By: Dan Matheson
The 2017 Major League Baseball draft will take place in three weeks. Last year, the NCAA revised bylaw 12.3.1.1 to permit non-college players selected in the MLB draft to use sports agents in contract negotiations without giving up their college eligibility. While revised bylaw 12.3.1.1 is an advancement in NCAA amateurism legislation, it comes up short by not extending the same rights to NCAA student-athletes that it gives to high school players. In the interest of student-athlete well-being, the NCAA should allow all players drafted by MLB teams to use agents when negotiating with experienced baseball executives over contracts that could have life-altering implications.
MLB teams selected 1,206 players during last year’s draft, and 695 of them were at NCAA schools. Some of those student-athletes had exhausted their college eligibility and were not under the NCAA’s jurisdiction, but many still had eligibility remaining. Baseball’s unique draft rules allow MLB teams to select NCAA student-athletes after their junior season, and those players may return to school for their senior season if they do not end up signing a contract with the team that drafted them and do not use an agent. This provides college juniors with negotiating leverage because an MLB team loses the right to sign a player it drafted if the player returns to school.
17 players taken in the first round of last year’s draft were college juniors. Per NCAA bylaw 12.3.2, those 17 college juniors could seek contract advice from lawyers and remain eligible to return for a senior season, but per bylaw 12.3.2.1, they could not have lawyers present during negotiations with MLB teams or allow lawyers to communicate with teams on their behalf. On the other hand, 17 high school seniors were selected in the first round of last year’s draft. Per bylaw 12.3.1.1, those high school seniors could allow agents to represent them in negotiations without jeopardizing future college eligibility, as long as they paid the agent, did not end up signing a contract with the team that drafted them, and terminated the agency agreement before enrolling in college. Prior to 2016, high school seniors had to negotiate under the same NCAA restrictions as college juniors – without an agent – if they wanted to retain their college eligibility.
Part of the rationale for the new rule when presented for consideration by NCAA schools and conferences was, “Prospective student-athletes and their families, generally, have been advised that agents are not needed to negotiate an initial contract with a professional baseball team due to the salary slotting system. The reality is that very few prospective student-athletes or their families feel comfortable negotiating a professional contract with a professional team.” Of course, most high school players and their families will not be comfortable negotiating high-stakes contracts with experienced pro baseball executives, but neither will most college juniors and their families. The rationale applies to NCAA student-athletes, so the same rule should apply, and student-athletes and their families should have the full range of options available to them when deciding how to handle negotiations over significant amounts of money with baseball executives who have the upper hand.
Instead, the NCAA rules allow baseball student-athletes to consult with a lawyer, under the restrictions outlined above, and each NCAA school may form a professional sports counseling panel (PSCP), per bylaw 12.3.4, to advise student-athletes on pro careers, review contracts, participate in meetings between pro teams and student-athletes, and communicate with agents to determine market value. While that sounds good in theory, each school does not have a pro sports counseling panel, and if there is a panel, it may not include anyone with pro baseball expertise or contacts.
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North Carolina State University’s PSCP is composed of the university’s deputy general counsel, a finance professor, a former WNBA player, a former NFL player, and a former college basketball coach. The University of Southern California’s PSCP consists of faculty members from the colleges of law and accounting, athletics department officials, university counsel, and a consultant with experience in NFL front offices. Baseball student-athletes should not be limited to working with their coaches and a committee that may not be a good fit for a baseball contract negotiation if they and their families prefer the knowledge, relationships, and dedicated service that a baseball agent can provide when communicating with MLB teams.
Instead, the NCAA should allow baseball student-athletes to use agents to negotiate contracts with MLB teams, just like high school players can now do. PSCPs should be available to help baseball student-athletes and families interview and select suitable agents and monitor agent relationships to ensure that agents do not provide improper benefits that could jeopardize student-athlete eligibility. This would help improve student-athlete well-being because the truth is that most players have agents but conceal the extent of the agent’s representation if the player fails to sign a pro contract after the draft and returns to play a senior year. The NCAA rules should support providing student-athletes and families with the best possible representation by ethical agents at a pivotal time in their lives when they have one shot at a lucrative signing bonus, not force student-athletes into the shadows to deal with potentially unethical agents without the sort of vetting process that a PSCP could offer.
Having spent several years working in an MLB front office executing contracts with baseball draft picks, I can attest to the fact that many student-athletes have agents, and those agents have discussions with team representatives before, during, and after the draft. Many players, through their agents, have essentially already agreed to contract terms with teams before hearing their name called on draft day. MLB teams naturally seek to reduce draft-day surprises – teams want to have a good idea of how much it will take to sign a player before selecting him. Leading up to and during the draft, team representatives must communicate with the agents for dozens of players before seeing which ones will be available once they are on the clock to make a selection.
Drafted players sign minor league contracts, which include standardized salaries that do not require negotiation. The most significant negotiation for a drafted player is over signing bonus. Although MLB assigns signing bonus values to each draft position, which makes it seem as if little negotiation should be required, there is actually room for significant bonus negotiation. For instance, a team can negotiate a reduced bonus for their first-round pick in order to overpay other picks who might be more difficult to sign, as the Cincinnati Reds did in 2016. The Reds paid $1,562,900 below slot value for their first-round pick (a University of Tennessee junior), $1,362,800 over slot value for their lottery pick (a high school senior) at the end of the first round, and $502,500 over slot value for their second-round pick (a Clemson University junior). The Reds had their first four draft picks signed less than three days after the draft. Signings occur very quickly as teams attempt to get players into their development systems and started playing their first pro seasons within days of their selection. PSCPs are not prepared to be the nimble, knowledgeable, and highly focused negotiators needed by baseball players under such circumstances, and it is unfairly restrictive and unrealistic to require student-athletes to talk to MLB team representatives and consult separately with a lawyer who cannot have contact with the same representatives. It is understandable that a student-athlete and his family would want an experienced baseball agent working the phones on their behalf as representatives from multiple teams make signability and value decisions before deciding whom to draft.
Unfortunately, the hundreds of college juniors selected during next month’s MLB draft will not have access – if they follow the NCAA rules – to the same resources available to high school players as all draftees navigate their professional and educational futures. It is time for the NCAA, schools, and conferences to finally acknowledge that agents have a place in college baseball and focus school efforts on helping baseball student-athletes receive the benefits of experienced representation for the draft rather than on trying to catch and punish those who return to school for a senior season after using an agent.