Scott Boras, Draft and Free Agency Changes, and the Optical Problem of Self-Interest

MoneyYesterday, super agent Scott Boras wrote a kind of Op-Ed on Buster Olney’s blog on the many problems with baseball’s current CBA, which changed both the free agent structure (qualifying offers) and the Draft structure (pools). It’s worth reading, as Boras is generally right about the broad problems with those changes.

The primary two beefs: (1) impending free agents traded midseason are not subject to the burden of draft pick compensation and that’s unfair; and (2) draft-eligible players are having their bonuses artificially deflated by the pool/slotting system (and, I’d say, savvy teams that are willing to spend on the amateur side are prevented from doing so).

These are legitimate beefs, and I have no problem with Boras raising them. The problem is, whether the arguments have merit, Boras is the wrong guy to be making them. It’s too easy to dismiss everything he writes as pure self-interest.

Take a look at a couple sample selections from his article. First, on draft pick compensation:

The proof is clear based on how the market worked last year. Kyle Lohse (one of my clients) turned in a 16-3 record and 2.86 ERA in 211 innings last season at age 33 and was less valued in the market than Ryan Dempster after his 12-8 record and 3.38 ERA at age 35. Dempster was traded midseason and had no draft compensation attached to him.

First of all, there’s the obvious issue of Lohse being a Boras client – it just screams partiality. Because Boras represents so many top players, I can excuse that conflict. The appearance here, however, already starts on the self-serving foot.

Instead, I’ll just point out a few things: first, the stats Boras cites to demonstrate that Lohse was “clearly” better than Dempster in 2012 are frighteningly thin. Wins and losses and ERA? Seriously? Lohse pitched for the mighty Cardinals, while Dempster pitched (mostly) for the woeful Cubs. Lohse’s FIP was 3.51 to Dempster’s 3.69, and Lohse’s xFIP was 3.96 to Dempster’s 3.77. There were a number of teams that didn’t “buy” Lohse’s career year, and instead were more attracted to Dempster’s stable track record (and, arguably, better performance in 2012).

Further, it’s not like Lohse didn’t get the bigger contract. Lohse got three years and $33 million from the Brewers, while Dempster got two years and $26.5 million. Given that shorter term deals almost almost come with a higher AAV (since the team is taking less long-term risk), I can’t say that Lohse’s deal was worse than Dempster’s. Couple that with the value questions, and it’s anything but “clear” that Lohse was damned by the draft pick compensation, while Dempster was spared because of his midseason trade.

That’s the problem with Boras’s argument here: he’s making a good point (the draft pick compensation system is screwy) on the back of a terrible – and outwardly biased – example. It’s just too easy to take his argument apart because of the support he chose to offer, and because of his position as a super agent. Did the draft pick compensation drive Lohse’s contract price down? I have no doubt that it did. But I don’t think this particular iteration of the argument does much to advance the cause.

The same issue pops up in his Draft discussion. Noting that the pool/slotting system unfairly inhibits the earning power of top draft picks like Mark Appel and Kris Bryant, Boras offers a solution:

So what’s the resolution? I think each team’s first pick in a season should not be subject to any signing limits. Look at it from the team perspective: One player is not going to break any team’s budget, big market or small, and the flexibility to pursue one elite player of its choice will reward scouting and player development personnel who properly identify and value talent as it fluctuates from year to year. The remaining rounds could still be subject to the pool system, striking a balance between cost certainty and healthy competition.

This is a horrible solution that solves only the problem impacting Boras: reduced signing bonuses for the top talents. Once again, the optics here are all wrong, and appear purely self-serving. If first picks, and only first picks, are uncapped, who benefits? Those elite players … who are the types that agents like Boras are likely to represent. Heck, his two examples – Appel and Bryant – are both his own clients.

And if only the first pick for a team is uncapped, and the pool applies thereafter, there is absolutely no solution here for teams that are looking to add deeply in the Draft and are willing to spend to do so (*cough* Cubs *cough*). In fact, this proposed solution would have the opposite effect: since there would be no pool money to “save” on the top pick, teams could not try to apply “saved” funds later in the Draft.

In the end, the arguments here are done harm by the man making them (whether that’s fair or not). Boras makes good points, has legitimate issues with the current system – some of which are not self-interested – and does a good job of laying out the problems.

But, by making his arguments on the backs of the very players he represents, the whole thing winds up coming off like a press release. Hopefully others join Boras in what has become a very public quest to have these issues in the CBA sorted out. I don’t think he can be the one carrying the banner if things are actually going to change.

Boras, himself, might agree with me, because he concludes his piece with a call for others in baseball to take action and come up with a solution to these issues.

Brett Taylor is the editor and lead writer at Bleacher Nation, and can also be found as Bleacher Nation on Twitter and on Facebook.

45 responses to “Scott Boras, Draft and Free Agency Changes, and the Optical Problem of Self-Interest”

  1. cub4life

    Interesting……

    on a completly differant note what do you know about the guys the Cubs have on the DL? Time when the are estimated to come back (baring set-backs). We have 10 guys on the DL and I was just wandering if the is any legit info on there estimated time tables. Thanks man.

  2. Jcubs1107

    Not to mention, with an unslotted first round, no second rounder would ever sign and would instead opt to re-enter the draft the following year.

  3. hansman1982

    I like how Boras was railing against the old CBA taking money away from the pros to give it to the kids and now he’s saying the opposite sucks.

    Obvious Boras is obvious.

  4. wvcubsfan

    Can’t read because I refuse to pay money to ESPN to read something on the internet.

    I will say that when you only pull randomly chosen sentences without entire context it’s easy to make the point that you are trying to make.

    I know that Boras gets a bad rap from many fans, but why he does I can’t understand. He is just doing his job and doing it very well. I’ve heard several of his radio interviews and I’ve heard other people in baseball talk about him. It seems like each time I learn something new about the man and you start to see that he really cares about baseball. Not only his clients that make him money but the game as a whole.

    I agree the new draft rules are stupid, and I don’t see a major issue with the first pick being uncapped. Use the same slotting rules and numbers (I’m pretty sure this crap is here to stay), just move them back a round. The teams still can use the same type strategy as now only in the second round rather than the first. The elite players will get elite money.

    Would anyone disagree that Harper or Strasburg was worth more than Correa or Appel? With the new system they aren’t and that’s not right.

    1. cub4life

      One of the biggest problems with this teory is that if in the 1st round your “slot” is worth 5 mil and you sign him to a 4.375 mil that means that you can use that .625 mil to pay “overslot” for players that “fall” to a lower position but are bettre then there pick says to pay them and if you get rid of the slotting in round 1 and just start in round 2 the money comes down sugnificatly and you no longer have that extra money to spend in the latter rounds.

    2. JB88

      No, that’s not accurate. In the new system, you have a “slot” which predefines value and probably artificially caps the amount paid to the top players and certainly caps the amount paid to later players. The reality is that, in the old system, no such artificial constraints existed and a player could receive any amount. So Harper and Strasberg were absolutely worth more than Correa and Appel and could be paid that amount.

      A better example would be when a Strasburg or Harper type player exist in the new system why their value should be deflated.

      If you really wanted to institute some sort of fairness into the system, maybe you place a cap on the playoff teams each subsequent draft and allow all other teams an open budget. That would ensure that teams that don’t make the playoffs are capable of acquiring dynamic talent throughout the draft and preclude perennial playoff teams from paying ridiculous overslot to acquire talent that should have been available sooner, but weren’t picked due to economic concerns.

    3. Kevin

      “Can’t read because I refuse to pay money to ESPN to read something on the internet”.

      I also refuse to pay ESPN for anything. I have the means to pay but choose not to because my cable bill is already higher because of ESPN.

  5. jt

    Makes me wonder as to dynamics of limiting PED’s and greenies.
    Are old players leaving The Show at an earlier age. If so, by definition teams have to be getting younger because of the vacancies created by the retirement of older players who can no longer juice. That will putting stress on the pool of younger players in the short term. Supply and demand would make today’s prospects more valuable than they were a couple of years ago. But as these vacancies are filled the need to stress the prospect pool should recede. If so, the value of tomorrow’s prospects should recede.

  6. JB88

    Why in the world wouldn’t Boras just have his schill, Jon Heyman, write this article? Or at least ghost write it for Heyman? Talk about a strategically poor decision from a guy that doesn’t tend to make those sort of errors.

  7. ETS

    An interesting article on boras from BP circa 2011 (I wish they’d update this study)
    http://www.baseballprospectus.com/article.php?articleid=13584

  8. CubFan Paul

    Dempster at the most should of gotten 3/$30M. He received $13M AAV for the same reason the Marlins can’t sign big free agents (trading away recently signed mega contracts/players)

    The Red Sox overpaid for everyone they signed this past offseason save Napoli whose overpay contract had to be reduced because of hidden injuries.

  9. bbmoney

    Frankly, I just don’t like the new ‘hard’ cap structure. It offends my free market leanings and whatever the owners or the MLB tell you it’s #1 purpose is to limit signing bonuses and keep more money in the owners pockets.

    Not that I have a problem with owners making money either…..I just don’t like them doing it with unfair practices that only work because of their monopoly.

    1. MoneyBoy

      I don’t know if it’s true or merely urban legend … but you pretty much have the owner of the other Chicago team to thank for this crap. The same one, by the way, who wants NO IFA’s and is leading the charge for a world wide draft!

  10. Norm

    Abolish the draft, everyone is a free agent, no cap.

    1. hansman1982

      With this FO, yes please.

      1. Cyranojoe

        Wait, why? This FO has turned around our moldering minor leagues into a golden source of pride, primarily using the draft. Why would you want to abolish the draft on the strength of our FO’s ability to pick free agents? I guess they’ve done well in that arena as well, but only in terms of finding diamonds in the rough who can then be sold for more prospects… right?

    2. Edwin

      Agreed.

    3. Justin

      I would be cool with that. Although, Appel may have approached $100 Mill. if all teams were bidding on him, which would be pretty ridiculous.

      1. On The Farm

        I doubt Appel would get $100 Mil especially if the first years of his contract would need to be spent in the minors. If that were the case I would be happy with the FO going out and signing all the guys who fall to the 2,3,4th rounds

        1. Edwin

          Plus, if a team had $100M to spend, they’d probably be more likely to spend it on current MLB FA, where there would be an immeadiate impact felt on the team, and less risk.

          The problem is, neither the player’s union nor the owner’s have any incentive to do something like this. Rising lablor costs for amatuer talent means less profit for owners, and probably less payroll going to MLB talent. Amatuer players have absolutely nobody looking out for their best interests in any labor negotiation.

        2. Justin

          $100 Mill was probably high. But I could see him getting paid close to that considering his can’t miss status, youth, and seasoning.

          1. Edwin

            I’d think pricing would be similar to how a player like Soler was priced. It might be more, but I don’t think too many rookies would get paid like current MLB players. Who wants to risk that kind of payroll on riskier talent?

            1. On The Farm

              Even Alfredo Gonzalez didn’t get $100M or near that, and he was considered a month ago to be (by some teams) MLB ready, and a TOR arm.

              1. ETS

                MAG didn’t get anything, yet. Did he?

                1. On The Farm

                  Well I suppose that’s true, but even the deal that was rumored with the Phillies wasn’t in that amount. If anything I would expect him to get less than what was out there for him to the Phillies.

              2. Justin

                Everything I have read has indicated Gonzalez had some serious arm injury question marks leading up to his signing. I think Appel would have been paid more, but I could be wrong for sure..

            2. Justin

              From everything I have read Soler and Puig were both pretty big risks because lack of exposure and ability to scout them. Teams have had many chances to watch and scout Appel very closely for years. I think Appel would have been way less risky for a team to pony up cash too than Soler. Hell, Brett posted the same pic of Soler probably 50 times because there was nothing else of him, he was like Bigfoot.

              1. Edwin

                Sure. And obviously, this all speculation. Who knows how the actual market would react. Still, with regards to signing amateur talent vs MLB talent, I think teams would prefer MLB talent due to a more immeadiate impact and less risk.

  11. Sandberg

    I’d slot/cap the first round the same way they do now and cap the remaining picks at whatever was spent on the first round pick.

  12. WGNstatic

    I agree with Boras that removing the supplemental pick for in season trades is rather silly. There are all sorts of problems with this. Would Garza have been more open to an extension if being traded wasn’t a sure fire way to increase his value on the free agent market?

    As for the slotting system. As much as I would love for the Cubs to be able to take advantage of the draft in the way that teams such as the Red Sox did over the last decade, I am coming around to the new slotting system.

    First off, it is fair (between teams), and that is good. I don’t like the idea of a top talent scaring away smaller market teams to sign with a big market team. That was never a huge problem, but “signability” was always a discussion for some smaller market teams first round picks.

    Second, while I would love to think that the Cubs could have taken advantage of the old system, at some point, enough teams would be willing to spend big money in the draft that any advantage would effectively disappear. Remember, the reason the Red Sox were able to work the system was precisely because teams like the Cubs refused to spend draft money.

    1. Edwin

      I’m not a fan of the new slotting system, because I don’t think it really helps “competative” balance, and mainly serves as another way of supressing wages for younger players.

  13. Justin

    I’m not a Boras fan in the slightest, but I do think the Qualifying offer over free agents heads really hurts their value a ton. Baseball players obviously make ridiculous coin, but taking money out of the pockets of established players who have earned their free agent contracts seems backwards to me. Garza and his people had to be ecstatic to have been traded. It put a ton of money in his pocket. Why can’t teams who lose a Prince Fielder type be rewarded draft compensation (varying degrees of it) without the signing teams keeping their picks? Basically, no team picking in the middle of the first round (11-20) is ever going to sign a free agent who has compensation over them. It’s to big of a price. So that takes a 1/3 of the teams out on free agents at least…

    1. ssckelley

      But the issue is not the compensation pick, the real issue is the team that signs the free agent loses their #1 draft pick if drafting outside the top 10. To me losing a first round pick to sign a free agent does not mean much. Drafting outside the top 10 in the first round is a crap shoot and I think teams that attempt to build their team using the free agent market should lose their #1 draft pick. If you have played well enough to be offered a qualifying contract you are going to a be rich ball player whether you decide to accept it or not.

      1. Justin

        Yeah, that’s what I am saying (I may have phrased it wrong). Teams are hesitant to lose their first round pick, especially picking between 11-20. By all accounts the Mets wanted Bourn badly and were willing to pay him, but didn’t want to lose the 11th pick. At the end of rd. 1 isn’t as big of a deal. I think absolute studs like Cano, and Fielder are going to get paid regardless. But the other guys like Lohse, and Bourn get screwed for sure.

      2. cms0101

        Teams are not just balking at signing players with compensation requirements because of the lost pick. With the new pool rules, nobody wants those dollars removed from their overall pool, especially teams drafting later in the first round. Often those later first rounders will sign for slot or below, allowing teams that much more in pool space to grab overslot guys later. The draft compensation issue is even more prohibitive now than before because of the pool factors, not just the lost picks themselves.

        1. Justin

          Exactly, it’s about the combination of the pick and the cash alloted for the rest of the draft. You basically lose flexibility to be creative later in the draft.

  14. TK

    Don’t forget that more than 1/3 of Dempster’s IP were in the AL West, while Lohse had the fortune of building his sub 3 ERA in the NL Central. Boras is nothing more than the slimiest piece of pond scum on earth and should never ever be taken seriously.

  15. Ivy Walls

    Met Boras once, he is literally money bags….for himself and says if you are part of his world you will benefit, only his world.

    1. Edwin

      So, he basically walks around like Mr Monopoly all the time?

    2. jay

      He does make an appearance. But when he comes to Mesa he strokes his low pay guys just as his money boys. I actually like him and I have heard when one of his youngsters is released he does all he can to re-connect-even Independent Leagues

  16. Caleb

    Yes, his comments might be self-serving. And his W-L and ERA comparison seems odd to we advanced baseball minds here at BN.

    But to the unwashed masses? His arguments have great appeal. Whether that’s an accidental benefit or calculated design is debatable, but this guy is too smart to not weigh his every statement.

    Boras FTW.

  17. another JP

    The main problem with Boras’ arguments is that all players are being paid more than ever before for performance that isn’t exactly commensurate with their paychecks. Just because he can’t fleece more teams with his high profile clients Boras bashes the system. Like you said Brett, the point would have been better made by someone else, and I think ole Scotty was merely grandstanding so he could improve his standing amongst FA & prospects- which has taken a beating the last couple years. Losing Borne as a client was probably an eye-opener for a lot of players.

  18. TK

    On the surface, one could easily make an argument against the changes brought forth via the CBA; however, I strongly disagree with the basic principal of that argument. Yes, a change has occurred. Yes, guys are being paid less. But I sincerely believe they are not being underpaid or in any way being taken, swindled, scammed, ripped off, or any other word you chose to use.
    Can you say Sammy Sosa? Alphonso Soriano? A-Rod? The list is extensive. All albatrosses created by a culture of the rich get richer — players AND teams. These guys and the unlimited spending surrounding them were ruining the game. Remember when teams like Tampa, Toronto and Baltimore had absolutely NO chance of a WS? Wasn’t too long ago. The game is INFINITELY better now than it was. Much of the turn around is directly contributed to the CBA.
    We are talking about a FA market that blasted to unprecedented heights and was far beyond real value levels. It was way out of control. The comp pick does not in any way reduce that FA’s value. Quite contrarily, it tunes his value to a much more accurate figure. A guy worth 4 yrs/ 36 mil is no longer getting 5 yrs/55 mil. Boo hoo hoo! Fahgetabuttem! The comp pick adjusts values back to reality, it does not prevent guys from signing, nor does it take away money they “deserve.”
    As ar as signing PROSPECTS, are you kidding me? What a freaking joke!!!! They are PROSPECTS. Actually, NO, they are not. Not yet. They are less than prospects until they sign a contract and report to camp. The vast majority of prospects fail, and we want teams to have to she’ll out $10mil per to say competitive?!?!? Are you F-in nuts?????
    The CBA truly is for the good of the game. It’s easy for a select few players, their agents, and fans of big market teams to argue otherwise; however, arguing against these cost control and competitive balance measures is selfish and severely shortsighted. Thank god their are actually wise men making decisions that will ensure this game continues beyond the days of Boras’s bank account and the fandom of Joe Q. New Yorker, and in a manner that retains its historical interest and gamesmanship.

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