MORE MANIPULATION OF THE MARKET

By Murray Chass

July 24, 2014

Have Major League Baseball clubs found yet another way of manipulating players’ pay? They have if the union is correct in its suspicions about the Houston Astros’ contract negotiations with three of their selections in last month’s draft.Brady Aiken 225

The union filed a grievance against the Astros this week, contending the Astros tried to manipulate the signings of pitcher Brady Aiken, the No. 1 player picked in the June draft, and two players selected in lower rounds, pitchers Jacob Nix and Mac Marshall.

Tony Clark, the head of the union, declined to talk about the issue because a grievance had been filed. Dan Halem, MLB’s chief labor executive, and Jeff Luhnow, the Houston general manager, did not return telephone calls seeking comment. In the messages I left, I mentioned the reason why I was calling.

However, a person familiar with the dispute said of the Astros’ treatment of the players, “Everything they did reeked of desperation. It didn’t smell right from the start and as he continued to talk about it, it smelled worse.”

Last Friday, the day on which unsigned draft choices had to be signed by 5 p.m. Eastern time, Luhnow told reporters the Astros made three different offers to Aiken, the key player in the scenario, and that the San Diego high school left-hander rejected them.

Aiken’s adviser/agent, Casey Close, has not confirmed Luhnow’s version of developments, but the Astros needed to sign Aiken to be able to sign Nix, a fifth-round choice, and Marshall, whom the Astros took in the 21st round.

The signings, or non-signings, were tied to the relatively new draft rules. Under the system, which the union agreed to in the 2011 collective bargaining negotiations, the commissioner’s office assigns each club recommended figures as signing bonuses for players selected in the first 10 rounds of the draft.

Clubs can sign players for more or less than what is called the slot figure, but if a club’s total bonuses exceed its pool total, it incurs penalties in the form of a tax on the excessive amount or loss of future draft choices.

Shortly after the Astros made Aiken a rare No. 1 pick, a high school left-handed pitcher, they reached agreement on a $6.5 million bonus, which was below the slot figure of $7,922,100, leaving them approximately $1.4 million to use on other draft choices.

The money would come in handy in their effort to sign Nix and Marshall because both had dropped in the draft after announcing their intention to attend college instead of signing to play professionally. The Astros reportedly agreed to sign Nix, whose slot figure was $370,500, for a $1.5 million bonus and were prepared to give Marshall $1.5 million, which was later raised to $1.65 million.

However, before any of the three signed a contract, Aiken had an MRI that gave the Astros pause and second thoughts. They apparently discovered something unusual about the ulnar collateral ligament in his left elbow. The unusual ligament didn’t seem to need Tommy John surgery – teams have drafted and signed pitchers who needed the operation – but the Astros weren’t about to pay $6.5 million to find out.

They withdrew their $6.5 million offer and subsequently gave him an offer of $3,168,840, which they had to do to retain their right to next June’s second pick. They qualify for that pick, which is one below this year’s, by making an offer that is 40 percent of their first-round slot bonus this year.

In the final hour of deadline day, the Astros say they made three increasingly higher offers. They didn’t say what they were, but a person not connected to them identified the offers as $4 million, $4.5 million and at the deadline $5 million. Aiken rejected them all.

At the same time, this person said, Nix nixed a $600,000 offer.

The Aiken deal was the key to the signing of all three players. Without, the remainder of the first-round slot amount, the Astros could not satisfy Nix and Marshall.

“The entire process was manipulated to the detriment of the players,” said a person familiar with the union’s position.

The dispute erupted in public late Friday, after the deadline had passed, when Clark issued a terse, cryptic statement:

“Today, two young men should be one step closer to realizing their dreams of becoming Major League ballplayers. Because of the actions of the Houston Astros, they are not. The MLBPA, the players and their advisers are exploring all legal options.”

The union could argue its case on several bases. One is the alleged manipulation of the Aiken deal to use it to sign Nix and Marshall as well.

Another is the Astros’ release of medical information about Aiken’s elbow. Since he was not their player, they had no authority to disclose confidential medical information in violation of the privacy rule of the federal HIPAA law.

In addition, dealing strictly with Nix, he had an agreement with the Astros for $1.5 million, having nothing to do, as far as he knew, with Aiken, but the Astros didn’t honor it.

The union most likely will not be able to use the Astros’ withdrawal of their $6.5 million offer as part of its case. Baseball has a long history of teams’ rejecting contracts because of failed physicals.

RA Dickey2Aiken’s case is reminiscent of R.A. Dickey’s in 1996. The Texas Rangers drafted Dickey in the first round of the June draft and were prepared to give him an $810,000 signing bonus when their doctor discovered he didn’t have an ulnar collateral ligament in his right elbow. He signed instead for $75,000 and five years later reached the majors as a knuckleball pitcher.

Christopher Geary, an orthopedic surgeon and chief of sports medicine at Tufts Medical Center in Boston, brought up Dickey when I called him to discuss Aiken. Geary has not examined Aiken or seen his MRI but said, “I got a little information.”

“A lot of times these things are straightforward,” he said. “There’s a tear, a partial tear or a full tear.” Then referring to Masahiro Tanaka of the New York Yankees, he added, “Tanaka has a partial tear that they’re trying for rehab to see where it goes.

“From what I’ve heard that’s not what’s happening with Aiken. He apparently has a small ligament or part of it is missing. It sounds like it’s congenitally small or absent. That was the case with Dickey. Dickey never had one and that’s what caused him to rethink his delivery.”

There’s one other element of the Aiken case that could be perilous to him, Nix and Marshall. One of their options is to go to college. Aiken and Nix have committed to UCLA, and Marshall has already enrolled at LSU. But would they be eligible to play baseball if they opted to attend college?

The NCAA doesn’t allow its athletes to have agents, and one person who has dealt with players suggested that since the three players had agreed to contracts, the NCAA may view their “advisers,” Casey Close, a prominent agent, in the case of Aiken and Nix, as agents. In other words, the NCAA could rule them ineligible to play college baseball.

However, an agent found that possibility highly unlikely. “If Major League Baseball breaks their rules,” he said, “who’s going to run to the NCAA first? If that were to happen, next year nobody would talk to anybody. No one would ever reach an agreement.”

Other options for the players would be junior college or an independent league. Once players attend four-year colleges, they can’t be drafted until after their junior year. Junior college players can be drafted after one year. Players who play in an independent league – a favorite destiny of unsigned Scott Boras clients – lose their amateur standing and are considered professionals.

That’s why MLB changed the name of the June draft from amateur draft to first-year player draft.

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