If you go by the interview that he gave Jerry Crasnick of ESPN, it looks like Scott Boras isn’t the least bit perturbed that Rafael Soriano, Michael Bourn and Kyle Lohse aren’t yet signed. What’s more, it doesn’t really look like Jerry Crasnick sees anything unusual about this year’s batch of late-offseason Boras free agents. He does, after all, have a history of this sort of thing. And he does, after all, usually (if not always) get a big fat deal for his guys in January or even February.
I have the feeling that this year is going to be different. The reason? The increasing importance of draft pick compensation. Draft pick compensation has always been a bit of a drag on free agents in the market (since it has been around, anyway) but this year will be the first year that we have far fewer free agents that come with compensation attached and the first year in which that compensation hits a franchise like a sledgehammer. In the past, it had been possible to get a first-round talent as a sandwich pick or second-round pick just by overpaying. That is no longer the case. In the past it was true that “trading” free agents netted teams picks, they would both lose a first-rounder, gain a first-rounder and gain a sandwich pick. That is also no longer the case, now the team that signs the free agent sees it’s first rounder disappear into thin air but the team that lost him gains only the sandwich pick. And, of course, teams used to be able to sign as many international amateurs as they wanted for however much they wanted. And, of course, they can’t do that either. What I’m trying to say here is that if a team’s goal is to allocate a “normal” bonus budget to get a normal distribution of talent losing pick didn’t used to really prevent them from doing that – though it might have forced them to overpay for equivalent talent. Nowadays? If you lose your first-round pick you lose the signing bonus budget that goes along with it and the only ways that you can reallocate that money you didn’t spend are to get somebody from Cuba or Japan or to use it on major league free agents.
So… what exactly is the value of a first-round pick nowadays? If you could sell one on the open market, how much would it fetch? There is just no way to answer that – but Scott Boras, perhaps, is going to find out.
I don’t think that people have really gotten just how big that disincentive to sign free agents with compensation attached until this month, the assumption has always been that somebody will ignore it because they want those guys bad. But… all but one of this year’s compensated free agents are fairly close in value to other guys who aren’t compensated. They’re all similar to the guys in past years who just barely made the cut to be type-A rather than type-B (and some of those did see their stock fall). We’ll never know if the compensation would have been an issue for David Ortiz and Hiroki Kuroda, because their qualifying offers were just part of their semi-exclusive negotiations with their current teams. We know compensation wasn’t an issue for the Angels in signing Josh Hamilton (the one guy who wasn’t “borderline”) – though it probably was for the other teams interested in him. Nick Swisher managed to get a deal with the Indians (for far less than he was hoping to get at the start of the Hot Stove season), who only had to cough up a second-rounder due to their bad record. But, even the Indians only started pursuing Swisher in earnest after missing out on a few other free agents who didn’t cost picks. The Braves signed BJ Upton and coughed up a pick, justifying that cost with the knowledge that since Michael Bourn would be signing elsewhere they would at least be getting a sandwich pick. By all appearances, Adam LaRoche really didn’t want to resign with the Nationals and he really didn’t want the kind of contract that he wound up signing (too few years, not enough annual value) but thanks to his pick cost, that was the best he could ultimately get. And there’s the kicker: the Nationals actually wanted LaRoche. A lot. They just didn’t want to pay more than they thought that he was worth. The Yankees don’t appear to want Soriano. The Cardinals don’t appear to want Lohse. The Braves appear to have moved on from Bourn. A lot of teams that would have been in the market for these guys have signed free agents that don’t cost picks already to fill those holes.
The question – as far as I’m concerned – that we should be asking of Scott Boras now isn’t whether or not he’ll actually be able to find a top dollar contract for his guys this winter but whether he is going to find a contract for them at all (and therefore whether he was foolish not to accept the qualifying offers or less lucrative offers earlier in the offseason). This is most clearly the case for Rafael Soriano… Soriano’s previous deal with the Yankees has to rank among Boras’ finest work – finding a team that would pay that kind of money for a setup man when nobody else seemed willing to pay it for a closer. Boras saw fit to opt out of the last year of Soriano’s deal – which would have paid him $14 million – to look for a longer-term deal. Logically he also declined the qualifying offer that would have paid him less. I assume it seemed like perfect timing to Boras and Soriano – he was coming off a good year and didn’t appear to have much competition among “closers” on the market. It’s likely that, if this were a few years back, Soriano would be in exactly the same position as he is right now – trying to find somebody still willing to pay big bucks for an “established closer”. And – as it was for Jose Valverde in 2009 – the team to cough up cash and a pick would have been the Detroit Tigers. I am positive that Scott Boras not hoped but expected that he would get Soriano a 3-year, $40 million deal from Mike Ilitch. This year things look to be different, even here in Detroit. The thing is, while the Tigers have seemed more willing than just about anyone else to sacrifice draft picks they have also been among the biggest exploiters of that “loophole” that effectively let teams get first-round talent anywhere in the draft so long as they were willing to pay the picks what a top-10 guy would have gotten. They were never willing to go without prospects, they just figured that they could get the kind of players that they wanted without a first-rounder and that is no longer true.
Now the problem for Soriano, Lohse and Bourn is that the signing a one-year bridge deal to try for free agency again is going to make that lost pick seem like even more of an exorbitant cost and they’re going to know that a good year probably means another qualifying offer (unless, I suppose, the terms of their contract forbid it). And for Soriano, remember that when Ryan Madson couldn’t find his lucrative multi-year closer gig he wound up signing for 1 year and $10 million – and he didn’t even have any compensation attached!No one wants to give up $40 million and a pick to get Soriano for 3 years. But does anyone want to give up $13 million and a pick to get Soriano for one year? $10 million and a pick? $8 million and a pick? While there would certainly be some takers, I imagine that a lot of teams wouldn’t be willing to give up the pick even if they could get Soriano for $500K – though I’m sure that the Yankees would. The Tigers would clearly be a better team next year with Soriano than without – but would you be willing to give up Nick Castellanos to have him, even if that’s all that he cost? I would not. I have the feeling that Soriano is going to wind up resigning with the Yankees for a single year (and a promise of no qualifying offer) for that same setup role and significantly less than $14 million – I just don’t think there are going to be any better offers forthcoming. That will be perhaps the biggest plate of crow ever served to Boras or a Boras client (though there would be some competition).
I’d be more optimistic about Lohse and Bourn, markets for starters and outfielders are deeper than for closers – I imagine that they will both get decent multi-year offers (like Nick Swisher) that fall well below what they were hoping to get and might not put them on the sorts of teams that they were hoping to play for (like Nick Swisher). Bourn to the Mariners and Lohse to the Angels seem plausible since, if I am not mistaken, in those circumstances both would only cost a second-rounder (like Nick Swisher). Still, we might be looking at 2 years and an option for $25 million for Lohse and 4 and $40 for Bourn – probably not half of what Boras was looking for. Things have changed for free agents since the new CBA went live, Scott Boras just might not have realized it yet. In the future I think we’re going to be seeing more guys gnash their teeth, curse, and accept qualifying offers and we’re going to be seeing more contracts that forbid them explicitly.