Boras says anonymous executives' negative opinions to ESPN about Morales/Drew violate CBA. I'd worry about the $14M offers you turned down.— Kiley McDaniel (@kileymcd) April 13, 2014
I'd estimate the terrible advice you gave your clients was about 14 million times worse than a few execs saying what we're all thinking.— Kiley McDaniel (@kileymcd) April 13, 2014
Morales/Drew have a much better chance of proving a claim that your hubris caused negligent advice than you proving a conspiracy against you— Kiley McDaniel (@kileymcd) April 13, 2014
Finally, it's awfully convenient that Boras never says that anonymous execs raving about one of his clients talents is a CBA violation.— Kiley McDaniel (@kileymcd) April 13, 2014
In conclusion, taking slightly fewer millions + a knock to your ego is more prudent, Scott, than arrogantly giving even more terrible advice— Kiley McDaniel (@kileymcd) April 13, 2014
To me, this goes a little deeper than an agent digging a hole for himself with a risky move that backfired, then trying to perform some magic to get himself out of that hole, a move that Boras has successfully completed a number of times. While that is what happened after Boras turned down 1-year, $14.1 million qualifying offers on behalf of Drew and Morales, the details of this story reveal a deeper truth about the evolution of the game.
Boras made his name by negotiating huge deals for clients in the draft and in free agency, often shattering already high expectations. He entered this past offseason with a couple premium players in outfielders Jacoby Ellsbury and Shin-Soo Choo. Boras has consistently set and reset markets in the amateur and professional ranks with premium talent and that continued with Ellsbury (7 years, $153 million from the Yankees) and Choo (7 years, $130 million from the Rangers), both of which either beat or shattered all media predictions of their contracts. Left in the cold are Boras clients and second tier free agents Drew and Morales, who both still haven't signed a month into the season and likely will have to wait another month, until after the draft.
How We Got Here
Both Drew and Morales turned down 1 year, $14.1 million qualifying offers at the beginning of the offseason, which in turn tied draft pick compensation to them. The only way that is a logical move is if the agent/players are certain they have multi-year offers. Boras made his name by consistently beating expectations with his elite clients, but has shown the ability at times to take a good deal when it's offered (taking a slot $2 million bonus for Florida senior 1B Matt LaPorta as the 7th overall pick in 2007 draft) instead of always holding out for a precedent-making deal.
The mistake Boras made with Drew and Morales was marketing them like top tier free agents in a market where nearly every team now has the discipline to only offer second tier money to second tier free agents. This is driven mostly by the information—call it Moneyball or the internet metrics explosion or the influx of analytical types into front offices—that's been available for decades but has now worked its way into all 30 war rooms in MLB.
As recently as last decade, Boras could count on second tier free agents to fetch first tier money if he could get good enough intel to spot the sucker team that would overpay. In this old system, differences in decision-making processes around the league and a deeper free agent pool (created by less long-term deals for young players) means there was more demand for veteran free agents because there were more rosters spots to fill. Now, clubs are making more money than ever, investing more intelligently than ever in young players and have less roster spots to fill, making the free agent pool shallower and squeezing some second tier free agents into short-term deals, as more teams are relying on the cheap, homegrown player.
You'll likely hear more rumors about clubs interested in Drew and Morales leading up to the draft and both players should sign quickly afterwards, possibly as soon as day one of the draft ends on June 5th. These missteps with big league free agents likely won't affect Boras' 1st round draft clients (N.C. State lefty Carlos Rodon, California prep bat Alex Jackson, Oregon State left fielder Michael Conforto and UNLV righty Erick Fedde) as there's less information asymmetry in the draft, allowing Boras to more purely play the leverage and find the team that will offer the biggest bonus.
In the 2012 draft, Boras has $6-7 million bonus and #1 overall pick expectations for Stanford righty Mark Appel. Those demands and a tightly-bunched top group of prospects led to a fall to the Pirates with the 8th pick. Appel/Boras were offered $3.8 million, which they turned down, but then got $6.35 million in 2013 as the #1 overall pick, balancing the diminished leverage as a college senior with an impressive year when Appel became a better prospect.
Agents can make similarly risky moves with elite talents in the draft and come out ahead in the long run. Elite players are always in demand and it's easier to tell when you're being undervalued in a draft setting. Pittsburgh's offer of $3.8 million in 2012 was clearly below Appel's value but the those demands forced them to wait a year to collect.
Boras made his name in this old version of free agency and can continue playing the leverage game with owners for elite players, because their demand for elite talent will always be there and the prices rise with league-wide revenues. The difference is that in this new version of free agency, an agent can't use the same playbook with second tier talent. Boras got a little too confident in his own ability to find the sucker and also underestimated the irrationality clubs have to keep their high draft picks (another matter for another article). This made turning down the qualifying offer (turning down a big, one-year deal and attaching draft pick compensation to both players) a double whammy that no agent could negotiate his way around.
This wasn't a lightly-considered decision, as it's leaked that Boras/Morales turned down a 3-year, $30 million extension during the 2013 season and Boras/Drew turned down a life raft of a 1-year, $9.5 million deal from the Mets. Drew made that same $9.5 million in 2013 and the Mets offer came after the qualifying offer mistake, essentially re-offering the same deal and a chance to partially save face, with the cost of the pick the Mets would lose discounted from Drew's salary. There is now no chance Drew will get close to that much to play about half a season, which is all either player will be able to play if they sign right after the draft.
All Boras is doing right now is admitting he will wait until after the draft for both players to sign and bringing trumped-up tampering charges to try to shift the blame from his lousy advice. Two other players with different agents that ended up in the qualifying offer limbo as Drew and Morales were Orioles OF Nelson Cruz and Braves RHP Ervin Santana. Santana signed a $14.1 million deal identical to the qualifying offer (and the Braves gave up a pick) after Atlanta suffered some pitching injuries in Spring Training and Cruz settled for $8 million on a 1-year deal. Both players signed before Opening Day.
It's worth noting that Cruz (.295/.373/.581 in 118 PA) and Santana (career best 9.6 K/9 and 2.1 BB/9) are both having career years right now after taking lesser one year deals while in qualifying offer limbo. Even with a weak finish, a strong first half may end up changing evaluators' opinions of Cruz and Santana enough to get those multi-year deals this offseason, all while Drew and Morales are sitting at home trying to outsmart the system. Drew particularly would benefit from starting as soon as possible, as middle infielders need to get to know their pitchers and double play partners while hitters in general take longer to get up to game speed than pitchers. Lastly, players often privately voice displeasure after their team signs a holdout or after acrimonious negotiations, as these potential teammates start to wonder how much players like Drew or Morales want to play baseball and be a part of a team.
Now that it's pretty clear how this will play out—both players will play half a season on a one-year deal for about half of the $14.1 million qualifying offer—the question isn't who is to blame (Boras), how they players made out in this deal (terribly) or why clubs seem so hesitant to sign these players (to not pull the rug from under their scouts so close to the draft) but why this happened and what there is to learn from it. Obviously, Boras wasn't the only agent to end up in qualifying offer limbo, so he wasn't alone in miscalculating the market for mid-tier free agents.
The basics of big contracts, like the total value or average annual value of a deal, will often be a cursory amount higher than the previous record-holder, so agents can claim they got their client a market-beating deal. Agents recruit new clients off of these facts and that's a big part of Boras' recruiting pitch to potential nine-figure free agents. Being the first agent to have a client accept the qualifying offer would be a blow to his ego, as a player could clearly do that with no representation, so why would they need him?
"[Boras] is trying to shoot the moon on a multi-million dollar roller coaster ride that hasn't met code, with Morales and Drew as the test dummies."
It isn't hard to imagine how Boras' (and other agents') egos got the best of them in that situation. The reason Boras is the example here is that he's the top name in the agent game and instead of admitting defeat, he is trying to shoot the moon on a multi-million dollar roller coaster ride that hasn't met code, with Morales and Drew as the test dummies.
Boras implied he has multi-year offers on the table, but it's hard to believe he's in a position of power when he's using the media to bring ridiculous tampering charges for execs simply saying what we're all thinking, saying and typing. it's a desperate, last-ditch move to change the conversation and try to gain some leverage, if Boras could somehow collect damages and use that money to pad the half-season contracts and claim victory.
Competition Never Ends
With more and more clubs running their offseason in a manner that mirrors or emulates the success of the A's and Rays on shoestring budgets, there is much less reckless spending on non-elite free agents. An agent's job is to be as sophisticated as his least sophisticated bidder and, in this case, Boras didn't meet that threshold. He needs to make a plan for this offseason that is more aware of market realities because rival agents will have a superior recruiting pitch if Boras fails with mid-tier clients two years in a row. Meanwhile, Boras also has serious competition in recruiting top tier clients after a rival agent's record-breaking offseason.
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