Kusnick responded by filing a motion for default against Deglan one day later, but the notice of default was not entered based on the court’s finding that a pleading was filed by Mr. Deglan.

On December 8, 2010, Kusnick amended his Complaint.  Deglan filed another motion to dismiss on December 27, 2010, this time based on the Amended Complaint.  Interestingly, on March 16, 2011, the judge granted Deglan’s motion to dismiss Kusnick’s Amended Complaint, and gave Kusnick 15 days to file and serve a new Amended Complaint.  I assume that the Amended Complaint was dismissed without prejudice.

The 15 day period expires tomorrow.  At the time of writing this post, the docket does not indicate that Kusnick has filed and served Deglan a new Amended Complaint.

Meanwhile, Deglan appears to be struggling in the Minors.  In 22 games for the Class A Short-Season Spokane Indians, Deglan had a batting average of .159 and only 1 homerun.  Perhaps he will pick up his game once he does not have to focus on the lawsuit where he is named as the Defendant.

Update: Howard A. Kusnick PA v. Kellin Deglan 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

Monday’s post about Cliff Lee’s taxes created quite an interesting discussion in the comments section.  Off of the site, I had a good conversation with Robert Raiola, a CPA at Van Duyne, Behrens & Co., P.A. Raiola helps many athletes with their taxes and provided great insight to Darren Rovell of CNBC in his piece on Cliff Lee and taxes from November 4, 2010.  Here are some figures that Lee might have considered when weighing the options of going to play for the Yankees, Rangers, or Phillies:

*State taxes based on top individual income tax rate in Pennsylvania (3.07%), New York (8.97%), and Texas (0.00% – tax listed based on “jock tax”).

I also spoke to Chris Dingman of The Dingman Group to find out where Lee might be looking to move now that he is a member of the Phillies.  Dingman’s Philadelphia clients (MLBers & NHLers) have typically been attracted to Haddonfield, New Jersey. Players also like Rose Tree/Media area in Delaware County, PA.  Both places have great schools with easy access to the stadium.  Single players generally like to live in South Philly near the stadium.

Raiola says the tax play is for Lee to get a place outside the city limits of Philadelphia, since Philly has its own separate city tax rate of 3.9285% for residents (3.4985% for non-residents – Lee would only have to pay this tax on half his income – half his games are played in Philly).  New Jersey has a top individual income tax rate of 8.97%, which is a gross income tax rate (no write-offs).  Lee could live there, but still attempt to remain domiciled in Arkansas as a resident, which has a slightly lower tax rate.

This is why you make guys like Raiola and Dingman a part of your team; your clients will come to you to ask about tax and relocation questions.  It is better to become familiar with the experts in those areas so that you are well prepared to give your clients options immediately.

Did Taxes Have A Role In Cliff Lee’s Decision? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Talk about a beautiful frame and picture!  I know we have three losses so far this year, but I cannot wait to put this up in my office.  It is one of the new products on Church Hill Classics’ Mike Sullivan Sports Artwork Frames line.  Sullivan is a nationally known sports artist who is known for his chiseled, edgy style.  The frames (which come in two different styles) are available here.  Go take a look.

And while I have your attention, Sports Agent Blog is running a contest for a separate prize.  We are teaming up with Buffalo Wild Wings to offer a free Buffalo Wild Wings lawn chair.  The chairs are great for tailgating or for additional seating all season long.

All you have to do is tweet what you think will be the the final score of tonight’s Game 4 of the New York Yankees vs. Texas Rangers match-up and reference @Darren_Heitner. Here is an example tweet: “@Darren_Heitner Game 4 #ALCS final score prediction: NYY-5 TX-2.”  If more than one person correctly predicts the final score, we will randomly select the winner amongst those who got it right.  If no one gets it right, then everyone who submits their guess will be eligible in a random drawing.  Make sure you include @Darren_Heitner, though, or else we won’t know that you tweeted your prediction.

Gators Picture Frame And Sports Agent Blog CONTEST from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The MLB postseason is truly one of the best, because unlike football and basketball where the best team usually wins, time and time again we see instances of a wild card or underdog team making a run to the World Series (’08 Rays, ’07 Rockies, ’03 Marlins). There is not a more exciting moment in baseball than the bottom of the 9th inning of an elimination game, where the true character of a team is tested.

• Outdoor October baseball in Minnesota.
• The core 4 Yanks (Rivera, Jeter, Pettite & Posada) going for rings on a second hand.
• The Phillies attempting to make the World Series for the 3rd consecutive year.
• Bobby Cox’s final post-season.

So many great story lines and so much baseball left to play. And with that, I give all you SAB followers a taste of what’s to come this October:

Here are my rankings of the Postseason 8:

1. Philadelphia Phillies – Halladay, Hamels and Oswalt aka H2O (the first release of this new nickname) – A match-up problem for anyone they face. The Phillies have both experience and depth, and have a great chance to repeat as champions of the National League.
2. Tampa Bay Rays – You know the pitching will be there, but this team will go as far as their bats take them. The Rays have played consistently throughout the season despite the lack of support from the hometown fans. Look for Carl Crawford, BJ Upton and Evan Longoria to step up this October.
3. New York Yankees – Struggling as of late, but October in the Bronx is a magical place. The veterans must continue to lead and use their experience as they face an unfamiliar situation as the American League Wild Card team. Jeter batted a career low .270 this season, but it’s not how you start, it’s how you finish. We all know what the captain is capable of in October.
4. San Francisco Giants – This team has the 2nd best pitching staff in the playoffs, and has been playing great in the last month of the season. Jonathan Sanchez may be the key for this team, as he has delivered time and time again for the Giants in big games. I’m curious to see how rookie Buster Posey reacts to his first postseason.
5. Minnesota Twins – The Twins are a different team with Justin Morneau. Minnesota has had the central locked up for a while now, so it will be interesting to see how they come out in game 1 tonight; especially with the recent struggles of Francisco Liriano. New Target Field should be electric tonight.
6. Cincinnati Reds – This could be the sleeper of all postseason teams. The Reds, after not making the playoffs in over a decade, have been leading their division for virtually the entire season. Not much playoff experience on this roster, but look for Scott Rolen to take the responsibility of clubhouse leader.
7. Texas Rangers – With Josh Hamilton’s injury, Cliff Lee is the only thing keeping Rangers fans optimistic. Lee has the ability to win 2 games in a 5 game series, but how they get that other win over a great Rays team remains a big question mark.
8. Atlanta Braves – With yet another playoff berth, Bobby Cox has cemented himself as one of baseball’s greatest managers. Nobody picked the young Braves prior to the season, but they proved doubters wrong. With Martin Prado and Chipper Jones out, though, there is just not enough power at the plate to find success.

Predictions:

Division Series
Phillies over Reds in 4
Giants over Braves in 5

Rays over Rangers in 4
Yankees over Twins in 4

Championship Series
Giants over Phillies in 7
Yankees over Rays in 6

World Series
Giants over Yankees in 7

Your MLB Playoffs Preview from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

I’m just reporting the facts on this one, so if you are a party involved in this matter, don’t get upset (there is no malice involved in my write-up).  Anyway, in my MLB Draft Day 1 breakdown, I listed the advisors next to the players who were fortunate to be early draftees.  With pick #22 overall, the Texas Rangers selected Kellin Deglan, a Canadian catcher committed to Florida International University who was being advised by Double Diamond Sports Management.  Deglan ended up being the 1st player selected in the 1st round to sign with a team, albeit for a below-slot deal ($1 million).  No matter what Deglan signed for, it is likely that Double Diamond expected its advising commission of whatever was agreed to by the advisor and advisee prior to the draft.  It is not uncommon for that commission to be set at 5% of the player’s signing bonus.

In a post titled, You don’t say: Player in Scott Rothstein Ponzi scheme ripped off!, Jose Lambiet wrote (I did not change a single word or add emphasis on any phrases),

One of the alleged players in the Scott Rothstein Ponzi scheme is going to spend what could be his last few months of freedom chasing a professional baseball player who, he said, ripped him off!

Howard Kusnick, a partner in Rothstein’s now-defunct Fort Lauderdale-Boca Raton lawfirm expected to be indicted for his role in the $1.4 billion scam, last week filed a breach-of-contract lawsuit in a Palm Beach County court.

The lawsuit alleges that Kusnick’s Double Diamond Sports Management represented Major League baseball first-round draftee Kellin Deglan, a catcher prospect of the Texas Rangers. Kusnick supposedly babysat Deglan through the pre-draft weeks — and now Deglan won’t pay the $50,000 he allegedly owes Double Diamond for the work.

That amount of money, according to the lawsuit, represents five percent of the 18-year-old Deglan’s $1 million-signing bonus.

In the lawsuit, Kusnick is also kvetching about the fact he had to buy all kinds of baseball equipment for Deglan, including a $110-Oakley glasses.

When a 1st round draft pick does not pay his advising fee, it is probably worth it to go after that kind of money in court.  I do not see the suit as being bad publicity, instead, I commend the filing of the suit because it may serve to let players understand that advisors provide a time-consuming and research-intensive service that deserves just compensation.  One can argue about whether 5% is fair compensation, but since it is fairly solid custom in the industry to charge that amount, that defense probably won’t have strong legs.

I assume that Deglan and Kusnick will settle prior to a hearing for something slightly less than $50,000, but if Deglan decides to see this through, I would be very interested to follow the case and see what the outcome will be.

Kellin Deglan Being Sued For Advising Fees from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

As of last night, only one player selected between the 1st round and Supplemental Round A had signed.  His name is Kellin Deglan, and he was the #22 overall pick made by the Texas Rangers.  It is reported that he signed for $1 million.  Only 2 players in last year’s 1st round signed for $1 million or less – Brett Jackson (#31 overall to the Cubs for $972,000) and Tim Wheeler (#32 overall to the Rockies for $900,000).  Jackson and Wheeler were college juniors while Deglan was a high school player.  High school players are known to have more leverage going into negotiations than Junior College players, 4-year university juniors, and 4-year university seniors.  Steven Baron, a high school catcher (Deglan is a catcher) selected #33 overall last year, received a bonus of $980,000.  I wonder if teams will try to use Deglan’s bonus to try to bring down the price of players selected around his slot.

Some good reading going into the final rounds is a piece written by my friend Jason Wolf – MLB Draft: Stay In School Or Sign A Contract.  It is a topic I have covered from time to time, and in depth in the book, An Athlete’s Guide to Agents, Fifth Edition.

Last Day To Get Drafted Into The MLB In 2010 from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

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.

Johnny Lujan Becomes A Part Of Dynasty from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Basketball

• 5 games in 3 continents, and a total of 40 sponsors. NBA office in India opening soon [NBA Int'l Games Reach New Levels With Record Number Of Sponsors].
• Casey Jacobson with a great look into the world of AAU basketball [(Too Much?) Power to Influence].
• Trading gym bags for backpacks [N.B.A. Players Make Their Way Back to College].
• The Chinese REALLY love them some Kobe Bryant [Kobe Bryant’s jersey still top seller in China; D Wade's moves up to fifth].

Baseball

• “This is the business we chose.” [Last Week].
• Dennis Gilbert’s chances at becoming a part owner of the Rangers may be increased due to his access to liquid cash [Notes from a press conference: Wrapping up the Texas Rangers 2009 wrap-up get together].

Entertainment

• Did you know that Arn Tellem (President at WMG), has a pretty powerful wife who works at CBS? [CBS' Nancy Tellem is in talks to step down from post].

Sports Agents

• SMWW may want to do a better job on its background checks in the future [ONLY IN AMERICA: From Corrupt SEIU Boss to Sports Agent].

Football

• Adrian Peterson’s next contract is going to shatter Larry Johnson’s current deal.  Poor Pierre Thomas…for now. [Under the Cap: Top Ten Running Backs].

Shabbat Shalom: Friday Wrap-Up (10/9/09) from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules