December 2, 2007               

THE RISE OF THE SPORTS AGENT IN THE BUSINESS OF BASEBALL

      Before the 1966 baseball season, just months removed from the initial meeting between representatives of major league baseball players and soon to be players association chief Marvin Miller, two of the game’s biggest stars decided to join forces and withhold their services in search of better contracts.  Pitchers Sandy Koufax and Don Drysdale had been lynchpins for the success of the Los Angeles Dodgers and had established themselves as the most dominating one-two punch in baseball, but both pitchers had grown weary of having their contracts renewed at far lower levels than the better players in the game, and also at having the organization use the weight of one’s salary to keep the other one down.  Koufax and Drysdale hired a lawyer to negotiate a package deal for them—a lawyer that couldn’t in any way be called a sports agent because at that time owners just didn’t deal with sports agents.

       The players knew they weren’t likely to win free agency, but their stand made a point and they signed early in the season for much better money than they had been making.  It also showed the rest of the players in baseball that success could be had, however minimal, in the endlessly frustrating and losing battle with the owners. 

       “Young man, I’ve got some advice for you,” American League president Joe Cronin said to the then forty-nine year old Miller, “players come and go, but the owners stay on forever.” 

      That was about to change. 

      Five years later the players association won the right for players to have representation present during contract negotiations--and that provided the players with enough savvy business sense to recognize when they were being used, and what was a fair deal.   

      Imagine the open field for lawyers at the time—more than 400 major league baseball players, and each without representation.  The financial possibilities were enormous, and those early practitioners really had to do very little to make money.  Occasionally opportunities would arise to make a name a name for themselves by striking historical deals for their clients--gaining the publicity needed to garner more clients.

       In 1974, nine years after Koufax and Drysdale held out and five years after Curt Flood first became part of the baseball conscience the New York Yankees signed James Hunter, a pitcher who had been making a hundred grand the previous year with Oakland, to a five year contract worth $3.75 million.   Before each season Catfish and Athletics owner Charles Finley would sit down, argue, get angry, threaten and finally agree upon a reasonable contract for the upcoming year. But part way through 1974 Finley discovered that the contract, signed by Finley, had half of Catfish’s salary going into an insurance annuity—and this type of expense could not be used by Finley as a tax deduction.  A salary was tax deductible and Finley wanted the entire annual expense paid out as salary.  Hunter had wanted, and had negotiated, for his own tax shelter.  Finley refused to pay into the annuity and defaulted on the contract.  Hunter took action.  Finley tried to right the wrong, but it was too late—the players association was fighting for Catfish to be declared a free agent.  They filed a grievance on Hunter’s behalf against commissioner Bowie Kuhn and organized baseball.

       Arbitrator, Peter Seitz agreed with the player, ordered Finley to pay the entire annuity and granted Catfish his freedom.  The players association worked with Catfish the entire way and together they generated the largest contract ever awarded a major league baseball player.

       The chances of an owner defaulting on a contract again was remote, but Andy Messersmith and Dave McNally took the next step when they played the following season without contracts.  The very same arbitrator, Peter Seitz, awarded them free agency.  The players now had an avenue around the reserve clause and into freedom. 

       Like hungry wolves the agents descended upon the game.  The players association needed to keep tabs on all the would-be solicitors (at the time there wasn’t any certification program at the time and as such many fly by nighters entered the scene and nearly ruined the gains made by the players).  Jerry Kapstein was the first “super agent” and within two years of entering the arena had nearly 60 clients.  He was hired by Catfish Hunter during his initial foray into free agency, but was quickly fired when the player came to realize that his new agent had become friendly with owners and didn’t think Catfish would win his case. 

       So eager was Kapstein, and his less powerful brethren, to make money that he would negotiate players away from future free agency for more immediate money.  In 1976 Kapstein negotiated five years deals with the Boston Red Sox for his clients Rick Burleson, Fred Lynn and Carlton Fisk.  The catch in the contracts was that the players gave the club first right of refusal in future contracts meaning that Boston could effectively match any offer and keep the players for the remainder of their careers.  Players association head Marvin Miller was none too pleased with the deal and said to Fisk, “Look, you and Kapstein can stand on your heads for all I care. I’m representing all 600 players, and you, Burleson, and Lynn are not to have something in your contact that jeopardizes the other 597!” 

      Sports agents soon learned that when dealing with baseball players and basebal owners they needed to follow the guidance of the players association.   As the association’s power grew so to did the agents and Catfish’s contract was soon surpassed by Reggie Jackson, who was soon passed by Pete Rose.  In 1979 Nolan Ryan became the first million dollar ballplayer.  By 1990 Rickey Henderson was making $3 million per year, ironically with the Oakland Athletics—Finley was long gone  Seven years later Albert Belle was making $10 million per season with the Chicago White Sox and Kevin Brown’s unbelievable $105 m,illion contract with the Los Angeles Dodgers was the standard for only one year as in 2001 Alex Rodriguez signed for $252 million with the Texas Rangers. 

       Nowadays, it would be improbable for a player to negotiate a contract without an agent.  If a player decides to got it alone they are, ironically, applauded for being an independent thinker.  It’s a long way from Curt Flood banging his head against a wall, and, more specifically, the Supreme Court, simply because he didn’t want to play and live in Philadelphia. 

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