January 28, 2009
BASEBALL: The Ethics of Cornering A Thin Market
Jack Marshall at the Hardball Times, after defending in general how Scott Boras does his business, argues that he's violating legal-ethical duties to his clients:
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.
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.
Read the whole thing. I'm not sure how I come out on this - it's an interesting argument, and it passes the test of being true at a fundamental level - for example, an agent representing Varitek might reasonably have chosen to argue that he was, specifically, a better investment than Rodriguez; representing both, Boras cannot do that. On the other hand, the pond at issue here is so small that if you never represent two players with possibly competing interests, you'd hardly be able to represent more than about 10 players.
Forget Boras, who's a polarizing figure. Doesn't virtually every major agent or agency corporations like SFX and IMG fail this test?
It's also ignoring the fact that while Scott Boras Corporation is seen as one man, there's plenty of other agents in the firm. Again, can a firm 'compete' against itself? What about the "advisors" come draft time -- can you have two clients who both might go in the first round?
Well, in the legal profession if the lawyer has a conflict, the whole firm does. That said, if you move from the realm of legal ethics to a common sense standard, if you have two separate agents from the same firm acting as the point man, you have considerably less actual conflict.
Like I said, I'm not sure where I come out, but it's a question that's disturbed me before. It's a little like having two teams in the same fantasy league - it can't help but affect the way you draft them.
I don't see how the conflict would be the same in the draft, since the dynamics are radically different - the players hold far fewer cards.
There is an obvious conflict of interest. That being said, Boras did the single thing most antithetical to Manny Ramirez's interests when he steered Teixeira to the Yankees, rather than the Red Sox. I think that suggests that his clients are actually able to look out for their own interests.
Clients can waive conflict of interest problems and I'd bet that sports agents all protect themselves with waivers. A waiver, of course, does not take away the fact that it still smells.
It's an interesting argument because it makes such sense in the legal arena and so the mind is tempted to give it credence here. But if fails because the underlying assumption -- that money procured for one client will exhaust available money for others -- is patently false. With 30 bidders and record profits and payrolls far exceeding the profit line Boras can get a ton of money for one client after another. And his clients didnt fire him after Tex signed, they are operating under the impression he is still the best. Boras is demonized because he is so good at what he does, just like Marvin Miller was, just like Arod is. The owners will always wage subtle and not so subtle media campaigns against anyone on the players' side who raises the salary bar.
How about Steinberg? Didn't he represent a couple of dozen NFL QBs?
Once a sports agent condoned his client take steroids, to help the short term bottom line, he lost any argument he could make in the future about serving his client's best interest. Like the MLBPA, and even worse, the NFLPA, they did little to deal with the actual issues involving looking after their members' health interests. However, since most if not all agents (and owners too) actually have the feelings of a piece of sandpaper, they don't care either. Not many like Leon Hess in the world I guess.
Daryl: Once I see the owners returning all the profits they made during the steroid era to the fans then I'll buy the argument that Boras is somehow an ignoble figure. Everyone made millions, you're singling out a scapegoat, just like the Mitchell report did with Bonds.