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Agents owning teams is ethical dilemma
A decade ago, Scott Boras, Jeff Moorad and Arn Tellem were perhaps baseball’s most influential agents. That was before Moorad left his practice to become part owner of the Arizona Diamondbacks in 2004. Moorad later moved to the San Diego Padres with plans to assume majority ownership, but those hopes died with his resignation as CEO last week.
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Tellem, meanwhile, was an investor in the unsuccessful effort of hedge fund billionaire Steven Cohen to buy the Los Angeles Dodgers. Tellem still works as a basketball and baseball agent but had agreed to divest his interest in Wasserman Media Group if Cohen’s group won the bidding.
In short, it’s been a rough month for current/former agents with management aspirations.
So, what about Boras? Any chance he tries and succeeds where others have failed?
For now, the shingle still hangs outside his humble corporate palace in Newport Beach, Calif. In January, Boras negotiated the third $200 million contract of his career; the other agents in baseball history have combined to produce one.
Since there’s not much left for Boras to achieve in the realm of player representation, I asked him this week if he might share the ambitions of Moorad and Tellem. Judging by the ferocity of his answer, you would have thought the Red Sox had just offered his client Jacoby Ellsbury a five-year contract extension at the minimum salary.
“Absolutely not,” Boras barked over the telephone, adding that he’s always responded that way when inquiries come to him from people interested in putting together baseball ownership groups. “I best serve this game by representing players. That’s what I’m going to do. That question is like fingernails on a chalkboard to me.”
Boras’ emphatic response is a window to the provocative debate that unfolded recently within some of baseball’s most powerful corridors: Will there be a day when MLB owners fully welcome a former agent into their exclusive fraternity?
It should be noted that MLB owners pre-approved Cohen’s group earlier this week, with the understanding that Tellem would have a prominent position — likely president — if Dodgers owner Frank McCourt sold to Cohen. The approval of other owners isn’t required for high-ranking team officials, in the way that it is for majority owners. For example, Moorad wasn’t tripped up until he tried to go from 49 percent ownership to 51.
Tensions between owners and players are far less intense than they once were, given the prolonged labor peace. Still, Tellem’s pursuit of the Dodgers raised questions about conflicts of interest with his clientele at WMG. Tellem is barely two months removed from negotiating one of the most scrutinized deals of the offseason: Yu Darvish’s six-year, $56 million contract with the Texas Rangers.
Tellem didn’t respond to requests for comment, but sources with WMG and the MLB Players Association insisted to FOXSports.com that his clients’ interests never were compromised during the offseason. Rangers general manager Jon Daniels said Tellem disclosed his involvement in Cohen’s group during one of their first discussions about Darvish.
“He assured us it had no impact on Darvish, and it didn’t. It was a non-factor,” Daniels said in an interview this week. “Arn has an excellent reputation in the industry. He’s one of the guys you like to deal with. He’s got integrity. He’s straightforward. He’s a dealmaker.”
Union regulations don’t specify what agents must do in these circumstances. Likewise, baseball’s basic agreement does not expressly forbid those in the commissioner’s office from pursuing club ownership. However, MLB officials and those involved with the sale process agreed that Joe Torre needed to step down as MLB executive vice president for baseball operations while he was part of a group pursuing ownership of the Dodgers.
The reason, one source said, was to “avoid any hint of conflict.”
Torre resigned from his post on Jan. 4. He rejoined MLB in the same position earlier this month, after his group was eliminated from consideration. “It was appropriate for him to step away while he looked into a unique opportunity,” MLB commissioner Bud Selig said in a statement.
Tellem neither resigned from WMG nor took a leave of absence. The firm’s operation was unaffected, sources said, other than the fact that the firm’s clients on 40-man rosters throughout the majors were notified about Tellem’s involvement in a potential transaction.
Three of those players are with the Dodgers — catcher Matt Treanor, starter Rubby De La Rosa and reliever Kenley Jansen — although Tellem isn’t the primary agent for any of them. Joel Wolfe represents Treanor, and Adam Katz represents De La Rosa and Jansen. (Wolfe, Katz and Paul Kinzer are executive vice presidents of baseball at WMG — one level below Tellem, who is vice chairman of team sports.)
Tellem probably has been more involved with the basketball side of his practice in recent years, and there is precedent in that sport for a smooth transition from agent to top executive. Phoenix Suns president of basketball operations Lon Babby did it in the summer of 2010, going from Grant Hill’s agent to Grant Hill’s boss.
Suns owner Robert Sarver initially sought Babby’s advice on candidates for the job, because of Hill’s status as a veteran on the team. Then Babby noticed that the tone of Sarver’s questions had begun to change. “Sort of like Dick Cheney, how he ended up as vice president,” Babby quipped. “Actually, it wasn’t quite like that. I was just trying to help him get the best person for the job, and one thing led to another. It wasn’t my plan.” Babby said he discussed the possibility with Hill before anyone else; Hill gave his blessing, which Babby said was essential.
Babby said he observed a policy of full disclosure as he considered the job, communicating with his clients as soon as the position became a possibility. Asked how Tellem would handle a similar circumstance, Babby said, “He’s an honorable guy. The process is always better if you’re doing it in daylight, and he’s too much of a class act to do it any other way.”
It’s not clear if Tellem will pursue future opportunities in team ownership or management. But he is said to be more popular than Moorad among the baseball owners.
For now, Tellem is an agent, and it’s too early to tell if his dalliance with The Other Side will impact his practice. As Boras said without mentioning Tellem by name, “The advocacy of the player is what we are 100 percent about. We have no other agenda. We are focused on nothing else. To go into other projects, such as ownership pursuits, would substantially mar my ethic to the commitment of the player’s advocacy. That’s my personal belief.”