Strasburg brinksmanship

From Heyman, who says that the Nats have offered “at or above $12 million”:

While the Nats are offering a contract above Prior’s record deal, Strasburg’s agent Scott Boras is said to be using Matsuzaka’s $52 million bonus as the baseline. That doesn’t mean they wouldn’t come off that number. But it likely means they don’t believe $12 million is a fair number. Or even a close number. Strasburg’s people believe he is worth several times that and shouldn’t have to sign for what they believe is a fraction of his true value. They also don’t see any reason to hurry to get Strasburg onto a mound after he threw 109 innings for San Diego State.

Only a handful of people really know what goes on in negotiations like this, but I wonder if anyone has ever said “well, Scott, I appreciate that you believe your guy to be worth $X million, but do you have any basis for saying so aside from whatever else it was that came out of your butt when you made that demand?”

Maybe $12 million is too low a number for some good reasons, but it strikes me that when the market consists of a single bidder, notions of abstract “worth” on the part of the commodity in question are not the most important consideration.

And at the risk of falling into silly populism, how does one go home and tell their mama that they turned down $12 million+ to play baseball?

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Comments

  1. APBA Guy said...

    Having just been in DC, the Nats fans are souring on the ownership group there like Bal’mer has soured on Angelos. Being in last place with little hope for the future does that.

    Unfortunately, the Nats had to choose Strasburg, even though they knew it would be extremely difficult to sign him. Boras’ as the agent guranteed difficulty, and the particulars of his sophistry are irrelevant.

    Personally as much as I detest the Lerners and their cheapskate, shabby business practices, I hope they don’t bump their offer too much. All you have to do is go back over the last 10 drafts and realize that the record for first rounders making it to the pros is about 50%, and far less for players making an impact.

    Despite what Boras says, Strasburg has proved nothing at the ML level yet. And based on that, he’s worth way less than Brett Anderson, for example.

    Remember Strasburg lost to the University of Virginia in the CWS this year. If they can hit him, what will Mark Texeira and Manny Ramirez do?

  2. J. McCann said...

    You can bet Heyman will be plugged into this negotionation, but I forget why.

    I think the only thing you can count on is that whichever side releases more updates is more desperate.

    I think it is more likely he does not sign, only the Boras/Heyman side has seemed more nervous.

    Plus I’ll be in DC this weekend, so I’ll get to see the mood of the fans whichever way this breaks.

  3. Total said...

    I’m not clear on what Boras’ job in all this is.  I gather from the post, that it’s some kind of “arbitrate between the two groups to come up with a contract that is reasonable for each and does not upset baseball tradition too much.”

    That’s right, isn’t it?

    It wouldn’t be something silly like “make as much money for his client as he can” because then the post wouldn’t read the way it does.

  4. Craig Calcaterra said...

    Total—the point is that one’s ability to make as much money for his client as one can is seriously hampered when you play games and come into a negotiation with unreasonable expectations and demands. And yes, Boras has often done well with such an approach with free agents, but he has had guys lose out in the draft.  If he thinks that Strasburg is worth more than $17M or whatever it is this year, he’s going to be in for a big shock when he’s fighting for $10M next year.

  5. Jeff said...

    Even if it was just about “making as much money for his client as he can,” I would be more okay with Boras (well, maybe just a little).  But you get the feeling that Boras really doesn’t care about his current client, but is using him as a part in a larger war.  Boras will keep playing these games until he busts open the draft compensation process.  If Strasburg doesn’t sign, gets hurt, and then gets pennies on the dollar later, that’s a risk Boras is willing to take.  Because all he needs is for someone to capitulate, and then he’ll rake in the cash for his future clients.  I just have a hard time, given his record, that he really cares for ALL of his clients ALL of the time.

  6. Jeff said...

    Bah editing.  Should be that I have a hard time believing that Boras cares about all of his clients all of the time.

  7. MooseinOhio said...

    On the plus side for Boras, Strasburg has an American shoulder and not a Japanese shoulder like DiceK that doesn’t work so well in Western baseball as it did in Eastern baseball. 

    Wait … that’s a bad comparison as the Red Sox have gotten no value from DiceK this year so comparing Strasburg to DiceK is a bad thing, right? 

    Okay I think the comparison to Mark Pryor makes more sense as we comparing American shoulders and great college careers with what appears to be incredible MLB upside.  So we should just ask the Cubs if they got fair value for the record signing deal they gave Pryor because that comparison works much better for Strasburg … you think?

    Gotta love Boras.

  8. Carroll C said...

    I don’t understand the chatter to the effect of “The Nats have to pay the Boras tax or they lose their fan-base.”  As a baseball fan living in DC, I follow the Nats.  I think that among the fans here, many would be turned off if the Nats overpay. 

    @MooseinOhio: Mark Pryor is a Senator from AR, last win in 2008.  Mark Prior the pitcher, last win in 2006.

  9. Greg Simons said...

    The Nats are obviously paying for potential, which is simply how the game works.  And if Mark Prior got $10.5 million back when MLB’s revenues were half what they are now, I can see Boras reasonably wanting $20 mil or so for Strasburg.

  10. jlive said...

    @Greg:

    If Prior had lived up to his upside, then sure.  But it seems to me that there ought to be a collective “once burned, twice shy” sentiment in baseball about paying huge money for non-MLB talent.

    @Total:

    If Strasburg signs now (even better had he signed immediately after being drafted) and performs as projected, then he reaches free agency earlier in his life and thus has (much) more value on the open market than if he delays signing.  So, I’m not convinced that Boras has Strasburg’s interests in mind.  Rather, Jeff seems to have the right take on Boras; Boras works for his own interests (or more charitably for the interests of his clients *in general*), not for the interests of any particular client.

    @Craig:

    How does insurance work in all this?  Can the Nats find someone to insure them against injury to Strasburg or against his failing to make the major leagues in some specifiable way?  Could Strasburg (or any other prospect) do something similar?

  11. Diesel said...

    And at the risk of falling into silly populism, how does one go home and tell their mama that they turned down $12 million+ to play baseball?

    At the risk of sounding overly snarky, it’s much easier when that mother has probably spent thousands of dollars, 80 percent of her PTO, and countless miserable hours on the road to help her son become a professional pitcher, with the understanding that it could all go away tomorrow.

    Look, of course 12 milly is lots of scratch. 10 milly is. 5 milly is. $20 is, if you happen to find it in your pocket one day.

    Stephen Strasburg has one clean shot at setting up his career. While we may not agree with his ultimate decision, we should at least have some empathy. This negotiation is the culmination of a lifetime focused on one goal. Just because someone offers you a lot of money, money that 99 percent of the population would happily take, doesn’t mean you’re morally obligated to accept. We’d take much less money than he would precisely because no one would pay to watch us play. Lots of people want to pay to watch Stras play, and right now he’s fighting for the maximum possible portion of that while he has ANY say in the matter.

  12. Greg Simons said...

    @Jlive – Teams have been burned by a huge number of contracts over the years, but they’ve also gotten great deals, too.  There’s always a risk-reward, and the reward if Strasburg pans out is a bargain-priced pitcher for six seasons.

    The thing that could really suck about this whole episode, at least from a free market angle, is that these negotiations could lead to hard slotting in the draft.  Who benefits from that?  Well, the owners, since they’ll save millions of dollars in signing bonuses.  And the MLB players – theoretically – since the money saved would supposedly go to them, but that’s not a certainty.

    Who gets shafted?  The several dozen top draft-eligible players who have the talent to actually create some leverage in their negotiations, which would be lost, leaving them at the mercy of MLB and the MLBPA.  Sure, it sounds great from a “let ‘em prove what they can do, then pay ‘em” perspective, but it’s really just a group (owners) or two (current players) of people screwing over another group for their personal gain by creating more restrictions on the free market.

    When they spin this as a way for small-market teams to once again be able to afford the best draft-eligible talent, remember that Washington has over 5 million people in the metro area and that the team was given a $600 million stadium.  And that MLB’s revenues have grown 5x in the last 15 or so years while player salaries have grown roughly 3x.

    Never, ever feel bad for the owners.

  13. jlive said...

    Thanks everybody!  I hope I’m not coming off as an apologist for the owners, I’m just not convinced that Boras has any particular player’s interests at heart when he pushes negotiations to the last possible moment and makes demands that are unlikely to be met, even if they are reasonable in some sense.  VanderBirch, yeah, you’re probably right.  Now that I look at it, Prior’s 2003 probably *was* worth $10M.  Greg, those are great points, and I’m now convinced that $25M would not be unreasonable for Strasburg.  But $50M?  I’m still not so sure.  Even if he pans out and is cost-controlled for six seasons, that amounts to ~$8.3M/year, all paid up front.  Even with guaranteed output, that’s a hefty chunk of change, right?

  14. Greg Simons said...

    jlive – agreed that Boras probably isn’t as concerned about any particular player he represents as he is about his personal ability to change the negotiation game and win in his own way.  My guess is his ego wouldn’t fit inside any ballpark in America.  And I also think $50 mil for Strasburg would be ridiculous.

  15. Craig Calcaterra said...

    Jlive—I think both parties can insure themselves, though obviously not enough to cover everything. Teams have insurance on post players, in fact, to cover time on the DL.  Players in Strasburg’s position—as well as college seniors in football and basketball, etc.—usually have pretty good policies as well. No, not $50M, but certainly a few million, so if Strasburg falls off a stepladder tonight, he’s covered.

  16. VanderBirch said...

    Jlive-

    Mark Prior provided more than enough value in his few short seasons to justify that $10 million bonus.

    What Strasburg is selling is six years of cost control. If he gets a $20 million bonus, he only needs one Cy Young type year to be worth the money.

    Still, with only one bidder for draft picks, I think the opportunity cost on this move is pretty high- you might get better value just signing 20 over slot guys at $1 million a piece.

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