Money Players

More O.J., agents, runners and baseball draft

Jason Whitlock, the love-him-or-hate sportswriter, offers some interesting points about how the media and the public view college basketball and baseball players.and their interactions with agents. Writes Whitlock:

When the NCAA enacted its new, get-tough Academic Progress Report standards, a little-known fact that the media ignored is that college baseball programs traditionally performed far below basketball programs. Let me translate that for you: Baseball players were less likely to graduate from college than basketball players. The APR forced baseball coaches to bring their kids back to campus for summer school rather than allowing them to audition in front of scouts and agents in the Cape Cod League. Yeah, the "cesspool" of street agents, runners, handlers, scouts and agents we love to rail against in basketball co-mingle in baseball at high school All-American games without raising a word of dissent.

Conquest Chronicles, a USC fan blog, weaves some of my earlier comments on agents and the baseball draft to make his case that college athletics could be improved if we "Make it above board!". Writes Conquest Chronicles:

I am not naive enough to think that this sort of thinking work have stopped the alleged benefits that an O.J. Mayo might have received but instead of being a watch dog why not consider some sort of partnership with the pro leagues and agents with stiff penalties for those that break the rules.

The product would be so much better if the "minimum" requirements helped nurture the players into more responsible solid citizens that can also play at that level. I also agree that rookies should play one year in the "D" league before getting to the big dance. Surely some legitimate compromise can be made..

Money Players reader and frequent commenter Garrett Sanders emails some interesting points:

Guillory allegedly was given $250k to recruit OJ by BDA, but "only"30k ended up in his pocket. Clearly, if OJ took money from Guillory, he was wrong for this...but the larger point is that there is economic system that compensates people who have deep relationships with top players. For college coaches, the market determines what college coaches can are paid. For runners, agents can have them on the payroll (even if the practice is generally frowned upon). And then for the players, the ones who create economic value for both sports agents and athletic departments, are conveniently cut out of the deal. I am not sure I want college athletes to be paid, the  schools and the NCAA are the ones who have turned this into a big money game. So if they take the one and done players, they're telling the public it's about the money, not the education. And if they don't pay them, someone else will step in. Everyone can do their typical hand wringing, but should anyone expect a different outcome.

The unintended consequences of trying to protect athletes

Darren Heitner, who is on top of all things agent related, provides an excellent analysis about yet-another- college athlete/agent situation. It is definitely not as high profile as O.J. Mayo, but it does raise some interesting issues. It involves Oklahoma State University sophomore star pitcher Andy Oliver, who was declared ineligible in the middle of the College World Series. Rather than set up the situation, read Darren's story and analysis.

Let the judgment begin...except here
The facts surrounding Andy Oliver's are not clear to take sides, but my views expressed in the O.J. Mayo situation apply here: Don't rush to judgment, wait for the facts to come out and let the appropriate authorities conduct their investigation.

My analysis will focus on amateur baseball players and their involvement with so-called "family advisers" and NCAA rules governing these relationships. For most student-athletes agent prohibitions make sense. However, baseball players drafted by MLB teams are unique from other college athletes because they are automatically entered in MLB's amateur draft (rather than declaring for the draft like basketball and football players). While I am a big fan of MLB's system for drafting players, drafted ballplayers should have the opportunity to receive quality representation in negotiating their first professional contract. Maybe I am alone on this, but I think everyone's interests (players, schools, NCAA, agents) would be well served if the system for "advising" amateur baseball players is brought above board, rather than devising ways around NCAA rules (athletes and agents certainly aren't the only ones figuring out loopholes).

Not all agents wear horns
The intersection of amateur athletes, agents and the NCAA is complex. There are bad agents out there. The overarching question is, How can we come up with ways to improve the system? I would love to think that education is the primary tool to deal with the "agent problem," especially since my book, Money Players, would, of course, be an essential part of the solution. But it will take more than just well-constructed educational programs laced with strong admonitions to refrain from taking money from agents and runners. (No, I am not advocating that athletes be paid.) I'm actually not sure what the solution is for college basketball and football. But I firmly believe the rules governing agents for amateur baseball players need to be restructured.

NCAA rules are supposed to protect student-athletes. And for the most part they do. NCAA rules prohibit an NCAA athlete from having any oral or written agreement for representation by an agent. They also prohibit an athlete from retaining an agent to represent his athletic interests. These rules make sense for amateur football and basketball players. But baseball players drafted by MLB teams are in a completely different situation, yet governed by the same agent prohibitions.

IMO, amateur baseball players absolutely need above-board, expert representation by someone who is not only well versed in the legalese of MLB contracts, but also understands the marketplace. And who possesses these skills? Agents! But student-athletes who wish to retain their amateur status are not allowed to retain agents. A baseball player drafted by a MLB team, even with the help of his family, is unlikely to be capable of effectively negotiating a contract, let alone obtaining full market value. It would be so sensible -- and truly demonstrate that the NCAA is more "kinder, gentler" these days -- if they would allow a small window for agents to negotiate MLB deals on behalf of drafted baseball players.

So-called family advisers
In doing research for my book Money Players, I spoke to a several baseball agents. They all agree that the concept of "family adviser" is a sham. Baseball players selected by major league teams need some form of professional counsel. What they really need is an agent, but NCAA rules prohibit amateur athletes from retaining. So these advisers work behind the scenes, but they do not sit at the negotiating table (probably the most essential agent function). Good, reputable agents won't do anything to jeopardize an athlete's collegiate eligibility. They'll do whatever they possibly can to assist an athlete and their families, but they won't "agent" an amateur athlete. Of course, that's all a fine line and open to wide interpretation. My primary advice to athletes is: Don't break NCAA rules. Secondary: Don't scorn a b-list agent!

Who says it doesn't pay to be an alleged student-athlete?
Interestingly NCAA rules empower individuals from members institutions to negotiate with professional sports teams. There are obvious conflict of interests, although I find most coaches and athletic directors honorable when it comes to advising athletes on the decision to stay or go pro. But baseball is different: For players drafted after their senior year in high school and/or their college junior year, they are in the unique and enviable situation where they can negotiate with a MLB team and use the leverage of another offer (the opportunity to go to college) against the MLB team. And, magic, baseball teams offer more money rather than risk losing the rights to a coveted draft pick.

Fiduciary responsibility of those negotiating professional sports contracts

NCAA bylaws empower athletic departments to act as agents.

12.2.4.3 Negotiations. An individual may request information about professional market value without affecting his or her amateur status. Further, the individual, his or her legal guardians or the institution's professional sports counseling panel may enter into negotiations with a professional sports organization without the loss of the individual's amateur status. An individual who retains an agent shall lose amateur status.

Let's look at the concept of fiduciary. The word comes from the Latin fides, meaning faith. It has been said that fiduciaries must conduct themselves "at a level higher than that trodden by the crowd." A fiduciary is legally required to put their clients' interests above all else, and is certainly not allowed to profit at the expense of his or her clients.

I am not familiar enough with baseball to know if it is commonplace for a representative from a school's professional sports counseling panel to negotiate with MLB teams, but is hard to fathom that a university employee, even with impeccable academic and practical experience, could be a fiduciary for a student-athlete. Knowing the potential liability, would a school's legal counsel even allow? And what about players associations' regulations that stipulate that only "certified" agents negotiate playing contracts?

The early analysis
The only reason the public knows about Andy Oliver's alleged involvement with an agent is because one agent was left at the altar for another agent (the fact that it is Scott Boras certainly gives this story added juice). What about all the other baseball agents who acted as "family advisers"? The only difference is they typically do not send 6-figure invoices. And to compound the issue, it probably was not a good idea to have Boras's deputies intervene on behalf of an amateur ballplayer in the middle of his college baseball season. Scott Boras, George Vujovich and Ryan Lubner are attorneys and, I assume, licensed to provide legal services. Keep in mind this issue is over a legal bill, not whether an agency relationship has or has not be established.

Of course, there's an alternative approach to this problem...

"Agents, please keep away from our student-athletes!"

--Marc Isenberg

Marvin Miller's HOF snub

Marvin Miller is one of my sports heroes. In fact, Money Players is dedicated to Marvin Miller and others who "fought for freedom and fairness."

Miller's contribution to the game -- and society -- is still not properly recognized. Yesterday the Baseball Hall of Fame's Veterans Committee elected several new members, including Bowie Kuhn (commissioner), Walter O'Malley (owner), and Barney Dreyfuss (owner).

Miller's slight is more disproportional this year because his fate was put in hands of a revamped Veterans Committee, comprised of many he "regularly opposed -- and beat -- in arbitration and bargaining sessions that altered the history of the game." The result: Miller out; Kuhn, Miller's long-time foil, in.

According to Brad Snyder's book, A Well-Paid Slave:

"Without the reserve clause, Kuhn predicted, the rich teams would sign all the players, the poor teams would go out of business, and the operation of a league would be impossible. Major League Baseball would devolve into an 'exhibition business.' He based his prediction on the 'chaotic conditions [that] prevailed when there was no reserve clause' from 1871 to 1879, when players jumped to rival teams and leagues and fixed games."

Snyder added: "Player salaries constituted 59 percent of team expenses in 1879 compared with 22 percent in 1950 and 21.5 percent in 1970. [The reserve system] certainly did not help equalize competition. Four teams won 63 of the 100 pennants from 1920 to 1969."

The reserve clause, so fundamental to Kuhn's reign as MLB commissioner, was modified because of the courageous battle waged primarily by Marvin Miller and Curt Flood. The rest is history. Pretty much everything that Kuhn predicted did not occur. Free agency led to higher salaries, which was more than offset by greater revenues and ultimately higher franchise values.

In May 2007, MLB Commissioner Bud Selig apologized for the reserve clause, saying it "should have been modified decades before someone like me came into the sport. Change was long overdue, and some balance to the relationship was necessary." Added Selig: "So much of our success has been made possible because of our improved relationship with the players."

Exactly!

At every opportunity, Kuhn attempted to thwart the change Miller and his players fought for. Yet Kuhn gets baseball's highest recognition, which is tantamount to rewriting history. Both Marvin Miller and Curt Flood deserve to be in the HOF.

--Marc Isenberg

The truth will set you (and your fat contract) free

By Marc Isenberg

Yankee Jason Giambi faces a 50-game suspension for telling the truth about steroids.

Last month Giambi told USA Today, "I was wrong for doing that stuff. What we should have done a long time ago was stand up — players, ownership, everybody — and said: 'We made a mistake.'"

Not a shocking revelation by Giambi, but it was nice to hear someone involved in the whole steroid controversy speak directly in the light of day, rather than hear from alleged uses in staged Congressional hearings or in leaked grand jury testimony. Most gave Giambi an attaboy for his admission, but not MLB. To them this was their Al Capone moment.

Selig has "ordered Giambi to meet with Sen. George Mitchell,, the chairman of baseball's steroid investigation, within two weeks and said he would defer imposing discipline until then."

MLB can't catch guys red handed so they take after the only "alleged" truthteller. Selig wants Giambi to literally take one for the team -- actually the owners. Giambi can talk to Senator George Mitchell in a confidential forum with full immunity. Anyone want to bet money that the testimony gets leaked?

What kind of messed up world do we live in when the truth has more consequences than outright lies and deception. In the bizarro world of Major League Baseball, the truth can lead to 50-game suspensions. (And in the military, the truth can kill. The military recently discharged 58 gay (not that it matters) Arabic language experts under "Don't ask, don't tell.")

David Zirin wrote on Giambi two weeks ago, but it's even more relevant today now that Selig has made his strong-arm tactics known. Some highlights:

[Giambi's] statement last week constitutes the most honest and interesting talk in two years--ever since the anabolic institution of Major League Baseball was born again as straight-edge.

Tim Keown, in a moment of sanity, wrote on ESPN.com, "If Major League Baseball attempts to get punitive with Jason Giambi for his tacit but not explicit admission that he used steroids, it will constitute a new level of hypocrisy. And if baseball's investigation gives the Yankees the shield they need to attempt to void Giambi's contract, it will constitute a new new level of hypocrisy... Baseball, the entity that closed its eyes and counted its money for years and years while extolling the virtues of the artificial long ball, is now threatening to come down hard on the one guy who might provide a sliver of salvation to the whole episode."

Often I am asked why athletes don't speak out more on issues of the day. Here is another example of how the athletic industrial complex hammers those who step out of the shadow of cliches, who actually have something to say.

Blame agents like Scott Boras

LA Weekly's Jeff Anderson wrote an excellent feature on baseball agent Scott Boras, (mis)titled "The Boras Factor: Is super agent Scott Boras destroying the game of baseball? And what does he want now?" Despite the rhetorical title, Anderson actually provides a nuanced, fair examination of Boras. It took 7,128 words to accomplish, but it's well done.

If you believe much of what is written and said about slimy agents like Scott Boras, they are leading sports straight to Hell. Oh what a world we would live in if sports agents did not exist. Without them professional sports would most certainly not be littered by lack of loyalty, greed, out-of-control ticket prices, pampered athletes, government subsidized stadia, and so on. The problems in college athletics would also disappear. And someone (perhaps a college athletic director) might suggest that the war on terror would end too. If. We. Lived. In. A. World. Without. Sports. Agents.

Boras is a complicated figure. He's generally reviled by owners, media, and fans. Fellow agents don't particularly like him either. But Boras' clients are well represented by Boras' firm, which is really all that should matter.

The Cliff Notes version of Anderson's article:

Steve Lyons, former major leaguer and current Dodgers broadcaster, doesn't like Boras.

"He definitely affects what happens on ball clubs. No one else manipulates the game like that, like where players end up. And it's not always positive or in the best interests of the player or the game."

Jeff Musselman, former major league pitcher and current Boras associate, disagrees.

"Scott has never done anything purely for profit. He believes if you do things right, the money will follow. You can make a million dollars today, but is that in the best interests of your client in the long run?"

In 1983 Boras signed Tim Belcher and Kurt Stillwell. And soon after Boras was demanding market value salaries. According to Boras:

"Teams were irate. They said to me, 'Don't get involved, come work for us.' I told them I didn't want to be a baseball executive, I wanted to be an advocate for players, that this was bad for baseball, bad for the system."

On players' salaries

Anderson writes, "Boras' argument, one that is hard to counter, is that players should reap a fair percentage of team revenues because they are responsible for baseball's popularity and its expansion. But it is his gift for talking — part baseball knowledge, part business vision, a verbal onslaught of research and data delivered with a conviction that sounds presumptuous, if not threatening — that further sets him apart."

On a permanent World Series site
Writes Anderson, "Boras says he wants MLB to scrap the current World Series format and adopt a nine-game series in one designated city per year — the way it was played in the early 20th century. He's talked to owners and says some see nothing but upside.'

Says Boras:

"The TV and advertising and marketing revenue would explode. Places that might never have a World Series could compete for the location like they do for the Olympics. Nine games would allow a greater chance for the best team, and not just the hottest team, to win. It would be like the Super Bowl, but better."

I like the idea of designating a World Series venue, but nine games? Then again, as I learned on my trip to Australia, the sport of cricket is interminable -- and thriving.

Article on Curt Flood

Book brings Flood's contribution to game out of the shadows

By Marc Isenberg
Published May 14, 2007: Page 25

Although Jackie Robinson suffered many indignities when he broke Major League Baseball’s color barrier in 1947, his legacy is enshrined. Curt Flood’s historic contribution to baseball and society, however, remains in the shadows. His decision to challenge the power of the baseball establishment is still largely misunderstood. Thanks to "A Well-Paid Slave: Curt Flood's Fight for Free Agency in Professional Sports," by Brad Snyder, we get a new look at Flood’s life and times. Snyder’s book illuminates Flood’s challenge of the reserve clause through the events that shaped Flood, including his childhood in desegregated Oakland, playing minor league baseball in the racist, segregated South, his participation in the civil rights movement, and his troubles with alcohol. <Continue reading article>

Postscript: MLB commissioner Bud Selig was honored in Boston at the Sports Lawyers Association conference, which I attended. In his speech Selig made an interesting apology. The reserve clause, Selig said, "should have been modified decades before someone like me came into the sport. Change was long overdue, and some balance to the relationship was necessary." He added, "So much of our success has been made possible because of our improved relationship with the players."

I expect The Onion or some other faux news organization to suggest something like, "Former players sue for well-paid slave reparations." Hmmm.

 

The Devil made them do it

By Preetom Bhattacharya

The Tampa Bay Devils Rays have one of the lowest attendance figures in Major League Baseball for several years now. Rather than investing money in better players, the team has decided to take its act to nearby Orlando for a three game series with the Texas Rangers.

In a marketing ploy to increase the visibility of his franchise, owner Stuart Sternberg is hoping to make fans appear in the Magical Kingdom. "We're looking to build a regional power," Sternberg told the Ft. Worth Star-Telegram. "If we include Orlando in our region, we enjoy 4 to 5 million people as potential fans. Changing the culture doesn't happen overnight."

If successful, the series in Orlando could lead to increased television ratings in Central Florida and might convince Orlando residents to make the almost-100 mile sojourn to St. Petersburg, where the Devil Rays play in the over-ripened Tropicana Field. (The Juice Box has undergone a $35-million renovation over the last two years).

In addition to spending money on the stadium, the team provides free parking and allows fans to bring outside food into the stadium, acts that scream "revenue hemorrhaging." Unfortunately, an updated stadium can't help the Devil Rays squeeze more victories (just ask the Pirates). In the Devil Rays' nine-year existence, they have averaged just 65 wins per season.

The Devil Rays' business model is clear - profit is more important than winning. By keeping their payroll low, getting however many fans they can, and cashing in with MLB's revenue-sharing plan, the team is going to operate in the green almost every year. With all the revenue streams being split equally amongst the franchises in baseball, there is little motivation for Sternberg to field a winner.

That idea goes directly against the athlete's oath to preserve the integrity of the game by giving it their all. Owners like Sternberg who win money by losing are violating the basic trust between a franchise and its fans - albeit a dwindling number in the case of the Devil Rays.

Sternberg isn't completely at fault here, as the system that MLB has put together has hindered the competitive balance the owners and players hoped to achieve in 2001 with monumental revenue-sharing and luxury tax impositions. Money was handed out to teams with smaller revenue, but there weren't any requirements to spend that money on players. Small-market teams like the Devil Rays, Kansas City Royals, and Pittsburgh Pirates have owners who are resigned to the reality that lack of money makes difficult, if not impossible, to compete for pennants.

Their reasons are simple enough - the luxury tax hasn't deterred the Yankees, Red Sox, Dodgers, and Cubs from freely spending money in the free-agent market. So why bother trying to win when you can turn a profit by feeding on MLB handouts?

If giving one's all is a fundamental tenant of sports, MLB owners should realize that the current economic system cheats fans, as much as a player taking illegal performance-enhancing drugs. And steroid use is far more difficult to prove than objective measures such as wins, losses and payroll.

5/18 UPDATE
Devil Rays sweep Rangers, draw decent crowds.