Sports Agent

News article from CBS Sunday Morning

Why Do Baseball Players Make So Much?

http://www.cbsnews.com/stories/2007/07/05/sunday/main3021144.shtml

NEW YORK, July 8, 2007

(CBS) Baseball plays out from one end of the country to the other — from one end of the lifespan to the other. It’s a game, a sport and a pastime.

But at the highest levels, it is a $6 billion a year business where the extraordinary skill and talent of the best reaps once unimaginable rewards. The minimum wage in major league baseball is almost $400,000 more than half the players make $1 million or more. New York Yankees’ third baseman Alex Rodriguez takes in $25 million — some 500 times what a teacher or a cop or a paramedic makes.

“My wife’s a school teacher, and she works 12 hours a day, 10 months a yearand she doesn’t make a whole lot of money," baseball fan Tom Nighe told CBS News correspondent Jeff Greenfield. "And it is sort of disheartening to see a ballplayers make the kind of salary they do when a teacher doesn’t make what they really deserve.”

The force behind many of the most lucrative baseball contracts is sports agent Scott Boras who works at a high-tech ultra-contemporary fortress in Newport Beach, Calif.

Boras never made it past the middle reaches of the minor leagues. But, at 54, he arguably does more to shape the outcome of a major league season than a dozen all stars with far more firepower than the negotiators he’s up against. He says his staff of 40 people crunches numbers with a multimillion dollar database that teams just don't have.

"This is something actually we did back in 2000 with Alex Rodriguez, where we create these treatises where we try to give people an idea about the talent of a player," he said.

Boras is more appropriately called a baseball agent — baseball players are the only athletes he represents. His office is festooned with celebrations of his clients—best pitchers, best fielders and most valuable players. His profession — or craft — or calling — has been portrayed on the big screen, in “Jerry Maguire”, with one of the best known lines in modern movie history: “Show me the money!” But Boras says no player has actually ever done that.

Maybe it’s because they don’t have to. When Oakland A’s pitching ace Barry Sito went across the bay to the San Francisco giants for $126 million; when Red Sox idol Johnny Damon left for the hated New York Yankees for $52 million; when the Red Sox signed Japanese pitching star Daisuke Matsuzaka for $52 million — those were all Scott Boras deals.

And — most famously, or infamously — when Alex Rodriguez — who is making a $250 million over 10 years — joined the New York Yankees — Boras was the man pulling the strings.

“He has the most important quantity going into the negotiation," New York Post sports columnist Joel Sherman said. "He has a finite talent. And then, better than anyone else, he knows how to use time. He’s willing to draw out the negotiating process. He has a steel gut and he knows it’s musical chairs. Somebody’s gonna be left without star players at the end, and money in their pockets."

But for most of Major League Baseball’s history, players were paid a small fraction of their worth. They were indentured servants, bound for the length of their careers to the teams that signed them.

"My average salary for eight years in the big leagues came out to $19,500," said former Yankee pitcher Jim Bouton. "We weren’t making enough to pay our bills year round. That’s why during the off-season, guys had to get jobs. So to show you how desperate we were a bunch of us got together—a basketball team and we would play high school faculties in the New York area for $50 a man. "

But in the mid-1970s, decisions by courts and labor arbitrators freed ballplayers to bargain for their value in the marketplace. And one team, more than any other, has been defined by its willingness — at times its eagerness to play big spender.

Yankee stadium is ground zero of the idea that money can buy success — where it’s utterly appropriate that the general manager of the New York Yankees Brian Cashman is called “cash-man.” No team spends more, year after year, buying up the best — or at least, the most costly — talent in the game.

"They’ve had the highest payroll in baseball for however many years," Bouton said. "They haven’t won a world series in what? Six or seven yeas now?"

Not since the 2000 season to be exact, despite a yearly payroll nearing — at times exceeding — $200 million. But Boras says money doesn’t buy world championships.

"The probability of being in the payoffs is greater if you spend money. That’s proven," he said. "But other than that the game is — the game has a great mystery to it."

But if you want another side to the story, you need to leave baseball’s Fort Knox, and head west 3,000 miles, and $120 million a year away to Oakland, Calif, where a baseball executive has become something of a legend by turning his cash-starved team into a consistent contender.”

Billy Beane, 45, like Boras, is a former ballplayer. But for the last decade, as general manager of the Oakland A’s, he has defied the idea that money guarantees on-field success. His $80 million payroll is less than half of the Yankees,’ but his team is almost always in the hunt.

"There’s an optimum amount of dollars that you can spend or maybe need to spend to get to the playoffs," he said. "Anything you spend over that is, you know, you’re really gaining very little."

Instead, as the best-selling book “Moneyball” described it, Beane ploughs through overlooked statistics to find undervalued players. He gets help from unlikely sources.

"I've got a young man working for me who holds a Ph.D. in behavioral economics from Cal Berkeley and was an MIT undergrad," Beane said.

Sherman says Beane doesn't fall in love with players as people but rather sees them as stocks which will rise and fall in value. But despite their on-field achievements, the A's are lucky to draw 2 million fans a year. By contrast, the Yankees, for all their struggles this season, are still by far the most dominant baseball franchise and not just because they are the only team to have made the playoffs for a dozen years straight.

"For the first time in their history they've dawn over 4 million fans," Sherman said. "They’re gonna draw 4 million fans again this year. They started their own network. Their marketing arm is tremendous."

Still, among those who play ball for free and who work day jobs for much smaller paychecks, there is a larger question: is there something off-kilter about a society where a ballplayer makes 500 times what a teacher or cop or paramedic makes?

"Does anybody go to a movie and go 'Man, Tom Cruise is making $25 million for this movie and this is his performance? Al Pacino’s making this? Julia Roberts is making this? Cameron Diaz is making this?'" Sherman said. "What is it about baseball players? If you’re asking me 'Is society messed up?' Yeah, society's messed up. We put a lot into celebrity, fame and sports. But we've decided as a culture that we like our leisure time. We like our free time, and we're willing to pay those people and pay a lot to go see those people."

Sooner or later, Boras said the ballplayers will be making even more money. He expects the $30 million player is on his way.

"And in years to come there’ll be 40," he said.

Article 2

http://www.usnews.com/usnews/biztech/articles/040510/10eeagent.htm

Go-To Guy

Agent Scott Boras is changing the business of baseball

By Matthew Benjamin

Posted 5/2/04

NEWPORT BEACH, CALIF.--A few weeks into the young baseball season, a staffer delivers a sheaf of statistics--pages and pages of obscure numbers--to Scott Boras, halting him in midsentence. A minute passes in silence as he pores over the figures, as if searching for some eternal truth. He finally comes away shaking his head. "All this stuff about OPS"--on-base percentage plus slugging percentage--"nonsense," he scoffs. The problem, according to baseball's most powerful and controversial agent, is that on-base percentage depends on walks, and "it is being a great slugger and a great hitter that allows you to get the walks," he implores. So the number to watch, he explains, is slugging percentage plus batting average. And which major-league player currently leads in that category? Kansas City Royals center fielder Carlos Beltran, one of many stars in Boras's galaxy of high-profile clients and apparently next in line for a Scott Boras jaw-dropping, eye-popping contract.

It's because of just such contracts that Boras has earned titles such as "the real commissioner of baseball" and "baseball's most hated man." Street & Smith's SportsBusiness Journal says his hard-line negotiating and innovative thinking changed the amateur draft. Whether those titles and claims are accurate or not depends on your point of view. They do, however, attest to one truth on which the entire baseball community can agree: Boras, a former .283-hitting second baseman and center fielder in the St. Louis Cardinals and Chicago Cubs organizations who never made it beyond the AA minor level, has certainly come a long way.

The 51-year-old superagent represents 65 major-league players who collectively will take home $230 million this season--an average annual salary of more than $3.5 million, well above the league average of $2.5 million. Boras's clients include a significant number of the sport's most talented, highest-paid players, including the San Francisco Giants' Barry Bonds, the New York Yankees' Alex Rodriguez and Bernie Williams, and Greg Maddux, the longtime Atlanta Braves ace who's now with the Chicago Cubs. The deals Boras has negotiated are legendary: more than a quarter of a billion dollars over 10 years from the Texas Rangers for Rodriguez (who has since been traded to New York), $105 million over seven years from the Los Angeles Dodgers for pitcher Kevin Brown (also now with the Yankees), and $18 million a year for Bonds.

Boras's uncanny ability to coax outsize pay packages out of team owners is a force, his critics contend, behind many of the national pastime's problems: a large imbalance between rich and poor teams, distrust between players and owners, and a trend among players to judge themselves solely by the number of zeroes on their paychecks. "He makes these outrageous contract demands and always winds up getting someone to agree to them,"says Tom Schieffer, former president of the Texas Rangers and now the U.S. ambassador to Australia. "They oftentimes turn out not to be good for the player or the team, or baseball itself."

Boras sees it differently. "It's not about the amount or the number," he says. "It's the fairness."As good attorneys do, he represents his clients without reservation, doing whatever it takes to secure the most advantageous deal; to get players exactly what Boras believes they are really worth. Is that bad for baseball? "Big contracts are important. They create stars and bring people to the ballpark. Remember when A-Rod was signed" in December 2000? he asks, referring to Rodriguez. "It's basketball and football season, and he's the biggest story."

Of course, those big numbers garner Boras big bucks, too. His 5 percent commission makes him a rich man, even after paying the 60 or so employees of Scott Boras Corp., a full-service shop that provides clients access to fitness and nutritional professionals and well-known sports psychologist Harvey Dorfman, and handles all their marketing matters. "Money and contracts are about 30 percent of what we do," says Boras.

It doesn't feel like work to Boras. "For me, baseball was always a privilege," says the native of Elk Grove, Calif., a farming hamlet south of Sacramento. "I had to get up in the morning and milk cows and do all the other work by 5 o'clock so I could get to the baseball field." While Boras went to graduate school to be a research chemist, he played for the St. Petersburg Cardinals in the Florida State League, among other minor-league teams. He was never a lock for the majors, and three knee operations ruled the big leagues out altogether. After earning a doctorate in industrial pharmacology and a law degree, Boras wound up at a Chicago law firm specializing in medical litigation. When former teammates on their way to the majors asked him to represent them, Boras realized his true calling, and in 1985 he won his first big contract, for a friend, pitcher Bill Caudill: $7.5 million over five years from the Toronto Blue Jays. Boras spent his first years as an agent crisscrossing the nation, learning the trade and recruiting.

Two decades later, his routine is quite different. An extensive scouting staff made up of former major leaguers, which reaches into Asia and Latin America, now does most of the legwork. Boras himself starts each day at 5 a.m. with a workout, then makes East Coast calls from home in this posh beach town just south of Los Angeles, where he lives with his wife and three children. More calls around the nation are followed at noon by lunch with whichever client is passing through town. He breaks up his long day by getting to one of his two teenage sons' afternoon baseball games.

On a California-perfect April day, Boras jumps into his black Range Rover, pushing the speed limit to get to Irvine by 2:30 for his sons' batting lessons. It's with legendary hitting and pitching coach Ron LeFebvre. "You want to emulate a swing?"asks LeFebvre, who offers tips to students and onlookers. "Emulate Bonds. Before him you have to go back to Pete Rose and Ted Williams."

By 4:30, Boras and a few of his staff are at the ballpark to meet with clients and take in a game. Today it's out to Anaheim for an Angels-Rangers game. Rangers first baseman and Boras client Mark Teixeira stops by the Boras Corp. box before the game to talk about a nagging injury. When they're not here, Boras and staff are at Dodger Stadium to connect with National League clients.

During the game, Boras talks baseball, baseball, and more baseball. It's either the present game--"Kenny's Texas Rangers pitcher and client Kenny Rogers slider is right on tonight"--or the performance of other clients around the league, updates of which are sent every 30 minutes from the office to staff pagers. "Did A-Rod homer? No? A single? But he's 2 for 3, right?" Rodriguez, now a Yankee because of Boras, has just finished a particularly dreadful series against the Red Sox, and a copy of the New York Post with the headline "Awful A-Rod" circulates among the staff, but Boras laughs it off. "It's New York," he says. "I'd be worried if he wasn't in the headlines."

When Boras travels, it's often to college or even high school games, scouting new prospects. His next trip will be to watch Jered Weaver, the undefeated ace of the Long Beach State Dirtbags pitching staff, a Boras advisee who will probably be this year's top draft pick.

When and if he does represent such players, Boras will employ his trademark strategy. "Three simple words: preparation, preparation, preparation," he says. "When you walk into a team, it's not that you have information--it's that you have incredible information." When he was shopping Rodriguez around in 2000, Boras and staff put together an 80 - page book that included the player's history and potential, as well as a prediction that he would become the best shortstop ever.

General managers say Boras's poker skills are his real asset. He always seems to conjure up a competing offer--or hints at one--that drives a player's price through the roof. That gambit cemented Bernie Williams's seven-year, $87.5 million offer from the Yankees in 1998, which Boras calls his toughest negotiation so far. "He was a 20-home-run center fielder, and we wanted 40-home-run money," he says. "It took a lot of information, a lot of data, to get him that. In the end, we got an offer from the Red Sox, and Yankees owner George Steinbrenner came around." Yankees GM Brian Cashman calls Boras a very tough negotiator but says the market ultimately sets the price: "Scott's a seller and we're the buyer. He's willing to take chances, and his clients are willing to take chances with him."

The deals that Boras makes have won him enmity from some fans. In Seattle, they still chafe over losing Rodriguez to Texas back in 2000. Anxiety that Boras will find star catcher Jason Varitek, now in the final year of his contract with the Red Sox, a better deal elsewhere is the talk of at least one fan Web site, where bloggers spell the agent's name "Bora$."Several owners and general managers, too, have disparaged Boras in the press for his hard-nosed tactics.

Thus the "most hated man" title, which makes the affable backslapper suddenly glower. "Who said that?" Boras demands. "GMs never say these things to my face. If I am responsible for growing salaries, I must also bear a large responsibility for the growing revenues of the sport."

League revenues have been growing at roughly 10 percent a year since 1995, estimates Smith College professor and expert on baseball economics Andrew Zimbalist, and the vast majority of teams appear to be profitable. That's despite the fact that owners continue to cry poor and look for new ways to hold down salaries, just as they've done since Oliver Wendell Holmes wrote the 1922 Supreme Court decision approving baseball's monopoly status.

The other knock on Boras is that he focuses too narrowly on money, ignoring other factors that contribute to players' happiness and fulfillment, like being with a winning team or living near family. Bill Madden, a New York Daily News baseball columnist and vocal Boras critic, points to defensively gifted first baseman Travis Lee, a Boras client who played 145 games last year for the Tampa Bay Devil Rays and now sits the bench for the Yankees, though for four times the money. "Lee should be a starter for somebody, but Boras screwed around with him all winter, and now he's a backup player."

Still, says former Mets General Manager Steve Phillips, "Scott doesn't dictate to the players. If he does, then shame on them. Players have to know what they want and where they want to go."

These days, many of the best ones seem to want Scott Boras.

Alex Rodriguez $252 mil. for 10 years

Barry Bonds $ 90 mil. for 5 years

Bernie Williams $ 87.5 mil. for seven years