Ozzie Albies inking an extension with the Braves sent shockwaves through the industry, which is really saying something given the number of deals being signed by young players recently. In what is being referred to as perhaps the worst contract ever signed, the 22-year-old agreed to an eight-year, $35 million extension with two club options for $7 million each and a $4 million buyout on the first.
Even if he maxes it out, the total value is a mere $45 million over nine years (the buyout is factored into the $35 million and obviously doesn’t pay if the options are picked up). That’s $5 million AAV for a player who posted 3.8 bWAR and was named an All-Star in his first full season. He’d almost certainly be able to clear more than that through arbitration, and now he’s potentially locked up through the entirety of his 20’s. It’s just a weird deal all around.
ESPN’s Jeff Passan wrote about the extension as a flashpoint among other long-term deals for players with little or no MLB experience. The incredibly low guarantee and max value drew the ire of the union and had other agents pulling their hair out. Adding another layer of intrigue to the matter is the fact that Albies is represented by SportsMeter, a relatively small agency headed by David Meter that also lists Craig Kimbrel — who’s unemployed at least in part of what many see as an irresponsibly high asking price — among its clients.
About a dozen large agencies are employed by a majority of players. These agencies, because of their size, do not depend on single commissions for the health of their businesses and thus are inured from the moral hazard that can influence those with fewer clients. At 5 percent commission, a $20 million extension means $1 million for an agent. The incentive, then, to do an extension can be strong for smaller shops — Albies employs one in agent David Meter — which also fear client-poaching from larger agencies. Even among the larger agencies, the concern over losing a client — and a commission — can compel extensions.
That logic makes sense if we suspend any notion of ethical propriety or fiduciary duty, both of which an agent has to their clients. The staggeringly low value of the deal alone is bad enough, but it’s even worse when viewed through the lens Passan provides.
“It’s frustrating,” an agent who operates with a smaller agency told Cubs Insider. “CBA framework frustration, frustrating as a benchmark for future deals.
“There’s also a bullshit narrative that this was caused by a ‘small agency’ trying to cash in before a ‘big agency’ poached their player. Big agencies are made up of agents with small client bases that could have made the same terrible deal. This just gives ammo to big agencies to poach even more. It was a self-serving line given by big agency to Passan.”
If that sounds a little conspiratorial, consider for a moment how much it could benefit a big agency to plant seeds of doubt regarding smaller competitors. Any agent can screw up and sign a bad deal, but the idea that small agencies are more likely to jump on a low early offer just to lock in a payday for themselves could raise eyebrows among players and the union.
Even if people in the industry tacitly accept the reality of unethical practices, big agencies stand to benefit from their smaller brethren being cast in a poor light.
The agent with whom you spoke is either woefully naive or lying. If he believes agents don’t cash in out of fear of poaching, well, he’s just wrong. And yes: It is clearly wrong, a break of fiduciary responsibility, etc. It’s not narrative, though. And it’s not bullshit, either.
— Jeff Passan (@JeffPassan) April 13, 2019
To be fair, Passan did explicitly state in the quoted text above that fear of losing a client can drive any agent to pursue or agree to an extension. And my understanding is that he and the agent in question have ironed things out. Regardless of the clout or capital possessed by a given agency, the fallout of being driven by selfish motives could be dire.
“If there’s any truth to an agent putting their interest before their client’s interest, that’s shameful,” the agent said. “As a lawyer I would get disbarred for such activity.”
There are obviously any number of additional factors involved in the Albies deal, including the possibility that the player told his agent he cared nothing for money and just wanted a deal immediately. Perhaps Albies feared that his production would drop off sharply starting in May of this year and his future earnings would go in the tank as a result.
Some of our readers might be drawing comparisons to Kris Bryant, whose name has come up frequently in extension talks and who is currently in the midst of an early-season slump. He and Scott Boras are certainly not going to take an offer so egregiously low relative to his potential value, but last year’s brush with athletic mortality may have increased Bryant’s willingness to sign long-term.
Hypotheticals aside, the fact of the matter is that baseball is undergoing something of a sea change in which younger players are jumping at offers to ensure financial security now while older players are speaking out against undesirable labor conditions. Of those player groups, the former is going to be around longer and wields greater influence over future labor negotiations despite perhaps not being as upset about their collective situation.
In the meantime, the current state of unrest will continue as the union and ownership tug on their respective sides of the rope. But as the Albies deal shows all too clearly, ownership is winning by a wide margin.
“I wish I was shocked,” the agent admitted. “The last CBA was a disaster for the players, so this kind of deal is all too possible.”