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Negotiating with Scott Boras

6/4/2011

There will be the day that Scott Boras, player agent from the Boras Corporation, becomes the first agent inducted into the National Baseball Hall of Fame. The free-agent draft is an area he has dominated since the record-breaking Andy Benes deal of $235,000 in 1988.

I personally negotiated hundreds of contracts with Scott Boras and his corporation from 1985 through 2008, with Nationals second baseman Danny Espinosa becoming the last amateur contract I would ever negotiate with him. Thank goodness.

I found Scott to be bright, quick, intelligent, challenging, prepared, deceptive (in terms of bluffing), entertaining, but also predictable.

Here is a breakdown on how I found Boras and his negotiating style to be predictable:

The negotiating process:

1. Pre-draft: Boras will talk to all 30 scouting directors, general managers and owners (if they’ll take the phone call). He will give him his expectations for his client list -- how he values them (not in terms of specific dollars but against previously signed talent) and reminds clubs that his player could re-enter the draft or go to college. If he’s talking with a small-market club whose history includes not paying over recommended slot, Boras might suggest that they pass on that player because he probably won’t sign with them and then will suggest maybe they draft one of his second-round type players in the first round because they could afford him. He also will look at an organization's depth chart from the major leagues to the minor leagues. If a team has an All-Star catcher in the major leagues and a top catching prospect at Double-A, he might advise a team not to draft his catcher, re

alizing it might take his client longer to get to the major league team in that organization, thus delaying arbitration and free agency -- where the real money is. He wants clubs to be prepared to pay the price if you draft one of his players.

2. Post-draft: Boras will advise his clients not to talk to anyone with the club about contract terms until the deal is finalized. He will brief them and advise them on the most professional way to handle the club, media and fans for immediate post-draft relations.

3. Timing of negotiations: He will commence negotiations as soon as the club is ready. He returns phone calls within 24 hours to each scouting director or general manager. There is not an agent in baseball more prepared for contract negotiations. His research team is deep and his data bases have the most volume of information, statistics, history and details of any agency that I negotiated with or against. In his case, it was always against. Boras doesn’t conclude many deals early in the process unless it really changes the market place for the industry. He doesn’t believe the sooner you sign the quicker to arbitration and free agency. He believes that the best deal will be at end of the process.

4. The process: Boras takes the process seriously. He will have studied every contract in the history of the sport. He will find the top contracts that will allow him to argue for the most money. Many of his arguments have holes, and when prepared clubs debate with him, he is always respectful. He listens and responds. When the club argues relevant slot signings from the past, he will recognize and then demonstrate why this particular player has much more talent and value. He’s a former baseball player with an edge, and combine that with an intelligent lawyer who loves the courtroom and you have a tough opponent. He wants the intellectual back-and-forth of negotiations. He will demonstrate how each player is so special that he has to be considered different than the market place.

Remember, he only has one club to negotiate with and a deadline to meet. His only real leverage against the club is the player not signing with them and going back into a future draft. He has no open market to shop his player. He’s not afraid to go around the scouting director to the GM, or the GM to the team president, or the president to the owner. He will climb the ladder to get his best offer. If he finds a difficult negotiator in his way, he will attempt to get that person distanced from the process. That’s why it’s been even more remarkable to watch how he went from signing Andy Benes to a record $235,000 in 1988 to Stephen Strasburg’s $15.1 million package just 21 years later. He wants dialogue and communication. The process will be lengthy and tiresome but always professional. He’s a grinder. He’s not afraid to negotiate daily. He will always find new arguments, information or angles. He’s a warrior. He’s not afraid to bluff. He’s not afraid to walk away.

5. The result: Most of his players in the first round will sign. If it’s a high school player drafted in Rounds 2 to 5 whom Boras thinks could develop into a first-rounder in college, they’ll have to be paid late-first-round money or he’ll take them to college. His players always sign for an amount above the commissioner’s office recommendation (somehow he always has a copy of the recommendations). To get his most talented clients to sign, the payout will normally have to shatter a previous year's record; for others, it will just have to be above the recommended slot and, most importantly, for more than the player above and below his client's position in the draft. Boras' image is important. He doesn’t want another agency to make his clients look anything but the best. Don’t draft his players if you're not going to overpay, because they’re not signing, unless of course the player overrules him. Boras does let his players make the final decision, always. If you understand the process and are in the ballpark in terms of dollars, the player will sign.

Boras leverage

1. Deadlines: Boras believes, and rightfully so, that the club's best offer will be made in the last 15 minutes, under the pressure of losing the rights to the draft choice. You have to study his client list. If he has five to 10 unsigned players in the last hour, Boras tends to save the final minutes for the very top picks. If you have a late first-rounder or second-rounder, you could get the deal done a few hours or few days before the deadline. He’ll only close the deal when he’s convinced that there’s nothing left on the table.

2. College: If the player has college as leverage, he’ll advise them to enroll and prepare to attend. Early in his career as an agent, he had several players walk away from the draft and go back to school or go play independent ball. Boras feels the player will do better financially in a future draft even with the risk of injury. This gives him tremendous leverage.

The draft was initially instituted to allow the worst clubs in baseball to improve. The intention was to work toward parity. Rule changes, including draft pick compensation, has worked against this concept because the big-market teams had the most Type A free agents and could let theirs go, get two additional first-round picks and sign even more Type A free agents.

It also hasn’t worked partly because Boras used negotiating leverage to get small-market teams to overlook his best players so they could get larger contracts from clubs willing to spend more money.

Boras' response to slotting

While the commissioner’s office provides all 30 clubs with a recommended slotting system for each selection in the first few rounds, Boras has his own system. He sets talent range values on players he represents and relays them to the clubs prior to the draft. In 2007, he priced Rick Porcello from the top of the draft right down to No. 27 and the Detroit Tigers. Most clubs had David Price and Rick Porcello 1-2 on their draft boards. However, clubs hearing the asking price range all passed knowing that Boras would not be afraid to take Porcello to college and the club would lose a top-of-the-draft talent. Porcello ended up signing with Detroit for a record $7.3 million.

In 2006, Gil Meche signed a free-agent contract with the Kansas City Royals for five years and $55 million. Forget the fact it was a bad contract at the time. The fact is that the Royals' baseball staff would have preferred to invest $7.3 million on Porcello than $55 million on Meche. Boras just needs a few owners to understand why it’s a much better investment and get them to go against the grain. It’s not fair to the teams at the top of the draft that deserved Porcello but had to pass because they couldn’t get ownership's approval to go above slot.

The Tigers didn’t outscout the 26 clubs ahead of them. They just had an owner who was willing to let the GM and scouting director break a signing record with Scott Boras to get a quality player. It was a shrewd move.

Boras has changed the payscale for players drafted in the amateur free-agent draft and will continue to do so until the process has a hard slotting system. A breakdown of some of his record breaking contracts:

Record-breaking Boras draft deals:

  • 1988: Andy Benes signed for $235,000

  • 1989: Ben McDonald signed for $1.01M and became the first amateur free agent to sign a major league contract

  • 1990: Todd Van Poppel signed for $1.2m and became the first high school player to sign a major league contract