Pedro Alvarez officially signed his $6.355 million major league contract with the Pirates Wednesday, officially ending a saga that dragged on for nearly six weeks past the Aug. 15 signing deadline.
In my Ask BA column two days earlier, I wrote that it was curious that the Pirates negotiated a new deal after club president Frank Coonelly said the Major League Baseball Players Association grievance over the extension of the deadline was meritless and that the club wouldn’t reopen talks. I also said that the decision by the commissioner’s office to extend the deadline was looking more calculated than innocent.
Coonelly called me Wednesday night to explain the Pirates’ perspective. He said their incentive to renegotiate came because they didn’t want to risk arbitrator Shyam Das voiding the deal because it came after midnight, and because the club valued the big league contract as worth roughly the same as the straight $6 million bonus to which Alvarez originally. He also said MLB prodded the club to settle the grievance, and said that the MLBPA encouraged Alvarez’s agent, Scott Boras, to do the same.
The Pirates had maintained all along that Alvarez, the No. 2 overall pick in the draft, had signed a couple of minutes before midnight, and in a statement issued after Pittsburgh placed Alvarez on the restricted list Aug. 27, Coonelly said that the contract had been submitted "in a timely fashion." Coonelly admits now that the deal wasn’t consummated until 12:02 a.m. on Aug. 16, two minutes past the deadline.
But he’s adamant that there was no prearranged deal with MLB, for whom he worked as a senior vice president before becoming Pirates president last September. Coonelly said that Rob Manfred, MLB executive vice president of labor relations, notified the Pirates (and, presumably, other teams) on the morning of Aug. 15 that deals past the midnight deadline wouldn’t be permitted.
So how did the Pirates get an extension? "We begged after the deal was done," Coonelly said.
MLB initially declined Pittsburgh’s request, Coonelly said, but Manfred later spoke with commissioner Bud Selig, who approved the deal. Coonelly said Selig also approved the Royals’ late signing of No. 3 overall choice Eric Hosmer, who also is represented by Boras. Boras maintains that Hosmer agreed to terms with Kansas City 15 minutes before the deadline.
Coonelly and Boras also disagree about the comparative value of the original $6 million bonus and the guaranteed $6.355 million value of the major league contract, which includes the same bonus and $355,000 in minor league salaries from 2009-12. The contract also provides for escalating major league salaries of $400,000, $500,000, $550,000 and $700,000, plus team options with split salaries of $500,000 (if Alvarez is in the minors) and $700,000 (if he’s in the majors) for 2013 and 2014. Alvarez can void the major league salaries once he qualifies for arbitration, which happens after a player accrues close to three years of big league service time.
In a conference call to announce the signing, Boras called it "a favorable change for Pedro Alvarez." Coonelly said that the net present value of the deal, with the bonus being spread over four years rather than two, is worth $5.67 million. A source familiar with the terms of the contract said that it could make Alvarez nearly $1 million more in salaries than he would have with just the straight bonus, while Coonelly said the two deals will wind up being close to equal if Alvarez lives up to expectations.
Another Boras client, Julio Borbon, signed a post-midnight deal with the Rangers in 2007, the first year of the deadline. Coonelly disputed Baseball America reports that MLB contacted the MLBPA before authorizing that contract, calling that notion a "fallacy." At the time, Coonelly worked under Manfred as a senior vice president of labor relations.
While Boras said during the conference call that the grievance was about upholding the draft rules and a fair negotiation, Coonelly said it was purely about Boras’ dissatisfaction with the money.
"It’s very simple. He didn’t like the deal," Coonelly said. "He liked the Borbon deal because the club said yes to his number. He liked the Hosmer deal because the club said yes to his number. He didn’t like the Alvarez deal because Pedro said yes to our number."
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