Maybe Agents Have No Leverage, Either

If you don’t follow college football, you may not be familiar with Baker Mayfield. He is the quarterback for the University of Oklahoma, the reigning Heisman Trophy winner, and a player who is expected to be selected in the first round of April’s NFL draft. What is his relevance to the pages of FanGraphs? Well, what is interesting to me about Mayfield is that he might not hire an agent to represent him.

Writes Mike Florio of NBCSports:

The argument against hiring an agent is simple: Thanks to the rookie wage scale, contracts for incoming players basically negotiate themselves. (Also, agent fees are no longer tax-deductible.)

Earlier today, Nathaniel Grow addressed the difficult situation in which the players union has found itself vis-à-vis owners. “The MLBPA Has No Leverage,” is how Grow titled that post. With baseball having introduced limits on amateur spending and having added recommended bonus for draft bonuses, it’s possible that more high-profile baseball prospects will question whether or not an agent is necessary when entering professional baseball. Several recent first-rounders like Hunter Harvey and Kyle Parker opted to negotiate for themselves and to varying degrees of success.

While negotiating pro contracts for amateur baseball prospects is more complicated than in, say, football as teams try to gauge signability and maximize their bonus pools and agents filter information for prospects, etc., what happens when negotiating major-league contracts becomes less and less about art and more and more about science? How will player representatives add value then?

Is it possible, to borrow Grow’s language, that agents have no leverage, either?

In this information age, measuring and forecasting player value has become so much a science that ultimately many — including, I imagine, all 30 major-league teams — are trying to assign a dollar-value to on-field performance and forecasts. Those values are arrived at using much of the same methodology and approach, and there is similar information available in the public realm.

In fact, the crowd — the general public — has become quite good at estimating contract values.

As highlighted earlier this month at Fangraphs, Max Rieper of Royals Review found that, from 2013 to -17, free agents who signed before Jan. 1 received guaranteed dollars 4.0% above FanGraphs’ crowdsourced estimates. Pretty accurate! (Free agents who signed after Jan. 1, meanwhile, received 25.3% less than FanGraphs’ estimates.)

So, in the first half of the offseason, before the approach of spring training begins to produce anxiety in players, the crowd does pretty well.

Let’s see how the crowd is doing in its predictions for contracts this offseason. Through Jan. 16, 21 of Dave Cameron’s top-50 free agents have signed. In the following table, I compare those actual contract values with the crowdsourced median predictions.

(Note: since we forgot to crowdsource Tyler Chatwood, I have substituted Cameron’s prediction.)

The Crowd’s Contract Predictions to Date
Crowd Actual
Rank Name Years $ Years $
4 Carlos Santana 3 $45 3 $60
7 Wade Davis 4 $60 3 $52
9 Zack Cozart 4 $60 3 $38
12 CC Sabathia 2 $26 1 $10
14 Jay Bruce 3 $39 3 $39
16 Brandon Morrow 2 $18 2 $21
17 Tyler Chatwood* 3 $30 3 $38
19 Addison Reed 3 $27 2 $17
22 Mike Minor 3 $27 3 $28
24 Bryan Shaw 3 $21 3 $27
25 Joe Smith 2 $12 2 $15
27 Anthony Swarzak 2 $14 2 $14
29 Yonder Alonso 2 $20 2 $16
31 Juan Nicasio 2 $16 2 $17
32 Pat Neshek 2 $16 2 $16
37 Michael Pineda 2 $16 2 $10
38 Jake McGee 3 $24 3 $27
39 Tommy Hunter 2 $12 2 $18
40 Steve Cishek 2 $12 2 $13
47 Brandon Kintzler 2 $14 2 $10
48 Welington Castillo 2 $18 2 $15
49 Doug Fister 1 $8 1 $4
Total 54 $535 50 $505
Average 2.5 $24.3 2.3 $23.0

The crowd has been perfect in predicting some contracts: Jay Bruce and Pat Neshek, for example, signed for precisely the same terms predicted by respondents. It’s been very close on a number of others, as well.

Regarding the length of the contracts, the crowd has been very close, predicting a total of 54 years for the 21 players in this same. The actual contracts total 50 years. As for the guaranteed dollars, it’s also close. The crowd forecast $535 million ($9.8 in annual average value) while the actual dollars total $505 million ($10.1 million AAV).

Not bad!

While the crowd doesn’t have the same sort access of to medical records, scouting reports, and Statcast data as clubs, they have still exhibited a rather strong understanding of how the market values player performance. Also interesting is that, from 2013 to -17, the crowd was 4% above the actual contracts signed prior to the New Year. This winter, the crowd is 5.9% over. Again, a sign of a strong understanding of how the market values players.

The point here is really more of a question: what happens when the art of the deal becomes the science of the deal? If readers of this site can collectively predict the terms to which a player a player will ultimately agree, what use is negotiation? What becomes of the role of the agent? How must he or she evolve? How difficult is it to create markets and enhance the perception of players?

There will always be some sort of role for agents to play, but it seems they have been removed from what has previously been regarded as their main job — namely, to create leverage for their clients. Will certain players, in certain phases of their careers, consider the possibility of not hiring an agent to avoid losing a percentage of income?

Just as agents might have to adapt to MLB teams slow playing free agency, they might also have to learn how to interject more art into the process.

Scott Boras has been creative in going around front offices, though that tactic might not be sustainable. Last offseason, James Wagner wrote a terrific piece for the New York Times, providing some insight on how Yoenis Cespedes’s agents — CAA Baseball’s Brodie Van Wagenen and Kyle Thousand — pitched their client to the Mets last winter. With the help of an outside firm, CAA attempted to value Cespedes beyond his on-field contributions, including the quantification of variables like the 50 back-page tabloids featuring Cespedes ($3.2 million).

It was creative. Did it work? The crowd’s median prediction was five years and $118.4 million ($24 million AAV). Cespedes signed a four-year, $110-million deal (or, $27.5 million AAV) on Nov. 29, 2016, back when star free agents agreed to new contracts before the New Year.

It was, if nothing else, a creative way to extract and quantify value in a valuation game that is increasingly becoming more and more scientific. It is a valuation environment in which agents are going to have to be more creative to find ways to put some art back into the negotiation of a deal.

We hoped you liked reading Maybe Agents Have No Leverage, Either by Travis Sawchik!

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A Cleveland native, FanGraphs writer Travis Sawchik is the author of the New York Times bestselling book, Big Data Baseball. He also contributes to The Athletic Cleveland, and has written for the Pittsburgh Tribune-Review, among other outlets. Follow him on Twitter @Travis_Sawchik.

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TKDC
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TKDC

The statement that football draftee contracts are less complicated than baseball draftee contracts is extremely dubious.
Also, there have been many stories written about players representing themselves with poor results.

martyvan90
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martyvan90

NFL contracts are significantly “slotted” I believe that was Travis’ point.

Dave T
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Dave T

While it’s true that the number of years and total dollar amount of the contract is more or less set, there are still more points of negotiations than Travis implies – https://www.si.com/mmqb/2017/05/16/nfl-rookie-contracts-fine-print

Summarizing, NFL teams and draftees still negotiate deferral terms on bonuses, the number of years that are guaranteed, offset language, whether the contract includes any split (meaning the player receives less money if he is on IR), and voiding.

I’m pretty sure that TKDC is correct here that these contracts are more complicated than baseball draftee contracts and is being downvoted due to people just seeing years and dollars on NFL rookie contracts and not understanding any of the very important subtleties of them. Aren’t baseball draftee contracts just set as standard minor league contracts where the amount of the bonus is negotiable (within the context of a team’s overall pool) but terms such as date of payment of the bonus are already set?

TKDC
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TKDC

Yes, this was my point. Baseball is just dollar amount of the bonus. Football has all sorts of other aspects besides the years/dollars.

bohknowsbmore
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bohknowsbmore

“The statement that football draftee contracts are less complicated than baseball draftee contracts is extremely dubious.”
I would disagree. Football draftees have nearly preset terms now and there is nothing like a major league deal vs. minor league deal, overslot/underslot, etc. of baseball.

Dave T
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Dave T

There is nothing like a major league deal vs. minor league deal in the baseball draft now either. Major league deals for draft picks went away in the 2012 CBA.