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Teams finally act to control bonuses

By Alan Schwarz

NEW YORK–Sandy Alderson couldn’t help but smile. Asked about the state of draft bonuses, whose dizzying annual increases slowed a tick this summer, he flashed back to the day he summoned all 30 scouting directors to the Westin Atlanta Airport just before the June draft.

Alderson, Major League Baseball’s executive vice president, said he wanted "to point out some of the options that one has in the course of any negotiation."

"I’m smiling because that’s what negotiation training is all about," he said. "There was a time when everybody was concerned about allowing draftees to have any professional representation. Now, the professional representation in many cases exceeds the representation that clubs are getting."

Scouting directors, who weren’t thrilled about being pulled off the road so close to draft day, sat through seminars on the history of amateur bonuses and received lessons from a professional negotiation expert. The meeting generally reminded them that despite their tools-and-talent pedigrees, they could be as hardline as the agents they so often complain about.

Recalled former Rangers scouting director Chuck McMichael, now with the Braves: "We knew the trends, we had the figures of the escalation of amateur bonuses, and we were continuing to do the same thing year after year. The question had to be asked and answered: Why?"

The question of whether the seminar had an immediate impact is still open.

With 29 of the 30 first-round picks signed–everyone except No. 7 overall pick Matt Harrington–bonuses were up again, though not quite at the 10 percent rate of last year. The numbers don’t compare perfectly, given that one pick (the Mets’ Billy Traber) received just $400,000 because of injury and another (the Reds’ David Espinosa) received an eight-year, $2.95 million major league contract that had no bonus at all.

But even including Traber’s low figure and ignoring Espinosa, first-rounders received an average bonus of $1.94 million, a 7.5 percent increase over last year’s $1.81 million. If Harrington, a high school righthander drafted by the Rockies and considered the top talent in the draft, signs as expected, the figure would probably grow, yet probably not to last year’s 10 percent.

Some of the savings came because several teams at the top of the draft–the Marlins, Twins, Cubs, Royals and others–emphasized predraft deals to avoid long and potentially costly negotiations. Some came from the relative lack of top-level talent.

And some came from the lessons learned at the seminar. "Maybe we have a date we can point to when we came in the same room and were made smarter," McMichael said.

Boras Targeted?

Though Alderson and McMichael say the name of Scott Boras–whose success in getting top contracts for draft picks was the engine behind the 1990s bonus inflation–did not come up purposely in Atlanta, most clubs had yet to accede to his clients’ characteristically ambitious financial demands this year.

Boras advised nine of this year’s top players, as well as North Carolina high school free agent Landon Powell. Powell earned a general equivalency diploma to become eligible for the draft, went undrafted and was then free to sign with any club.

So far just four of Boras’ 10 players had signed, and none could be characterized as conventional.

Righthander Zach Miner, the Braves’ fourth-round pick, signed for a $1.25 million bonus the day he was scheduled to begin classes at Miami. The Reds signed Espinosa and Dane Sardinha, a second-round pick, to major league deals with no bonuses. (Sardinha got $1.95 million guaranteed over six years.) And righthander Chris Bootcheck, an Angels first-rounder, signed for $1.8 million three weeks after classes began at Auburn.

Both Espinosa and Sardinha can earn more than their current guarantees through roster bonuses and other incentive clauses.

Three Boras clients had returned to school, making them ineligible to sign. First baseman Taggert Bozied (Twins, second round) and outfielder Patrick Boyd (Pirates, fourth round) enrolled for their senior years at San Francisco and Clemson. And Powell, despite his ability to negotiate with any team, received no offer to his liking and returned for his senior year of high school.

Boras’ three other clients remained unsigned and weren’t in school. Former Miami shortstop Bobby Hill (Cubs, second round), who turned down the White Sox as a second-round pick last year, has renounced his college eligibility and played this summer in the independent Atlantic League. California third baseman Xavier Nady (Padres, second round) was sitting out classes as negotiations continued. And Stanford righthander Jason Young (Rockies, second round) wasn’t set to begin classes until Sept. 27.

Each year’s draft tends to include a subplot of how the industry fares with Boras’ clients, whether they break the bank–like when the Yankees signed Brien Taylor for $1.55 million in 1991–or meet with resistance–like when the Mariners held firm on Alex Rodriguez in 1993 and signed him to a $1.3 million major league deal. Subsequent controversies surrounding Jason Varitek, J.D. Drew and others keep Boras and his draft performance in the headlines.

Neither club officials nor Boras say baseball’s attempt to curb bonuses was aimed at Boras specifically. Alderson said one of the main points of the Atlanta seminar was to reassure teams that they can say no to any agent.

Harrington is advised by Tommy Tanzer. Two supplemental first-round picks–righthander Aaron Heilman (Twins) and outfielder Tyrell Godwin (Rangers)–were represented by agents other than Boras and did not sign. Whether Harrington signs or not, the number of unsigned top picks will be comparable to most years.

"Many (scouting directors) feel like if they don’t sign their first-round pick their job is in danger," Alderson said. "And one of the messages I hoped to convey was, ‘Look, most of the time you’ll sign your top picks. Sometimes you won’t.’ You have to recognize it’s like going to salary arbitration. You’re not a great negotiator because you never go to salary arbitration. In fact, if you never go to salary arbitration, you’re probably a lousy negotiator. So accept those few occasions when players don’t sign."

Boras does have a history of advising players to delay pro careers for college. He says a vast majority of those players, including Alex Fernandez (1988), Charles Johnson (1989) and Drew (1997), not only received considerably more money later on but also became successful major leaguers.

"We were right about these people," Boras said. "And teams agreed that the player was worth more than they were being offered."

Boras said both Bozied and Boyd returned to college primarily because they were coming off injury-plagued seasons and wanted to prove themselves as premium players for next June’s draft.

And he considers the long-term major league contracts for Espinosa and Sardinha positive deals. He said the Reds’ cash-flow problems left the team without bonus money to offer, so the contracts allowed the club to get the players it wanted and gave the players guaranteed money, 40-man roster spots and incentive clauses.

Club officials contacted by Baseball America said because of the unique nature of the contracts it was hard to judge who "won" those negotiations.

Steering Clear Of Powell

Powell, meanwhile, found himself with no negotiations at all despite going into the spring as one of the top-ranked high school juniors in the nation.

The commissioner’s office imposed a signing freeze on the switch-hitting catcher before ruling Aug. 9 that he indeed was a free agent. Yet Ron Powell, Landon’s father, said just four clubs spoke directly to him, even after Landon’s two generally positive public workouts. Fewer than half of the major league clubs attended the workouts.

Word quickly spread that Ron Powell wanted a hefty bonus for his son. "I never told a club a dollar figure between 1 and 10 gazillion," Powell said. "I likened him to an early first-round talent who is a free agent."

That murky appraisal, characteristic of Boras-advised parents, was interpreted by most clubs as meaning the top-10 average of $2.5 million before the unspecified free-agent multiplier, which could raise the total to anywhere from $3 million to $6 million.

That priced out all but the most free-spending teams in baseball–a tactic more and more premium players are using to scare small-market teams away in the draft. Just two clubs, Powell said, even asked if he would sign for a specific figure. He declined to identify the teams or the figures but said he answered "yes" to both of them.

He said after calling him back hours later one said, "We can’t make this happen," and the other said, "We can’t be the club to do this."

Powell returned to Apex High Aug. 29 and will either enter the 2001 draft or attend South Carolina for the spring semester, delaying his draft eligibility to 2003.

Several club executives said Powell wasn’t a premium first-round talent in the first place. Others wanted more time to evaluate him, an ironic request considering MLB’s sluggish handling of the free-agency appeal. Others saw a combination of factors.

"We had no interest," Phillies scouting director Mike Arbuckle said. "I get tired of Scott looking for loopholes to circumvent the draft. If Landon Powell was so special, then maybe. But I don’t think he’s a franchise-type player. We won’t dive into that."

Countered Boras, "We had four major league teams tell us that Landon Powell had power rated in the 60-70 range (on the 20-to-80 scouting scale), someone worthy of a first-round selection. All those people were at the workout to see Landon Powell personally. Mike Arbuckle was not one of them. And no one from our office ever suggested anything about the word ‘franchise.’ "

Ron Powell has sensed the unpleasant climate surrounding his son’s free agency.

"Baseball’s pretty irritated at something we’ve done–they’re irritated that Landon became a free agent and he used their rules to do it," Powell said. "I think they held that against him . . . Baseball exerted pressure not to (sign him)."

Alderson denied that charge. "Have you ever known teams to work in concert on a free-agent first-round signing?" he said. "Has that happened when a player comes out of Cuba? Does it happen when a player’s available from Venezuela and gets showcased in Boca Raton? . . . There are too many clubs out there. It does not happen."

Some people have mentioned the word "collusion" in both the Powell case and in referring to Alderson’s predraft pep talk, but baseball’s collusion rules apply only to major league free agents. Clubs are free to set a common strategy with respect to the draft.

While the final results have yet to come in–Harrington and Boras’ clients still lurk over the 2000 draft ledger–Alderson’s Atlanta summit had at least a slight effect.

"We can complain about the state of the industry all we want, but fundamental change comes slowly," Alderson said. "What we can do is raise the level of competence of individuals within the industry.

"I’m glad we had the meeting. I’m glad we made the effort."

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