Tag Archives: free agents

The Other Alleged Collusion Scandal: Baseball’s Unemployed Free Agents

Major management-labor troubles are brewing below the surface in Major League Baseball. With the 2018 Spring Training camps opening in a few days, over a hundred free agents remain unsigned, including many of the best players on the market. The Players Association is preparing to open a special training camp just for all the unsigned players, and shouting foul. They are alleging illegal collusion among the team owners to keep salaries down.

A lack of signings on this scale has never happened before, and agents and their player clients are increasingly hinting that dark forces are afoot. Fanning the flames are sportswriters and commentators, whose left-wing sympathies are only slightly less dominant than in the rest of the journalism field. The content on MLB’s own radio station on satellite radio has become an almost unbroken rant about how unfair it is that the players aren’t getting “what they have worked so hard for.” The theory appears to be that employees decide how much they are worth, and their self-serving assessments shouldn’t be challenged.

It is not that many of the free agents haven’t offers for their services on the table. It’s not that they don’t have multiple year contracts that will pay them millions of dollars on the table. They do, and thus  many of the unsigned players can substantially fix the bitter impasse by saying “yes.” Oddly, they are finding that public opinion is not substantially in their corner as they choose to bitch instead.

The poster boy for this controversy is, as luck would have it, a player who is sought by my very own Boston Red Sox. He is J.D. Martinez, a slugging outfielder just entering his thirties who had the best year of his life in 2017. Naturally, he wants a large, multi-year contract that will leave him set for life; this is his big and probably only shot. He also has the most aggressive, successful and, in my view, unethical of sports agents,  Scott Boras, who began the free agent auction season by announcing that J.D. would be seeking a contract worth 250 million dollars or more.

The problem is that not a lot of teams can afford such a contract, and those that can are, finally, wising up. Multiple year contracts have a way of blowing up in a team’s face. Analytics are now widely used to allow teams to make intelligent projections regarding just how much a player will add in value and wins. This year, most of the richest clubs are not hurting for home run hitters or outfielders, which leaves the Red Sox, who despite winning their division last year for the second year in a row didn’t hit as many homers in doing so as the spoiled Boston fans are used to, as the most obvious landing place for Martinez. Sure enough,  the team offered Martinez a five year deal reputed to be worth 125 million bucks. No other team has offered anything close, and it is unlikely that any team will. Boras and J.D. still say it’s not enough. They want a sixth year, and more cash. The Red Sox see no reason to bid against themselves, and have said, in essence., ‘There’s our offer. Take it or leave it.’  Somehow the baseball writers and the player see Boston as the villain in all this.

As George Will likes to say, “Well.” Continue reading

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Ethics Quiz: The Marriage Mark-Up

Wedding reception

The New York Times published a feature in December exposing how hotels and wedding service vendors typically charge more to couples planning wedding festivities than they do to corporations seeking the same facilities and the same services. Is the result of  gauging, market forces, negotiation inexperience by the happy couple, or something else? Is it unethical?

The article seems to conclude that the vendors are simply taking advantage of purchasers who have no sensitivity to price, especially so-called “Bridezillas.” They want what they want for their perfect day, and will pay whatever it will cost to get it. Are the venders being unethical to take advantage of what is an emotional rather than a rational mindset? After considering whether more price transparency in the wedding industry would help (the author thinks not), the piece concludes,

“Strong consumer preferences — about the flower type, bridesmaid dress, cake decorations, music style, whatever — mean less price sensitivity (what economists refer to as greater demand inelasticity). If the cocktail napkins must be blue, the happy couple will be willing to pay more for blue. So if there are enough brides out there with strong and specific preferences, who want their weddings to be the special day they always dreamed of, that’s going to push equilibrium prices higher, no matter how transparently they are displayed. In other words, the Bridezillas keep prices high for the rest of us.” Continue reading

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The Unforgivable Conflict of Interest: Sports Agents, Robbing Their Ignorant Clients

The ethical course is to choose.

The ethical course is to choose.

Sports agents are rich, powerful, and ethically handicapped by inherent conflicts of interest. The first two qualities so far have insulated them from dealing fairly and openly with the second. This is wrong, and has got to stop. For it to stop, it would help if the players, their unions, the sports leagues and the sports media didn’t either intentionally pretend not to see the obvious, or weren’t too biased and ignorant to realize what’s going on.

Four years ago, I wrote about this problem in a long piece for Hardball Times, a baseball wonk blog of consistent high quality.  The specific agent I was writing about was Scott Boras, the king of baseball player agents, but the egregious conflict I flagged isn’t confined to that professional sport; it’s present in all of them. In the article, I argued that Boras, a lawyer, is engaged in the practice of law when serving as an agent and was therefore violating the legal ethics rules, which prohibits having clients whose interests are directly adverse to each other, specifically in the so-called “Zero-Sum Conflict” situation.

A lawyer can’t assist two clients bidding for the same contract, because the better job he does for one, the worse his other client fares. A lawyer can’t sue a defendant for every penny that defendant has on behalf of one client when he or she has another client or two that have grievances against that same defendant—if the lawyer is successful with the first client, he’s just ruined his other clients’ chances of recovery. There is some controversy over whether the legal ethics rules automatically apply to a lawyer-agent like Boras, but never mind—whether he is subject to the legal ethics rules or not when serving as an agent, the conflict of interest he is blithely ignoring still applies, still harms his clients, still puts money in his pockets, and still should not be permitted. Continue reading

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Ethics Hero: Gil Meche

[ Finally reduced to hunt-and-pecking blog posts from an Arlington, VA. Starbucks as the result of a still-ongoing power outage at the Marshall home-office, I apologize for an uncharacteristically quiet day.]

All Kansas City pitcher Gil Meche needed to do to collect $12 million in 2011 was to show up, do his best to pitch—which his ailing right arm would no longer permit him to do—and cash the checks. But despite having an iron-clad contract (the last in a long-term deal he signed as a free agent), Meche decided to retire, thus ending the contract and forfeiting the money. Continue reading

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Baseball’s Free Agent Follies: Dumb Clients, Conflicted Agent

Baseball’s super-agent Scott Boras has his annual off-season conflict of interest problem, and as usual, neither Major League Baseball, nor the Players’ Union, nor the legal profession, not his trusting but foolish clients seem to care. Nevertheless, he is operating under circumstances that make it impossible for him to be fair to his clients.

This year, Boras has three aging outfielders in his stable, all with some Hall of Fame credentials, all with fading skills, and all without jobs. Their names are Manny Ramirez, Johnny Damon and Andruw Jones. Thanks to a glut of unsigned hitters still on the market, the price for each of these three—once, when they were young, in the 8-figures a year range—is falling fast. According to an analysis by ESPN, only six, and possibly as few as three, possible teams are still looking to fill slots on their rosters suitable for Ramirez, Damon, and Jones, and none of them will sign more than one, if any. Continue reading

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Stupid Unethical Reporter Tricks

If true, what Sports Illustrated reporter Jon Heyman is being accused of by his colleagues is a major ethics breach. The context—a free agent baseball star’s negotiation with teams competing with each other for his services—is a narrow one, but it challenges us to ponder how often the same dishonesty occurs in other news reporting contexts. Continue reading

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