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Sunday, March 24, 2013

Is Scott Boras Losing His Edge?

I've made it clear in posts in the past that I think Scott Boras has been great for the game of baseball.  I think he's one of the primary reasons that teams took the "Moneyball" approach to operations.  When faced with his intimidating tactics and ludicrous demands for his clients, teams took to avenues that would help them field winning ball clubs without utilizing the services of those players.  However, at some point, the market HAD to shift away from this dynamic.  I don't think anyone is naive enough to think that this relationship between Boras and MLB's top executives would always exist as it had for many years.  This change appears to have occurred right before our very eyes in this off season.
 
To set the stage, Boras came into the off season with a few major clients: SP Kyle Lohse, CF Michael Bourn, RP Rafael Soriano, and RP Ryan Madson (who will not be discussed in this post).  One would think that due to the 2012 performances of the first three players, Boras would be stuffing a nice wad of money into his bank account after the off season.  While he's still stuffing a much larger wad into his account than I am, it's a lot smaller than what it could have been (and I mean a LOT smaller).  Let's go case-by-case here, starting with the biggest disaster of them all:
 
SP Kyle Lohse
 
I hold this truth to be self-evident: Kyle Lohse is a lot better than a lot of the starters that will be on MLB's 30 rosters come April 1st.  I wrote about the fact that he's still not signed here.  Today, it was reported on Twitter that Boras is still seeking the same $14-$15 million AAV that teams have been scoffing at for Lohse.  I really appreciate persistence and drive to succeed at your job, but there comes a point where you're stuck between a rock and a hard place and need to just give it up.  Even teams with protected picks don't appear to be comfortable in signing Lohse to a short-term deal at the price range Boras is seeking.  Boras isn't just playing hardball on this one; he's playing diamond ball.  Let's forget the compensation issue for a second and ask ourselves, "Would Lohse be overpaid even if he wasn't attached to the loss of a draft pick?"  Well, here's a line I'm stealing from my own blog post:
 
"Knowing Boras and the fact that Edwin Jackson brought in 13 million dollars a season, I would imagine Lohse is looking for something like 4 years, 56 million.  Based on my model, this would be an overpayment of about 7 million dollars by the signing team. "
  
So yes, Boras is looking for a nice overpayment with compensation thrown out the window.  However, since we don't get to play games like that when it comes to the MLB CBA, compensation is definitely an issue.  For a 34-year old with compensation attached to him, demanding a big overpayment is something that wise MLB teams are just not going to jump into. Unless a club gets really gutsy and loose with its cash, Lohse won't be signed any time soon unless the price comes down.
  
CF Michael Bourn
  
To understand what happened with Michael Bourn, it is incredibly important to understand how dynamic the center field market was coming into free agency.  Coming into the off season, there were several notable center fielders on the market:
  
Michael Bourn
B.J. Upton
Angel Pagan
Josh Hamilton (I'll include him simply because some teams probably were ok with him in CF)
Shane Victorino
Melky Cabrera (he played there 144 games with KC in 2011)
  
Keep in mind, these are just free agents.  All six of these players ranked in MLBTR's top 50 free agents heading into the off season.  The market expanded even more when the Minnesota Twins started looking for deals to ship off Ben Revere AND Denard Span.  What does this mean?  Eight center fielders were possibly switching teams, and Bourn was sitting on top of all of them.  So, ignoring the fact that this market was uber-deep this year, what should Bourn have gone for?  Projection time!
  
Expected fWAR over the next five years:
  
2013:  5.5
2014:  4.8
2015:  3.5
2016:  3.0
2017:  2.8
  
Bourn is a high-BABIP and high-BB% guy whose greatest value comes out of his defense and base running. He is an elite player both on the bases and in the field.  However, he is also 30 years old.  What does this mean?  Well, it means that his speed isn't going to be around forever...or is it?  A decent comparison here is Juan Pierre.  When Pierre hit age 30, his BsR numbers really started to drop significantly. Some of this could be due to his age 30+ OBP of .341 compared to his pre-age 30 OBP of .348, but I highly doubt that a drop in OBP of .007 lead to BsR numbers roughly half of what they had been before.  Pierre's defense also saw a steady decline, because speed doesn't appear to last.  Given that, I think the model above is a pretty optimistic model for Bourn (I like to be optimistic in projections because I like to give players the benefit of the doubt).  Based on my 5.2 d/WAR projection (again, this may need to be adjusted because of the lucrative TV deals around the league), that would make a 5-year contract for Bourn look like this:
  
5 years/$102 million*
  
*Immediate disclaimer: players whose value comes from defense and base running are terribly undervalued on the free agent market.  Teams tend to be more wary of defensive value, and they definitely appeared to be more cautious about Bourn's eventual speed decline than I was (and rightfully so, it's not my $102 million that's being thought of as a "fair" contract).
  
So what did Bourn get?  4/$48 million.  I understand being cautious with an aging speed guy, but that figure is less than half of what I thought was a pretty fair contract.  The AAV on the actual deal versus the expected deal was $8 million less.  So what the heck happened?  Time happened.  Bourn was signed after B.J. Upton (5/$75), Angel Pagan (4/$45), Josh Hamilton (5/$133), Shane Victorino (3/$39), and Melky Cabrera (2/$16).  He also signed after Denard Span was traded to Washington and Ben Revere was traded to Philadelphia.  If my math is correct, this makes him the last center fielder on the market with the Indians, Mets, and Rangers all as potential suitors for his services.
  
Boras got him half of what he deserved and the 3rd-smallest AAV on the CF market.  I project him to be slightly more valuable than Josh Hamilton over the next few years, and he signed for 36% of what Hamilton got.  Boras' "let the market play itself out" strategy seems to have failed.
  
RP Rafael Soriano
  
Had the Nationals not stepped up and been the frequent Boras buyers that they are, Rafael Soriano might also have been a disaster for the Boras Corporation.  To start off, the Yankees made Rafael Soriano a qualifying offer (so a 1 year/$13.3 million contract) that Boras advised Soriano to decline.  Not only did this prevent Soriano from becoming one of the highest paid relievers in the game, but it also attached compensation to his name.  Even with Soriano being the most highly-coveted fee agent reliever on the market, he still only signed a 2 year/$14 million contract with the Nationals (kicker, he gets $14 million in deferred payment to 2018-2025).  Soriano gave up a lot of potential cash by turning down the qualifying offer.  For starters, the $14 million he's getting might end up actually being less valuable than the $13.3 million he would have gotten with New York, considering money loses value over time.  Then, factor in this same concept to the deferred payment.  In 2018, I imagine $14 million is going to be a pretty run-of-the-mill AAV.  That is being paid off over eight years (so $1.75 million per year) and will be worth far less than money he could have gotten now.  
  
I completely understand that deferring payment gives Soriano the opportunity to go out and sign a new contract, but had he accepted the qualifying offer, his 2013 AAV would be almost twice what it is going to be with Washington, and he would have been immediately able to enter free agency after the season.  Again, this feels like Boras didn't read the situation properly.  Unless his client severely valued multiple years (hard to believe two years versus one was a huge deal for Soriano), then he lost an opportunity to make his client money.
  
Future Impact
  
I think it's pretty clear that Scott Boras read the market incorrectly in 2013.  To put it frankly, his clients appear to have gotten screwed out of a lot of potential cash.  This is a huge deal, because Boras has a pretty big list of major clients that will be eligible for free agency in the next couple of years.  He'll have plenty of time to adjust, but here's a list of Boras clients that will be seeking new deals shortly:
  

Elvis Andrus, SS (2015)
Robinson Cano, 2B (2014)
Shin-Soo Choo, OF (2014)
Jacoby Ellsbury, OF (2014)
Chris Davis, 1B (2014)
Kendrys Morales, 1B/DH (2014)
Max Scherzer, SP (2015)
  
Obviously the big kicker here is Robinson Cano.  If the Yankees are really serious about getting under the luxury cap by next year, then Cano will very likely hit the free agent market.  As the best second baseman in the game, he's going to be seeking the kind of lucrative contract that Boras has been known to land in the past.  However, he's going to have compensation attached to his name (foregone conclusion that the Yankees make him a qualifying offer if they can't re-sign him) and the list of potential suitors may be short and sweet.
  
Let's not forget about the rest of these guys, though.  Andrus, Ellsbury, and Scherzer have the ability to all land in the top 50 players in the game in 2013, and I would wager that all three would end up in the top five on future free agent lists.  With this kind of bulk about to hit the market, it's incredibly important that Boras avoids playing the waiting game.
  
Conclusion
  
As I mentioned earlier, it really seems that Boras badly misplayed this off season.  As far as losing his edge goes, I think it's going to take more than one off season to declare Boras as anything less than the best agent in sports.  Let's not forget, he turned an ACL tear from Victor Martinez into a 9 year/$214 million contract for Prince Fielder.  His upcoming free agents also have skills that pay well in free agency, and Andrus' status as one of the better shortstops to hit the open market in the past ten years would certainly land him a lucrative deal if it ever reached that point.  Some food for thought: maybe Boras would be better off to try to negotiate extensions with these teams.  After all, it appears that the concept of the qualifying offer may end up dropping the going rates on the free agent market.  If this happens, then perhaps there is less incentive for Boras to even let his clients hit the market.  While I don't know that that is going to be the case, it is certainly something that Boras will have to explore, because the 2013 off season was a disaster across the board for the Boras Corporation.  Something needs to change, or Scott Boras will become a shadow of what he once was.

5 comments:

  1. I like the premise, so many people focus on the deals themselves, the team's perspective and the player's perspective, but not so much the agent's.

    One thing, you keep mentioning that Boras misread the market, but what could he have done better. In the case of Lohse I understand seeing as the season is a out to start and he's still unsigned, but Soriano and Bourn got very nice AAV values, especially given their ages and the types of players they are. In fact, I think player types screwed this up most for Boras. When you're top free agent clients are older relievers and 30-year old speedy/powerless center fielders, you can't expect big money. There weren't any big time corner outfielders or 1st basemen, or even hitting/fielding catchers in this crop. Now, I'm not saying that's the only reason why things played out how they did, as I could name many more, but it definitely had something to do with it.

    Interestingly, what Boras seems most peeved about now is what the Astros and Marlins are doing and how it will affect his clients going into the draft like Mark Appel. http://insider.espn.go.com/mlb/blog/_/name/olney_buster/id/9091535/examining-baseball-most-inflammatory-situations-mlb

    Otherwise, nice piece, like the direction.

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    1. I mentioned the issue for Bourn in the post (how his skills are simply undervalued on the free agent market).

      The biggest thing he could have done better would be to make plays early in free agency. Even with Bourn's skill set, I still think his AAV was 3 million less than he should have gotten. As far as Soriano, relievers tend to be pretty age-resistant (they just don't decline as quickly as other positions)..although that one was much more about how he turned down the qualifying offer, which would have been a staggering AAV for a reliever.

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  2. We, you and I, included can only speculate. We weren't on the phone with Boras and GM's. How do we know that the offers he was fielding on these guys in the beginning of the offseason weren't worse than what they got? That's all I'm saying, the results don't point towards Boras losing his edge, just a change in the system's dynamics.

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    1. Have to speculate a little bit, don't we? I went based on what other guys were signing for. Otherwise there wouldn't be much to write about in terms of analyzing off season moves.

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  3. Agreed. I guess I just think that there's so little information concerning these negotiations that speculating is going too far. It's just my journalistic approach and obviously my opinion. The analysis is good though, no issues there. As a side note on Bourn, I love to look at a players RE24, and Bourn's was below Pagan's but ahead of B.J. Upton's. Not saying it's an end all be all stat, obviously other factors in play, but interesting to use when looking at AAV's.

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