Prior, Teixeira Set New Contract Standards
By John Manuel
Every scout, every agent, every organization, every player knew it coming into the 2001 draft: Mark Prior and Mark Teixeira are special talents. And they would have to be paid as such.
When they would be paid, and how, took all summer to figure out for the Cubs and Rangers, the teams that drafted them. And in the end, they signed on the same dayAug. 22.
Prior, Baseball America's 2001 College Player of the Year, agreed to terms first. The No. 2 overall pick out of Southern California agreed to a five-year major league contract with the Cubs that guarantees the righthander at least $10.5 million. He received a $4 million bonus. Teixeira, the 2000 Player of the Year out of Georgia Tech, signed a four-year, $9.5 million deal with the Rangers, who selected him fifth overall. He received a $4.5 million bonus.
That these are two of the four largest draft signings in history comes as a surprise to no one in the baseball industry. The deals are rivaled only by the $10.2 million and $10 million bonuses received by loophole free agents Matt White and Travis Lee in 1996.
"Those two guys are awfully, awfully good," said one scouting director, "so if they don't make it, we've got to start over in how we evaluate talent. Those two were head and shoulders above everyone else.
"I do think they are worth the most of the talent that was out there. But are they worth $10 million? I don't know about that."
The two teams that drafted them certainly thought so. In fact, the contracts could both be worth much more if the two players reach performance and roster bonuses in their deals.
The next closest contract given to a player that signed with the team that drafted him is the $8 million major league deal Pat Burrell got from the Phillies as the No. 1 pick in 1998. Among other deals in 2001, the $5.15 million bonus Joe Mauer received from the Twins as the No. 1 pick pales in comparison.
If there was a race to see who would set the record for the largest contract, Prior won. He has the largest guarantee built into the contract, though his contract is longer by one year.
The real competition wasn't between Prior and Teixeira and the rest of the draft class, though. It wasn't even between Prior and Teixeira, who played together with Team USA in 2000 and get along well, by all accounts. The true competition was between the agents, Prior's John Boggs and Teixeira's Scott Boras, with spin a politician would be proud of. While each insists it was not his intention, both have tried to present their deal as the better one for their client.
Who won and who lost will be determined. The players lost development time this summer and won't play in meaningful games until next spring, but both are set for life financially. The clubs lost two months of instruction with the players but gained the draft's two top talents.
The news is all good for the agents, though. Both negotiated contracts that caught the attention of the industry and gave critics of the draft two more good reasons to get rid of the current structure.
"We didn't want to hold out," said Jerry Prior, Mark's father. "We knew this would establish some new standards and that it could take time to negotiate, but the process leaves you twisting in the wind. The inaction was more frustrating than anything else.
"We wound up in the exact same position as the clients of some of the more volatile agents."
The Teixeira Deal
Boras has had his share of volatile negotiations involving high-profile draft picks such as J.D. Drew, Jason Varitek and Alex Rodriguez. But it's not a word he used to characterize the Teixeira negotiations.
Boras has a strong relationship with Rangers owner Tom Hicks and represents three-quarters of the Rangers' future infield with Teixeira, first baseman Carlos Pena and $252 million man Rodriguez.
"We've never paid much attention to slotting players, so that wasn't a factor," Boras said. "Tom Hicks realized with A-Rod that he made an excellent business decision in terms of the character of his player, and with the addition of Teixeira he has another such player.
"I don't know if there's been a third baseman/shortstop combination in major league history capable of each hitting 40 home runs. And as long as A-Rod is around, nobody's going to be talking about Teixeira's money."
According to terms of the contract obtained by Baseball America, more of Teixeira's money comes at the back end of his deal, with a $2.5 million salary in 2005, the contract's final year, compared with $2 million for Prior. The $4.5 million bonus is paid out over three years, including $1.5 million this year.
Roster bonuses in the contract could bring Teixeira up to $540,000 more annually if he spends an entire year on a big league roster (disabled list time included).
If the Rangers want Teixeira back in 2006, they would have to pay him at least 80 percent of his previous year's salary, bringing the five-year total to $11.5 million, not including his roster bonus.
The Prior Deal
Prior's contract has three key points. First, Prior can opt out of the last two years of his five-year deal. Second, he can boost his salary with performance bonuses that, while not easily attainable, are certainly possible.
Thirdthough maybe it's really firstis the $10.5 million figure. No matter how anyone spins it, it's the largest guaranteed figure given to any amateur player.
"I really think he got a good deal with the security and flexibility built into it," Boggs said. "This a player who was controlled by the draft, not a free agent, but he still receives more guaranteed than the free agents in 1996. So we feel good about it."
Boggs and Prior will feel even better if the righthander hits some of his performance bonuses. Prior will receive $500,000 added to every remaining year of his deal if he is named an all-star, rookie of the year, Cy Young Award winner or MVP. If he finishes in the top five in the three awards, he triggers a $250,000 escalator clause.
"I adore escalators, because teams always underestimate them," one agent said. "If Prior hits it, he hits it big."
Prior also gets one-time bonuses for those awards, as well as a college scholarship plan worth $20,000 for two semesters. Unlike many players, Prior is using his college plan this fall, attending USC instead of instructional league, on his way to a business degree.
The option years were also attractive to the Prior camp to speed up his arbitration/free-agent timetable. If Prior reaches the big leagues in 2002, he won't be tied to his $2 million salary in 2006.
"This gives us protection, so that if Mark performs like we think and everyone else thinks he can, then over these five years he could easily be above $12 million," Boggs said. "Under the current Basic Agreement, he could option out and go to arbitration or even under a new BA, he could become a free agent."
Nobody knows what the new labor deal will be, or when it might be agreed to. Boras, in an ominous sign, negotiated language into Teixeira's deal guaranteeing him $7.8 million regardless of the length of a work stoppage.
Assuming games go on, the players are guaranteed a total of $20 million before they've played one game of professional baseball.
And that's a fact no one can take away from themor their agents.
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