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Griff says...Not So Secret Agents - Licensed to Kill

Now we come to the topic of my favorite rant – player Agents. No doubt all sports have agents but somehow baseball is more notoriously famous for agent dealings. You never really hear about agent issues in football and basketball, but in baseball it is a yearly ritual.

When the Curt Flood Supreme Court case created an arbitration system for player disputes, and subsequent court challenges by pitchers Andy Messersmith and Dave McNally were won, free agency was created. No longer were teams considered to “own” players. From that time on, and especially after the players’ union was formed a little later, agents became an inevitability.

There are about 300 MLB agents certified and available for player representation. Others go through a certification process if not already on the list. It is a high stakes business and the agents have had a large part in driving up player salaries and as a direct result, baseball ticket prices. There are no set fee arrangements. You have to find a way to justify the incredible payrolls, and the fans have taken the hit.

Salaries have become almost surreal and the majority of everyday baseball fans resent it a great deal. Some blame the players; some blame the owners, some both. Most fans do not feel that players deserve to make the astronomical salaries of today. The average baseball salary has increased from a million a year to over $3 million per year. Remember, that is just the average. The only ones making less than that are backup players, role players, old veterans trying to hang on, and some younger players just emerging on the scene. Tack on the fact that most are guaranteed contracts and you have a motivational issue as well. How did that ever start? Why should a player be guaranteed salary each year no matter what happens? He can get hurt, released, or traded and he is still guaranteed his money. Don’t you wish you could get that in your career of choice? Where is the incentive for them to perform until they are in the final year of their contract? Why can’t they just take out disability and insurance policies like everyone else if they are worried about injuries?

Although initial high draft picks do get signing bonuses, agents are not much of a factor until a player hits the free agent market, typically after their sixth full season of being on the 40 man roster. From there on, look out.

There is a select group of super agents who represent player contracts in excess of $50 million. This group of less than ten collectively represents over 40% of the $2.5 billion being paid out recently. I don’t know what the commission rates are but even if you put them conservatively at 10%, there is a lot of money to be made by top agents.

Tops on the agent list are the Greenberg brothers, whose fluency in Spanish has solidified their ranking. Their top position has earned their clients higher salaries as it is documented that their clients make more than twice as much as players with similar statistics in the free agent marketplace.

Other high ranking baseball agents include the Hendricks brothers and of course, the notorious Scott Boras. Boras is easily the most feared and I would say, hated, agent. His firm represents players totaling over $266 million in salary. He has been known to ask for exorbitant salaries, hold out until the last minute, possibly make up additional suitors to drive the market up, and even bypass the GMs and go right to the owners as in the recent Damon/Detroit signing.

Boras was actually a minor league player himself once, noteworthy in that he has insider respect and knowledge amongst players, GMs and owners. Boras really hit the spotlight when he negotiated A Rod’s insane $252 million contract back in 2000. In all fairness, I also lay a large part of the blame on the Texas Rangers owner at the time. That contract was unheard of, ridiculous, outrageous, and escalated other player salaries upward immediately. My research discovered that Boras’s clients earn a premium of 40% over peer typical peer comparisons. No wonder so many players want him on their side.

My beef with agents is simply that they only represent their clients’ interests and it is often not in the best interest of baseball and the fans. Since professional baseball exists because of the fans, I deem this to be a bad thing.

It is harder today to maintain fan fervor and loyalty than in the first century of baseball. Essentially for most teams, half of the players are different each year. You can lock up a superstar who is a fan favorite for perhaps 5-7 years at best. Then the highest bidder will snag them away. Chipper Jones is an exception to the rule and you have to admire his personal loyalty and desire to remain a Brave. He most definitely could have made more money by accepting larger contracts with other big market clubs if he wanted to. But not only does he like the stability and have great respect and loyalty to the Braves, he has a sense of loyalty to baseball history itself and feels the constant wheeling and dealing is bad for the game.

That is where I’m coming from. I have nothing against players becoming millionaires. But at some point it is just spiteful to the loyal fans and disappointing to kids who look up to them, when they nonchalantly take a little more money, or sometimes a lot more money, to go elsewhere. Johnny Damon, or Boras, totally blew the opportunity to play another year with the Yankees and try to win two more World Series. Why did Boras have to be so greedy that now his client is stuck in Detroit? Boras started his negotiation process early by telling the Yankees not to even make an offer if they were going to offer anything less than what he made the prior year. Damon had a good year, but $13 million a year for a 270 hitter who has pop at the short Yankees porch? Really, get serious. He ended up with about $7 million a year. The Yankees offered that for two years I believe so if he had any team loyalty he could have stayed. You can say this is just an agent mistake but I think the player has to intervene when they want something to get done, as did A Rod when he ended up with the Yankees on a new contract a couple years ago.

You can’t tell me that the constant money chasing is good for their families either, so I would say the players have their priorities misplaced when they do so. It is often times pride and ego that cause players to take larger contracts and move elsewhere. They frequently say it is because they want more for their family but how much more does a family need when they are already making $5-10 million per year? Too often the hidden reason is that they want to be one of the highest paid players at their position. That smacks of egotism.

The larger the salaries the more pressure on the owners to raise prices to prevent losses. The more prices increase, the lower the fan attendance. The lower the fan attendance, the harder it is to get the better players to your team because you have less money to offer. Hence the recent problems of smaller market clubs like Pittsburgh and Milwaukee.

But agents seemingly have no concern or sense for that issue at all. They want to maximize the contracts for their players. If their player has to move, so be it. It’s not like the agent has to move with them. That would be a novel idea.

Maybe we all need agents too. Who says they are only for the sports and entertainment world? Perhaps we need agents to represent the plumbers and salesmen and contractors and construction workers. Why not? You could certainly have a pool of candidates, measure performance and statistics, secure references and negotiate contracts a year or multiple years at a time. It might be nice to think about yourself commanding a bit higher price and going to the highest bidder for your services, and not having to worry as much about unemployment. But at the same time, if every job type had agents, then prices would go up across all industries. I can’t believe that from an economic standpoint that would be good for our economy. So if it is not good for everyone then intuitively I suggest it is not good for baseball either.

We will probably never get away from agents and the wild negotiating of outrageous deals. But at some point, it will become obvious that the game has been seriously hurt. I for one miss the old days of seeing the same players on my team year after year. I miss the traditional rivalries with other teams and their stars that would come to town every year. Perhaps the answer for the fans is to follow college sports more than professional sports. Indeed I sense that has happened and had a negative impact on attendance in pro sports. Unfortunately, the best college players are now at their schools no more than one or two years either because they are eager to make money and as soon as they are ready to go pro the agents snap them up into the market.

There seems to be no answer in sight. It is harder each year for fans to stay loyal. But the Braves fan loyalty is ranked #5 in baseball and I am personally trying to hang in there in spite of my annoyances with agents and their negative impact on the game. I guess I will have to accept it as long as I can complain about it from time to time.

See you on my next blog. Griff says…later.

1 comment:

  1. Baseball salaries are out of control but the problem now is the current salaries are so high that it has created a nice baseline for them to work off of. In addition while there are a lot of clubs struggling with finances it is easy for the agents to point out that some probably make a pretty nice buck. And the final problem is that while I hate how much baseball costs to go to now you can see by the attendance figures in a lot of places that fans are pleased to pay it so there isn't economic pressure to lower the ticket prices. The good news is I see baseball at some point making a ton of money through online video that maybe they can use to offer relief on ticket prices to get young kids hooked on the game. My last point on salaries is that at least you have to like in baseball the players have to toil in the minors for year in not the greatest conditions and far fewer of those players have big contracts, the average salary for the MLB players still seems way to high though.