WHERE IS ALL THE MONEY GOING?

By Murray Chass

January 13, 2013

With spring training quickly approaching, one might think from reading Web site and newspapers (does anyone still read newspapers?) that Michael Bourn, Kyle Lohse and Rafael Soriano are the only free agents out there who have yet to get jobs.

There are, in reality, many free agents still seeking jobs, but the focus falls on the trio of Bourn, Lohse and Soriano because they are clients of Scott Boras, and Boras is everyone’s favorite agent to hate.Scott Boras5 225

Some, maybe many, people in baseball management and some close to baseball, as in other agents and members of the news media, are rooting for the new free agency rules to undermine Boras’ efforts to get his usual big contracts for his clients.

I have long been a Boras critic and probably one of the reporters he likes least, but I think it’s too early to bet against him, no matter what the new rules say. He has always gone deep into the off-season before making deals for his free agents – and good deals at that most often – so I won’t be surprised if he does his thing for Bourn, Lohse and Soriano.

I called Boras last week to get his take on whether or not the new rules are affecting him, but he effectively turned the first of our two conversations to a different issue, one that I frankly found more interesting than the reason I called in the first place.

Boras, who doesn’t let any baseball financial aspect escape him, has made a study of payrolls and has found, he said, that most teams have lower payrolls five weeks before spring training than their highest opening-day payrolls since the 2000 season.

“Only about five teams have higher payrolls,” the agent said. “Everybody else is below even though revenue is up by 200 percent and the value of franchises is up 300, 400 percent. What we’re seeing is not many teams are spending on payrolls despite the fact that their profits are extraordinary. You’d expect teams to have their highest payrolls but they don’t.”

Boras offered these examples (payrolls in millions):

Boras Payroll Chart (2013-01-13)

I do not have data to confirm Boras’ numbers for current payrolls, but based on my records derived from club information I agree with all of his highest opening-day payrolls except the Mets. The year he has their 2009 payroll at $149 million I have it at $136 million, and I have their 2008 payroll higher at $138 million.

That difference, however, doesn’t undermine Boras’ point that so many clubs are spending less on players’ salaries while producing greater revenue.

“There’s a whole bunch of teams that still have a great deal of dollars to improve their team,” the agent said.

The current payrolls Boras has computed will rise with teams’ signing of their unsigned players, including those eligible for salary arbitration. Some teams will sign free agents, mostly the inexpensive variety. But the eventual opening-day numbers for these teams will not reach their record highs. I say record highs because payrolls since 2000 have exceeded any prior to that year.

Now what was Boras’ point in citing the depressed payrolls? Was he subtly saying that clubs have not made substantial offers for Bourn, Lohse and Soriano, and their refusal to spend money was the reason?

I don’t know, but his comments are valid. With Major League Baseball annual revenue soaring to $8.5 billion and lower-revenue clubs getting millions of dollars in revenue sharing, every team should be in good enough economic condition to build their teams.

“What are they doing with all of the profits?” Boras asked. “They’re paying off the debt they acquired to buy the team. The fans need to be aware of it.”

Signing Bourn, Lohse or Soriano at whatever price may not be everyone’s idea of building a team and Boras’ prices may not be their idea of intelligent spending, but many teams obviously are not spending at any price.

The Mets are one of those teams. They haven’t spent for two years under General Manager Sandy Alderson. They belong in a class with the Miami Marlins, which is the last place any self-respecting team should want to be.

Boras knows not to expect interest from the Mets or Marlins, but he does expect offers from teams looking to win.

“These guys are very talented,” he said. “The microscope of evaluation shows that. Teams are calling. We’re discussing, exchanging proposals. We’re going through the process.”

As is his usual practice, Boras declined to say with which teams he’s exchanging proposals. At least he didn’t say a mystery team was involved, which is also his usual practice.

Boras has been singled out for speculation that the new rules have altered his ability to get deals because Bourn, Lohse and Soriano were three of nine players who received and rejected qualifying offers of $13.3 million from their 2012 teams and remain unsigned.

The other six players have signed: David Ortiz remaining with the Red Sox, Adam LaRoche with the Nationals and Hiroki Kuroda with the Yankees and Josh Hamilton joining the Angels, Nick Swisher the Indians and B.J. Upton the Braves.

The purpose of the qualifying offer, a new wrinkle, is to insure that a club losing a free agent receives compensation in the form of a sandwich-round pick following the first round in the next June draft.

“With these types of players,” Boras said, “to get where you’re a qualified free agent, you have to be talented players. These guys are difference-makers. They’ll help decide if these teams can win and be playoff teams.”

Compensations via a qualifying offer replaces the system in which a complex statistical formula ranked free agents as Type A and Type B. Counting only players who signed, a study of the past five years of free agency shows that there were 100 players whose signing called for compensation – 36 Type A and 64 Type B.

The signing of those 100 free agents triggered draft-choice compensation (two picks for an A, one for a B) amounting to a total of 136 players selected in the five drafts, or an average of 27 a year compared with a maximum nine who would have been selected next June had all nine players who received qualifying offers this year signed with new teams.

The team that signs a qualifying free agent does not necessarily lose a first-round pick in the next June’s draft. The first 10 picks in the draft, those that go to the teams that had the 10 worst won-lost records the previous season, are protected, meaning a team that signs a qualifying free agent would get a later pick.

There is, however, another price to pay for signing a qualifying free agent. The club loses part of its draft bonus pool, that is, a percentage of the total amount of money allotted to the team for signing draft choices.

Boras finds that aspect of the new rules particularly poor. You have to remember he has signed draft choices to some of the biggest bonuses ever paid, for example, Stephen Strasburg $7.5 million in a $15.1 million contract and Bryce Harper $6.25 million in a $9.9 million contract.

“Where would Washington be without Strasburg and Harper?” asked Boras, whom the new rules hoist on a double-edged sword.

On one side, his efforts on behalf of his qualified free-agent clients are affected by the presumed reluctance to sign them with teams not wanting to risk losing a draft choice and part of their draft bonus pool.

On the other side, if he gets one of his qualified free agents signed, he faces the possibility of weakening his bargaining power with the team for a high-ranking draft choice.

“I can tell you what teams are offering,” he said. “’My draft dollars are a commodity, and I have a limited amount of them.’”

“Teams are saying ‘I don’t want to give up my exclusive draft dollars.’ Before, it didn’t matter. I still had the opportunity to sign spectacular talent because I had money to do it. Losing a first-round pick wasn’t that restrictive. Now risking a first-round pick is vastly more restrictive. Now I’m losing 40 percent of my draft dollars.”

Boras sees the new policy having a long-range negative effect on baseball, suggesting it will drive young athletes to other sports.

“In the best interest of baseball,” he said, “any restriction on acquiring players disenfranchises youth from playing baseball.”

“The freedom of a club when it needs to spend has been an absolute success,” he added. “That’s because scouts are good at their jobs. We’re good at it, too. We have a history with this draft. The players I’ve asked big money for have turned out to be good players.”

Boras didn’t say if he was asking for big money for Bourn, Lohse and Soriano, but you can bet he is.

As for being in January without deals for them, he said, “I’ve always been a believer that talent has no wrist watch.”

COMEBACK OF A COACH

Jeff Mangold hasn’t matched Billy Martin’s record, but he still has time.

Jeff MangoldMartin managed the New York Yankees five different times in the 1970s and ‘80s and was looking for a sixth term when he was killed in a road accident on Christmas in 1989. Mangold has served as the Yankees’ strength and conditioning coach two different times, 1984-88 and 1998-06.

He served under Martin during the manager’s fourth and fifth tenures. Mangold also held the same position with the Mets 1993-96.

After working in private practice in Oakland, N.J., Mangold, a good man, is returning to baseball. He will be the strength and conditioning coach for TEAM U.S.A. in the World Baseball Classic, which will be held for the third time in March.

Mangold will work under manager Joe Torre, who was the Yankees’ manager during Mangold’s second term with them. The Yankees won three World Series and lost two with Mangold on the staff.

GIVING RAINES AND A SUPPORTER CREDIT

I don’t know much about Tom Tango other than he has co-authored a book on baseball statistics and that isn’t his real name. I asked Tom in an e-mail last week if he cared to share his real name and why he doesn’t use it.

“I don’t discuss the matter,” he replied.

OK, I suppose that’s his prerogative, but I respect him nonetheless. Of the many stats guys who have written to me criticizing my view of new-age statistics, Tom has easily been the most civil, maybe the only one who has been civil.

I bring up Tom and his civility because he wrote an e-mail commenting on my column last week about Tim Raines, his admitted use of cocaine in the early 1980s and his steadily growing vote totals in the Hall of Fame elections. I wrote about Raines in the context of the voters apparently increasing their support for him while soundly rejecting steroids users.

Showing his class up front, he began his e-mail by disclosing he runs a Web site http://www.raines30.com.

“I don’t see,” Tango wrote, “where you make the case that cocaine use,
self-admission, and future rejection is somehow equivalent to PED use,
non-admission, and future denial, nor that the two can be equated under
the suddenly popular and useful character clause.

“Indeed, you can make the case that a 23-year old person, approaching the
team owner by himself to admit his problem, going into rehab, and then
letting the world know that he messed up in an article by the then-young
but always-great Michael Farber actually showed character.  That Raines
worst season in his 1981-1987 peak coincided with his use of cocaine in
1982 is also the exact opposite of performance-enhancing.

“And, you said zero about Paul Molitor, who provides an obvious parallel to
Raines, though he was older when he finally stopped, and never admitted
use to the world the way Raines did.  And he was voted as a 1st timer.”

Tango makes a good case for Raines, including his point about Molitor, whom I didn’t vote for, but even if cocaine hadn’t been involved, I wouldn’t have voted for Raines. He falls short of my portrait of a Hall of Famer.Tim Raines 225

Except for the first time I voted 40 years ago, I have annually voted for only a few candidates, the best of the best, in my opinion.

That reminds me that after this year’s results were announced last week, there was a lively discussion on the baseball writers’ site centering on the view of many writers that they should not be restricted to voting for a maximum of 10 players.

I knew I had to be missing something so I soon went on to something more worthwhile. They want to be able to vote for 11, 12, 15 players? If they have voted for 10 players in any year, have all 10 been elected?

Do they know that five players were the most ever elected in one year, and that was the first year? Do they know that four players were elected twice, the second time in 1955? How and why could they possibly want to elect 12 or 15 players at the same time? Isn’t that what they’re saying when they advocate abolishing the limit?

As I said, I must be missing something.

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