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The recent contract given Roy Halladay is a good example of how an inexperienced Agent can hurt you. Despite back loading the deal for the teams' benefit Greg Landry, who did most of the work on Halladay's deal & hadn't done a large deal like this before, failed to negotiate even a deferred signing bonus into the deal.

Why is that important?

#1) In Halladay's tax bracket he will pay the highest tax rate(approx. 40%) on all income both in Canada & the US. Taking only $2 million in a Signing Bonus(in a back loaded $42 million deal he should have gotten $5mill.-$6 mill. if he took a deferred bonus)would have saved him at least in excess of $500,000 a lot of money even when you sign for $42 million.

How would that save him anything? In Canada Signing Bonuses are taxed @ only 15% & in the US there is no Social Security witholding on a Signing Bonus.

#2) Signing Bonuses are paid in a lump sum salaries are paid in incremental payments. If Halladay took a Signing Bonus & invested it in almost anything, in addition to saving the tax money he would have earned money on his money.

For this he also had to pay Landry's commission. A bad deal anyway you slice it.
Original Post
quote:
Originally posted by TRhit:
VC

"You certainly do not know all the details of that specific deal."

What other details would you like to know?
Roy Halladay III Toronto Blue Jays 1/22/04. $42,000,000/4+A. 2004-2007. $6,000,000-2004; $10,500,000-2005; $12,750,000-2006; $12,750,000-2007. Plus: $75,000 for 1st and 2nd time All Star; $100,000 for 3rd and 4th time All Star; $250,000 for Cy Young; $250,000 for MVP; $50,000 for LCS/MVP; $100,000 for WS/MVP; $50,000 for Gold Glove. Player will donate 1/4 of 1% of annual salary to Jays Care Foundation. NTP. SGP.

"Why do you need to cut down another mans situation in public? I just wonder!!!!!!"

Trying to give info. to the readers of the board to beware of the ultimate cost of working with an inexperienced Agent.

TRhit
PCX, There were 5 that I asked about. I have no experience with any of them other than checking some of their signings.

I don't feel that any agent who is good needs to bad mouth another agent. He just needs to show what he can do for the prospective client. I have listened to a few bad mouth others and it makes me think that they are insecure in their own ability.
I for one, am fascinated by the information being given here. I want to know about agents making 1/2 million dollar mistakes. I see people missing the point and attacking the messenger instead of appreciating the information. We don't hesitate to knock a second rate showcase company on this site. Why not knock a second rate agent? I want to know.

"I love the HSBBW"
BIGHIT


Me amd me only speaking here but I find it a bit uncool for a self proclaimed "agent" who does not tell who what or where is he is to sit and bash another individual in his profession--he is a supposed professional--- those on here are critique showcases are parents not showcase people.

Yeah it is interesting to read what he posts but when one gets to thrashing his competition I take exception.

Again as I say it is just my thoughts.

TRhit
I feel that there is a big difference between discussing a contract that is public knowledge and giving an experienced opinion based on that information, and just bashing someone by namecalling and innuendo.

I find it fascinating as to how deals are stuctured, how they can be structured, etc. One may not like the messenger, but I would prefer the information as to not having it.

I also believe that VC being new to the board is going through some of the same things that other new people go through. Though his style is rough and tumble, he is doing nothing more than I do when challenged. I feel that his style has mellowed and that he is trying to give information here. I have learned much.

TR, you have made it clear that you wonder about his motives and I respect that. I just do not happen to see it the same way that you do. My son is going through the process now and I like to read the information. My son probably won't be drafted, but I like the information.

It just appears to me that people are really opposed to the style rather than the accuracy of the information. Based on VC's knowledge of the deal and the fact that he is an agent would leave me to believe that he is qualified to point out what a bad deal is in his opinion. I also happen to believe that he made some good points about the deal. Fascinating stuff.

Though you may find it uncool, which is your opinion and I respect that, I would rather have the information than not.

Thanks

JMO

"I love the HSBBW"
quote:
Originally posted by voodoochile:

#1) In Halladay's tax bracket he will pay the highest tax rate(approx. 40%) on all income both in Canada & the US. Taking only $2 million in a Signing Bonus(in a back loaded $42 million deal he should have gotten $5mill.-$6 mill. if he took a deferred bonus)would have saved him at least in excess of $500,000 a lot of money even when you sign for $42 million.

How would that save him anything? In Canada Signing Bonuses are taxed @ only 15% & in the US there is no Social Security witholding on a Signing Bonus.

#2) Signing Bonuses are paid in a lump sum salaries are paid in incremental payments. If Halladay took a Signing Bonus & invested it in almost anything, in addition to saving the tax money he would have earned money on his money.

For this he also had to pay Landry's commission. A bad deal anyway you slice it.


Voodoo,

1) You cannot make that statement with any validity without knowing what would be taken away in the "out years" in return for the upfront bonus. You can only speculate.

2) I dont see how you could make that statement without knowing what Mr. Hallady's personal reinvestment rate assumption is.

3) I dont consider dodging US income taxes as the right thing to do.

4) Social Security taxes are not even a rounding error for Mr. Halladay.

These are just some observations on the financial aspect of the deal.
I am sure there are other aspects that havent been cited here.
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[QUOTE]Originally posted by TRhit:
First you said "It makes me wonder why you criticize what another agent and player have done. You certainly do not know all the details of that specific deal.Why do you need to cut down another mans situation in public?"

Well, I proved that you were wrong again regarding what I do or do not know.

Then you said "Me amd me only speaking here but I find it a bit uncool for a self proclaimed "agent" who does not tell who what or where is he is to sit and bash another individual ...Again as I say it is just my thoughts."

Just your thoughts? You can't dispute my facts or opinions so you have to attack me personally. It is obvious to anyone who has read the previous posts that anything I say pisses you off because I won't identify myself. Sorry you can't get past that but I really think you need to grow up.

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[QUOTE]Originally posted by itsinthegame:
Voodoo,

"1) You cannot make that statement with any validity without knowing what would be taken away in the "out years" in return for the upfront bonus. You can only speculate."

Taken away in the "out years"? First of all he signed for at least $2 million/year less than he could have gotten either through arbitration or Free Agency so to think he would have had to make even more concessions to get even a modest Signing Bonus is wrong.

"2) I dont see how you could make that statement without knowing what Mr. Hallady's personal reinvestment rate assumption is."

I'm assuming it's greater than zero therefore it's indiputable that he would have made something on the investment of his money had he gotten anything in a Signing Bonus to invest.

"3) I dont consider dodging US income taxes as the right thing to do."

Are you serious? It's not only the reason for the entire accounting industry but it's practically a national obsession to pay as little tax as possible.

"4) Social Security taxes are not even a rounding error for Mr. Halladay."

Soc. Sec. is 3.3% so if he would have gotten only half the Bonus he should have gotten i.e. $2 million he would save a mere $66,000. Might not be much money to you, but I'd rather see it in my clients' pocket if possible.

If you look at similar deals it's obvious that he should have gotten $4-5 million to sign. So when you add the savings on the Soc. Sec to what he could have gotten if he would have only put the Bonus into a Savings Account he obviously cost himself some significant money AND had to pay Landry for costing him the money on top of it. Like I said, a bad deal any way you slice it.
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Voodoo,

No offense intended - I think it is just pure speculation on your part.

If he wanted to structure the deal differently - it is very possible that the alternatives offered by the club may have been detrimental to him financially.

On the other hand - based on the numbers - it would appear that Mr. Hallyday wont be eating at the hot dog stand anymore. LOL
It will be interesting to watch the deals that are made between now and spring training. Will the players get the same type of deals as they have in the past few years? If Halladay's deal is as Voodoochile says "a bad deal", will the remainder of the new deals be for less?

With over 200 free agents out there, the quality agent will sure earn his commission this year. It will be a battle to get some good players anything more than an invite to spring training, let alone top dollars.
[QUOTE]Originally posted by itsinthegame:
Voodoo,

"No offense intended - I think it is just pure speculation on your part."

Basing my opinion on the other deals done this offseason for similar quality players. Technically yes it's speculation with research.

"If he wanted to structure the deal differently - it is very possible that the alternatives offered by the club may have been detrimental to him financially."

Halladay is the undisputed Ace of the Toronto staff as well as Arbitration eligible & a year from Free Agency. He was in a commanding position in this negotiation & should have been able to get pretty much whatever he wanted so I can't see him beingforced to accept bad terms...unless his representation wasn't as effective as it should have been.

"On the other hand - based on the numbers - it would appear that Mr. Hallyday wont be eating at the hot dog stand anymore. LOL"

Roy should be able to eat wherever he wants for the rest of his life & his children & grandchildren as well.
[QUOTE]Originally posted by bbscout:
"With over 200 free agents out there, the quality agent will sure earn his commission this year. It will be a battle to get some good players anything more than an invite to spring training, let alone top dollars."

I think you're comparing apples to oranges here. Halladay is in the prime of his career & was offered Arbitration so he could have gone to a hearing. Can't compare him to someone like Maddux who despite having a great past is viewed as having a questionable present & limited future. The lesser FA's like John Burkett, Dave Veres etc. are more likely to be at the mercy of the teams at this point.
[QUOTE]Originally posted by pops:

You ask "How about Moorad, IMG (close-VanWaganen), Tellum or Sloane? Are they any good?" So you're asking for opinions right?

Then in another post you bash me for giving opinions by saying "I don't feel that any agent who is good needs to bad mouth another agent. He just needs to show what he can do for the prospective client. I have listened to a few bad mouth others and it makes me think that they are insecure in their own ability."

Is everyone who offers an opinion on this site " insecure in their own ability."? Or is it only me?

Re:the names you asked about:

Moorad brought TV cameras into the negotiation of Manny Ramirez's contract to get himself free publicity. Is that the kind of Agent you'd want for your kid?

IMG(close-VanWaganen) & Tellum/SFX represent a zillion players so it's not even a "small fish in a big pond" situation it's more like an amoeba in the ocean.

Sloane only takes a few clients so there are limitations there as well.

Just my opinion for what it's worth... usually 5%(LOL).
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Chill,

It is an interesting point.
Again - I say this with no disrespect intended - but the phenomenon of agent's squeezing every last penny out of the professional clubs (in the name of "taking care of the client) seems to be changing a bit.

Perhaps the difference between 75 million and an "unhappy" marriage versus 72 million and a happy marriage is worth something after all.
Especially for a young talented player with his whole career ahead of him.

This very new trend must be quite disturbing to agents. Your point is IMO - a very very good one.
quote:
Originally posted by voodoochile:
[QUOTE]Originally posted by bbscout:
"With over 200 free agents out there, the quality agent will sure earn his commission this year. It will be a battle to get some good players anything more than an invite to spring training, let alone top dollars."

I think you're comparing apples to oranges here. Halladay is in the prime of his career & was offered Arbitration so he could have gone to a hearing. Can't compare him to someone like Maddux who despite having a great past is viewed as having a questionable present & limited future. The lesser FA's like John Burkett, Dave Veres etc. are more likely to be at the mercy of the teams at this point.


Don't get me wrong, I am really just trying to compare Halladay to what he may have recieved in the same position about two years ago. The $42 mill he recieved now may have been $65 mill a couple of years ago. He, after all is a much better pitcher than Park or Driefort. Smile

My thinking is that baseball right now is like the real estate market. It goes up over the long haul, but at the present time there are too many houses for sale and not enough buyers. Next year it could change again and reverse (probably when Park and Driefort become free agents again) Smile That was my meaning when I said that the quality agent will sure earn his commission this year.
[QUOTE]Originally posted by TRhit:
VC

"I guess the % is rising--early on it was 4% now you get 5%--is this an increase due to the new year"

I answered the follwing question: " posted January 09, 2004 12:05 PM "Would you agree that 4% of the entire bonus is standard?"

My reply was: "If you were to survey the field that would probably be the most common number. Is it standard? No,many charge more some charge less." Where in there did I say I charge 4%?

"BIG HIT

I agree on gathering information but I always like to know the source and how solid the source is."

TRhit You're just an unredeemable "hater" & you'll never give me credit for anything I say because I won't tell you who I am. Like a spoiled little child who just keeps calling another child names until you get your way.
[QUOTE]Originally posted by itsinthegame:
Chill,

"It is an interesting point.
Again - I say this with no disrespect intended - but the phenomenon of agent's squeezing every last penny out of the professional clubs (in the name of "taking care of the client) seems to be changing a bit."

I wasn't trying to advocate "squeezing every last penny out of the professional clubs". All I was trying to point out was that an Agent who had more experience/ability would have done a better job of structuring the deal and netted more money for his client without increasing the amount paid by the team by a single penny.

"Perhaps the difference between 75 million and an "unhappy" marriage versus 72 million and a happy marriage is worth something after all."

Not to nit pick but the number was $42 million. However, I agree about keeping the "happy marriage" part of a players career. I have ALWAYS emphasized that since day 1 of my career. The reality is no matter how great the player, the name is only stitched on the back of jersey & the team can stich a different name there whenever they want.
[QUOTE]Originally posted by bbscout:

"Don't get me wrong, I am really just trying to compare Halladay to what he may have recieved in the same position about two years ago. The $42 mill he recieved now may have been $65 mill a couple of years ago. He, after all is a much better pitcher than Park or Driefort. Smile"

Agreed 100%. Still wondering what's in the pictures Boras has of Tom Hicks to get the money he did for Chan Hopeless.

"My thinking is that baseball right now is like the real estate market. It goes up over the long haul, but at the present time there are too many houses for sale and not enough buyers."

Like the Real Estate market, the demand is always high for premium properties. A "correction" has been going on for many years in Baseball & you don't see as many mediocre Jose Offerman type players getting 5 year guaranteed deals. But as was the case from the beginning of the game, the great players, ARod, Clemens, Delgado, Martinez, Jeter, Prior etc. will ALWAYS get big money.
VC

the 4% was bandied about in the discussions--now the number used is 5%

I never said you used it because in essences we know nothing about you

My second paragraph was to BIGHIT not you

Take umbrage all you want but off of what I see here it will be some other agent I recommend if asked. You may be helping others but you have not shown me a thing

I am not a hater but more of "show me " guy--you have shown me nothing yet except for a lot of cut and paste , "quotes" and then your opinion which follows. How can I give one credit if I do not know who he is--you have shown ME nothing original or outstanding

JMO

TRhit
[QUOTE]Originally posted by TRhit:
VC

"the 4% was bandied about in the discussions--now the number used is 5%"

I cited the exact quote in my post but apparently that isn't good enough for you.

"I never said you used it because in essences we know nothing about you"

Telling you about me isn't why I came here. I came here to exchange opinions & information.

"My second paragraph was to BIGHIT not you"

Ooohh sorry I didn't realize you were speaking in secret.

"Take umbrage all you want but off of what I see here it will be some other agent I recommend if asked."

I've done pretty well so far without your coveted recommendation. Don't want or need your help.

"You may be helping others but you have not shown me a thing"

As I said above, don't care, not here to "show" you anything.

"you have shown me nothing yet except for a lot of cut and paste , "quotes""

Yeah, I've tried to establish my opinions by furnishing quotes from objective sources rather than saying it's true because I say so. Sorry if the thinking makes your head hurt. I'll try not to confuse you with the facts or use too many big words.

And my Daddy can beat up your Daddy. Nyah, nyah, nyah.
Voodoo and bbscout,

The real estate analogy is an interesting one.

There are some significant differences however IMO. With "true" premium properties - the supply is actually quite limited. (i.e. You wont see many new premium properties built in mid-town Manhattan in the next 50 years).

In baseball - there is always a new supply - every year as you both well know.

There will always be a demand for premium players - and rightfully they will get the most money. The real question IMO - is what the inflation adjusted levels of salaries will be - lets say over the next 10 years - as compared to the prior ten. That will be very interesting to watch.

Note: The real estate market for premium properties has still not recovered to similar price levels from the late 1980's bubble. My guess is that baseball will see a similar - albeit less dramatic and severe - adjustment.

Just my opinion. Interesting analogy IMO.
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VC,
I'm enjoying your info, but have to interject that I find your posting style VERY difficult to read. Is it possible for you to just post a sentence or two rather than the whole passage to which your're responding. I never know where your response begins or ends and have a total headache by the time I'm done w/ the thread 14

And, I feel the need to stand up for TRhit. He's a longstanding member of this site and is very helpful and respected. He's asked you to identify yourself, and you've declined. Certainly within your rights, however as you're telling him to "grow up"....you might want to turn that finger around to point at yourself.

_______________________
"People ask me what I do in winter when there's no baseball. I'll tell you what I do. I stare out the window and wait for spring." Rogers Hornsby, Hall of Famer
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Paul, I don't know much about east coast real estate, but the prices in California are sky high. The premium properties on the beach in Santa Monica and Malibu range from about 3 mill to 20 mill and are going for about 4-5 times what they sold for in the 80's. Our home has gone from about 100 K in 1988 to over 500 K today.

As for players, there is always a demand for premium players, but the question is "how much money"? Will it be $20 mill for the top guys, or might it be around 10-12 mill. Vlad was the top guy available this year and he did not get Manny or A-Rod money.
Doug,

The Malibu stuff equates to about a 6.5% increase per year over the last 25 years - not exactly earth shattering - but I wish I owned some LOL.

The properties (and market) I spoke of in the analogy were interesting to me because of the parallels you can see developing in MLB IMO.

Not residential premium properties - there are a ton of those all over the US.
I was referring to premium buildings (buildings that sold for huge sums of money - $1 billion plus) in the late 1980's. (The Japanese bought alot of this stuff - and got hammered.)

Cutting to the chase - I think you will see - on an inflation adjusted basis - a very significant decline in MLB salaries in the coming years - relative to where they were just 5 or so years ago. I see this as just about inevitable at this point.

Sorry for the boring business angle - but I find it very interesting - and I think many agents are well aware of this as well. Either way - it is fun to watch the market evolve IMO.

Example: A guy that got $20M (lump sum for this example) 5 years ago - would need to get approx. $25M - just to stay even with inflation (call it 4% per year). I just dont see that happening - and that is for the "premium" guys. The rest of the "non-premium" players have no chance at keeping up with 1990's prior levels IMO.

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[QUOTE]Originally posted by bbscout:
"Vlad was the top guy available this year and he did not get Manny or A-Rod money."

He shouldn't have gotten Manny or ARod $$$ because:

1) His back is uninsureable.

2) Isn't the presence in the community that ARod is i.e. can't use Vlad in TV ads to sell tickets, send him to banquets etc.

3)Hasn't had the career they've had. Check the numbers.

In a couple of years Arte Moreno(Angels new owner) will either look like a genius for signing Guerrero & Colon or he'll have the new version of Mo Vaughan & Wilson Alvarez to the tune of $25 million/year.
[QUOTE]Originally posted by itsinthegame:
"Cutting to the chase - I think you will see - on an inflation adjusted basis - a very significant decline in MLB salaries in the coming years - relative to where they were just 5 or so years ago. I see this as just about inevitable at this point."

Salaries are a function of revenue. If the teams make less money, the players will be paid less if they make more, the players will be paid more. The dramatic escalation in '00 was fueled primarily by the increase in the National TV rights deal MLB signed. If those numbers continue to rise so will salaries.
Whether it meets or beats inflation, who knows.


There are some pretty good players who'll be Free Agents next year Carlos Delgado, Eric Chavez, Carlos Beltran etc.. Let's see what they end up getting.

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Voodoo,

I'm talking about average salaries - not specific individuals.

Interesting info: last 5 years

2003 - 15 teams reduced average salary. Most in last 6 years.

Salary increases for all MLB since 1998

1999 - 15%
2000 - 17.4%
2001 - 13.4%
2002 - 7.4%
2003 - 3.3%

The money just isnt there - and the competition from non-US players is heating up.

Will be interesting to watch.
Voodoochile, Actually, Ramirez and Guerrero have had very similar numbers.

Through age 27 Guerrero has a .323 BA, 234 HR's, 226 2B's, 702 RBI, 123 SB's,.390 OBP, and a .588 Slug. Pct.

Ramierez at the same age had a .307 BA, 198 HR's, 213 2B's, 682 RBI, 27 SB's, .390 OBP, and a .577 Slug pct.

Similar in offensive talent, with the edge to Guerrero in speed and arm. The edge goes to Ramirez by about $90 Million in cash. Smile
[QUOTE]Originally posted by itsinthegame:
"I'm talking about average salaries - not specific individuals."

Don't know where you're getting your info but according to the numbers used by both MLB & MLBPA Average salary for the last 5 years has been:
03 - $2,372,189
02 - $2,295,649
01 - $2,138,896
00 - $1,895,630
99 - $1,611,166

"The money just isnt there"

Sure it is. What isn't there is the competition between teams for each others players. I'm sure that's a total coincidence though.

"and the competition from non-US players is heating up."

Don't understand your point. No matter where a player comes from, his salary counts toward MLB averages.

"Will be interesting to watch."

Agreed. At the very least interesting... & hopefully lucrative.
[QUOTE]Originally posted by bbscout:
"Voodoochile, Actually, Ramirez and Guerrero have had very similar numbers."

Their career numbers are similar. However in their "platform" years Ramirez led in HR's 38/25, RBI's 122/79, BA .351/.330, OBP .457/.426, SLG .697/.586 but most important of all days on the DL 0/46 with a disc problem in his back making him uninsureable.
Voodoo,

Those are almost exactly the numbers I have from the MLBPA - and the %'s decreases I cited are correct. I'm confused by your post.

Year to year increases have declined from an approx. 15% annual rate (1998-1999) to about 3% this last year. They have declined for 4 years in a row now.

That is no coincidence IMO.

As for the foreign player impact - With the influx of quality foreign players - in addition to the steady supply of homegrown quality players - there is simply more to choose from. That is most likely why the "demand" competition has lessened.

Either way - it sure is lucrative for all who make it to that level.

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