Baseball Business Journal: Scott Boras And The Strasburg Effect

Boris YovchevCorrespondent IAugust 20, 2009

BOSTON - DECEMBER 14:  Newly signed Red Sox pitcher Daisuke Matsuzaka (L) speaks to the media alongside his translator Tak Sato (C) and agent Scott Boras (R) during a press conference December 14, 2006 at Fenway Park in Boston, Massachusetts. The 24 year-old Japanese pitcher signed a six-year 52 million dollar contract with the Red Sox.  (Photo by Darren McCollester/Getty Images)


As a supporter of the Milwaukee Brewers I was impatiently waiting to see how the negotiations between Stephen Strasburg and the Washington Nationals would unfold.

Rumors were circulating that Scott Boras, Strasbug's agent, was asking for a $30 million deal that would eclipse any previous contract for a player chosen in the Major League Baseball rookie draft. In the end Strasburg and the Nationals agreed to a four-year $15.1 million deal that still ended up being the most lucrative in history for a drafted rookie.

The reason why this topic was of particular interest to me was that as a fan of a team that can not afford to spend big money on players, or buy its way to a postseason, I was wondering what a big contract between Strasburg and the Nationals would lead to in the future.

I was even more concerned based on the fact that this deal was for a player who has not proven anything to anyone in professional baseball.

That would be like a fresh college graduate, who attended a good but not necessarily an Ivy League school, asking to immediately be hired as an executive for a company based on the fact that she scored at the top one percent of her class.

Strasburg has the stats, too, but at a level much different than that of Major League Baseball. Someone once told me something that caught my attention.

"In order for a player to make it to the majors they were at one point or another really good at the respective level they played. But the fact that they were outstanding at that level, be it high school, college, or the minor leagues, does not necessarily transfer to success in the big leagues."

A quite simple logic that carries a lot of meaning.

So what can the effects of the Strasburg deal be in the future? In a free market where no set limitations exist the effects of this signing could compare to some corporate deals conducted in the business world.

The eternal debate of whether the introduction of a salary cap would be a good thing for baseball has been going on for years.

Truth be told, I am not sure how much of the guilt for the existence of bloated salaries can be credited to the lack of salary cap. Yes, a salary cap would certainly help in allowing teams from smaller markets to keep one or two star players, but I see the main problem elsewhere.

I see the problem as being incurred by the teams themselves, and not so much by the rules established by the league. I also take issue with the leverage that sports agents carry in front of franchises at present.

What I mean is this. If a team from a small market, such as the Milwaukee Brewers or the Tampa Bay Rays, decides to sign a player to a big contract that team is forced to abide by the already established salary brackets for players carrying a certain statistical quotient.

But this is a misnomer in terms of signing a contract that the team will benefit from. The reason hides in the fact that these established brackets for a player who for example hits 35 homeruns and about 100 RBIs are set by other teams that can afford to overspend.

A deal for a player of the aforementioned caliber player would likely cost the Yankees a premium because of the leverage hyenas of the sports agency world like Scott Boras have in terms of negotiating with the Yankees.

And because New York can afford to pay a premium for a player with such stats, without losing financial flexibility in the process, what gets recorded by the league and what gets noted by sports agents is the mere dollar amount, not the circumstances that surrounded the signing. According to sport agents all future players that fall within this statistical bracket should fall in the same salary bracket and that number is only supposed to grow.

Why agents are allowed to twist the arms of clubs asking for high premiums, guaranteed contracts and big incentives is anyones's guess. And all of this is happening in front of the eyes of the league, which either feels too weak to change things and force a new system or it simply benefits too much from the current system that it is not interested in changing it.

Either way the weight is lifted by the small teams. And they are not being very wise either.

Let me give you a good example of that.

A few years ago Bill Hall hit 35 homeruns for the Milwaukee Brewers. He was named the Most Valuable Player on a very bad Brewers team at the time. 

On Feb. 5, 2007, Hall agreed to a four-year, $24 million contract with a club option for 2011 that could raise the total value to $32.75 million. This was the most lucrative contract for a Brewers player at the time.

Just last night the Brewers traded Hall to the Seattle Mariners for what may turn out to be a bag of peanuts. Hall posted a .201 batting average and was absolutely miserable on the field this season. His guaranteed contract, however, was still in place and not only did it allow him to be the worst player on the Brewers but also gave him the leverage to decide if he can be sent to the minors.

Of course, the Mariners and their GM Zack Zduriencik, who joined Seattle last year after spending a number of years as the Brewers scouting director, were not stupid to take on Hall's salary and the Brewers still sent most of the cash owed to Hall through this and next year as part of the deal.

Now if you are the smallest market in baseball, that one hurts. Can the Brewers blame the lack of salary cap in baseball?

No. At least not within reason. They were the ones who decided that one good season by a player was sufficient to start breaking contract records. They probably did it because they thought they would lose Hall to one of the cash cows of professional baseball but that was still not a good enough justification for the type of contract Hall agreed to.

Scott Boras and his sports agent counterparts were paying attention in the meantime and diligently recorded the following note in their diaries; "Hall signs a big contract with the Brewers. Good! Let the arm twisting of other teams for similar players with a single breakout year begin!"

Pathetic, isn't it?

So the Yankees are being the Yankees. The Red Sox are being the Red Sox. Other clubs like the Angels, Dodgers, Mets, and Cubs are all able to flex the green dollar bill muscle. But now add to that the fact that smaller clubs are not being very smart in the way they conduct their business and that leads to trouble.

The latter has lead to as much damage in terms of overpaying unproven players as has the lack of salary cap alone.

Every club believes that by adding that extra couple of million to the contract offer they will get ahead of the competition. This is to believe that one player alone can bring you a World Series title. The reality, as proven by the Florida Marlins not many years ago, is to keep a balanced roster of both young and experienced players who are hungry to prove something to the world.

The best strategy is not to load up on the best free agents and hope that everyone stays healthy all year.

Smaller clubs have a lower margin of error, no doubt about it. But that does not eliminate their ability to stay competitive in the long run if they have the right structure and plan in place. Just imagine what the Brewers could have done before the trading deadline had they not carried the "falling" contracts of Bill Hall and Jeff Suppan. 

As constrictive as the lack of salary cap is for small clubs if teams are more patient, and if there are some commissions created by the league to regulate the types of contracts offered to players who have not proven anything, the overspending for rookies like Strasburg will be limited, if not eliminated.

But for the time being the capitalistic outlook of the baseball player market will rule and agents like Scott Boras will hideously smile at every mistake made by the next victimized baseball franchise. 

Welcome to the Strasburg effect. Batting to Scott Boras's hand is now permitted.



Boris Yovchev is a Milwaukee Brewers Featured Columnist for the Bleacher Report and a supporter of the children's story "A Glove of Their Own."

"A Glove of Their Own" is the award winning children's story that teaches Pay It Forward through baseball and is being supported by Louisville Slugger, International Baseball Federation, iFungo, Rawlings, Modells, as well as players and coaches including Jason Grilli, Joe Torre, Luis Tiant, Dick Drago, Ken Griffey, Craig Biggio, and Sean Casey.

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