Case of the Tainted Term Sheet

By Murray Chass

December 21, 2008

This column was going to be about the number of shortstops available as free agents this winter, among the better known Edgar Renteria, Orlando Cabrera, David Eckstein, Omar Vizquel, Nomar Garciaparra, Rafael Furcal, Adam Everett, Cesar Izturis.

Renteria, Cabrera and Eckstein were all free agents after the 2004 season and played a game of musical shortstops, each one moving to a new team, though not always at his desire. That was the same season Garciaparra was traded by the Red Sox to the Cubs and the last season he was primarily a shortstop.

Some of those players have signed with new teams this month, Renteria replacing Vizquel with the Giants (his fourth team in five seasons), Everett replacing Renteria with the Tigers (third team in three seasons), Izturis with the Orioles (fifth team in four years) and most recently Rafael Furcal for an extended performance with the Dodgers.

It is the Furcal signing that necessitates a change in column subjects. His signing last week was one of the most controversial and heatedly disputed in the 33-year history of free agency. The development prompted John Schuerholz, the Braves’ veteran executive, to refer to it as unprofessional, disgusting and despicable.

In the last week to 10 days, you might have seen or heard that Furcal was close to signing with several teams, including the Giants and the Athletics.

Reporters often get overaggressive with free-agent reports, thinking a signing is imminent when the pursuit is far from over, but in this instance Furcal’s agent, Paul Kinzer, was likely the overaggressive one, hinting that this team was close here and that team was close there. Perhaps it was his way of inducing teams to improve their offers, leading reporters on as he knew he could for the sake of a better deal.

Suspicions that Kinzer didn’t always act in a professional manner were strengthened as a result of the Furcal fiasco with the Braves. They thought they had an agreement last Tuesday, faxing a term sheet to Kinzer at the agent’s request. The next day, though, they learned that they didn’t have an agreement.

“The agent was announcing to everyone Monday night that he was coming to the Braves,” Frank Wren, the Braves’ general manager, said in a telephone interview. “That’s how it became a major story. It didn’t come from me.”

Wren said he and Kinzer negotiated Monday night in three or four telephone calls all of the deal points –  salary, term, option vesting mechanisms, awards packages and bonuses. “We talked about all those things with one thing open,” Wren related. “The agent needed to talk to Raffy. He couldn’t reach him.

“He said if we come up a little bit we can get it done. We moved up a few hundred thousand on the base. He asked me to move money around a little bit. We talked around midnight. He still had to talk to Raffy. I went to bed. I woke up the next morning to a voice mail saying Raffy’s excited, send us a term sheet and we’ll be done. That’s what we did.”

But once he sent the sheet detailing the terms of the pending agreement, Wren related, Kinzer “started backpedaling and he said no, we don’t have a deal. He didn’t question anything in the term sheet.”

Speaking of what he said was customary practice, Wren added, “When they request a term sheet, it’s so we could finish the deal. We sent it so they could see exactly what we agreed to. Ninety-eight times out of 100 they sign it and send it back. Once in a while they might ask ‘can you clarify this or that?’

“I’ve never seen this happen. Once they request the term sheet, the deal is done. You don’t request a term sheet when you’re still talking.”

Furcal, however, will not be returning to Atlanta, where he played the first six years of his major league career. Instead he is staying in Los Angeles, where he has played the past three years for $39 million. His new contract with the Dodgers is three years for $30 million, the same deal the Braves thought they had and one the Dodgers met to clinch their deal before Furcal could find someone else to make a deal with.

What happened? “I think it’s pretty clear there was some promise they would get back to the Dodgers either by another party or I don’t know,” Wren said. “They put our deal aside to go back and talk to them.”

Ned Colletti, the Dodgers general manager, said he didn’t know anything about Furcal’s negotiations with the Braves.

“All we did was continue negotiating with the player we’d been negotiating with and talking to almost daily for nearly a month,” Colletti said. “We began conversations with Kinzer in spring training and we talked more and more as the season progressed. There weren’t many days in the off-season that didn’t include conversations with Paul or Arn.”

Arn Tellem is the well regarded head of the baseball department at the Wasserman Media Group. WMG is one of the agencies that have bought the businesses of various agents in recent years. Tellem initially was an agent in partnership with Steve Greenberg, who went on to become deputy baseball commissioner under Fay Vincent in 1989.

Agent Paul KinzerKinzer worked for the highly respected agents Tom Reich and Adam Katz before their firm merged with the Wasserman group.

Kinzer, Tellem, Reich and Katz did not return calls seeking comment on the Furcal fiasco and on Kinzer’s handling of it or contribution to it. I reached Kinzer on his cell phone Saturday afternoon, but the conversation was brief and unenlightening.

“I’m going through the airport right now; there’s not much I can say right now,” Kinzer said.

Tellem sent an e-mail stating his firm’s position and absolving Kinzer of any blame.  Baseball has become e-mail happy. Send an e-mail and you don’t have to answer follow-up questions to the original question.

In the e-mail Tellem said there was never an agreement with the Braves and the Braves knew that Furcal had asked for more time to think about it. One thing he wanted to think about, Tellem said, was the Braves’ plan to switch him from shortstop to second base because the Braves have a good young shortstop, Yunel Escobar, a Cuban native.

Throughout their phone conversations, Wren said, Kinzer had raised no objection to the position switch. Presumably the agent had talked with his client about it, but Kinzer didn’t make himself available to address that issue.

Tellem noted in his e-mail that no deal exists until both club and player have signed an agreement. That’s an absolutely true statement. But what did it mean when Kinzer asked Wren to fax a term sheet? Why did he want it?

Asked that question in the brief phone conversation, Kinzer replied, “I can’t say anything about it right now because there are some other things.” He, of course, didn’t say what the other things were.

The term sheet is the pivotal piece of evidence in the dispute. Furcal said upon his signing Saturday that he hadn’t made up his mind whether he wanted to stay with the Dodgers or return to the Braves. A friend said he had a serious conflict not just choosing the team but also with the managers, liking both Joe Torre and Bobby Cox.

But if Furcal had not made up his mind to play for the Braves, why did Kinzer ask for their term sheet?

Tellem did not address the term sheet in his e-mail statement. Defending Kinzer’s actions, Tellem said it was simply a case of Furcal’s ultimately deciding to take the Dodgers’ offer, basing his decision on several factors, the most important being the position switch.

Tellem acknowledged the Braves’ disappointment and frustration “with the outcome of this negotiation, but it does not change in any way the fact that we conducted ourselves with integrity and complied with all rules of major league baseball throughout this process.”

In his last point, Tellem addressed the angry part of the Braves’ reaction.

“We won’t be dealing with them,” Wren said, referring to the Wasserman group. “They’ve been notified. We like their players; it’s nothing against the players. But we can’t deal with them.”

Tellen countered, “If it serves our clients we will continue to present opportunities to the Braves,” adding, “we would not want this incident to color their better judgment.”

Tellem contended that the Braves will have to negotiate with the Wasserman agents under collective bargaining rules and federal labor law. The Braves, however, can’t be forced to pursue a Wasserman player. Nothing in the labor agreement says they have to.

However, if they don’t and the union can prove they didn’t because the player had exercised a contractual right – hiring an agent of his choice – the union could file a grievance, accusing the Braves of violating the agreement.

The Furcal fiasco is so strange that a general manager and a players’ lawyer wound up supporting the other side.

“There’s no deal until the player agrees to it,” said the general manager, who also called the Braves’ stance on not talking to Wasserman agents “grandstanding.” But the players’ lawyer said, “I know enough about Schuerholz and Wren to know they thought they had a deal.”

Santana vs. Sabathia

In what seems like a bit of revisionist history, Brian Cashman says when he opted not to trade for Johan Santana last winter, it was part of his long-range plan, knowing that CC Sabathia would be a free agent this year. Cashman said he knew “that we were going to have to place him just above Johan, and that’s what we’ve done.”

Cashman is entitled to like Sabathia more than Santana, but what was the basis of his judgment? Could he really have made that judgment at the time he said he did?

Yes, Cashman didn’t want to give up any players in a trade for Santana, but they would have had Santana a season sooner and how can Cashman ignore that potential impact?

Phil Hughes and Ian Kennedy, the young pitchers Cashman especially didn’t want to trade for Santana, were busts and aren’t even in the Yankees’ plans for 2009.

With Santana, the Yankees might have made the playoffs. Without him, they didn’t.

George Steinbrenner would have traded for Santana last winter and signed Sabathia this winter. What would it have cost the Yankees to do both? Santana has a $137.5 million contract with the Mets, but if the contract’s no-interest deferred money is discounted for present-day value, the contract would be about $120 million.

Using that same contract for the Yankees, the sum of the Santana and Sabathia contracts would be $281 million. Sabathia and A.J. Burnett are costing the Yankees $243.5 million, a difference of less than $40 million, or about $5 million a year. For a team with a payroll over $200 million, that’s an insignificant addition financially, but it would be one competitively that would make the Yankees a fearsome foe for the Red Sox, the Rays and anyone else that would be in the playoffs next year.

If, on the other hand, Cashman’s decision to pass on Santana was based on his belief that Sabathia was the better pitcher, here are the figures he would have been comparing a year ago: 

 

Santana

Sabathia

  Age

29

27

  Won-Lost Record

93-44 (.679)

100-63 (.613)

  Earned Run Average

3.22

3.83

  Innings

1,308 2/3

1,406

  Strikeouts

1,381

1,142

  Walks

364

464

  K:W Ratio

3.79

2.46

  Runners / 9 Innings

10

11.7

  Innings / Start

6.8

6.4

If Cashman emerged from studying those statistics and any other factors he had at his disposal believing that Sabathia was worth waiting for, he would have had to consider the risk he was taking that Sabathia would be available. He had to consider the possibility that the Indians somehow would be able to re-sign him or that they would trade him to a team that would be able to keep him with a new contract.

Cashman, in reality, risked getting neither pitcher.

Going High or Low for Lowe

Now that CC Sabathia and A.J. Burnett have signed, other pitchers on the free-agent list are expected to follow. Derek Lowe is probably next on the list in terms of interest, but the interest has been all talk and no offers. His agent’s asking price is said to be the reason.

Scott Boras has told clubs he wants Barry Zito money for the 35-year-old Lowe, which means $18 million a year. Clubs interested in Lowe have not rushed forward with such offers. The slow-moving market may be just what the Mets want.

The Mets need an established starter, and Lowe is one of the available starters most coveted by general manager Omar Minaya. Oliver Perez is another, but he is another Boras client for whom the agent seeks a huge contract. The Mets aren’t interested in adding another big contract.

But as he demonstrated in his acquisition of Johan Santana last winter, Minaya is good at playing a waiting game. If he plays it as well this time, he may be able to outwait competing teams to the extent that the price will drop and Boras will be left with only the Mets to deal with for one of the two starters.

Scott Boras and Yet Another Tale

There’s another Scott Boras story making the rounds in baseball circles. This one involves his soon-to-be-very-wealthy client, Mark Teixeira.

Boras, the story begins, lured Red Sox executives to Texas last week for a meeting with Teixeira, holding out the idea that an increase in their offer to a number he suggested would finish the deal because the first baseman wanted to play for their team.

It’s not known precisely what the numbers were, but the two sides were talking about an eight-year contract for more than $20 million a year.

John Henry, the Red Sox principal owner, and general manager Theo Epstein showed up in Texas with a new offer, believed to be in the $170 million-$175 million range but slightly lower than the number Boras mentioned. It was a negotiating number.

“You’re not even close,” Boras is quoted in the story as saying. “I’ve got a team close to” and he supposedly related a number not far from $200 million. At this point in his telling the story, the executive of a club not the Red Sox laughed and said, “It’s one of Scott’s mystery teams.”

He refered to Boras’ practice of having an ever-present mystery team involved in his negotiations. His client never signs with the mystery team, and no one ever finds out the identity of the mystery team, but it’s always at the table, like an 800-pound gorilla.

After the trip to Texas, Henry announced that given other offers Teixeira had received, the Red Sox were not going to be a factor in talks for his services. Henry, however, didn’t say he wouldn’t negotiate with Boras for Teixeira.

Henry, in an e-mail message, and Epstein, on his cell phone, declined to discuss any part of their Teixeira talks. Boras did not return a message left on his cell phone saying what the call was about.

 

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