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Wednesday, November 23, 2011

Scott Boras says CBA draft provisions will lessen the value of franchises

Scott Boras believes baseball’s new Collective Bargaining Agreement includes “a lot of positives” and sees ways in which it will help “the integrity of the game.” But the new provisions regarding the draft, the domain in which Boras has helped drive signing bonuses and become perhaps the most prominent agent in sports, is not one of those positives.

In a phone conversation, Boras argued that the new rules governing draft spending will affect baseball to the highest reaches of the league – he said that the limitations on spending could lessen the value of franchises. 

...“The franchise values, I think, are going to be affected by this,” Boras said. “New franchise owners such as the Lerners can no longer rely on the draft to improve their franchise in a major way. The GMs now have less flexibility, less ability to do it. It’s going to take longer to improve your team in a meaningful way.

“It used to be, the owner could think, ‘I’ll hire the right people, I’ll have the scouting intellect.’ Now artificial behavior prevents that. I think the decrease in values of GMs and scouting is a loss.

“If I’m a new franchise purchaser, if I’m the Lerner family and I’m buying the Nationals, and if you put limitations on Mike Rizzo, his value is worth a lot less to me. That limits the value of the principal employees.”

Thanks to Elliot.

Repoz Posted: November 23, 2011 at 01:44 AM | 33 comment(s) Login to Bookmark
  Tags: business, media

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   1. Jim Wisinski Posted: November 23, 2011 at 02:14 AM (#3999881)
“If I’m a new franchise purchaser, if I’m the Lerner family and I’m buying the Nationals, and if you put limitations on Mike Rizzo, his value is worth a lot less to me. That limits the value of the principal employees.”


That seems completely backwards to me. In the previous situation a team could just stockpile the obvious talent with a willingness to pay the big bonuses for guys with higher demands. Scouting acumen wasn't as vital because you could use money to grab several consensus good picks. Now being able to pick up those hidden gems is more important than ever so the value of a good scouting department and decision makers has increased.

Not that I think Boras really believes this himself, he just hates that he won't have as large of signing bonuses to get a cut of and is reaching for any criticism.
   2. charityslave is thinking about baseball Posted: November 23, 2011 at 02:23 AM (#3999886)
Perhaps we should take Scott Boras' critiques of a tightly controlled slotting system with a grain of salt, no?
   3. MM1f Posted: November 23, 2011 at 02:49 AM (#3999896)
Man, Scott Boras and Mike Rizzo really do have some sweet bro love for each other.
   4. MM1f Posted: November 23, 2011 at 02:51 AM (#3999898)
If there's one thing Scott Boras doesn't want it's more emphasis on scouting and less emphasis on hype and GM stupidity.


Nonsense, Boras almost always has the best talents in a draft. He has his own scouting department, he finds the best players and he represents the best players. He really doesn't represent many scrubs in the draft - except for his own son.
   5. snapper (history's 42nd greatest monster) Posted: November 23, 2011 at 02:59 AM (#3999901)

Nonsense, Boras almost always has the best talents in a draft. He has his own scouting department, he finds the best players and he represents the best players. He really doesn't represent many scrubs in the draft - except for his own son.


And now they're going to be getting $2M instead of $5M, which cuts directly into Boras' income.

Of course, they'll be zero impact on the revenue of MLB teams. Baseball is going to be the best economic option for 99.5% of all draftees, regardless of the changes.

Like Strasburg was going to do something else if he "only" got $7M from the Nats, instead of $15M.
   6. ray james Posted: November 23, 2011 at 03:00 AM (#3999902)
Yes but now those best players can't quite command the signing bonuses they once did, and that's going to eat into Boras" income.

Which of course he is against.
   7. micker17 Posted: November 23, 2011 at 03:29 AM (#3999916)
If Scott Boras is against it, it must be good for everyone but him.
   8. Howie Menckel Posted: November 23, 2011 at 03:42 AM (#3999921)
Boras does a great job, just as a defense attorney or a prosecutor may do a great job.

But in all 3 cases, sometimes they are just spouting nonsense and hoping someone falls for it.

I wonder what percentage of the time Boras believes what he is saying.
   9. cercopithecus aethiops Posted: November 23, 2011 at 03:47 AM (#3999922)
I'm not sure that 6 and 7 have anything at all to do with 5. Sure, Boras is against this because it negatively impacts his own bottom line. But MM1f's point was just that Boras being against this has nothing to do with it making scouting more or less important.
   10. Dan Posted: November 23, 2011 at 02:51 PM (#4000037)
Like Strasburg was going to do something else if he "only" got $7M from the Nats, instead of $15M.


It's not going to affect guys like Strasburg or Harper who were already committed to baseball, but it's going to reduce the number of signings among players who have college football scholarships to fall back on. The next Carl Crawford or Todd Helton may very well end up an NCAA QB instead of a MLB player.
   11. Sean Forman Posted: November 23, 2011 at 02:59 PM (#4000039)
The next Carl Crawford or Todd Helton may very well end up an NCAA QB instead of a MLB player.


Or Joe Mauer. Or Zach Lee. or Kyle Parker.

Would baseball be better off if over the last five years the owners had kept more profits, paid Juan Castro, Ty Wigginton and Clint Barmes more money, and didn't have Todd Helton, Carl Crawford and Joe Mauer as stars in the league?

Crawford, Helton and Mauer may have still chosen their current path, but there are going to be players like them who decide to play football and either don't develop as baseball players (without the four years in the minors) or get hurt and can't return to baseball.
   12. Don Geovany Soto (chris h.) Posted: November 23, 2011 at 03:31 PM (#4000054)
Crawford, Helton and Mauer may have still chosen their current path, but there are going to be players like them who decide to play football and either don't develop as baseball players (without the four years in the minors) or get hurt and can't return to baseball.

This.

The amount of money spent on the draft, relative to overall expenditures, has always been small. The idea that this needed further controls is ludicrous, and it will push at least some athletes into other sports.

I honestly don't understand why the new rules regarding the draft and amateur FAs were added. They certainly don't benefit amateur players, and they don't really benefit anyone else except the true cheapskate owners like Reinsdorf.
   13. The Id of SugarBear Blanks Posted: November 23, 2011 at 03:32 PM (#4000056)
They certainly don't benefit amateur players, and they don't really benefit anyone else except the true cheapskate owners like Reinsdorf.

That's why.
   14. Kiko Sakata Posted: November 23, 2011 at 03:52 PM (#4000065)
I honestly don't understand why the new rules regarding the draft and amateur FAs were added. They certainly don't benefit amateur players, and they don't really benefit anyone else except the true cheapskate owners like Reinsdorf.


Because they don't really hurt anybody who was at the bargaining table. If less money is spent on amateur players, that money can go into either of two places: owners' profits or in higher salaries for current players. Amateur players aren't in the MLBPA.
   15. Barnaby Jones Posted: November 23, 2011 at 04:04 PM (#4000071)
If they make that decision then they really want to play football. Anyone who compares the average earnings, career length, guaranteed dollars, quality of life in retirement, etc. is going to choose baseball 99% of the time. Not to mention the opportunity to be drafted.


Again, the choice isn't MLB vs. NFL. It is MLB vs. College Football and then theoretically picking between MLB/NFL again in 3 years. A top tier athlete is going to want a significant chunk of change to forgo the latter.
   16. Randy Jones Posted: November 23, 2011 at 04:16 PM (#4000080)
If they make that decision then they really want to play football. Anyone who compares the average earnings, career length, guaranteed dollars, quality of life in retirement, etc. is going to choose baseball 99% of the time. Not to mention the opportunity to be drafted.


As I said in another thread and everyone seems to be willfully ignoring, football and basketball offer a much more immediate benefit. If you are good and play for a big school, you are already a sports star in college, even if you don't get the big paycheck. And then when you get drafted by the NBA or NFL, you immediately get the big payday, no waiting. Previously, baseball could offer guys large bonuses to convince them to forgo college. Now the only option for a player in this situation is to take a relative pittance in bonus money and get a shitty minor league contract that pays peanuts while you are stuck playing minor league ball as a nobody for several years and even after you make the Majors, you still have to wait at least 3 years before you start making big money through arbitration. Yes, in terms of long term health and money, baseball is still probably the best choice, but since when are people in general and young people in particular known for taking the long term view over an obvious short term gain?
   17. billyshears Posted: November 23, 2011 at 04:27 PM (#4000091)
I agree with Boras to an extent. Even though teams have become much more aggressive in the draft than they were previously, there was still room for a team to be unusually aggressive in spending and to bring very significant talent in to the organization. And the great thing about it was that you could do it for the cost of 1 year of a pretty good closer. To the extent that approach is no longer an option, there are fewer avenues available to a bad team to improve their standing. It's worse for small market teams because the low price on draftees allowed small markets teams to compete with big market teams, but it's generally bad for any team that doesn't have a great farm system. By narrowing the box in which teams can play, it just reinforces the status quo.
   18. Don Geovany Soto (chris h.) Posted: November 23, 2011 at 04:35 PM (#4000097)
Agree with both #19 and #20.

Also, the limits on amateur FA spending suck, too.
   19. snapper (history's 42nd greatest monster) Posted: November 23, 2011 at 04:41 PM (#4000103)

Again, the choice isn't MLB vs. NFL. It is MLB vs. College Football and then theoretically picking between MLB/NFL again in 3 years. A top tier athlete is going to want a significant chunk of change to forgo the latter.


But, 1st round slot is still going to be several million dollars. Again the range bandied about is $4.5-11M for the team's first 10 picks.

Anyone who is a first round talent can still get $2-7M. Most guys are going to take that money.
   20. What did Billy Ripken have against ElRoy Face? Posted: November 23, 2011 at 09:57 PM (#4000372)
ways in which it will help “the integrity of the game.”


= "ways in which it will make money for Scott Boras"
   21. Slivers of Maranville descends into chaos (SdeB) Posted: November 23, 2011 at 10:09 PM (#4000379)
Yes, in terms of long term health and money, baseball is still probably the best choice, but since when are people in general and young people in particular known for taking the long term view over an obvious short term gain?


Isn't it the general opinion that if you can play football and [non-football sport] and get paid for both, you always pick the non-football sport? When's the last time a highly-touted MLB prospect chose to play football instead? Elway?
   22. SM Posted: November 23, 2011 at 10:30 PM (#4000386)
I don't get the Todd Helton example - wasn't he already an NCAA QB? He was on the Tennessee football team for 3 seasons.
   23. Jolly Old St. Nick Still Gags in October Posted: November 23, 2011 at 10:32 PM (#4000388)
Isn't it the general opinion that if you can play football and [non-football sport] and get paid for both, you always pick the non-football sport? When's the last time a highly-touted MLB prospect chose to play football instead? Elway?

And when's the last time that an alleged two sport phenom on the amateur level ever demonstrated that he could play Major League Baseball at a superstar level? For all the hype about Bo Jackson and Deion Sanders, at the end they wound up with career OPS+ numbers of 112 and 89, not exactly anything to write home about. Admittedly Jackson showed signs of greatness in his last year (1990) before his football injury derailed him, but even assuming that a 3.6 WAR season at age 27 meant that he was headed towards superstardom, for every Bo Jackson (and there's really been only one of him) there have been many more Danny Ainges and Drew Hensons.
   24. J. Lowenstein Apathy Club Posted: November 23, 2011 at 10:39 PM (#4000392)
Anyone who is a first round talent can still get $2-7M. Most guys are going to take that money.

Then why the hell aren't they paying that in the first place?

If teams could sign their draftees for half the money, they would.
   25. Swedish Chef Posted: November 23, 2011 at 10:43 PM (#4000396)
Then why the hell aren't they paying that in the first place?

Because they can implicitly threaten to try next year and be drafted by a team with a bigger purse

If teams could sign their draftees for half the money, they would.

Where can they turn, where is the alternative? Nobody else is going to step up and pay these guys millions, not even Best Buy. Next year is more of the same.
   26. Danny Posted: November 23, 2011 at 10:45 PM (#4000399)
Are we sure the new draft restrictions will result in drastically less draft spending? The league-wide draft pool is supposedly $200 million, which is not at all similar to the $133 million that MLB recommended for bonuses last year.

Here's what the league has spent the past 4 years on draft bonuses (from BA):

2008: $188M
2009: $189M
2010: $196M
2011: $228M

If they're really starting 2012 at $200M, and we assume 2011 was a bit of an outlier, it's not much of a step back.
   27. Heinie Mantush (Krusty) Posted: November 23, 2011 at 11:17 PM (#4000412)
In order to drive down bonuses, wouldn't it make sense to just consider them player payroll? Ex. A 10M bonus is the same, for luxury tax purposes, as a 1 yr/10M k?

That way, the Yankees/Red Sox would effectively be paying luxury taxes on 'spects and two major causes of price inflation would be somewhat sequestered.
   28. Harold can be a fun sponge Posted: November 23, 2011 at 11:25 PM (#4000418)
And when's the last time that an alleged two sport phenom on the amateur level ever demonstrated that he could play Major League Baseball at a superstar level?

Carl Crawford, Todd Helton, Mauer, Lofton. There are lots. By bringing up Jackson and Sanders, Andy, you're considering only guys who played both sports professionally.
   29. Der-K thinks the Essex Green were a good band. Posted: November 23, 2011 at 11:30 PM (#4000422)
30: Nope - MLB can clamp down on bonuses w/o offending the union much - it cannot do the same w/ mlb contracts.

29. I agree (also, 2011 was a bit of an outlier - teams were spending in anticipating of tighter controls going forward).

2 sport: The main benefit will be with locking guys into baseball early. Helton was going to MLB no matter what - Mauer wasn't necessarily (there's a guy for you, Andy - or do you only mean collegians?). That said, the #1 overall slot is high enough that he'd still sign - it's later in the draft where you might start to lose guys. I'm not that worried, yet.

24: What's your threshold for highly touted? Russell Wilson unexpectedly quit his minor league team (Asheville) midseason to go be a Heisman candidate for the Badgers.
   30. snapper (history's 42nd greatest monster) Posted: November 24, 2011 at 01:43 AM (#4000464)
If they're really starting 2012 at $200M, and we assume 2011 was a bit of an outlier, it's not much of a step back.

Correct. They're not bringing bonuses down much, so the sturm und drang about losing athletes is way overblown.

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