Agent Scott Boras went to the GM meeting demanding that teams spend big money on his clients like J.D. Martinez and Jake Arrieta. He is looking for $200 million plus deals for his players.
But his rants only caught the attention of a few reporters.
The luxury tax threshold and penalties of the new CBA are starting to take effect. Simply put, the penalty for going over the threshold of $195 million payroll is a percentage of the overage. If you go over year after year, that percentage increases to 100%. And then, you start having your draft choices being downgraded 10 slots. So the payroll cap has now both financial and operational penalties.
Owners want to control unnecessary costs and scouting departments do not want to be handcuffed with their draft picks. It puts teams more in line with the spirit of the rule. It also lessens the big market teams from overspending on free agents who are demanding long term deals.
The longer the deal for a veteran, the more likely it is that there will be more dead money at the end.
So it will be a harder sell for agents to get top dollar for an above average, free agent player.
Some speculate that many teams, including the Cubs, are holding back overspending this year because next year's free agent class is better (with Bryce Harper the star who may blow past the $400 million contract line.)
Others speculate that a few teams would rather collect international signing bonus money to try to get 23 year old Japanese star Ontani. The Mariners just traded a young, 100 mph flame throwing reliever to the White Sox for $500,00 international cash. Seattle now has $1.55 million in international cash to attempt to sign Ontani.
The Cubs and a few other clubs previously went over the international pool cap. They are penalized by not being allowed to spend over $300,000 for any foreign player. This effectively puts them out of the Ontani sweepstakes (if he gets posted by his current club).
It has been reported that baseball revenues have increased while the CBA is effectively not allowing those new dollars to flow into player salaries. The Marlins talk about trading Stanton (who has a no trade clause) to drop their payroll is another item that irks player agents. If Stanton and few other higher cost players are traded, the Marlins (under new ownership) will field a low-cost, AAAA team in 2018.
Showing posts with label Boras. Show all posts
Showing posts with label Boras. Show all posts
November 18, 2017
May 12, 2016
ARRIETA RESPONSE
When Stephen Strasburg did the unusual by agreeing to a long term extension with the Nationals instead of taking a chance in free agency, attention turned to Scott Boras' other client, the currently unworldly Jake Arrieta.
Arrieta was blunt to the Chicago media.
"Aces get seven years," Arrieta said of recent big name pitchers who signed mega deals. "I'll let you judge that. Just look at the numbers. You want to be paid in respect to how your peers are paid. I don't think that changes with any guy you ask. It happens around baseball every year."
The Strasburg decision seems to be "client" driven, meaning that the baseball agent was giving marching orders to get a deal done and not the agent driving the player's future.
Arrieta's words appear to be more "agent" driven - - - that Arrieta looks forward to get paid like his peers - - - in free agency.
And here is Arrieta's argument for looking for a major pay day:
He is in his 6th pro season. He is 30 years old. He has massed a career 17.2 WAR (with the Cubs 5.3, 8.7 and 2.1 in 2014, 2015, 2016). He has only been paid $15.5 million. Under WAR contract valuation, Arrieta's performance value was $86 million. In other words, he has outperformed his contract by five and one half times.
In contrast, Strasburg is also in his 6th season. Strasburg is only 27 years old. He has a career WAR of 8.8. He had been paid $25 million prior to the extension. His past WAR contract valuation was $44 million, so he was also underpaid by that standard. But Strasburg has leveraged his 59-37, 3.07 ERA career numbers into $175 million, almost four times the valuation metric.
Arrieta will be looking in 2017 for $30 million per season (6.0 WAR valuation) or more for seven years or $210 million. That would bring the back end of his contract into dead money years of his late 30s. Yahoo Sports' Jeff Passan has written extensively about the sudden production fall-off of pitchers in the 30s. That is why long term pitching contracts are not favored by the owners. The Cubs probably will do more than a 4 year deal with Arrieta.
But Arrieta is looking for his one great last contract without a hometown discount.
But a better comparison is David Price. Price, 30 years old, is in his 8th major league season. He signed a 7 year, $217 million contract this off-season. He is at the magic $30 million plus per season contract status. Price career numbers are good: 108-57, 3.19 ERA and 28.5 WAR. His past performance value was $146 million. With the new Boston deal, Price is struggling at 4-1, 6.75 ERA and negative 0.7 WAR.
So what is Arrieta worth?
Whatever a team is willing to pay. Arrieta's recent history would put him more in the Price category, but injury history and Arrieta's recent two grinding starts make some think more Strasburg. The difference between those two contracts is $42 million.
Current Cubs management has painted itself in a corner. It hit a home run with the Scott Feldman trade for Arrieta and Pedro Strop. However, the draft strategy of taking the best bats has given the team a "core" of young players who will need to be paid during any megadeal of Arrieta (plus Lester's deal). I don't see the Cubs willing to set aside $330 million for two pitchers from 2017 on when you have to think expensive extensions for Anthony Rizzo and Kris Bryant.
But the price of quality starting pitching continues to go up. The only way to counter that is to develop a young, solid core of pitchers from your own system. This is the Achilles heel for the Cubs: they have not developed a young arm under Theo-Jed. They have trapped themselves in finding a rotation through free agency.
The Cubs have one more full season of Arrieta control. If the Cubs cannot work out an extension with Arrieta this off-season, the Cubs have two options: keep him for his walk year or trade him at the Winter meetings for young, controllable, major league ready pitching. Some of these decisions will be determined by the new CBA (whether draft picks will still be at risk for qualifying offers).
It may depend on whether the Cubs win a championship in 2016. If that is the case, there is less pressure on ownership or management to keep Arrieta for 2017. If the Cubs fall short, then the pressure to win the championship in 2017 is expanded ten fold. Arrieta would have to be kept on board to anchor the pitching staff.
Without a doubt, in any situation, Arrieta is in the cat bird's seat.
Arrieta was blunt to the Chicago media.
"Aces get seven years," Arrieta said of recent big name pitchers who signed mega deals. "I'll let you judge that. Just look at the numbers. You want to be paid in respect to how your peers are paid. I don't think that changes with any guy you ask. It happens around baseball every year."
The Strasburg decision seems to be "client" driven, meaning that the baseball agent was giving marching orders to get a deal done and not the agent driving the player's future.
Arrieta's words appear to be more "agent" driven - - - that Arrieta looks forward to get paid like his peers - - - in free agency.
And here is Arrieta's argument for looking for a major pay day:
He is in his 6th pro season. He is 30 years old. He has massed a career 17.2 WAR (with the Cubs 5.3, 8.7 and 2.1 in 2014, 2015, 2016). He has only been paid $15.5 million. Under WAR contract valuation, Arrieta's performance value was $86 million. In other words, he has outperformed his contract by five and one half times.
In contrast, Strasburg is also in his 6th season. Strasburg is only 27 years old. He has a career WAR of 8.8. He had been paid $25 million prior to the extension. His past WAR contract valuation was $44 million, so he was also underpaid by that standard. But Strasburg has leveraged his 59-37, 3.07 ERA career numbers into $175 million, almost four times the valuation metric.
Arrieta will be looking in 2017 for $30 million per season (6.0 WAR valuation) or more for seven years or $210 million. That would bring the back end of his contract into dead money years of his late 30s. Yahoo Sports' Jeff Passan has written extensively about the sudden production fall-off of pitchers in the 30s. That is why long term pitching contracts are not favored by the owners. The Cubs probably will do more than a 4 year deal with Arrieta.
But Arrieta is looking for his one great last contract without a hometown discount.
But a better comparison is David Price. Price, 30 years old, is in his 8th major league season. He signed a 7 year, $217 million contract this off-season. He is at the magic $30 million plus per season contract status. Price career numbers are good: 108-57, 3.19 ERA and 28.5 WAR. His past performance value was $146 million. With the new Boston deal, Price is struggling at 4-1, 6.75 ERA and negative 0.7 WAR.
So what is Arrieta worth?
Whatever a team is willing to pay. Arrieta's recent history would put him more in the Price category, but injury history and Arrieta's recent two grinding starts make some think more Strasburg. The difference between those two contracts is $42 million.
Current Cubs management has painted itself in a corner. It hit a home run with the Scott Feldman trade for Arrieta and Pedro Strop. However, the draft strategy of taking the best bats has given the team a "core" of young players who will need to be paid during any megadeal of Arrieta (plus Lester's deal). I don't see the Cubs willing to set aside $330 million for two pitchers from 2017 on when you have to think expensive extensions for Anthony Rizzo and Kris Bryant.
But the price of quality starting pitching continues to go up. The only way to counter that is to develop a young, solid core of pitchers from your own system. This is the Achilles heel for the Cubs: they have not developed a young arm under Theo-Jed. They have trapped themselves in finding a rotation through free agency.
The Cubs have one more full season of Arrieta control. If the Cubs cannot work out an extension with Arrieta this off-season, the Cubs have two options: keep him for his walk year or trade him at the Winter meetings for young, controllable, major league ready pitching. Some of these decisions will be determined by the new CBA (whether draft picks will still be at risk for qualifying offers).
It may depend on whether the Cubs win a championship in 2016. If that is the case, there is less pressure on ownership or management to keep Arrieta for 2017. If the Cubs fall short, then the pressure to win the championship in 2017 is expanded ten fold. Arrieta would have to be kept on board to anchor the pitching staff.
Without a doubt, in any situation, Arrieta is in the cat bird's seat.
May 11, 2016
STRASBURG EXTENSION
He will still be the 6th highest paid pitcher in MLB history. But why did Washington's ace pitcher accept a long term extension early in his free agent walk year?
It was a baffling move from all sides. The Nationals have agreed to a seven-year, $175 million extension with RHP Stephen Strasburg. Strasburg is a Scott Boras client. Boras has the reputation of getting his clients to free agency where he can leverage the biggest deals (by getting teams to bid against each other). With an extension, Boras loses leverage to make a long term deal.
For Washington, it is a seven year risk based on Strasburg's injury history. The ace pitcher has underperformed throughout his career. He will soon be on the 7th anniversary of his Tommy John surgery. The Nats had said in the past that their major concern with any pitcher post-TJ is in year 7: they don't think the repaired ligament will hold after seven full MLB seasons. There is proof of this by the rash of pitchers having second TJ surgeries. So the Nationals are going against their own medical philosophy to make this extension.
In order to make a deal, both sides must receive something they value. For Strasburg, it is guaranteed money and an opt-out. For the team, it is deferring most of the guaranteed money.
According to the Washington Post, Strasburg will take home a team friendly $15 million annually from 2017 through 2023, excluding bonuses which could reach $7 million. The remaining $70 million will be deferred without interest and paid out in $10 million installments from 2024 through 2030. The team is spinning this extension at a "present value" of only $162 million.
Strasburg can opt out after its third and fourth seasons. If he can stay healthy, he can be a premier free agent in 2019 at age 30. But the real value to Strasburg, given his history, is this deal acts like an insurance policy against another major injury. If his arm gets hit by a bus tomorrow, he will get paid a lot of money through 2030.
In additional minor give and takes, Strasburg won’t receive no-trade protection but the team got no provisions relating to arm health to discount any future payouts.
The question remains why would Strasburg forego free agency? One would believe that he would have asked for a $200 million type David Price deal. Some could say that Strasburg did not want to "bet" on himself going into this off-season. Which is odd concerning in his first seven starts, he is 5-0, 2.76 ERA, 1.041 WHIP. But his body or his mind must have told him to cut a long term deal now when things are going well to take off any future financial pressures on his family.
The Nationals must believe that they got a star player at a market discount. But other teams see the revenue horizon being darker than today. Cable television model, which fueled the mega-local broadcast rights deals in the past few years, is going by the wayside. Younger fans consume their entertainment on demand and not by sitting to watch a designated game at a designated time on a designated channel. The big money spenders like ESPN have started to purge high priced talent and reign in expenses since their carriage charges are being balked at by the cable and satellite operators. In seven years, the MLB broadcast revenue could be cut in half which would make even Strasburg long term deal seem very expensive.
It was a baffling move from all sides. The Nationals have agreed to a seven-year, $175 million extension with RHP Stephen Strasburg. Strasburg is a Scott Boras client. Boras has the reputation of getting his clients to free agency where he can leverage the biggest deals (by getting teams to bid against each other). With an extension, Boras loses leverage to make a long term deal.
For Washington, it is a seven year risk based on Strasburg's injury history. The ace pitcher has underperformed throughout his career. He will soon be on the 7th anniversary of his Tommy John surgery. The Nats had said in the past that their major concern with any pitcher post-TJ is in year 7: they don't think the repaired ligament will hold after seven full MLB seasons. There is proof of this by the rash of pitchers having second TJ surgeries. So the Nationals are going against their own medical philosophy to make this extension.
In order to make a deal, both sides must receive something they value. For Strasburg, it is guaranteed money and an opt-out. For the team, it is deferring most of the guaranteed money.
According to the Washington Post, Strasburg will take home a team friendly $15 million annually from 2017 through 2023, excluding bonuses which could reach $7 million. The remaining $70 million will be deferred without interest and paid out in $10 million installments from 2024 through 2030. The team is spinning this extension at a "present value" of only $162 million.
Strasburg can opt out after its third and fourth seasons. If he can stay healthy, he can be a premier free agent in 2019 at age 30. But the real value to Strasburg, given his history, is this deal acts like an insurance policy against another major injury. If his arm gets hit by a bus tomorrow, he will get paid a lot of money through 2030.
In additional minor give and takes, Strasburg won’t receive no-trade protection but the team got no provisions relating to arm health to discount any future payouts.
The question remains why would Strasburg forego free agency? One would believe that he would have asked for a $200 million type David Price deal. Some could say that Strasburg did not want to "bet" on himself going into this off-season. Which is odd concerning in his first seven starts, he is 5-0, 2.76 ERA, 1.041 WHIP. But his body or his mind must have told him to cut a long term deal now when things are going well to take off any future financial pressures on his family.
The Nationals must believe that they got a star player at a market discount. But other teams see the revenue horizon being darker than today. Cable television model, which fueled the mega-local broadcast rights deals in the past few years, is going by the wayside. Younger fans consume their entertainment on demand and not by sitting to watch a designated game at a designated time on a designated channel. The big money spenders like ESPN have started to purge high priced talent and reign in expenses since their carriage charges are being balked at by the cable and satellite operators. In seven years, the MLB broadcast revenue could be cut in half which would make even Strasburg long term deal seem very expensive.
March 22, 2015
ANNUAL PISSING CONTEST
Every spring, sports agent Scott Boras gets on his soap box to yell at owners about holding back his talent from accumulating service time toward free agency. Boras wants his clients in the majors as fast as possible because that speeds up the clock on signing big money deals.
The CBA has many holding patterns clubs can use to stop the clock.
Boras is railing against the Cubs early announced plan to shelve his client, Kris Bryant, in Iowa at the beginning of this season from anywhere from three weeks to three months. If Bryant accumulates 172 service days in his first call up, then he can be a free agent one year earlier. If he does not, the Cubs effectively control his contract for an additional season (which projects to be near his peak production).
In addition, if when a stud young player hits his season season, he could earn an "early year" if he qualifies as a Super 2, in the top 22 percent of players between years 2 and 3 of club control.
An early arbitration hearing gives the player a salary boost, then raises the salary flow for future arbitrations or contract extensions.
Boras claims that the Cubs owe it to their fans to put the best team on the field from Day One. That best team would include Bryant. He is right in that assertion.
The Cubs counter by saying this is a business. Bryant is still just a prospect. He needs time to develop, even though he has crushed every level of minor league play. Bryant needs to work on better defense at third, or switch to learning LF which is best done in the minors. The Cubs have some valid development points they can make to hold back Bryant.
But sitting Bryant in the minors, based on ZiPS projections of a full season, could cost the Cubs at least 2 games. If the Cubs truly believe they can contend or win the NL Central, 2 games could be the difference between a championship and disappointment. But that is the risk that the Cubs are willing to take in order to hold onto Bryant for an extra year.
The CBA has many holding patterns clubs can use to stop the clock.
Boras is railing against the Cubs early announced plan to shelve his client, Kris Bryant, in Iowa at the beginning of this season from anywhere from three weeks to three months. If Bryant accumulates 172 service days in his first call up, then he can be a free agent one year earlier. If he does not, the Cubs effectively control his contract for an additional season (which projects to be near his peak production).
In addition, if when a stud young player hits his season season, he could earn an "early year" if he qualifies as a Super 2, in the top 22 percent of players between years 2 and 3 of club control.
An early arbitration hearing gives the player a salary boost, then raises the salary flow for future arbitrations or contract extensions.
Boras claims that the Cubs owe it to their fans to put the best team on the field from Day One. That best team would include Bryant. He is right in that assertion.
The Cubs counter by saying this is a business. Bryant is still just a prospect. He needs time to develop, even though he has crushed every level of minor league play. Bryant needs to work on better defense at third, or switch to learning LF which is best done in the minors. The Cubs have some valid development points they can make to hold back Bryant.
But sitting Bryant in the minors, based on ZiPS projections of a full season, could cost the Cubs at least 2 games. If the Cubs truly believe they can contend or win the NL Central, 2 games could be the difference between a championship and disappointment. But that is the risk that the Cubs are willing to take in order to hold onto Bryant for an extra year.
January 29, 2015
CORPORATE SHILLING
Patrick Mooney reports on a notion tossed around by baseball agent Scott Boras.
Having seen the media circus and national attention the NFL gets for its Super Bowl Week, Boras wants MLB to adopt the same format: have a World Series Week at a rotating neutral site.
“Baseball is serving up great steaks and we’re serving it in a drive-thru window,” Boras said. “We’ve got to change that. We need a ‘World Series Week.’ We need the World Series in one city, so that all journalists, from all over the world, can plan a year in advance and come to one place, stay there and watch these two teams go at it for seven days in one spot.”
“We’re talking about the betterment of baseball,” Boras said. “If we continue to do this on a regional scale, we’re going to lose something that baseball deserves. And what it deserves is world attention. And to keep the product at that level, you’ve got to create a platform (so) the world can attend.
“Most corporations and most journalists and most everyone involved — because you don’t know where the World Series is going to be until a day or two in advance — they have not budgeted (for it). They have not funded it. There’s no plan for the attention required to go and focus (on it).
“There’s so much more we can do when we know where the World Series is at. We can have so many events. We can involve corporations. We can have national media, international media. (But not knowing) where the World Series is going to be is making it a regional event.”
But one needs to realize that Boras is talking from a bias. He would like to see MLB generate a ton more money for the league and teams so the money pool grows to pay his clients more money in free agency. As we have seen, professional sports franchises are hitting the ceiling on broadcast revenue channels. Actual fan attendance will probably go down as many teams continue to price the average family out of baseball as an entertainment option.
Adopting another sports "championship set up" can lead to disaster. When the PGA adopted NASCAR's end of season points qualifying system to pare down the field to a small championship chase, it continues to be a confusing disaster. It was so much easier to crown a golf champion based upon earnings rather than a made up point system.
The greatest obstacle to a World Series Week would be the possibility it would take away a national fan base of Cub loyalists the opportunity to see a World Series played at Wrigley would be anarchy at its highest level.
Having seen the media circus and national attention the NFL gets for its Super Bowl Week, Boras wants MLB to adopt the same format: have a World Series Week at a rotating neutral site.
“Baseball is serving up great steaks and we’re serving it in a drive-thru window,” Boras said. “We’ve got to change that. We need a ‘World Series Week.’ We need the World Series in one city, so that all journalists, from all over the world, can plan a year in advance and come to one place, stay there and watch these two teams go at it for seven days in one spot.”
“We’re talking about the betterment of baseball,” Boras said. “If we continue to do this on a regional scale, we’re going to lose something that baseball deserves. And what it deserves is world attention. And to keep the product at that level, you’ve got to create a platform (so) the world can attend.
“Most corporations and most journalists and most everyone involved — because you don’t know where the World Series is going to be until a day or two in advance — they have not budgeted (for it). They have not funded it. There’s no plan for the attention required to go and focus (on it).
“There’s so much more we can do when we know where the World Series is at. We can have so many events. We can involve corporations. We can have national media, international media. (But not knowing) where the World Series is going to be is making it a regional event.”
But one needs to realize that Boras is talking from a bias. He would like to see MLB generate a ton more money for the league and teams so the money pool grows to pay his clients more money in free agency. As we have seen, professional sports franchises are hitting the ceiling on broadcast revenue channels. Actual fan attendance will probably go down as many teams continue to price the average family out of baseball as an entertainment option.
Adopting another sports "championship set up" can lead to disaster. When the PGA adopted NASCAR's end of season points qualifying system to pare down the field to a small championship chase, it continues to be a confusing disaster. It was so much easier to crown a golf champion based upon earnings rather than a made up point system.
The greatest obstacle to a World Series Week would be the possibility it would take away a national fan base of Cub loyalists the opportunity to see a World Series played at Wrigley would be anarchy at its highest level.
June 8, 2012
QUICK WORK
It took the Atlanta Braves less than 24 hours to sign their top five draft selections. That is Light Speed considering the unknown ramifications of the new Collective Bargaining Agreement and slot calculations.
The Cubs are on the opposite end of the spectrum.
Their first round selection, Albert Almora, is a high school senior who has a full ride scholarship to Miami. As a Florida kid, Almora was excited to get a scholarship. However, he is also been on numerous Team USA squads and wants to play professional ball. His only leverage to get beyond the #6 slot bonus amount is say he won't sign and go to college.
Almora's agent is Scott Boras. He does not like the new CBA draft system. His other client, Stanford pitcher Appel, went from the #1 pick, turning down a $6 million bonus, to being selected #8 by Pittsburgh. Appel was made about the events. Boras was livid about the events. By dropping eight spots, the bonus money is about half. Appel also has the option to return to college for his final year.
So, some writers believe that Boras may make a stand and play hard ball with the Cubs on Almora. The Cubs really can't sign any of their Top 10 selections without first knowing if they can sign Almora.
On the upside, if the Cubs don't sign Almora, they lose the slot amount in their bonus pool for this year. But they get a compensation pick in next year's draft (at #6). So in theory, a bad Cubs 2012 could lead to having a #2 and #6 selection in the 2013 draft.
But the same signability issues will happen again next year.
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