We’re not deep into the hot stove league yet but I have to admit, it has me shaking my head.

To begin with, I would like to take this opportunity to laud the Atlanta Braves on their policy regarding no-trade clauses–’we don’t do that here.’

The thing is, some teams pass these out like candy since they don’t cost anything monetary. Yet sooner or later we see just how expensive these things actually are; what has to be borne in mind is that money isn’t the currency in MLB–it is talent. It doesn’t matter how much revenue your team generates, it won’t be successful if it doesn’t generate talented players. Eventually that lack of talent will erode revenues.

If a team simply grabbed 25 players off the waiver wire and signed them to a one year deal at the major league minimum it wouldn’t be long before even that becomes expensive since it’s hard to make money when nobody comes to the ballpark and no local TV station is interested in carrying the games of a perpetual 110-game loser.

It does happen–there were times when there was very little interest in certain markets (Seattle, Montreal) in televising the games.

Often, the difference between a successful franchise and one that struggles comes down to perception: teams that view talent (read: players) as investments prosper while clubs that feel players are an expense tend to fail.

To use examples at opposite ends of the scale we look at the New York Yankees and the Milwaukee Brewers under Bud Selig. While some of the Yankees’ spending has been ill-advised, their treating players as an investment that grows revenues has served the franchise well. The Bronx Bombers weren’t always a financial juggernaut–in fact, under CBS ownership they scuffled so badly that George Steinbrenner bought them for a mere $10 million.

On the other hand, Selig has always viewed player costs as an expense akin to office supplies such as pencils, paper clips and staples–something you scrimp on whenever possible. The Brewers lasted six years into the free agent era before disappearing from the October landscape until taken over by Mark Attanasio who then invested in the roster and is now reaping the rewards of that approach.

It’s in this context that we see the true cost of the no-trade clause; right now we’re seeing how expensive they truly are in the case of former NL Cy Young winner Jake Peavy. We see that the money the Padres saved by giving him the NTC is about to cost them a bundle in talent. Ideally, trading a Cy Young calibre starter in a pitching hungry market (Scott Boras is seeking a Barry Zito type contract for Derek Lowe) should yield a bounty in young inexpensive talent.

However, the Padres are starting to come to the realization that their return on dealing Peavy will most likely be severely discounted because they wished to save a few bucks and gave the hurler the NTC is lieu of cash.

It’s another manifestation of being “penny wise and pound foolish.”

What the NTC does (as does 10/5 rights) is put the player in charge of trade negotiations. Obviously, the player will want two things to approve a trade–an improved contractual situation and his new club not being significantly weakened by the talent given up to acquire him.

When Ken Griffey Jr. used his 10/5 rights to engineer his trade from Seattle he later stated that he would’ve vetoed any deal to the Reds if he felt Cincinnati had to give up too much in the deal. In the case of the Padres, Peavy’s modest contract (relatively speaking) should increase his trade value yet San Diego feels that they still must divest themselves of the financial obligation which translates into the team not picking up a chunk of the deal in a trade.

In the modern era of big money deals, just taking on the entire financial obligation is considered the main return to the team moving the contract. Since Peavy will want to improve his financial standing a club will not feel obligated to surrender a bunch of premium young talent to acquire him in addition to assuming a financial burden.

The only way to maximize the return on dealing Peavy is to get a bidding war going between clubs for his services–however, the moment you give a player a NTC you are, in effect, forfeiting any chance of getting such a beast going since the player gets to call the final shot on whether he’ll accept the trade.

In the long run, most teams would be much better off if they eschewed the NTC and tried to avoid allowing players to reach 10/5 rights. They are a luxury item and should be treated as such; low and mid market/revenue clubs cannot afford them because their cost in talent is simply too high. To remain competitive, such teams by necessity have to keep turning over their rosters and stockpiling inexpensive young talent.

Once a team gives a player the NTC the value of that player to the club plummets unless they plan to hold on to him throughout the duration of the contract. They have to sit down and realize that they really aren’t farther ahead since all they’re doing is making it more difficult to turn over the roster and acquire precious inexpensive talent requiring more expensive methods of talent acquisition (trades/free agency).

As such, a NTC should be considered a luxury item and avoided at all costs by any team that needs to develop young talent to remain competitive. The money the Padres saved by given Peavy the NTC wasn’t saved at all but rather simply converted to young talent–the players they could’ve acquired had they not neutered their leverage in trade negotiations by giving it to Peavy. Those forgone prospects/young talent was the cost of the money saved by giving Peavy the NTC rather than extra dollars.

Speaking of understanding costs…

As we discussed a bit over a week ago, Boras’ latest statements regarding Derek Lowe about seeking “a Zito type contract” highlight that he while he peddles a lot of talent, his real genius is in selling sunk costs to teams.

The fact that the Zito contract is currently considered the zenith of fiscal folly and is largely a sunk cost at this point illustrates that point. Lowe is 36 and anybody that gives him a similar deal deserves all the scorn that will be heaped upon him. Hopefully teams will realize that a “good working relationship” with the agent will mean the odd stud on the roster but also a lot of overpriced dreck and sunk costs as well.

Insofar as on field success goes, it’s largely a wash. In recent memory, the Los Angeles Dodgers and Texas Rangers were teams that developed such a relationship with Boras and ended up with a lot of Chan Ho Park and Darren Dreifort anchors on the payroll. Right now, the Yankees have been doing a lot of business with the agent and have found the brass ring elusive.

Yeah, I’m not a big fan of the guy even though I generally prefer to see the men on the field get their dough; as I stated in the linked post, I realize it’s caveat emptor and all that but I view Boras as dishonest. In a sense it’s kind of like the whole potential Barry Bonds’ collusion business; just because I don’t like Bonds doesn’t mean I have to support a collusive effort to keep him out of the game–in a similar manner, just because I’m not a big fan of owners doesn’t mean I like to see them get cheated.

I think Boras’s time in the sport is getting short; as we discussed last night on The Locker Room with Kevin Williams (Tripp Rogers filling in) I feel pretty comfortable in stating that Napoleon Bonaparte had a more brilliant mind than Scott Boras and if Bonaparte could push things too far…

Let’s face it, baseball owners have a long history of just plain dumb behaviour and that made Boras look just that much smarter–in the land of the blind the one-eyed man is king. Now baseball management is starting to wizen up and soon players will realize that employing Boras narrows down their options considerably and amateur players will come to understand that they can pretty much the same money with another firm and avoid the headaches and notoriety of being associated with Boras.

It hasn’t happened yet but eventually even the most powerful fall victim to their own hubris and Boras will not be immune–I for one will be relieved when that day arrives.

Best Regards

John