CONTRACT CONSPIRATORS AT WORK

By Murray Chass

March 27, 2011

Eight years ago the chief executive of the Boston Red Sox called the New York Yankees the “Evil Empire,” and the Yankees have never returned the favor. The Red Sox, though, deserve equal name-calling notoriety.

What about Contract Connivers? Or Contract Conspirators? Neither has the colorful connotation of Evil Empire, but if the name fits, well, wear it.

Adrian Gonzalez is the Red Sox first baseman, and he enters the season, which begins Thursday (the Red Sox Friday), with a $5.5 million salary in the option year of a contract he signed with San Diego four years ago.Adrian Gonzalez2 225

However, soon after the season starts, Gonzalez will sign a new contract with the Red Sox, say a seven-year deal worth $154 million or so. The development will recall the four-year, $68 million contract Josh Beckett signed last April 5, the day after the 2010 season started.

Too much to be a coincidence, no?

It’s about the luxury tax. A contract signed before the season counts in the payroll of that season. A contract signed after the start of the season doesn’t count until the following season. It’s sort of like having a baby on Dec. 31 and getting the full tax exemption for that year.

If Gonzalez’s new contract has an average annual value of $22 million, that amount won’t be charged to the Red Sox luxury tax payroll until 2012. For this year, the amount will be $3 million, the average annual value of the five-year contract he will have on opening day. That will make a huge difference in the team’s luxury tax payroll.

On opening day last season Beckett had a contract that averaged $10 million a year. The next day his a.a.v., as it is called in the business, rose to $17 million.

It’s all legal but questionable the way the Red Sox manipulate the rules. Other teams, even the Yankees, don’t operate the game as obviously as the Red Sox do.

“There is this rule and whether it’s a pre or post opening day it’s purely a timing issue,” said Rob Manfred, ML.B.’s chief labor executive. “Whether it affects 2011 or 2012, their position is they don’t have an enforceable agreement so they have to live with the ramifications of that. If he doesn’t want to stay with the Red Sox he can walk away as a free agent.”

The game includes a risk for Gonzalez as well. If he had suffered a season-ending injury in spring training, a torn knee ligament, a Jason Bay-type concussion, he would have lost a lot of money, getting $5.5 million for the unplayed season instead of $22 million.

The new contract plays a significant role because the Red Sox traded for Gonzalez without a guarantee he wouldn’t become a free agent at the end of the season. Unless, of course, they had a tacit understanding with Gonzalez’s agent, John Boggs, on an approximate contract that they would sign after the start of the season.

It was Boggs who seemed to give away the game when he visited the Red Sox camp earlier this month. He told reporters he would be surprised if they didn’t negotiate a deal, saying, “I just think it’s going to move very positively in the direction of probably trying to get something done sometime in April.”

Why not before April? “There are so many issues we still have to talk about, nuanced issues in some respects, but still a lot,” Boggs said. “There’s language, there’s performance bonuses, there’s awards.”

The bonuses, which have become so pro forma you and I could negotiate them, are the silliest aspects of the contract. Gonzalez is going to have bonuses for things like the most valuable player award when someone making $22 million a year should play well enough to be the m.v.p.

Aside from that silliness, though, why other than the luxury tax matter couldn’t Boggs and the Red Sox have already completed the contract that the agent said would be done in April?

larry-lucchino“You try not to do a long-term contract when a player is in recovery from surgery,” Larry Lucchino, the Red Sox chief executive officer, said. “He’s playing but only recently has he started playing okay.”

Does Gonzalez look healthy enough to pay him $22 million a year? “I’m not going to comment until I talk to the doctors and Theo.”

That would be Theo Epstein, the general manager, who did not return a call seeking comment about Gonzalez’s physical status and the luxury tax issue.

“I have no comment on the luxury tax,” Lucchino said. “There is really no reason to discuss anyone’s new contractual situation other than to say he’s recovering from surgery.”

Consider, though, the timing of some other Red Sox signings, which weren’t expensive enough to prompt them to wait until after the start of the season.

Tim Wakefield signed a two-year contract on Nov. 9, 2009, but it was for $5 million, an a.a.v. of only $2.5 million, meaning it made no impact on the luxury tax payroll. Dustin Pedroia signed a six-year contract on Dec. 3, 2008, but again the a.a.v., $6.75 million wasn’t high enough to make an impact.

In discussing Red Sox contract practices, we should not forget J.D. Drew. Two years into a five-year, $55 million contract with the Los Angeles Dodgers, Drew exercised a clause that permitted him to opt out of the contract. In January 2007 the outfielder signed a five-year contract with Boston for $70 million.

A move engineered by Drew’s agent, Scott Boras, it was suspicious. The Dodgers believed that the Red Sox had tampered with Drew, letting Boras know that if Drew opted out, they would sign him. Boras and the Red Sox denied they had tampered, and the Dodgers opted not to file a protest with the commissioner’s office.

A couple of years earlier the Dodgers’ owner, Frank McCourt, opted not to fight the Angels’ hijacking of the Los Angeles name. He told me he had more important matters to fight. I think it was too early for him to have meant the fight with his wife.

Whatever, the Red Sox wound up with Drew, but at least his contract counted against the luxury tax from the start.

It should be noted, however, that even if the Red Sox delay a contract’s counting for luxury tax purposes for a year, it eventually is all counted. The Red Sox just try to have it count when it is most advantageous for them.

“The problem with this club,” a baseball executive said, “is they have to take every issue and push it far enough to make it obvious.”

Another executive, though, noted that there is a difference between tax avoidance and tax evasion.

BASEBALL BURNS BRIGHTLY; FIRES RAGE ELSEWHERE

Three of the four major professional sports have payroll caps, and the lone exception, Major League Baseball, would like to join the party. That is, the club owners in Major League Baseball would like a cap. The players don’t want one, and that’s why baseball doesn’t have it.selig4-225

The owners fought that war in 1994 and lost it, even though they think they won. They prepared for battle two years earlier by ousting Commissioner Fay Vincent because they feared he would get in the way of their battle plans.

That was the last round of baseball bargaining that was interrupted by a work stoppage. Commissioner Bud Selig, who was one of the leaders of the management strategy in the early 1990s, now sings the praises of the unprecedented 16-year period of labor peace (after five strikes and three lockouts) as the other sports trudge through labor pains.

The National Football League has locked out its players and threatened the 2011 season. The National Basketball League is approaching a difficult negotiation with its commissioner, David Stern, stressing the league’s financial distress. The National Hockey League faces its next labor confrontation against an unusually worthy opponent, the hockey players’ union’s new leader, Donald Fehr.

Meanwhile, representatives of baseball’s club owners and players held their second bargaining session of the new round of negotiations last Tuesday evening in Arizona and continued to speak positively of the talks. They didn’t say much, if anything, because they have agreed to an embargo on public comment on the talks.

But they are expected to emerge from their silence with an agreement well before the old one expires Dec. 11. Baseball is well off financially, and neither side has reason to disrupt the revenue flow. They quietly negotiated a new labor contract in 2006 and should repeat that development this year.

One other reason continued peace seems a certainty: Selig’s tenure as commissioner is scheduled to end after the 2012 season. Whether or not it does, Selig will not allow work stoppage No. 9 to be his legacy.

GARAGIOLA RECALLS MUSIAL AND ROBINSON

As far as Joe Garagiola Sr. was aware, Stan Musial had a good relationship with Jackie Robinson when they played against each other, starting in 1947.

Stan Musial 225“I never saw him do anything or heard him say anything,” Garagiola said in a telephone interview Saturday. “Stan in his heyday had blinders on.”

Garagiola was a teammate of Musial with the St. Louis Cardinals, reaching the majors the season before Robinson joined the Brooklyn Dodgers and broke baseball’s color barrier. Garagiola himself was once accused of having ill feelings toward Robinson because of a play at first base.

“I took a hell of a beating,” the former catcher said. “I nicked his shoe on the heel. Jackie was not a Gil Hodges at first.”

That incident was tame compared with the play on which Enos Slaughter deliberately spiked Robinson because he didn’t like his color. But Musial?

“Stan, I would say, had a good relationship with him,” the 85-year-old Garagiola said. “I think he admired Jackie. I never saw anything. Stan was like that. I can’t put discrimination in Stan’s vocabulary. I can’t come close to thinking Musial had any problems with Jackie.”

Garagiola said he was not aware of an incident many years later in which Curt Flood said he was not seated at Musial’s restaurant.

BONDS AND PIAZZA TWO OF A KIND

Among the many e-mail responses I received about last week’s column on Stan Musial, most but not all negative, two comments in particular prompt me to comment.

Several readers asked why I would trust the mind of a 93-year-old man, Marvin Miller, about something that happened 40 years ago or more. All I can tell you about this 93-year-old man, whom I have known and admired for 40 years, is his mind is as sharp and retentive as the mind of anyone a third his age.

On another matter, a couple of readers suggested that I wrote a deliberately controversial column about Musial to raise my page views. I barely know what that means, but I know it has something to do with the number of people who come to this Web site.

The idea that I would write a column to increase readership is interesting because I have no idea and have never cared what the readership of the column is. I write the columns because I enjoy writing them and I know there are people who enjoy reading them, people like George and Peter and Jason and Kevin, and I appreciate their interest.

I also appreciate, believe it or not, the readers who are consumed by sabermetrics. Their single-minded focus is mind-boggling. I miss the Red Sox fans who used to write. They probably think I have fallen off the face of the earth while Musial fans, who have set an e-mail record for this Web site with their responses, wish I would fall off the face of the earth.

Finally, there are the Mike Piazza fans, who become outraged whenever I use their hero’s name in the same sentence with steroids. Add his back acne into the mix, and they go crazy.

But in case they missed Thursday’s testimony in the Barry Bonds trial, I’ll be happy to fill them in.Mike Piazza2 225

The chief science director of the United States Anti-Doping Agency, Larry Bowers, was on the witness stand in federal court in San Francisco, and under questioning by a prosecutor he told the jurors about steroids and human growth hormone.

According to The New York Times, Bowers testified that “both acne and bloating were common side effects of steroid use.” Later in the trial, the Times reported, Kimberley Bell, who was Bonds’ girlfriend for nine years, “is expected to testify that she saw acne on Bonds’ back.”

What a coincidence, Bonds and Piazza both having acne on their backs. Maybe it was just a baseball thing.

Comments? Please send email to comments@murraychass.com.