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Free Agent Advice Form

Monday, November 22, 2004

ESPN.com has posted a scanned form of a 'Free Agent Advice Form' that a team can request from the Office of the Commissioner of Baseball. Below, I am recreating the form as best I can because the original is not text, and because I wish to comment on it.


TO: [Club Official]

FROM: Office of the Commissioner, Labor Relations

DATE: [Date]

RE: [Player's Name]

You have requested advice regarding a ___-year contract for [Player's name], a free agent Player. Based exclusively on the comparable Player contracts signed to date and listed in Section I below, [Player's name] value would appear to be between $____ and $____ on a contract of [length requested by Club].

Obviously, the value of a free agent Player is ultimately determined by market forces, the most fundamental of which are the supply of such Players and the demand for those Players. Moreover, the potential value of a free agent Player to one Club may be different from the same Player's value to another Club. Given this, the amount that your Club is willing to pay a free agent may appropriately differ from the value range supplied above.

I. Relevant Comparables

PlayerMLSYearAAVContract Length (and other details)

We have attached statistical comparisons for each of these players.

II. Other Factors

  • Age
  • Disability/Injury History
  • Role
  • Other free agent players whose signings could affect the Player's value
  • Other factors]
  • As a reminder, you are not permitted to share this advice, or even the fact that you have received advice on [Player's name] from the Office of the Commissioner with another Club. Likewise, the Office of the Commissioner will not disclose to any other Club the fact that we have provided this advice to you. Moreover, this advise is strictly advisory and is intended to assist you in formulating contract offers that you deem appropriate. As has always been the case, advice from the Office of the Commissioner cannot interfere with a Club's obligation to act in its own individual interest in the free agent market. In fact, you are required to act in your individual interest in deciding what contract terms to offer a free agent player.

    Feel free to give us a call if you have any questions concerning this advice.

    I find this form to be incredible, not the form of course, but the fact that the Office of the Commissioner of Baseball has set up a forum for teams to ask how much they should pay a player. Yes, I read the form and all of the text is legalese. The real point of this form is for the OCB to 'recommend' salary ranges to the teams.

    In most industries, I believe this would be bordering on illegal. However, baseball happens to be the proud owner of an anti-trust exemption, and is free to act like a monopoly.

    This type of document probably exists in other industries, but it would be filled out by an independent consultant. To me, this is similar to the NYSE or NASD putting out a memo declaring they think XYZ stock should be trading at $X dollars. In my opinion, the very fact that the Commissioner's office is the binding force between owners makes this memo inappropriate. Furthermore, there is a reason that the exchanges don't recommend prices, its because it can't be done reliably by an involved party.

    The logical counter-argument is that the memo is simply facilitating communication of salary data and injury history to interested parties. This is fine with me, because the players union makes a practice of making all player's contracts public. The union did this originally because players would negotiate with their GM saying something like "I'm just as good as Bob, so I should get paid what Bob gets paid."

    According to John Helyar in "Lords of the Realm" (maybe the best baseball book ever... a great gift for Christmas ), the GM would then wait a day, call the player back and tell him that Bob made $40,000 and so the player should be happy with the $45,000 he was being offered. Of course, Bob was making $80,000, but the lack of verifiable salary ranges were doing two things: creating inefficient markets, and slowing the growth of salaries.

    After making all the salary information public, the players association was able to let players know what they were really worth, and this contributed to the rapid increase in player salaries.

    So why is it wrong for the Commissioners office to do the same thing as the players union? Its not. The problem with the form is that the Commissioners office apparently decides who the player is comparable to. It is the Commissioners office deciding which are the other free agents who should be setting the market, and it is the Commissioners office writing a number on a piece of paper telling the owners what they think the player is worth. In the good old days, the Commissioners office was supposed to be an independent office with the bests of interests of baseball in its protection.

    These are decisions that need to be made by the teams. I think the OCB should simply have a dossier on each player that teams can request. That way if the Cubs think J.D. Drew's past salary, health, and role are important in deciding their offer to Carlos Beltran, they make that decision, not someone in the Commissioners office.

    In my opinion, the free agent advice forms are more than just advice... its loaded advice... and it leads down the road to an ugly word...


    Posted by Byron at November 22, 2004 11:42 PM | Bookmark and Share | BallHype: hype it up!
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