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August 30, 2008

Future Shock

Boras vs. Baseball—A Primer

by Kevin Goldstein

While the Pedro Alvarez story is still sending shockwaves through the industry, many people are talking about this as if it's a new scenario, but we're hardly in uncharted territory. From Tim Belcher's holdout in 1983, to the incredible inflation created by the representation of top talents Ben McDonald, Todd Van Poppel, and Brien Taylor from 1989-91, the structure of the modern draft has Scott Boras' fingerprints all over it. Even filing a grievance against baseball is nothing new, as Boras has commonly used it as a tool to gain leverage (and therefore money) for his clients. Here's a quick overview of five of Boras' biggest draft moments that actually resulted in Major League Baseball's involvement.

2000: If A Kid Is Eligible And Nobody Is There To Hear Him, Does He Make A Sound?

At the time, Landon Powell was one of the top high school talents in the country. Always looking for an angle, Boras came up with an idea for his client, who had just finished his junior year at Apex High school in North Carolina: get your GED. Great advice for anyone certainly, but the goal here was to enter Powell's name into the draft pool—and to not tell anyone. So Powell passed his tests, and Boras filed the paperwork to make his player eligible. That's really all they did, using the rule (and not inappropriately), that any player who had graduated high school or received his GED was eligible for draft. So while Powell had eligibility for the draft, nobody really knew that, and the 2000 Draft was completed without his name being called. Boras then accurately stated that his client was in the draft pool and had not been selected; therefore he was a non-drafted free agent and eligible to negotiate with all 30 teams. The commissioner's office then stepped in put a freeze on the Powell situation, giving them 90 days to reach some kind of conclusion. They had no legal leg to stand on, and the delay gave them only until early August, greatly limiting the signing window. Even though Powell was ruled a free agent, the messiness of the situation had many teams unwilling to step into the fray, despite their desire to sign the talent. He would not sign, and he returned to high school.

Fallout:

  • Powell would end up playing four years at South Carolina, and was a first-round pick by the Athletics in 2005, by which time Powell had left Boras for agent Mark Pieper of SFX.
  • MLB amended the rules to require players that have dropped out of high school to wait for one year, and to get a GED after their 18th birthday in order to become draft-eligible.
  • The GED route is now quite common in college baseball, as a number of top prospects, including catcher Robert Stock (Southern California), got their GEDs in order to begin their college careers one year early and have that one-year jump on the draft.

1997: Return To Sender, Address Unknown

Coming off of the biggest fiasco is draft history (which we'll get to in a moment), teams tightened down their processes the following year, but that didn't prevent Boras from trying to have his client declared a free agent—not once, but twice. J.D. Drew is one of the best college players in the history of the game, and was coming off of college baseball's first-ever 30-30 season at Florida State. Knowing what 1996's loophole free agents had received, Drew told every interested party that he would require a $10 million deal to sign. That was enough to scare away the Tigers, who wasted the first overall pick on Rice closer Matt Anderson, but with the second overall pick the Phillies took Drew. They were calling his bluff, and had no intention of giving Drew an eight-figure deal, but they believed that he'd sign anyway. Knowing that the negotiations were going nowhere from the start, Boras immediately went about trying to have his client declared a free agent. He began by claiming that the Phillies did not properly tend an offer before the early deadline because they had sent it to the wrong address. The Phillies sent a standard offer to the address listed on Drew's eligibility card, which was the address of the Drew family home in Georgia. Boras claimed that it was not his client's address, and therefore the offer was invalid.

The Phillies then made multiple attempts to both find and send contracts to Drew's Florida addresses, only to encounter more problems, including one refusal to sign for delivery by a man believed to be an assistant coach at Florida State. Boras would lose this grievance, with an arbitrator ruling that the Phillies had sent the deal to an address that Drew had registered, and the fact that it was the wrong address was Drew's own fault, and not any fault of the Phillies. Even before that ruling was reached, Boras had signed his client to a deal with the St. Paul Saints of the independent Northern League. He then filed a second grievance, saying that his client had signed a professional contract, and that by doing so, he was no longer beholden to an amateur draft—insisting that once Philadelphia's signing window had closed a week before the 1998 draft, his client would be a free agent. By baseball's own definition, an amateur was someone who had not signed a professional contract. After Boras filed this grievance, MLB altered the rule to add that those playing professionally in the independent leagues were still subject to the draft. In the end, Boras nearly got what we wanted, but it was a hollow victory. An arbitrator ruled that although baseball was in the wrong, especially in changing the rules following the grievance, that he did not have the authority to make a decision on Drew's draft status since he was not a union member. The arbitrator ruled that the decision should be made by MLB's executive council, who of course ruled against Drew. Keep that authority precedent in mind when trying to think through the Alvarez situation. The union carefully worded their statement to clarify that the grievance was not filed for any one player.

Fallout:

  • Drew would be drafted by the Cardinals the following year, and signed for a deal which included a total package of nearly $9 million, more than triple the highest offer that he had received from the Phillies.
  • Despite not getting what he wanted, Boras proved that year-long hold outs and playing in the independent leagues often led to more money for his clients, including the last two to pull off the gambit, Luke Hochevar and Max Scherzer. This negotiation tactic was one of the primary reasons for the establishment of the August 15th signing deadline in 2007.

1996: An Obscure Rule Turns Into Big Money

This is by far Boras' biggest win, when he took on the rules of the draft, stomped them into the ground, and earned his client at least $25 million in extra money. As with most drafts, Boras entered the year representing a great number of top talents. As with most drafts, those players were taken early in the first round, and as with most years, Boras had little if any communication with the drafting team within the first two weeks of the selection. A little more than two weeks after the draft, Boras had his clients, and others, declared as free agents. The CBA at the time contained a clause that required teams to either tender an offer to players within 15 days, or relinquish their rights to them, but the rule was buried so deep within the agreement that many teams did not even know of its existence. Boras initially filed a grievance for a single player, left-hander Bobby Seay, and baseball lost that grievance in late September, as they really had no case—the rule was the rule. Four players in all were granted free agency: second overall pick Travis Lee (Twins), fifth overall pick John Patterson (Expos), seventh overall pick Matt White (Giants), and Seay, the 12th overall pick by the White Sox. Now eligible to negotiate with all 30 teams, bidding on the quartet proceeded to go through the roof, and the four signed packages totaling nearly $30 million, with White, seen as one of the best high school arms in recent memory, topping out at $10.2 million from the nascent Devil Rays franchise.

Fallout:

  • MLB closed the loophole going into the following year.
  • Boras proved without a shadow of a doubt that the draft greatly deflates player values. Getting to the current matter, if he could somehow get Alvarez declared a free agent, a poll of industry insiders estimated that the bidding would reach the $17-22 million mark, or nearly four times the $6 million deal he had agreed to.

1994: Varitek-nicalities

Ask any college baseball historian who the best catcher is in the history of the game was, and any argument begins (and probably ends) with Varitek. Coming out of Georgia Tech in 1993 wasn't the best of timing, however. With bonuses nearly quadrupling over the last four years and with Scott Boras as Varitek's advisor, teams were terrified to take him until the Twins finally selected Tek with the 21st overall pick. The two sides were nowhere close to an agreement, and Varitek returned to college for his senior year, where he set numerous career records and established a new ACC record with 76 walks in 1994. The Mariners drafted him the following year with the 14th overall pick, and assuming that they had all of the leverage now that Varitek was a senior, they offered him even less than Minnesota's final offer had been from the year before. However, Boras had his client sign an independent league contract, and filed a grievance that, as a professional player, Varitek was no longer subject to the draft and would become a free agent. There was no conclusion to this hearing, as the Mariners upped their offer more than fifty percent (to $650,000) and signed Varitek, which ended the grievance process.

Fallout

  • Varitek's extra year at college and his extended holdout resulted in his not making his professional debut until he was 23, and he did not reach the majors until age 25. Without question, his delayed entry to baseball cost him a few of years of his career.
  • Without a ruling, MLB failed to take the proper steps to avoid another Varitek-like situation, leaving the same hole open for Boras to jump through with J.D. Drew three years later.
  • Boras proved that the leverage issues that the teams assumed to be true with seniors did not apply to his clients.

1993: He's An Advisor, He's A Family Friend, I Barely Know The Guy!

It was the spring of Alex Rodriguez. Not only was he the best high school player in the country, he was the best high school player that some scouts had ever seen—and his agent was Scott Boras. The Mariners selected him with the first overall pick, and Boras, just two years removed from getting a record-shattering $1.55 million bonus for Brien Taylor, asked for $2.5 million and a major league deal, a figure (and clause) that were all but unheard of at the time. The two sides were well apart, and classes were beginning soon at the University of Miami, where Rodriguez would play should he not sign. (Once a player attends classes, he is unsignable, so the university's class schedule dictated the deadline.) What happened next is of some debate. Days before the fall semester was to begin, the Mariners began negotiating directly with Rodriguez' family and a man named Joe Arriola, who, depending on who you listen to, was either now acting as Rodriguez' advisor, or was simply a family acquaintance. The two sides worked out a deal for $1.3 million, and Rodriguez began his pro career the following spring. Boras then stepped in and filed a grievance on numerous grounds, stating that the team took advantage of Rodriguez by circumventing his representation, and that the deal as Rodriguez understood it was different from what he had signed in the end. Both of those issues could come up again in the Alvarez hearing.

Fallout:

  • The grievance was continuously delayed, as Rodriguez was playing and happy with his deal (much like Eric Hosmer was before getting pulled of the field at the order of the commissioner's office yesterday afternoon). In 1996, Rodriguez and Boras agreed to drop the filing when he signed a multi-year extension. Thus (again bringing us to the current mess), the issues have no ruling to use as precedent.
  • While Boras remains Rodriguez's agent, the two still have a distant relationship, with Rodriguez doing much of the negotiations with the Yankees on his own, using Boras almost solely as an attorney/advisor.

These five cases certainly prove one thing: Scott Boras sees the draft as his own playground, and he'll go to any length to preserve his kingdom. The frightening thing for Major League Baseball is that even when he loses, he still wins.

With that, the history lesson is over; there will be a test on this material later.

Next week: In what ways the player's union might have a slam-dunk case, though finding relief could prove to be difficult.

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

Related Content:  1996 Draft,  Draft,  Scott Boras,  Free Agent,  The Who

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