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June 2, 2010

Future Shock

With Boras, Good Often Outweighs Bad

by Kevin Goldstein

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In baseball, it's known simply as "The Boras Effect."

Nobody has done more to contribute to the rapidly increasing bonuses paid out than the sport's most famous -- or infamous, depending on your perspective -- agent. Boras rules the draft like no other: In 2006, he represented the first overall pick, Luke Hochevar. The following year he represented three of the top ten selections, and in 2008 he had the second and third picks. This past year was his best ever, in some respects. Not only did he negotiate over $25 million in contracts by representing the first three picks in the draft, but four more selections in the first 60 signed for another $10 million plus -- not to mention the two unsigned picks in that range who will be looking for seven-figure deals this coming summer.

The 2010 draft isn't as star-studded for Boras as last year's was, but once again his influence is strong. Not only does he represent historic talent Bryce Harper; he also will be conducting the negotiations for Florida prepster Manny Machado, generally considered the top high school position player in the draft and expected to go either second overall to the Pittsburgh Pirates or third to the Baltimore Orioles.

Beyond that pair, the University of North Carolina's Matt Harvey and LSU's Anthony Ranaudo, a pair of right-handers, are expected to go in the first round, as is Cal State Fullerton infielder Christian Colon. Colon's teammate Gary Brown, a speedy outfielder, University of Arizona State righty Seth Blair and fireballing lefty James Paxton should all be off the board within the first 50 picks.

Even with all this Boras-represented talent going early, selecting a Boras client is never the beginning of an easy signing process.

At the very least, though, teams know what they're getting into; Boras negotiations tend to follow a predictable pattern. They almost always go down to the wire, as Boras often doesn't even begin negotiations until 48-72 hours before the deadline; he also almost always demands -- and ultimately gets -- a bonus that is well above Major League Baseball's recommended slot for that selection.

As a result, there are a few teams unwilling to even look at Boras clients. At the same time, those teams that do take on the Boras risk tend to reap rewards in the standings.

Boras clients used to drop precipitously in the draft due to bonus concerns, but this trend has slowed dramatically of late, as teams look back at their mistakes and realize that in the larger scheme of the baseball economy, that extra $1-2 million isn't more than a drop in the bucket that could have helped turn a franchise around.

For some, the straw the broke the camel's back was in 2007, when the Pittsburgh Pirates, drafting fourth overall, selected Clemson lefty Dan Moskos because they didn't want to deal with Boras on Georgia Tech catcher Matt Wieters. Moskos signed for just under $2.5 million and has yet to pitch above Double-A, while Wieters received $6 million. Even considering the extra $3.5 million, who had the better first-round pick? It's not even close.

Wieters is hardly the only lesson from 2007, as Boras client Rick Porcello -- who made it no secret that he was looking for a precedent-setting deal -- nearly fell completely out of the first round before being selected by the Detroit Tigers with the 27th overall pick. Detroit met his demands by giving the high school talent a big league deal worth $7 million; Porcello is only 21 years old and has 18 major league wins, while the 14 pitchers drafted between that year's No. 1, David Price, and Porcello have combined for just two victories -- and neither of those was registered by a pitcher currently in the majors.

This is a lose-lose situation, except for the players. Teams in need of talent pass on elite prospects due to monetary concerns, and as a result, those players can fall to later picks, where better-financed teams can grab them.

Teams picking high should consider grabbing Boras clients; look at what happened in 2009. Sentiment is nearly universal that Stephen Strasburg will be an ace. With just one such season for the Washington Nationals, the team will already make a profit on its initial outlay of a record-shattering $15.1 million; on the open market, that kind of season is worth $16-20 million. Consider six years of a controlled Strasburg costing $30-40 million once arbitration is included, and the Nationals could still reap a relative profit of two or three times that amount.

"One way or another, Scott Boras always gets his money," one front-office official told me last year, while waiting to negotiate a recent Boras selection. But as many teams have begun to learn, more often than not, they're worth it.

A version of this story originally appeared on ESPN Insider Insider.

Kevin Goldstein is an author of Baseball Prospectus. 
Click here to see Kevin's other articles. You can contact Kevin by clicking here

13 comments have been left for this article. (Click to hide comments)

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ubrnoodle

Kevin,

While I understand the general idea of the article, it would serve you better not to use Matt Weiters as an example. He's still a prospect, but looks more like the Alex Gordon type prospect than the Evan Longoria type. You should wait until Weiters is actually an average major league catcher before declaring victory and declaring an extra $3.5M for him a pittance.



Jun 02, 2010 14:49 PM
rating: 0
 
Richard Bergstrom

You need to consider the flipside. Major league backstops, even backup backstops, that have an OPS of around .700 like Wieters does generally cost a few million but, unlike Wieters, have little room for improvement. Meanwhile, like the Moskos scenario, there are many draftees who get a big signing bonus that never even make it to the majors.

A MORP comparison on major league catchers and backups to see where Wieters stands would be useful...

Jun 02, 2010 16:14 PM
rating: 3
 
ubrnoodle

Richard,

I have considered the flip side and as much as I’m into statistical projection, count me on the side of people who needs to see a ball player produce on the big league stage before declaring him a bargain. Wieters has been a disappointment. I just wanted to point out the fact that we’re putting the cart before the horse when touting him as one of the stellar examples of the sensibility of spending a few million more for the better prospect.

While he certainly can still have a great career and be a HOF caliber player, you have to acknowledge that the likelihood of him being a bust if far higher now than it was 2 years ago.

Jun 02, 2010 18:15 PM
rating: 0
 
Richard Bergstrom

The cart before the horse? He's been in the major leagues for a full season so far, which is better than a lot of people who were drafted and given a lot of bonus money.

Last year, he had the 14th best VORP among catchers in the major leagues and 9th best in the AL, way ahead of such players as Jason Kendall, Russell Martin, Bengie Molina. Last year, Kendall made $5 mil, Martin made $3.9 mil, Molina made $6 mil. Note that VORP also doesn't account for his defensive contributions.

Now, you may say that these catchers are horrid, and yes, Wieters has been a disappointment for not making the HOF in his first season, but considering the going rate for an average major league catcher, he's been well worth the value and a bargain. So, no, he hasn't been a bust and even if he keeps producing at his current rate, he won't remain a bust. Especially if you consider the Orioles could have spent that same amount of money on someone else who didn't even get a cup of coffee with the Orioles.

Jun 02, 2010 18:41 PM
rating: 1
 
ubrnoodle

Wow really, 14th best VORP among catchers? Didn't realize that, VICTORY!!!

Jun 03, 2010 10:43 AM
rating: -3
 
Richard Bergstrom

Would you rather have Ramon Hernandez and Javy Lopez at three times the price?

Jun 03, 2010 12:05 PM
rating: 1
 
ubrnoodle

No, but I'd rather have Jason Heyward at less than a 1/3 of the cost. However, I think you missed the point of my post. Wieters probably isn't the ripest cherry to pick in Kevin's example. I support his general thesis, so let's move on.

Jun 03, 2010 14:25 PM
rating: 0
 
Richard Bergstrom

I did get the point of your original post... "You should wait until Wieters is actually an average major league catcher before declaring victory and declaring an extra $3.5M for him a pittance." My point, which you may disagree with, is that, as of right now, he is at least an average major league catcher and the going rate for major league catchers makes a $3.5 million bonus (as opposed to a $3.5 million yearly salary) a bargain.

Either way, let's move on.

Jun 03, 2010 18:51 PM
rating: 1
 
Brian Kopec

I NEVER understood why otherwise smart men would piss away $2 million on a crap pick rather than spending $5 million on someone with upside. Where is the logic in that? If you have decided that the draft is not worth spending money on, then don't spend any money at all. Instead the cheap teams insist on paying 3rd round talents 1st round slot money rather than paying a small premium.

Jun 02, 2010 18:28 PM
rating: 0
 
DrDooby

Scott Boras also got Oliver Perez a 36 mio $ contract over three years. While he wasn´t a draft pick, I wonder whether the Mets would rather have Daniel Moskos at 2 mio $ right now ;-)

Jun 02, 2010 23:09 PM
rating: 1
 
eliyahu

Exacxtly DrDooby.

Kevin, I normally love your stuff, but this seems like you cherry-picked specific over-slot players to support your hypothesis. I wonder how many over-slot bonuses Boras has garnered that, in hindsight, were unjustified.

Jun 03, 2010 12:38 PM
rating: -1
 
jalee121

I wonder how many free agent contracts Boras has garnered that, in hindsight, were unjustified.

My point is that there is risk in both. Personally, I'll spend the extra two million on upside rather than overpay a free agent who will more times than not, be untradeable with three years left in a deal.

Jun 03, 2010 21:51 PM
rating: 0
 
eliyahu

The point of Kevin's article (as I understood it) wasn't to prove that an incremental $ may or may not be better spent at the draft in signing over-slot players; that may or may not be true (although I'm certainly not convinced of that from this piece).

Rather, it was to demonstrate that it is worthwhile for teams to spend more in the draft. Kevin wrote that "more often than not, they're worth it," and I am not convinced that's true.

Jun 06, 2010 03:04 AM
rating: 0
 
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