Tuesday, April 29, 2008

Risks and Rewards

USA Today runs a nice feature covering the recent spate of guys with short service time signing club-friendly long term deals:

"I keep hearing people say they left money on the table," says Tampa-based agent Tom O'Connell, whose client, Rockies closer Manny Corpas, signed a four-year, $8 million contract last offseason. "What table is that? Show me that table. And when you find that table, show me the crystal ball sitting on it. Anybody can play Monday morning quarterback."
There's a lot of nice perspective here, including quotes from Boras ("These deals are strongly club-oriented. I can only speak for our clients, but almost every client has benefited substantially from not signing those deals") and takes on it from the perspectives of John Hart, Jake Peavy, the Upton brothers, Manny Corpas, and Paul Cohen (agent of Evan Longoria and others who have signed young). USA Today always seems to do these kinds of articles well, and this one is no exception.

I think Cohen is the most interesting guy in this article. He's portrayed as something of the anti-Boras, defending these deals by basically saying, hey, my client could get hit by a bus tomorrow. For what it's worth, I tend to fall on his side of things. This is partially because I'm somewhat risk averse, but it's also because I agree with his general philosophy, stated thusly:
Cohen, who has signed All-Star caliber players such as Jim Edmonds, Tim Hudson, Troy Percival, Easley, Robinson Cano and Bobby Crosby to long-term contracts, refuses to sweat the competition. His contracts may be ridiculed by his peers, but his clients are happy . . .

. . . "If I'm worrying about what my competition says," Cohen says, "then I'm working for all of the wrong reasons. Look, would it have been better headlines for me, and better commissions for me and my family if Tim Hudson had gone to free agency and gone to a Northeast city? Sure. But would I go to sleep at night knowing I did it more for Paul Cohen than Tim Hudson? No way.

11 comments:

tadthebad said...

Craig, you must be confused. An agent is supposed to represent the best interests of his client, as expressed by said client? An agent shouldn't necessarily focus on getting the largest, obscene amount of money for his client if that client has other ambitions? Happiness is a consideration? That's crazy talk, mister.

I'm with you: two weeks ago, Longoria was not set for life. Today, he is. Isn't security/quality of life the more important consideration?

Craig Calcaterra said...

If I'm Longoria I'd say it is. Of course, if I'm the agent and my client (after hearing all of the counseling I have to offer) wants to maximize his paycheck and push on to free agency, hey, it's my job to do that for him as well, which is why I don't have anything against Boras in some blanket sense.

I would be curious, however, to know how many of Boras' clients tell him that's what they want vs. how many he convinces that's what they want.

GregP said...

I think the Manny Corpas deal is looking very good now.....for Manny Corpas.

tadthebad said...

Agreed. On all accounts. An agent is a representative and should do what his client wants.

Then again, isn't it also Boras' job to provide some counsel and review of considerations and circumstances? "You know, Alex, you could opt out, and you'll probably get more money. But you will immediately be thought of as a simple mercenary with no loyalty to anything but cash. You'll never be loved by the fans, your love for the game will be, at the very least, questioned, and you'll have to move yet again." THAT'S a conversation I can't imagine Boras initiating.

Pete Toms said...

Random comments.

This approach by clubs is one of the reasons that the players % of industry revenues has declined in recent years. ( I see that as neither good nor bad )

I think this approach will see the return of the holdout to MLB. ( Arbitration for all the flak it takes rid MLB of the holdout ) Somebody ( say Longoria i.e. ) will realize 4 or 5 years into their deal that they are playing for a samll fraction of their market value and blame their agent ( probably former agent at that point ).

Aren't these better deals for pitchers than position players - on the whole? Aren't pitchers more likely to have big health problems? Are the clubs offering fewer of these deals to pitchers than position players?

Does the PA have any leverage with the agents on this? Boras ( I'm not a Boras basher, sorry ) is right, these deals do depress salaries.

The fundamental question about this strategy, and one I've posed to Voros before is: How is the state of player evaluation? Is it still the crapshoot that Sandy Alderson thought it was in the Moneyball fairy tale? Or has it improved since then? Neyer has been linking to a series ( can't remember the name ) looking back on past BA Top 10's. ( BA is really a compilation of industry talent evaluators opinion ) The results aren't that impressive....

Interesting stuff.

Osmodious said...

Boras is a perfect example of one of the major problems (I think) facing America these days...the push for maximum dollars vs any concept of value. There is this idea that everyone is entitled to money, and lots of it, regardless of the value they return for it. Coupled with this is a complete lack of any concept of value from an employer other than the dollars (e.g. job satisfaction, feeling like you are 'part of something' or are a contributer, training, good working environment, etc.).

All apologies, I intended to expand on this but I'm being called into a meeting. Darn. Was it enough to get a sense of where I was going?

Craig Calcaterra said...

I get the drift, Osmodious. You're a godless communist who can't be trusted as far as you can be thrown. ;-)

Seriously, though, I'm glad you acknowledge that the arguable failure of prioritization is a two way street. For all of my troubles with Boras, he was created by a system that, for over a century, treated players like common chattel. While I don't think we'd disagree on his excesses and approach, the fact remains that the legacy created by ownership includes a good many players who are interested in getting paid the highest amount of money possible. There are still players like that, and I have no problem with Boras representing their interests the way he does, even if I wouldn't want him representing my son (who is totally going to be a reliever in the fat-guy-with-cool-moustache mode).

Osmodious said...

Craig...in a word, 'yes'.

Far be it from me to suggest that people should not be compensated for their efforts, and fairly at that. I just think that the over-compensation issue is a problem, and for more than baseball. It seems to me that it is damaging, in the long run, to over pay for the value returned...and Boras and his ilk do a disservice by fostering that environment (again whether in baseball or business).

It IS true that baseball was borderline, and occasionally outright, exploitative. Swinging the pendulum the other way has not 'punished' the powers that caused that, though...it has only punished the fans (who seem more than willing to be so punished, for the most part).

I know I'm not articulating this very well at all...it turned into a very busy day and I keep getting interrupted. One point I wanted to make, though, was that over-compensation hurts (other players, fans, owners, etc.) more than it helps (the player and the agent). The ridiculousness of the Zito deal is going to impact other pitchers who actually DO deserve good money, as is the Soriano and countless other big 'mistake' types of deals and it hurts the team by reducing the ability to field a good team (and the fans, due to a bad team and increassed prices)...it also makes teams less willing to deal with an agent who pushes that type of deal. Poor value all around...

Pete Toms said...

Osmod, I think I get what you're saying. I disagree with you on a minor point.

Over compensation has no impact on ticket prices ( I think you make this correlation ). This is a common misconception and one the owners always spin ( and the sports media happily report ) during labor negotitations. This notion that lower salaries will lead to lower ticket prices. Not the case, supply and demand sets the value of tickets. And this is why I'm not anti Boras - if he and his players don't get the loot then the billioniares will just get more. What is astounding is how much revenue a relatively small group of performers generates.

Osmodious said...

I agree that the salaries don't directly increase ticket prices...but they do provide the excuse to increase prices. And, of course, once the prices are high, there is no way they are going to go down (unless a team becomes awful, a la Minnesota in the mid-90's).

Of course, supply/demand is the primary mover when it comes to pricing...and a winning team creates more demand. But I do think that management uses salaries as an excuse to raise the prices when they can ('look at the team we are building for you, our fans', etc.).

Pete Toms said...

Osmod.

I'm not dismissive of your point that agents should have considerations other than ringing every last dime out of the owners. But if you expect that from the Boras' of MLB, shouldn't you also expect it of the owners? Aren't the owners also ringing every last dime they can out of us? I sense that fans are coming around to this way of thinking. In NYC you see the Yankees trying to manage public opinion in the press on the subject of "affordable" seats at their new stadium. Given that the Yanks received great gobs of public money for the project it is a sensitive subject. Public money is dumped in but only the very prosperous can afford to go...worth watching...