Juan Soto’s 765 million, the story of another amazing contract

“Even as they complain about exploding salaries, owners are paying more and more money to free agents with more eagerness than ever. » – New York TimesNovember 20, 1979

When this analysis by journalist Murray Crass was published in the late 1970s, MLB players had enjoyed the right to autonomy for only three years. And 24 hours earlier, pitcher Nolan Ryan had captured the collective imagination by starting with the Houston Astros a amazing 4-year contract worth a total of $4.5 million. It was the first time ever that a player earned an annual salary of at least $1 million.

In 2024 dollars, the total value of Nolan Ryan’s contract was $19.57 million.

MLB players won the right to autonomy through a grievance filed in October 1975 by Andy Messersmith of the Los Angeles Dodgers and Dave McNally of the Montreal Expos.

Both pitchers had been forced by their respective employers to play the 1975 season at the same salary as in 1974 even though they had not signed a contract to this effect. Messersmith and McNally now felt free to sign with the team of their choice.

An arbitrator and the courts then ruled in their favour. And baseball was never the same again.

In his biography entitled A Whole Different Ball Gamethe late Marvin Miller, legendary leader of the Players’ Association, recounted that his management counterpart, Commissioner Bowie Kuhn, predicted that the right to autonomy would sow immense chaos in the world of baseball.

Kuhn argued that autonomy would cause one of the two leagues to disappear (due to a wave of bankruptcies) and that the teams would lose control of their network of subsidiaries. A little more and he announced an invasion of locustsMiller quipped.

Poor Bowie Kuhn probably would have turned into a pillar of salt if he had lived long enough to witness this week the 15-year, $765 million contract the New York Mets signed with the outfielder Juan Soto.

The contract signed by Soto threw a lot of observers off guard. Because barely a year ago, the Japanese Shoei Ohtani had somehow become the equivalent of the first man to set foot on Mars by signing a 10-year agreement with the Los Angeles Dodgers totaling $700 million. .

The case of Ohtani, a phenom who excels as a pitcher as well as a designated hitter or outfielder, seemed so unique that it was unthinkable that another player could so quickly obtain more money than him.

To offer such a sum to Ohtani, it was believed, the Dodgers had to perfectly align the stars in addition to finely sharpening their pencils. They were banking in particular on a new infusion of capital from rich and enthusiastic Japanese sponsors. It was also agreed that payment 680 of the 700 million provided for in the contract would be postponed until later. It is therefore only between 2034 and 2043 that Ohtani will collect 97% of the sums owed to him.

And now this week, without even batting an eyelid, the spectacular owner of the Mets, Steve Cohen, made the Dodgers look like they were fake rich by dropping $765 million in cold hard cash on the table. Juan Soto immediately collected a signing bonus of 75 million and every dollar provided for in the agreement will be paid to him during the execution of his contract.

Let’s be honest.

Out of envy or out of spite, many fans feel retching when agreements so disconnected from their reality are announced. For the same reasons, there is probably also an appreciable percentage of the population who are not or no longer interested in professional sports.

But on the other hand, there is something fascinating about how for nearly 50 years, even as MLB curbs market forces by imposing a burdensome luxury tax on big-spending teams, owners continue to find their account by paying ever more for the best talents.

To negotiate Soto’s contract (the largest in the history of professional sports), the stars were, so to speak, perfectly aligned.

On one side of the table was billionaire Steve Cohen, a no-nonsense entrepreneur who has long been seen as something of a villain in the world of hedge funds.

In 2013, Cohen’s firm, SAC Capital Advisors, was fined $1.8 billion in what was at the time the largest ever criminal prosecution of a hedge fund. The attorney for the Southern District of New York, Preet Bharara, notably explained that his investigators had discovered that nearly ten employees of SAC Capital Advisors had committed an unprecedented amount of insider trading.

When Cohen became owner of the Mets in 2020, his reputation preceded him and other MLB owners feared he would destabilize the economic system in place. Since his arrival, his team has been the one with the largest payroll every year.

According to the Spotrac website, the Mets’ payroll last season was $314.7 million.

On the other side of the table, Juan Soto was represented by agent Scott Boras, who the media often presents as the man most hated by owners in major league baseball. Since the mid-1980s, aside from Ohtani’s contract last year, just about every record contract in major league baseball has been signed by Boras clients.

For example, pitcher Greg Maddux was the first to break the $50 million barrier in 1997 by signing a $57.5 million contract with the Atlanta Braves. Then in 2000, another of his clients, Alex Rodriguez, was the first to sign a contract worth more than a quarter of a billion ($252 million for 10 years) with the New York Yankees.

Scott Boras is now 72 years old and he has seen snow. There was probably no question of the super-agent being outplayed by Ohtani’s representative, Nez Balelo, of CAA (Creative Artists Agency).

It should be noted that Juan Soto would have somehow lost $325 million if he had not listened to Boras two years ago. His agent then advised him to refuse an extremely attractive offer (15 years/$440 million) submitted to him by the Washington Nationals. You have to have strong nerves to refuse such amounts.

Former star reliever Éric Gagné, who was represented by Boras during his career, recognizes this as a defining character trait of his former agent.

The difference between Scott and the others is that he constantly tells his clients that there is no need to rush to sign an agreement and that you have to choose the right time. Patience is so important. His knowledge of the market is exceptional. He knows the development cycles and budget situations of each team and he knows the specific needs of general managers. He sees things developing several years in advanceexplains Gagne.

A lot of people say the owners don’t like it, but I’m not sure about that. The owners wouldn’t sign such huge contracts with Scott if they didn’t respect him. He is an agent who knows the market value perfectly. He’s able to sit down with an owner and break down the benefits that a player like Soto will bring to his team, not just on the field, but also in terms of visibility, in terms of the impact in the rivalry that the Mets talk with the Yankees in their market, or in relation to the enthusiasm that a player like Soto can generate within the large Hispanic community of New York.

In short, Scott Boras knows his job. And his job is to get as much money as possible for his clients.analyzes the former Cy Young trophy winner.

Bets are now on as to when an MLB player will break the billion dollar barrier.