The truth about Scott Boras

The ethics of player agent Scott Boras have been a topic of debate before, but never more than during the Hot Stove season of 2008. As in earlier seasons, however, most of the discussion has focused on how “tough” Boras is on behalf of his clients, and how he ruthlessly squeezes every last cent of remuneration out of teams wishing to employ them. Being a tough negotiator, of course, is not unethical, and neither is seeking the best contract possible, even at the risk of eroding a player’s popularity and incurring the wrath of team executives. Still, Scott Boras is demonstrably unethical in his professional practices in one important respect, beyond any reasonable argument, but not in the ways most people think he is.

Much of the criticism of Boras as unethical is, in fact, misdirected. He is an agent, which means that he acts on behalf of his clients, after consultation with his clients, in their employ and at their pleasure. It was not Scott Boras who executed the escape provisions of J.D. Drew’s Dodger contract; it was J.D. Drew. Boras certainly told Drew that he thought the injury-prone outfielder could better his financial status by truncating his commitment, but it was up to Drew whether to do it or not.

Similarly, it was Alex Rodriquez, not Boras, who ultimately was responsible for exercising his option to become (for however short a time) a free agent to express his need for a contract greater than $25 million a year. The media like to portray Boras as the puppeteer figure in the original logo of “The Godfather,” but his puppets have complete power over the strings. They can also fire the puppeteer. They can refuse to do as he advises. If you don’t like the way Boras is negotiating for a player, blame the player. Legally, logically and ethically, the client, not the agent, is responsible.

There is nothing stopping a Boras client, say, Jason Varitek, from telling his agent, “I want to stay in Boston. Get the best deal you can, but get me a deal with the Red Sox. Posture, threaten, beg: I don’t care. I want the most years, at the most money, that team will pay me. That’s your assignment.” If Boras comes back to Varitek and says, “Sorry, Jason, they didn’t offer what I thought was a good enough deal, so you’re going to play in Pittsburgh!”, he’s guilty of professional malpractice. Varitek could fire him and should sue him: he’s violated his duties to his client. Boras literally cannot call the shots.

Negotiating to accomplish the client’s objectives, however, is Boras’ domain, and here he has a lot of latitude. Again, a client could order him not to use especially obnoxious or aggressive bargaining methods on his behalf, and perhaps some have done that—if they did, Boras would be bound to comply. But even without such orders, Boras must stay within certain ethical lines, fuzzy though they may be, or be regarded as an unethical negotiator. If he crossed those lines with any regularity, Boras would be jeopardizing his clients’ welfare and his own career, so we must presume that he does not habitually cross them. Tough negotiation is effective negotiation. But unethical negotiation is neither acceptable nor effective.

Whatever that is. Despite scores of seminars, treatises, court cases and books, negotiation remains securely in an ethical gray area, where even professionals who have spent their careers making careful distinctions cannot agree what is and what is not ethical negotiation technique. Many of Boras’ signature tactics, however, are well within bounds. When he argues that Varitek, a .220 hitter in 2008, is a “premium catcher” who is worth a multi-year contract in excess of $10 million a season, or when he compares pitcher Oliver Perez—he of the 55-60 lifetime record with a 4.20 ERA—to Sandy Koufax, Boras is engaging in the time-honored negotiation practice of “puffing.”

Although puffing often feels like lying, it isn’t; it is part of the negotiation ritual. Puffing is the exaggeration, hyperbole and bluffing endemic to the marketplace. In general, when a statement in negotiation involves a party’s future intentions, current desires, the negotiator’s opinion (even when stated as fact) or the negotiator’s characterization of the quality of the product being sold or what a “fair” price is, it is probably puffing. When a statement involves materially misrepresenting other facts material to the transaction, it is likely to be lying, and thus unethical negotiation.

Note the contrast:

Puffing: My client is in the best shape of his life. (He is healthy, but no healthier than ever.)
Lying: My client is healthy. (Actually, he has disclosed to me that he has been diagnosed with a rare muscle disease that will not be detected in a physical.)

Puffing: My client is a man of great character and a positive role model. (He has admitted to me that he has experimented with HGH.)
Lying: My client would never use performance-enhancing drugs. (But he has in the past.)

Puffing: If that’s your best offer, we’ll do better elsewhere. (When there is no other offer likely to be better, and if the team answers, “Well, that’s as high as we’re going,” my client will say, “Take it!”)
Lying: My client has higher offers than that. (But he doesn’t.)

Puffing: My client will not be happy with any fewer than four years. (Although my client specifically said that he would accept a three-year offer.)
Lying: My client says he will accept no fewer than four years. (When, in fact, he has said the exact opposite.)

The ethical distinctions are based, to a great extent, on an assumption that all parties are sophisticated and well acquainted with the coded language of the negotiation ritual. To a novice, the statement “This is my final offer!” might well seem like a statement of fact when it is actually a negotiating tactic. But truly deceiving sophisticated bargainers, like those Boras deals with, crosses the ethical lines into bad faith. Bad faith occurs when a negotiator deceives his or her adversary to achieve a deal that is unfair, based on misrepresentations.

We don’t know whether Boras engages in bad faith tactics. It is possible that the Boston Red Sox thought he was doing so when they (supposedly) pulled out of negotiations for the services of Mark Teixeira this winter, believing that Boras was citing imaginary offers by other teams to drive their offer up. But if all he said was that he knew he could get a higher offer, he was within the ethical boundaries. And, as it turned out, a higher offer was out there, as usual, in the Bronx.

The most recently cited example of unethical conduct by Boras was last year’s drama involving Pittsburgh draftee Pedro Alvarez. Alvarez, against the advice of Boras, agreed verbally to a $6 million minor league contract with the Pirates as the deadline to sign draftees was closing to its last seconds. Pittsburgh missed the deadline for filing the contract terms with Major League Baseball by two minutes, and Alvarez reneged on his oral agreement. After an arbitrator, the players’ union and MLB weighed in, the Pirates capitulated and agreed to a longer agreement with Alvarez, four years rather than two.

There was no unethical conduct by Boras. He told his client what his client had a right to know: that because the original contract was filed late, it was not binding (in his opinion), and that Alvarez might be able to get a better deal if he did not agree to abide by his oral agreement, which (again, in Boras’s opinion) was unenforceable. Alvarez was perfectly free to stick to his word, which would have been the honorable thing to do.

A Hardball Times Update
Goodbye for now.

But the rules and the law did not require him to do that, and not only was it not unethical for Boras to advise him of that factor, it would have been unethical and incompetent for Boras not to tell Alvarez that he could legally withdraw his verbal agreement. Alvarez, not Boras, was the decision maker. And again, the sequence of events worked out to Alvarez’s advantage. Nobody lied. Nobody bargained in bad faith. Boras gave necessary and accurate legal advice to his client, and his client acted accordingly.

Boras was able to give accurate advice to Alvarez because he is a lawyer. The professional ethical requirements on a lawyer serving as a sports agent are more stringent than on a non-lawyer, and this is part of Boras’ real ethical problem.

I regard Boras’ activity as an agent as the practice of law, though this is an unsettled matter and not all legal ethicists agree. A non-lawyer can be an agent, but the role of sports agent is one of several hybrid roles, including lobbying and estate and tax planning, that are often regarded as the practice of law when performed by a lawyer. And if the agent ever gives legal advice—and it strains credulity to believe that Boras does not—then there is no doubt: the agent is, for all intents and purposes, acting as a lawyer. As a lawyer, he is bound by the lawyer’s ethics rules.

As a lawyer, Scott Boras is absolutely violating the conflict of interest rules. He is defying a basic conflict problem called the Zero-Sum Conflict.

Imagine you are a lawyer who is retained by a parent to sue a school district in a sexual molestation case. You believe you can win and are pretty sure that you have a chance to break the bank and take almost all the assets of the district. Now another client comes to you wanting to sue a school in the same district to get damages for a horrible injury sustained by her child on a defective jungle gym. You can’t take the second case. If you achieve the objective of the first client, there won’t be money left for the second one. If you achieve the goals of one, you can’t possibly achieve the goals of the other.

The remedy for conflicts of interest is often informed consent. If both clients completely understand the implications of hiring the same lawyer to sue the same client with limited resources, can’t they just decide to trust the lawyer and hire you anyway?

The answer is no. The Model Rules of Professional Conduct for lawyers, specifically Rule 1.7, declare that the waiver of all parties is sufficient to waive the conflict only if the lawyer reasonably believes that the representation of one client won’t interfere with the representation of the other. In this situation, you can’t reasonably believe that, because it is impossible. To the extent that you help one client, you hurt the other. It is an unwaivable conflict.

Scott Boras has a number of these unwaivable conflicts this free agent season, as he has in the past. With three clients—C.C. Sabathia, Manny Ramirez, and Mark Teixeira—seeking in excess of $20 million a year, Boras had a classic Zero-Sum Conflict. At best, a handful of teams were able and willing to commit such resources, with only the Yankees a realistic candidate to sign more than one of the three premium players.

If the Yankees were the team most likely to contest the Dodgers for Manny Ramirez, in the event that New York did not wrap up Teixeira, Boras was undermining his own client’s bargaining power by helping Teixeira reach an agreement with New York. If the Angels signed Sabathia, as was a realistic possibility, it would have made the team an unlikely bidder for Teixeira or Ramirez. Sports commentators, talking heads and bloggers sensed this, speculating that Boras might “steer” Teixeira to an East Coast team to keep open a West Coast landing place for Manny. But Boras cannot ethically manipulate one client’s fate to benefit another. For a lawyer, doing so is grounds for bar discipline; for a non-lawyer, it is simply disloyal and wrong.

Boras represents two fading, star veteran catchers: Ivan Rodriquez and Jason Varitek. The Red Sox, with a veteran pitching staff, would like a veteran catcher. Varitek has appeal to Boston because he has anchored the team for over a decade and has been the team captain; Rodriguez might be attractive because, based on last season at least, his skills have not declined as steeply. With two different agents, I-Rod and Tek would be competing with each other for the job in Boston or other teams seeking a veteran catcher. But with the same agent, such competition is either impossible or unethical.

Scott Boras has over 60 major league clients, and most of them are not free agents. But unwaivable conflicts can arise with these as well. Several years ago, Boras client Bernie Williams was trying to hold on to his job as the New York Yankee center fielder, and Boras free agent client Carlos Beltran was eager to play center field in New York. He ended up signing with the Mets. Boras was ready to negotiate with the Yankees as well, evidently—ethically, he had to be, or he would not be serving Beltran’s interests. But if he was successful bargaining with the Yankees on behalf of Beltran, he would have been simultaneously sabotaging Williams, negotiating him out of a job. One way or the other, he was conflicted.

Two arguments are made to justify the conflicts of Boras and other sports agents who put themselves in the same position. The first is that classic rationalization of all bad conduct, “it’s done all the time” (or its ever-popular variant, “everybody does it”). That is certainly true, and Boras is far from the most egregious example. At one point years ago, an agent named Leigh Steinberg represented almost half the starting quarterbacks in the NFL. But such conflicting representations are still inherently unethical, because the conflicted agent cannot do what the agent promises to do when taking on a client: use his or her talents and skills to assist every client without harming any client.

The other argument is, as another legal ethicist recently said in an online exchange with me, “the players ought to have the right to choose Boras so long as they knowingly and intelligently understand that his loyalties will be divided.” I would say, first of all, that getting Manny Ramirez, for example, to “knowingly and intelligently” agree that his agent can trade off his welfare for that of Mark Teixeira, costing Ramirez money in the process, is impossible on many levels, some of them unkind to articulate. But more important, the rules of legal ethics say that a client can only consent to conflicts the lawyer honestly and sensibly believes will be harmless. A client cannot consent to being screwed over, in other words, and it is unethical for lawyers to even offer them that choice.

And Scott Boras is a lawyer. He has too many clients to serve all of their interests well and fairly, and whether or not they understand this, he should, and almost certainly does. Out of hubris, arrogance, or greed, Boras continues to engage in unwaivable conflicts of interest. The truth is that, contrary to conventional wisdom, it is Boras’ clients, not his negotiating adversaries, who are the victims of his unethical conduct.

References & Resources
As more than one reader has pointed out, CC Sabathia isn’t a Boras client. My apologies for the error.

Comments are closed.