It's Scott Boras' World. And We're All Just Living In It.

[darkhorse]

Very interesting article on why it increased Scott Boras' leverage to get Rick Porcello a huge deal by having him slip in the draft to the 27th spot. The article also shows why teams were D-U-M-B to not select Porcello with a pick commensurate to his abilities. They'd have had more leverage to get him at a lower price and, of course, would have had perhaps the best player in the entire draft.

http://www.baseballprospectus.com/unfiltered/?p=491

[ctorg]

Ah, yes, that's genius. That's why Boras is as feared and respected as he is.

[myasu]

It is interesting...

It actually shows how naive the whole baseball world was, business-wise, before he came in.

[Melo]

Boras should be the next Commish, IMO.

[mikev]

Originally Posted by Melo

Costas should be the next Commish, IMO.

[Skipaway]

Originally Posted by myasu

It is interesting...

It actually shows how naive the whole baseball world was, business-wise, before he came in.

I don't think it shows the baseball world was naive. Detroit Tigers aren't exactly the loser here.

Tigers got a top five talent with a very low pick, and the bargain pick-wise is compensated contract-wise. Overall the investment is balanced out. It shows market efficiency. It would actually reflect badly on the baseball world if Porcello didn't get a big contract.


Another thing of note is that Boras in generally is simply a risk seeker. His strategies generally involve higher risks, therefore higher return. Quite often his clients actually got burnt.

Some of his strategies:

1. Ask free agent clients getting off bad years to sign one-year deals to re-establish market value instead of settling for safer and longer contracts. It's great when it works, and horrible when it doesn't.

2. Delay the signing process of draft picks to gain leverage. When it works, he got bigger contracts. When it doesn't, the client would get a delayed entry into the league, therefore losing out big both career-wise and money-wise.

Most people are risk-averse, therefore don't do as many flashy things Boras did. Boras got to play with risks, because he's like hedge fund managers who got more to play with.

[bababui]

Originally Posted by Skipaway

I don't think it shows the baseball world was naive. Detroit Tigers aren't exactly the loser here.

Tigers got a top five talent with a very low pick, and the bargain pick-wise is compensated contract-wise. Overall the investment is balanced out. It shows market efficiency. It would actually reflect badly on the baseball world if Porcello didn't get a big contract.


Another thing of note is that Boras in generally is simply a risk seeker. His strategies generally involve higher risks, therefore higher return. Quite often his clients actually got burnt.

Some of his strategies:

1. Ask free agent clients getting off bad years to sign one-year deals to re-establish market value instead of settling for safer and longer contracts. It's great when it works, and horrible when it doesn't.

2. Delay the signing process of draft picks to gain leverage. When it works, he got bigger contracts. When it doesn't, the client would get a delayed entry into the league, therefore losing out big both career-wise and money-wise.

Most people are risk-averse, therefore don't do as many flashy things Boras did. Boras got to play with risks, because he's like hedge fund managers who got more to play with.

Nice analysis.

[eriqjaffe]

Originally Posted by Skipaway

1. Ask free agent clients getting off bad years to sign one-year deals to re-establish market value instead of settling for safer and longer contracts. It's great when it works, and horrible when it doesn't.

Then there's the Ordoñez contract, which had that clause that would have given the Tigers an out if he had been on the DL because of his knee for a certain amount of time. To this day, I am highly suspicious of the "sports hernia" that kept him on the DL the entire first half of 2005, but it looks like it's working out fairly well for Detroit now.

[myasu]

Originally Posted by Skipaway

I don't think it shows the baseball world was naive. Detroit Tigers aren't exactly the loser here.

Tigers got a top five talent with a very low pick, and the bargain pick-wise is compensated contract-wise. Overall the investment is balanced out. It shows market efficiency. It would actually reflect badly on the baseball world if Porcello didn't get a big contract.


Another thing of note is that Boras in generally is simply a risk seeker. His strategies generally involve higher risks, therefore higher return. Quite often his clients actually got burnt.

Some of his strategies:

1. Ask free agent clients getting off bad years to sign one-year deals to re-establish market value instead of settling for safer and longer contracts. It's great when it works, and horrible when it doesn't.

2. Delay the signing process of draft picks to gain leverage. When it works, he got bigger contracts. When it doesn't, the client would get a delayed entry into the league, therefore losing out big both career-wise and money-wise.

Most people are risk-averse, therefore don't do as many flashy things Boras did. Boras got to play with risks, because he's like hedge fund managers who got more to play with.

I did not mean Boras was taking advantage of the Tigers, by saying naive.
I am just surprised to see Boras coming up with these new ideas to make smart business moves, and just wondering why anybody before him did not come up with ideas like these.

[bababui]

Originally Posted by myasu

I did not mean Boras was taking advantage of the Tigers, by saying naive.
I am just surprised to see Boras coming up with these new ideas to make smart business moves, and just wondering why anybody before him did not come up with ideas like these.

But are they smart business moves when all is said and done? Or is Boras like a virus that infects an organism and eventually kills it through opportunistic infection?

[darkhorse]

Originally Posted by bababui

But are they smart business moves when all is said and done? Or is Boras like a virus that infects an organism and eventually kills it through opportunistic infection?

I'm not gonna hold my breath waiting on that outcome.

[Skipaway]

Originally Posted by myasu

I did not mean Boras was taking advantage of the Tigers, by saying naive.
I am just surprised to see Boras coming up with these new ideas to make smart business moves, and just wondering why anybody before him did not come up with ideas like these.

As I said, these ideas look new simply because it's more risk-seeking than most people would like. I wouldn't say Boras really discovered some kind of new way to do business.

[Skipaway]

Originally Posted by bababui

But are they smart business moves when all is said and done? Or is Boras like a virus that infects an organism and eventually kills it through opportunistic infection?

An efficient market would always need people who behave a little differently.

Boras is bad if you want MLB to become a hierarchical and hard-structured business. That would work to the best interest of owners only.

[myasu]

Originally Posted by bababui

But are they smart business moves when all is said and done? Or is Boras like a virus that infects an organism and eventually kills it through opportunistic infection?

I think it all comes down to this point.
Is it good for the sport?

I do not think it is, but then again I think it is logical for guys like Boras to take advantage of the given market situation, rules, to make some "smart" business moves like he is doing.

Maybe I sould not have used the words like "naive" or "smart".

Talking about "naive", I would love to see guys like Boras coming to the "very naive" Japanse baseball market, and do some of his business.
I think *** will panic to the point Boras will be hated like snakes.

[Russ]

Boras is a genius. Or at least gutsy.

[Skipaway]

Japanese league IS a controlling and hierarchical organization, and Boras wouldn't be able to do as much. His tactics are free market tactics.

[myasu]

Originally Posted by Skipaway

An efficient market would always need people who behave a little differently.

Boras is bad if you want MLB to become a hierarchical and hard-structured business. That would work to the best interest of owners only.

Good point!

And that's why Boras would be hated so much in Japan.

[Skipaway]

Originally Posted by Russ

Boras is a genius. Or at least gutsy.

One of his great strength is to compile so much reputation to attract top clients, therefore allowing him to do gutsy moves.

If you have only one or two major clients, you will have to play safer.

[myasu]

Originally Posted by Skipaway

Japanese league IS a controlling and hierarchical organization, and Boras wouldn't be able to do as much. His tactics are free market tactics.

What you say is true, but at the same time, Japanese league is not prepared well to deny the outsiders to do something new.
So, I think Boras CAN do something over here, even though I do not think it will happen really.

[Skipaway]

Kyle Blair, a projected first rounder, dropped all the way to fifth round due to signability issues, didn't get a contract. The strategy can cost you a lot when it fails.