Limits affecting how teams spend

BY foxsports • June 19, 2013

It was about Mark Appel. But it wasn’t only about Mark Appel.

Wednesday’s news was big: The Astros signed Appel — a Houston native and the No. 1 overall pick in this year’s draft — to a $6.35 million signing bonus. The rebuilding franchise secured a (literally) homegrown starter for the top of its rotation. With Appel’s family on hand for the news conference, there were many happy faces at Minute Maid Park.

Appel’s agent — the inimitable Scott Boras — was there, too. And he had a few points to make.

The contract was a victory for Boras, even if it was below the reported slot value of $7.8 million for the No. 1 overall pick. Appel was a senior at Stanford and thus had little negotiating leverage. But he still received more than the $3.8 million he was offered as the Pittsburgh Pirates’ first-round pick (eighth overall) last year.

Appel went back to school and became much richer for it. That doesn’t happen often in the Major League Baseball draft. And Appel’s case is particularly significant, because he’s the most noteworthy player impacted by the new amateur signing bonus pool restrictions that went into effect last year.

The system ultimately worked for Appel, even though it prevented him from getting his true market value in 2012. The system certainly worked for the Astros, who obtained a potential ace. But the system didn’t work for the Pirates, who missed out on a stud right-hander they could have paired with current rookie Gerrit Cole for years to come.

“You hate to see scouting influenced by artificial barriers,” Boras told me after the news conference ended. “The Pirates scouted right. They chose the right player. And when a system prevents them from signing the right player, it sets them back. When the system doesn’t allow them to pay the appropriate value, the players have to make very difficult decisions.

“It had nothing to do with Pittsburgh. It had to do with the system.”

Boras doesn’t care for the current system — even though it worked to Appel’s advantage in the end. That’s not a surprise. He’s an agent. In fact, he’s the most powerful agent in baseball. Even though teams have some freedom to spread their bonus money throughout the draft class — even more freedom if they don’t mind incurring penalties — Boras likes to establish his players’ value without boundaries from the MLB office. He’s a very wealthy man because of his excellence at doing so.

Not surprisingly, Boras has a Boras-friendly suggestion to fix the system: He’d like to remove spending restrictions for the top 50 overall picks. His argument is that one draft could have eight players who deserve to be paid like the No. 1 overall pick. Another draft may have none.

“You want to stop spending money on players that have the least opportunity to play in the big leagues,” Boras said. “Those are not the players chosen in the first round. Those are the players chosen in the second, third and fourth round. So, prohibit money in those rounds. But don’t prohibit it from being spent at the top of the draft.”

When I pointed out to Boras that he would regain leverage under his proposed system, he countered, “It may help (my) leverage, but it’s the better investment in talent.”

Of course, Boras isn’t in business to help teams spend money efficiently. He does, however, see the big picture. And he’s the rare agent who, in mid-interview, pivots skillfully from a discussion of Appel’s value to baseball’s version of the protectionism/free market debate.

Boras’ argument goes like this: By limiting what is spent on draft-eligible amateurs from the U.S., Canada, and Puerto Rico, MLB has incentivized investment in players not subject to the restrictions — namely, players who are 23 and older from the other countries.

“In the (2011) draft, we had $235 million in bonuses. Now, we have $200 million. Where’d the extra $35 million go? It went to higher payments for 23-year-old Cubans,” Boras said. “Teams are still spending money on entry. It just happens to go to Cuban players rather than American players. The Cuban players are getting a value push they’ve never had before. They’re getting record bonuses.

“I’m not saying the money is not spent appropriately. I’m saying those players used to get $15 million, $20 million. Now they’re getting $40 million. And the reason is teams have so much money to spend on entry (players).”

It should be noted here that the Los Angeles Dodgers’ wisest investments recently were two international free agents not subject to signing restrictions: Cuban outfielder Yasiel Puig and South Korean left-hander Hyun-Jin Ryu.

Boras wouldn’t dispute the wisdom in signing Puig or Ryu (Boras, after all, is Ryu’s agent). But Boras is troubled by the new complications in securing domestic talent — because of the effects of those rules on players and teams.

Even the big guys.

“You’ve got a $900 million franchise in New York that can spend $11 million total on entry players?” Boras asked of the Yankees. “That’s not good business. The Yankees had three No. 1 picks this year. They can’t spend what they want to spend on their No. 1 pick. That doesn’t make sense.

“What American families understand is we’re redirecting money to foreign entities rather than our own players. That’s a problem. This is America’s game. I want the Cuban (players) to be treated fairly, but I don’t want to create an artificial market for them at the detriment of the American player. That’s happened — clearly happened.”

Baseball’s collective bargaining agreement expires after the 2016 season. In all likelihood, Boras will have a couple more Mark Appels between now and then. The Astros ended up with the first one. The Pirates didn’t. And now Boras is on to his next case.