Sports Agent and Sports Lawyer Blog

With the Major League Baseball All-Star Break upon us, now may be a good time for any unsigned prospects who were selected in last month’s draft to re-evaluate their options.

If you did not sign, you are probably either (a) leaning heavily toward going to college if you are a high school player, or back to college if you are a junior college player or (b) waiting for others in the top rounds to sign so that you can sign for something over the MLB recommended slot. Some players may be in another state of mind entirely, however. They may be wishing they could sign, but they are being low-balled by the team that drafted them.

Remember, you have just over one month to sign. The deadline is 11:59 p.m. on August 15, 2010. If you have not yet signed, it may be time to consult an adviser and see if the adviser can assist you. Up until now the team has probably been negotiating with your family. If you have not yet signed, it is probably time to be honest and realize that these negotiations have been unsuccessful. Even if you are fine with an outcome that results in you going back to school instead of launching your professional baseball career, don’t you think you should at least let an adviser try to see if he can assist you in working out a better deal?

For this blog’s earlier analysis on the MLB draft and a breakdown of the bonus structure, see these links here and here and here. Remember that fewer than 10 percent of players who are drafted will make the major leagues. This means that the payday you might be about to receive from the team that drafted you could be the largest single paycheck of your entire life. Don't you owe it to yourself to let an adviser see if he can help you?

Editor’s Note: This is part two in a two-part series about the Major League Baseball Draft.

By reviewing the final draft results from 2009, there are a few trends that are eye catching for any player who is making the choice as to whether to go pro or continue with his education.

• Out of the 321 players drafted in the first 10 rounds, there were 107 high school graduates, 151 college juniors, and 23 total college seniors selected.
• Every college senior that was picked accepted their bonus and agreed to join the minor league ranks, while just two (1.3%) of the college juniors taken chose to go back and finish their final year of school.

Of course there were the greatest number of draftees going back to school from the high school group at six (4.6%). This information tells us that the bonuses offered should reflect this pattern and be significantly greater for high school graduates than anyone else and higher for college juniors than seniors. In fact the numbers are very convincing:

• The average bonus paid in 2009 to draft picks in the first 10 rounds was $554,699.
• From this number we can compare the figure given to high school graduates, which was an average of $698,222 paid to these athletes.
• But, there is drop-off in bonus money to college juniors, who were given $487,971, and a more considerable dip to college seniors who averaged $78,232.

It was not surprising to see that the player who received the lowest bonus in each round was usually a senior in college. Not a single senior was even drafted until the third round of the draft.

What we can conclude is that high school graduates may not always have the tools, education, or degrees to enter the job market, but what they do have is the greatest leverage when negotiating with Major League ball clubs. Because of an increased amount of opportunities, which decreases their "signability" to ball clubs, the front offices of said clubs will have headaches until they have no choice but to give in to bonus demands or let them walk. If the player is selected within the first ten rounds and an extremely high bonus is offered, it is then appropriate for the family to weigh the pros and cons of attending college or beginning a path that would hopefully end in Cooperstown.

Another factor to consider is the current state of the economy and job market for all levels of employment, even professionals. It's almost like a storm that you have no choice but to wait out and see what happens in the meantime. College will always be there and online universities are becoming more popular as time passes. To wrap things up, a player with great motivation, maturity, drive, character, and work ethic paired with a high bonus payment to invest for the future should no doubt give professional baseball a chance and will hopefully, one day, reach the majors, where even if a bench player, money will not be an issue (league minimum $316,000).

For more information, contact the author of this blog at the phone number listed on this page or using the form on the top of this page.

With the 2010 Major League Baseball Rule IV Draft upon us, one of the burning questions around the country among draftees becomes what the prospect of becoming a professional baseball player is. Players drafted are faced with the decision of whether they should accept an offer to enter the Minor Leagues and forego a College scholarship or to pursue a degree and further education. Some appropriate terms that will help explore the different options and ultimately make the choice that will benefit the player the most in the long run include opportunity cost, leverage, and of course "signability." If approached correctly, the opportunity cost (value of the next best alternative) will directly effect the leverage that the athlete has and in turn alter his "signability."

To begin let us take a look into the options that a recent High School graduate would have on the table. By the time the draft comes along a player will have already been approached by college scouts, professional scouts, and most likely all decision makers of the college baseball team. According to NCAA rules, each Division I baseball program is allowed to offer 11.78 scholarships, which can be divided among as many or as few incoming players as they deem appropriate. They can choose to use them only on a few players, awarding full scholarships, or can divide them among the entire ball club. If a player is a top prospect leaving the High School realm, there is the possibility that the college will offer them an increased scholarship knowing that any possible bonus sum from a professional ball club will be extremely lucrative.

This is the result of the professional organization knowing that there is the most risk for a player with just a High School diploma to accept an offer to play professional baseball. They must, in this case, be placing all their baseballs into one basket (the professional baseball route) with the always present reality that they may never go very far and might even have to explore the job market one day if it does not work out. Remember that fewer than 10 percent of players who are drafted will ever make it into the major leagues.

It is also true that when a player does decide to attend college and accept their scholarship, they are saying yes to an education and giving themselves a worthy backup plan in case a professional baseball career does not work out down the line. Once entering the college realm and that of the NCAA, a student must stay enrolled and will not become eligible for the MLB first year player draft until they complete at least their Junior year or turn 21. But the student-athlete is receiving a scholarship set at a specific value, earning a degree, gaining an invaluable college education, and is in the environment to facilitate an increased level of maturity and independence.

The first contract season for a Minor Leaguer allows him to make about $1,100 a month with a $25 stipend for meals per day, which totals to just $22,325 annually (but is actually much lower because players don’t get paid in the offseason). This is not a considerable amount of money, especially in comparison to the average American's salary ($39,795) or even a recent High School graduate just entering the workforce ($30,400). There is no doubt that the accumulation of degrees and the increased knowledge gained from an education will boost the yearly salary of an individual with an Associate's Degree ($38,200) after two years of college or someone who completes all four years to earn a Bachelor's Degree ($52,200). It is for this reason that bonuses are paid to players as a way to compensate for the mere possibility that a professional career does not work out in the end.

However, when accepting to go through with a college career as opposed to entering professional baseball from college, you would be decreasing your value and leverage significantly with every year that goes by. With each passing year and next best alternative that passes, the opportunity cost of staying in school goes down. The opportunity cost of staying in school was at its highest point directly out of high school since the bonus amount was in fact the largest.

Look for Part II of the “Baseball Draft: Should I Stay Or Should I Go?” series on Sports Agent Lawyer Blog tomorrow (June 9, 2010).

The annual Major League Baseball Rule IV Draft starts tomorrow and lasts three days. Approximately 1,600 players from around the nation (and a handful from Canada and Puerto Rico) will be drafted during the 50 rounds.

The majority of players who will be drafted already have an agent or an advisor. For those that do not yet have one, it is far from too late to choose an advisor. Once the player is drafted, unless he is a senior in college, he has plenty of leverage, which means savvy agent or advisor can help the player negotiate with the team that drafted him.

As fewer than 10 percent of players who are drafted ever reach the major leagues, the size of their signing bonus could be the largest payday of their entire life. The importance of using an advisor or agent to negotiate with the major league organization cannot be overstated. Even if the player has a relative who is a savvy and successful businessman, a professional sports agent or advisor is absolutely critical.

For more information, contact the author at the phone number listed on this web page.

It looks like there will be an increased number of new professional baseball leagues opening in Asia for players who are a notch or two below major league caliber.

According to this article, China is planning to launch a new baseball league. What is interesting about this new league is that the article says it is a precursor to an Asian “Superleague” which would involve teams in China, Taiwan, Japan and Korea:

"In the coming six years, we aim to create an Asian baseball league between China, Taiwan, Japan and Korea, most of whom have long been strong baseball league players on the world stage." Baseball in China was dealt a major blow when the sport was removed from the Olympic schedule after the 2008 Beijing Games as the country's state-run sports system is overwhelmingly focused on success at that level

If you or your son has been contacted by baseball scouts over the past few weeks, you can be sure that the scouts have asked about the prospect’s signability (or sign ability). How you answer that question can play a key role in the baseball draft prospect’s future.

Generally, signability refers to the question of who likely it is that the team who drafts the player will be able to sign him. Factors such as his college commitment, especially for a high school or junior college player, play a key role in determining signability. Another factor is how much money the prospect or his family expect as a bonus. Yet another factor is how high the prospect expects to be drafted.

For instance, let’s say you are a high school baseball prospect. With the major league baseball draft only a couple of weeks away (beginning June 7, 2010), scouts have been flocking to your late season high school games and asking you to work out for them. Scouts will be asking you or a relative who deals with the scouts about your signability.

How should you answer the question as to how signable you are? The answer is that it depends. Most players should have a professional baseball sports agent or “advisor” if the player has remaining college eligibility. The reason is that you cannot directly answer this question. As a prospect, your goal is to maximize your draft position and earn the highest possible signing bonus. If you tell the scout that you are going pro even though you have signed a letter of intent to play college baseball, the scout has less of an incentive to throw a large bonus your way. If you tell the scout you are almost certainly going to play in college, you may get drafted in a very low round, meaning your bonus offer could be a token sum.

While every high school and college baseball prospect who has ever been contacted by a scout has no doubt he is destined for Cooperstown, the reality is different. Fewer than 10 percent of minor league players ever reach the major leagues and even fewer stay long enough to have successful and lucrative careers. For that reason, the answers to questions about signability may be among the most important answers you have ever given.

The baseball bat debate – wood vs. metal – is a topic we have covered many times on this blog (here and here and here). Now it looks as though some of the answers as to whether wood or metal bats are safer may never be reached.

This is an interesting article about the UMass-Lowell Baseball Research Center, which is facing financial troubles because of a lawsuit. From the article:

The UMass-Lowell Baseball Research Center opened in 1998 and struck profitable deals to certify every model of bat used in the major leagues and NCAA competition. As a gesture of goodwill, the center gave free advice to the National Federation of State High School Associations and youth baseball organizations, gaining national acclaim for addressing the dangers of balls rocketing off metal bats at dangerous speeds.

Accused of violating its license to operate the testing machine, the baseball center became entangled in a seven-year court fight that spanned two jury trials and ended in January with the taxpayer-supported university taking a $4.4 million hit: a $3.1 million court judgment, plus $1.3 million in interest. The case also cost the university $1.7 million in legal fees.

While the article focuses more on the center’s financial and legal troubles and seems to blame the legal system and bat maker Charles Baum for those problems, the greater tragedy is that the center’s data may no longer be available to leagues.

Elliot Hopkins, the baseball rules editor for the National Federation of State High School Associations, said the organization cannot afford to pay for the safety information it receives from the Lowell facility.

“Losing the center would literally cripple high school baseball nationally,’’ Hopkins said. “We couldn’t replace it.’’

With the Major League Baseball draft less than three weeks away, now is as good a time as any to talk about whether a prospect has associated himself with a baseball advisor.

As most prospects know, high school baseball players or collegians with remaining eligibility are permitted by the NCAA to associate with an advisor. The advisor cannot sign a contract with the player, cannot enter into negotiations with the team which selects the player, but nevertheless plays a valuable role in the process.

How is the role valuable for a high school baseball player? If the player is considered likely to be drafted, it is almost certain that he has signed a letter of intent to play college baseball, or committed to a junior college. Scouts are observing the player, and inquiring about his “signability” which refers to the question of whether he is leaning toward college baseball or professional baseball.

All high school baseball players will use the possibility of college baseball as leverage. But if the player is truly and legitimately interested in furthering his education – and equally as important, improving his baseball draft position – he may inform a scout that there is a low possibility of “signability.” On the other hand, that player may also inform the scout that while he would prefer to spend a few years on a college campus, if he is drafted highly enough and offered a correspondingly high signing bonus, he will sign.

You can see that this is a complicated dance. The player cannot tell the scout that he hates the idea of college and wants to go pro. If that happens, the team will not have an incentive to draft him in a high round. The player also cannot tell the scout that he is definitively going to college. If that occurs, the player may not be drafted at all, or could be taken in such a low round that the signing bonus amount is virtually negligible.

This is why the player needs an advisor. The advisor is the advocate for the player, and can streamline information in an unemotional fashion. While the player may have an extraordinarily competent and intelligent family member handling contacts from the team, family decisions can be emotional. At Wolf Sports Management, one of the entities behind this blog, we are in talks with numerous players about becoming their advisors for this year’s draft.

Baseball prospects in the Dominical Republic are now subject to testing for performance-enhancing substances. The announcement by Major League Baseball this month is part of a comprehensive set of changes to the way in which baseball in the D.R. is organized.

As a sports agent who is already recruiting and scouting the Dominican Republic, I applaud this move. Performance-enhancing drugs (PEDs) have no place in baseball, whether in the D.R. or in the United States. The ban also levels the playing field between Dominican prospects and American high school prospects.

However, I hope that the initial stages of the testing program focus on the education aspect of this and not on the punitive aspect. If a 16-year-old kid from an impoverished town is caught using PEDs and is suspended for a lengthy term, or barred from signing a contract, this will not solve the problem. The players need to be educated and informed so that they can make the well-reasoned decisions about what to put into their bodies.

Sports agents can be easy targets sometimes, because the bad apples in the industry get an undue amount of attention. Sometimes, however, people go too far in impugning sports agent.

See if you can follow this saga of a potential problem with a sports agency. A major league ballplayer fires his agent. The cops are investigating a former employee of the agency for stealing money from the player. Somehow, a sports writer links this alleged theft with an entirely separate lawsuit filed against this sports agency.

Got all that? Me neither. Let’s see if we can sort out this scenario and figure out the preposterous implication made by this sports writer, a former lawyer who usually does outstanding work in my opinion. Last month, Angels first baseman Kendry Morales fired Hendricks Sports Management. Last week, the news was reported that an employee of Hendricks is being investigated by Coral Springs police for the disappearance of more than $300,000 from Morales’ bank account. Sounds like a fiasco, right? Clearly, the authorities will sort out whether money was stolen, and if it was, the responsible parties will face criminal charges.

The next part is what makes no sense. In December, heralded Cuban prospect Aroldis Chapman switched agents from a relative unknown to Hendricks. He then signed a 10-year, $30.25 million contract with the Cincinnati Reds. His former agent, the relatively unknown Athletes Premier International, sued Hendricks as a result of Chapman’s switch. Somehow, the writer links Chapman's choice to retain Hendricks with the alleged criminal actions by a Hendricks employee.

I cannot figure out what the alleged criminal activity by the apparently rogue employee has to do with Chapman’s switch. A Hendricks employee allegedly stole money from a client. A player switched from another agent to Hendricks, spurring a lawsuit from the old agent. How are these things an indication that a player should not sign with Hendricks. The Hendricks brothers have been around for decades so they do not need this blog to defend them, but it seems to me that their name is being unnecessarily dragged through the mud.

When Aroldis Chapman’s former sports agent sued his new agent this week, the lawsuit threatened to put the entire system of sports law and sports agent representation on trial. I mean this in a literal and figurative sense – the unsavory practices of the business of sports agents may be brought to light publicly, as well as in the courtroom.

The facts of the lawsuit are undisputed. Chapman, a recent Cuban defector who is considered a sure-fire superstar, signed with Athletes Premier International and Edwin Mejia after his defection. He became disenchanted, and subsequently signed with a more established agency, Hendricks Sports Management. So API and Mejia sued Hendricks, alleging tortious interference with their business relationship and also unjust enrichment.

This article from the Associated Press contains a hint that if this matter goes all the way to trial and up the chain of appellate courts in Massachusetts, the entire realm of player representation could be on trial:

Stealing clients is a longtime and lucrative practice among some sports agents, who can earn up to 5 percent of salaries reaching into the hundreds of millions of dollars.

This is probably an accurate statement that most people who aren’t in the sports law or sports agent business don’t understand or don’t realize. A former college baseball teammate of mine who is now a high-ranking executive in the front office of an American League team told me that it happens every day in baseball and he has never seen such a switch result in litigation. Sports law experts apparently agree, as the article notes:

"Generally speaking, players can change agents at their discretion," said Michael McCann, a sports law professor at the Vermont Law School. "There is certainly evidence of agents poaching clients (in cases) that don't result in litigation. Maybe it's unethical; maybe it's wrong; but it happens."

In most industries, if you sign a contract, you are bound by the contract. As we blogged earlier, it’s not always that way among college coaches. Still, that does not mean that an athlete, coach or even an agent should give up his right to pursue justice because standard business practice in his industry involves breaching contract. While the industry may view contracts as not worth the paper they are printed on, courts will often see things differently. Anyone who thinks he has suffered damages from a breached contract or because a competitor has interfered with his work should consult a qualified sports lawyer for legal advice.

Here is a story which is important for sports lawyers to monitor in light of the recent Louisville Slugger baseball bat verdict. A Massachusetts youth baseball league has decided to return to using metal bats after an eight-year run of using only wood bats.

The father of the child who was severely injured by a ball hit off a metal bat was shocked and angered by the move:

“[Aluminum] bats hit the ball harder, so those kids are in greater peril,’’ said Richard Hughto, an environmental consultant from Wellesley. “They’re deciding to put some kids in danger so some kids can get more hits . . . [With aluminum bats,] players will hit the ball more often and the good hitters will hit it that much harder’’ toward the pitcher’s mound, which is 46 feet from home plate as opposed to 60.5 feet from home in professional baseball.

The safety of baseball equipment is an issue which Sports Agent Lawyer Blog will continue to monitor, as it heavily impacts the field of sports law.

Sports lawyers in Taiwan must be having a field day with the most recent allegations of game-fixing and gambling. According to the article, a team has cut two players, and now plans to sue them for their role in the baseball game-fixing scam.

Apparently, this is not just an instance of a few rogue players going too far with a gambling scheme. The saga gets even murkier, according to the article:

Prosecutors yesterday summoned three additional Bears players — pitcher Hsu Wen-hsiung and outfielders Huang Hsiao-wei and Chiang Chih-tsung — as defendants for playing fake games for money.

Playing fake games for money? I’m curious as to what exactly constitutes a “fake game”? This is an intriguing legal saga that bears watching, not only for the fact that it sounds like something out of a bad movie. It's also important for sports agents in this country to monitor stories like this. The last thing an agent wants to do is send his client overseas to play in Taiwan only to find out that the entire league is embroiled in a massive scandal which makes it a miserable place to play baseball.

Typically when a baseball agent is released from prison, it is not necessarily a time to celebrate. The case of Juan Ignacio Hernandez Nodar, a sports agent imprisoned in Cuba for the past 13 ½ years, is different. I am not sure that we can lump Nodar into the category of disgraced sports agents.

The fact that he was imprisoned in after a trial in Cuba which does raises some doubts as to his actual guilt. He allegedly helped Cuban baseball players defect to the United States. Another noted sports agent, Joe Cubas, said that Nodar was made an example by the Cuban government.

``We had half the Cuban Olympic team ready to defect at a tournament in Mexico'' in 1996, Cronin told El Nuevo Herald in a telephone chat as he boarded a plane for Miami so that he could meet Hernández Nodar upon his arrival. ``But the government made a lesson out of Juan Ignacio and El Duque, and everything went cool.''

I personally do not know whether Nodar would have been convicted in an American court, although it seems doubtful.

Does the baseball bat verdict alter the way pro and amateur baseball is played?

When a jury in Helena, Montana ruled in favor of the estate of a baseball player killed when he was hit by a line drive from a metal bat, the entire baseball community took notice. Immediately, one had to wonder about the future of metal bats in amateur baseball. Almost all amateur teams use metal bats for the simple reason that they do not break, which means that they are more cost effective than wood bats.

It has always been common knowledge that balls hit off metal bats travel significantly faster than balls hit of wood bats. The Helena case did not necessarily signify the final out for metal bats; the actual verdict showed that the bat maker was negligent for its failure to properly warn that its bats were dangerous. So what are the implications of this ruling? If bat makers imprint a warning on each bat, would that be significant to evade any future adverse verdicts?

Only time will tell. It is important to note that change may be a virtual certainty, at least at some point down the road, because this is not a new problem. According to this entry in the Minneapolis Star Tribune newspaper, people inside Louisville Slugger were aware of the problem going back more than a decade, and probably longer.

As an attorney who handles lawsuits exactly like this one, in which there is a terrible tragedy which was a rare occurrence (in the substantial majority of the other people engaging in this activity do not suffer in this way), I think this lawsuit had merit, and this is not an instance of a runaway jury or an absurd verdict which highlights the problems with our judicial system. The fact that the jury did not find the bat defective probably meant that the impact of this verdict will be somewhat limited, in that it will not force the entire amateur baseball world to switch back to wood bats.

For more information on sports or baseball lawsuits, contact sports law firm Koch & Trushin, P.A.

Baseball scouting in the Dominican Republic is a well-documented problem these days, as a few high profile players have been caught misleading their teams about their age. Now, a Dominican Republic court has ordered the Washington Nationals to pay about $75,000 in damages to former scout Jose Baez who was fired after signing a Dominican prospect who lied about his age.

As usual, ESPN The Magazine’s Jorge Arangure Jr., is all over the story (he is one of the only top-level American journalists covering the inner workings of baseball in Latin America). Based on Arangure’s summary of the testimony, the reason Baez was fired was because he was believed to have participated in the player’s scheme to lie about his age.

Bottom line here: This is just another sordid chapter in MLB’s decades-long mismanagement of baseball in the Dominican Republic. Change is inevitable, but there is no agreement on the best way to reform the system. While some people call for a global draft as the panacea to solve these problems, there are numerous reasons not to have a worldwide draft, such as the inevitable destruction of local baseball (see Puerto Rico for an example). My proposed solution is for MLB teams to invent a new classification, which would be below the current “Rookie League” level, and play two or three teams in established leagues. Those who succeed would eventually be promoted to Rookie League or low Class-A teams in the U.S. As they would be taking kids as young as 16, the teams would be charged with educating the kids and keeping them until they age out of the system a couple of years later.