Monday, August 17, 2009

The New Era Of The New Deal

Returning back to Washington, D.C. late last night/early this morning, Sohna and I found it satisfying that we missed out on all the speculation, hyperbole and fearful worrying over Stephen Strasburg. We didn't want to hear the constant rumors. The anxiety over whether a deal will be stuck. Let's face it, everyone watching knew from the very day this San Diego State University Product was chosen by Our Washington Nationals in June, his agent, Scott Boras would manipulate the situation until the last possible moment.

That's his job to do--to get the best possible deal for his client.

It's also Washington's Ownerships' responsibility to find a financial deal that doesn't set the team back for years.

No question about it--this is business--BIG BUSINESS.

But these negotiations are really about more than signing Our Number 1 Pick.

Scott Boras is attempting to change the financial structure of the game.

Compensation is under re-evaluation and will change dramatically (possibly for the worse) if Mr. Boras is successful in blowing away--by a significant distance--any previous high dollar sign given to a talented any young man. Stephen Strasburg is The Poster Boy in this New Era Of The New Deal. What is considered fair and honest compensation for an unproven professional talent? What is considered right? Unfortunately, these contract talks are not just about a young man that wants to toe the rubber and get his baseball career started.

In that respect, this is all sort of a shame.

When you hear the press write or fans comment online--"Just give Strasburg the $50 Million!!" Do any of those people truly understand the domino effect that would have on The Great Game--from the Owner's Box--to Corporate Sponsorship--all the way to ticket prices? Those hard earned dollars that Sohna and I, you and every single fan out there spends to attend each and every home game at Nationals Park.

We don't want to see Nationals Park be like The New York Yankees with $2600 seats sitting vacant between 1st and 3rd Base at New Yankee Stadium. Seats the average fan (which is what baseball is suppose to be all about) can't possibly expect to use on any regular basis. We don't want to see ardent fans pushed even farther and higher away from the action on South Capitol Street--because that average family of four can't afford to attend regularly. Or maybe, not even one game per season.

But that's exactly what might happen--over a period of time--if the financial structure of the game is drastically changed by Stephen Strasburg receiving an overly excessive record contract. A new marker would be set. A height more and more agents and their unproven, yet remarkably talented, young players would strive for every successive year to come.

You can count on that.

Salaries would rise. Ticket Prices would follow.

The African Queen and I don't want to see that. Do you?

The New Era Of The New Deal is being negotiated this very day--Monday, August 17th, 2009. The consequences of this back and forth will finally be known by Midnight this very evening. Reasonable people come to a deal. Those who put their personal agenda above all others--usually do not.

We want to see Stephen Strasburg pitching for Our Washington Nationals wearing his customary Number 37 for years to come--just like every D.C. Fan out there. And we are expecting a deal to be struck tonight because both sides have too much at stake--to lose--if Stephen Strasburg sits out until The 2010 Entry Draft.

Unlike the never completed Aaron Crow negotiations last year where his agents--The Hendricks' Brothers--overplayed their hand and lost (and seem to be doing so again this year with The Kansas City Royals), Scott Boras usually gets his client signed. He understands saving face--while still getting much of what he REALLY WANTED all along.

As much as he may want to change the game--Mr. Boras also understands The New Era Of The New Deal. We imagine Team President Stan Kasten understands those aspects as well.


Anonymous said...

I think you are correct and baseball in DC will continue with or without him.

SenatorNat said...

Very good analysis, well stated, SBF. I suspect that Ted Lerner's trip to San Diego 10 days ago or so was akin to his meeting with Boras over Texiera - to validate owner's real commitment to getting a deal done. Unlike Texiera, as Z-Man points out, the MLB draft system does not permit the Number One Draftee to determine or influence, even, where he plays. Like it or not, he must play with the Nationals organization, should he sign, for one year at least, and, normally much longer, of course. Texiera, I believe, signed for $10.8 million, highest signing bonus for draftee to date. He then rejected $188 million offer from Nats, according to reports, to sign with his preference, the NY Yankees.

Nationals probably first put $12.5 million offer on table 10 days ago, which Boras probably feels is 50% less than a "minimum reasonable offer" for his client's services.

Thus, splitting that difference, I speculate Nats will make a blockbuster "cannot refuse" final offer at midnight hour of $18.8 million, ironically, 10% of their final bid for Texiera and $10 million more than his signing bonus. How much of this $18.8 million offer would be "guaranteed" I do not know, but I would bet at least $14 million. If this scenario plays out, he will sign, or he is being played as a fool by his agent. And, if rejected, his agent will be considered by most a fool (he is not), since he is playing several key hands at the same deadline; it is far more likely than not that all sign with premium offers for him to maintain his status as the go-to guy for all future top draft picks...

As for his Number 1, Boras will have achieved his probable practical goal - to wrest a substantial "bad team premium" from Nationals of about $3-6 million, or about 25%-50%, and to set the baseline that much higher for his future pushes. The "broken" system he rails against works very well, indeed, for him and he knows it - his rhetoric and scare tactics are pushing up payouts for him and his clients without shutting the casino down...

Trust in Incremental Obscene Greediness. And not biting the hands that feed it. All On a Crooked Wheel of Fortune.

SenatorNat said...

Teixiera is spelled Teixiera. Secondly, I mistated what $18.8 million would be - it would be $8 million, not $10 million, more than what Teixiera received as the highest bonus for any MLB draftee to date. Nats pocketed $3.5 million they would have paid Crowe, too, last year - so they can "sweeten" a $15 million final offer scenario with this to guarantee they ink Stasburg. The fact that Kasten gave signal over the weekend that was contrary to deal getting done was tactical. Strategy is get him signed and do it for less than $20 million. (Nats also still feel good about not locking in with Soriano for 7 years, now hitting .245 in his third year of that fateful K with Cubs. The $18.8 million signing bonus not much more than he gets every year!)The deal will get done.

Kevin Reiss said...

If only we could turn back the clock, reinstate the reserve clause, bring back Ladies Night, and enroll all the tikes in the Knothole Gang.

Would signing Teixeira have led to a Yankee Stadium situation? Because Strasburg will be getting a lot less money than they offered Teixeira.

Screech's Best Friend said...

Kevin: You need to look at the ramifications. The point is the precedent. The mile marker that moves entry draft top talent to a huge new pay scale--which eventually causes a domino effect on every single team in the game. The Yankees are in a league of their own and have the market to pay extraordinary salaries to most all their players. Yet, they found out this year--excess can cost them at the gate. Granted few, if any teams in baseball have the market capability to compete like The Yankees. But, if you want to only see New York, Chicago, Los Angeles and a few other franchises win every year, then a humongous bonus given to a major college, but unproven pro talent (who is a pitcher), is not important to you. Washington is not a small market but there is a point where all teams can't make a return on money doled out. The chance for failure is far greater than success at that high level. And no one wants to be saddled with that debt. If every single top draft pick goes for EXTREME TOP DOLLAR--no one is going to win. It's not possible. The economics will not work. If Strasburg can't sign for $16 to 20 Million including incentives--as has been speculated all day--then his agent is doing him a dis-service by telling him to pass. And make no mistake about it--if Entry Draft Talent does continue to get higher and higher dollars--eventually all of us (The Fans--and that includes you) will begin paying more and more, over time (as specifically stated in the original post) for those bonus and eventually increased budgets on the team. Count on it.

Workable economics is what this negotiation is all about--not a blast from the past as you claim in your mocking way.

Anonymous said...

this is big business without a doubt, and some think baseball is headed for more and more corporate sponsorship to help pay the bills. there's a pretty good article on the influence of corporations on ball parks around the country, over at onthebutton, its worth a read:


Edward J. Cunningham said...

Most reasonable fans (emphasis on REASONABLE) will forgive the Nats if Strasburg doesn't sign because the Nats won't give him $50 million. What they won't forgive is if the Nats do not use the money that would have gone into Strasburg's contract into getting a few key agents to make this a better team.

I'm not saying forget about building up the farm system, but if we try to get a few good players in a few key areas, this team will NOT finish in fifth place in 2010. In fact, we could have a winning record.

Also, I would suggest the Nats try to get some of the top free agents available, like Roy Halladay even if some fans think it's foolish. Last time I checked, the Yanks, Dodgers, Cubs, and Dodgers are only allowed to have 25 men on their roster. In other words, if the Nats are patient and keep laying out the bait, sooner or later someone is going to bite.