Are MLB teams trying to make contracts more like the NFL's?
This was the sort of meeting where you had to check your cell phone at the door. The Major League Baseball Players Association does some of its finest work in secrecy, and what was discussed inside the Gershwin Ballroom at the Westin a block from Times Square on Sept. 11, 2012, was no different. About 30 baseball agents gathered for what was supposed to be a conference about salary arbitration. It ended up as a summit on their future.
At the front of the room was Michael Weiner, the head of the MLBPA. His lieutenants at the union flanked him. Over the course of the next five hours, they would talk about everything regarding the arbitration process, a laborious topic. Only when they hit the seven bullet points about arbitration on the agenda did the union leadership pivot to something else.
They handed out copies of a six-page document. At the top was a bolded, italicized, underlined header: "Cubs Standard Guaranteed Language." All of the agents knew what this was. It's the contract beyond the contract, the minutiae with which only the most rigorous agents concern themselves.
Guarantee language is supposed to be a boon to players beyond the Uniform Player's Contract, which does not become a guaranteed deal until the opening day of the season. It is what makes a baseball contract a baseball contract, which is to say what makes it the most ironclad thing in sports. The union exists to look after the welfare of the players, and as the most popular sport in America, professional football, continues to exist with contracts that are essentially nothing more than one-year-at-a-time deals, the MLBPA considers its long-term guarantees sacrosanct.
That's why they handed out this document. It wasn't just the Cubs. It was the Washington Nationals and the New York Yankees, too, and it almost certainly would be more teams soon enough. The union believed they were weaponizing guarantee language to use against the players. Maybe this was excessive worry, but even with nearly two decades of labor peace, the union refuses to trust in whatever the best intentions of teams may be. Just as players would look to exploit loopholes to their advantages, teams would do the same.
And in this case, the union believed this sort of guarantee language was leading to an unthinkable place, one where teams are going to try to turn a baseball contract into a football contract.
The guarantee-language document distributed that day, obtained by Yahoo Sports, is a fascinating look inside the baseball boardroom, where every day teams and agents parley over millions of dollars when determining a player's value. While the player must weigh a number of factors in deciding to sign a contract, the majority of risk falls on the team. Baseball deals are heavily weighted in the player's favor, and the union worried guarantee language was looking to steal back some of that – and set up a situation in which perhaps something like performance-enhancing drug use or misrepresentation of age could be grounds to blow up a deal entirely. If the Yankees ever chose to use their guarantee language and go after Alex Rodriguez – they haven't yet, though sources said it certainly has been discussed within the organization – it would set up one of the most important cases in the game's history.
What the union stressed most that day was Section C of the guarantee language: "CONVERSION TO A NON-GUARANTEED CONTRACT." The conversion clause originated in the 1980s during baseball's cocaine heyday as a potential out for teams with players waylaid by blow. By converting a deal from guaranteed to non-guaranteed, a team could ostensibly cut a player without owing him any money for future years. It is how the NFL has slinked away from hundreds of millions in contracts.
San Diego tried unsuccessfully to void LaMarr Hoyt's deal when he got caught smuggling Valium across the Mexican border. Only three other conversion cases are known: the Rockies with Denny Neagle after he allegedly solicited a prostitute, the Orioles with Sidney Ponson following a second DUI, and the Mets with Francisco Rodriguez when he tore a ligament trying to punch his girlfriend's father. All three were settled for close to 90 cents on the dollar owed, sources said, before an arbitrator could rule on any grievance.
The expansion of the conversion clause – perpetuated the greatest amount in recent years by the Cubs and Nationals – shows the disparate motives for the sides. The union sees it as an affront to players and something that can be superfluous considering that much of it is covered by the league's collective-bargaining agreement and Joint Drug Agreement. Teams see it as insurance against fraud and distinct from issues covered by the CBA and JDA, and if that means going after PED users even though such discipline is the exclusive bailiwick of those agreements, perhaps the league would consider that a fight worth fighting.
While neither the union nor the Cubs would comment on guarantee language, major league sources outlined the positions both teams and agents have taken with guarantee language, showing its importance despite being such a little-known piece of the industry.
Take, for example, section C(2) of the Cubs' guarantee language. It says the Cubs may convert a player's contract "If Player is injured in any Prohibited Activity."
The prohibited activities are as follows:
"(A)uto racing, motorcycling, piloting, co-piloting, learning to operate, or serving as a crew member of, an aircraft, being a passenger in a single engine airplane or private plane, hot air ballooning, parachuting, skydiving, hang gliding, bungee jumping, horseback riding, horse racing, harness racing, fencing, boxing, wrestling, karate, judo, jujitsu, any other form of martial arts activity, use of an All Terrain Vehicle (‘ATV'), skiing (water or snow), snowmobiling, bobsledding, luging, ice hockey, ice boating, field hockey, squash, spelunking, basketball, football, softball, white water canoeing or rafting, kayaking, jai-alai, lacrosse, soccer, tennis, rodeo, bicycle racing, motor boat racing, polo, rugby, rodeo, handball, volleyball, in-line or other roller skating, surfing, hunting, paddleball, racquetball, archery, wood chopping, mountain climbing, boating, any weightlifting not prescribed by or approved in advance by Club (said approval not to be unreasonably withheld), participation in the ‘Superteams' or ‘Superstars' activities (or any like activity) or other made-for-television or made-for-motion picture athletic competitions, or any other sport, activity, or negligent act involving a reasonably foreseeable substantial risk of personal injury or death."
Twerking, apparently, is the only thing a baseball player is allowed to do.
The way the language was written, if a player skinned his knee spelunking or stubbed a toe in a hunting blind, the Cubs conceivably could have converted his contract. Agents asked the Cubs to reword that language, a request to which sources said they acceded, because despite their conversion clause being significantly longer than most, one agent said, "when it comes down to it they're reasonable people."
The union's concern isn't so much that the Cubs alone would be unreasonable as any team with such guarantee language might try to use it with ill intentions. Moving down to C(4), it talks about converting the deal "If Player engages in or is subject to any item listed in Section A(1)-A(10) or B(1)-B(14)."
Those sections cover everything from attempted suicide to contraction of HIV to criminal acts to PED use. Though Biogenesis was not yet a buzzword in baseball during the meeting last year, agents who heard the union's message that day understood it clearly: The MLBPA believed teams were broadening the conversion clause to potentially punish PED users beyond the discipline the JDA metes out.
Were a team to pursue such a case on account of simple PED use, it likely would not hold up, particularly since Section A of the Cubs' guarantee talks about the need for "long term physical or mental incapacity" as a necessity for contract termination. Still, the first paragraph of the Cubs' conversion language includes clause (b), which reads:
"[Player's] first-class physical condition is not caused by, enhanced by or related to Player having used, abused or misused and he will not use unless such use is part of a medical, treatment or rehabilitation program properly prescribed by a physician with Club's consent, any Prohibited Substance as defined in the Program, and will not misuse or abuse any drug or alcohol in any manner."
That section is in the same paragraph as clause (f), which includes two blank lines in which the Cubs ask for a player's "full legal name" and "date of birth." Between those two clauses, it represents the Cubs putting their foot down against fraud. And that brings forth a salient question: Should a team have to pay millions, or, in the case of Ryan Braun, more than $100 million, if a player used PEDs or lied about his age? While the answer to the latter is unclear, the former seems to be handled by the JDA's rule 7.M.:
"All authority to discipline Players for violations of the Program shall repose with the Commissioner's Office. No Club may take any disciplinary or adverse action against a Player (including, but not limited to, a fine, suspension, or any adverse action pursuant to a Uniform Player's Contract) because of a Player's violation of the Program."
Perhaps the best way to view guarantee language is through a legislative lens. As much as teams want to look authoritative with it, a club's guarantee language is like state law while the league's CBA and JDA are federal law. And a football-type contract right now is illegal in baseball. Even if an arbitrator were to embolden teams that try to wiggle out of long-term deals, doing so because a player stinks, which is perfectly acceptable in the NFL, never, ever will happen in baseball.
Still, guarantee language is of enough concern that teams unleash some of their brightest front-office and legal minds on it, trying to insure themselves in case of any kind of malfeasance. One longtime baseball man said you can track the history of player misdeed by looking at different versions of the Yankees' guarantee language.
Both sides tend to agree on one thing: making standard guarantee language truly standard would go a long way toward getting rid of the mistrust that permeates both sides. The subject was broached during the last CBA negotiations but was so far down the priority list it didn't register. That may change leading up to 2016, when the league will have a new JDA – sources expect PED penalties to be made more harsh before next season – and the incentive to go after PED users will be even greater.
For now, guarantee language is a bargaining chip. The union advises agents to negotiate guarantee language before it even discusses dollars, and teams across the league are weighing copycat language to protect themselves against less strict regulations that may serve as an advantage for a player who seeks that.
Ultimately, that's what the union intimated to agents that day: The Cubs and Nationals and Yankees and other teams will continue to use this sort of guarantee language until a player decides to sign elsewhere because of it. That has yet to happen.
Since the arbitration meeting in which the union called out the Cubs' guarantee language, they signed Anthony Rizzo, Edwin Jackson, Carlos Villanueva and Kyuji Fujikawa to multiyear deals. Rizzo's contract, in particular, was the exact sort the guarantee language is supposed to embolden: seven years for $41 million, plus two club options that can kick it to $66 million.
Each signed the deal fully aware of the Cubs' reputation and hopeful their word – that the language had no malicious intention and that the union's fears were rooted more in paranoia than reality – was enough. And each knew to stay far, far away from any wood chopping, lest they tempt an arbitrator to make them regret it.