Interesting article in the houston chronicle!
http://www.chron.com/cs/CDA/ssistory.mpl/editorial/outlook/2996464
Jan. 17, 2005, 7:15PM
Did Carlos Beltran's agent play fair with the Astros?
News reports suggest Boras may have overstated bidding
By MARC A. LEVIN
Astros fans are understandably distraught by the departure of talented free agent Carlos Beltran after the team and city did everything conceivable to make Beltran and his family feel at home. In addition to being saddened, we should also be disturbed by the ethically and legally questionable conduct of Beltran's agent, Scott Boras.
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There are now at least two reported incidents of Boras' allegedly deceiving the baseball teams with whom he has negotiated. Boras apparently told the Texas Rangers in 2000 that he had obtained an offer for star shortstop Alex Rodriguez for at least $200 million, but according to Atlanta Braves General Manager John Schuerholz, the highest offer at the time was the Braves' $150 million. The Rangers evidently bid against themselves, raising the final price tag to $252 million over 10 years, a contract that prevented the Rangers from fielding a competitive team around Rodriguez and ultimately led to his being dealt to the cash-rich Yankees.
In the last few weeks, Boras repeatedly told media outlets, and apparently the Astros, that he had five Beltran offers for at least $100 million. In fact, the Chronicle, ESPN and others have confirmed that only the Astros and Mets ever bid as much, and the Mets at the point of Boras' first utterance of this claim had apparently not even made their initial offer. These reports state that the Cubs topped out at $80 million and the other rumored teams — the Detroit Tigers, Seattle Mariners, New York Yankees and Baltimore Orioles — never entered the bidding.
If these reports are accurate, Boras arguably acted unethically in both instances. An attorney, Boras is subject to the ethical rules governing lawyers, even though his work involves negotiating deals, not appearing in court. The Texas Rules of Disciplinary Conduct, Rule 4.01 titled "Truthfulness to Others" states, in part, "In the course of representing a client, a lawyer shall not knowingly make a false statement of material fact to a third person."
If indeed Boras misrepresented his clients' offers to other teams and the media, it is hard to imagine he did so unknowingly, since as Rodriguez and Beltran's sole agent, he would necessarily know what offers they had and had not received. Although violating this rule could be grounds for disbarment in Texas, Boras is a member of the California Bar, where no such rule exists, meaning all the Texas Bar could do is deny him admission should he seek to practice here.
Beyond ethics, the legality of Boras' conduct can also be questioned. In Texas, the Deceptive Trade Practices Act (DTPA) prohibits making false or misleading statements in the course of selling a product or service, but because the Astros and Rangers have assets exceeding $25 million, they could not bring a claim. However, the Texas attorney general could initiate a DTPA claim on their behalf.
The Astros or Rangers could sue Boras for fraud. In Texas, to establish fraud, a party must prove: 1) that a material representation was made; 2) the representation was false; 3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; 4) the speaker made the representation with the intent that the other party should act upon it; 5) the party acted in reliance on the representation; and 6) the party thereby suffered injury.
If the Rangers sued, they could claim injury for overpaying for Rodriguez, while the Astros' damages would be more nuanced. It is conceivable that, absent Boras' bluster about other offers, the Astros would have given Beltran an ultimatum to sign by an earlier deadline, realizing they had the only major offer on the table for some time. This would have forced Beltran's hand and, if he declined, at least have enabled the Astros to sign other quality free agents who are now unavailable.
Baseball executives are particularly vulnerable to being misled about the extent of other offers because they could be charged with collusion if they attempt to contemporaneously contact their counterparts to verify them. Remarkably, Boras' credibility is so low that some teams refuse to negotiate with him. Thus, Boras' best defense to a fraud claim might be that baseball executives know they cannot rely on the veracity of his statements.
To be sure, the blame goes well beyond Boras for the integrity deficit in both baseball and the corporate world. From steroids to revenue sharing, the players' union and owners have so far failed to ensure that the game is played on a level playing field. From Enron to WorldCom, millions of Americans have suffered financially as a result of deceptive statements.
While Boras is unlikely to face any ethical or legal repercussions, professional athletes should choose agents who negotiate in good faith and abide by basic rules of fair play. Like their clients, baseball agents are entitled to play hardball and swing for the fences, but they should refrain from making misleading pitches.
Levin, a former staff attorney for the Texas Supreme Court and law clerk for the U.S. Court of Appeals for the 5th Circuit, is a lifelong Astros fan and an attorney at Potts & Reilly, L.L.P. in Austin. He can be reached at Levin@pottsreilly.com.
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