I’ve been trying to wait to post something on this until I could better understand what exactly was going on. Right now, it seems to be a situation of the more you find out, the less you know or the more confusing it gets. But here’s the deal as I understand it as of right now:

You can read the story about what’s going on officially at this point here. It’s also worth reading Pirates president Frank Coonelly’s full statement on the matter. For those of you who don’t know what I’m talking about, No. 2 pick Pedro Alvarez has been put on the restricted list at the request of the Pirates. Coonelly’s statement says, “The Pirates were forced to request that Pedro be placed on the
Restricted List because we were informed by his agent, Scott Boras,
that Pedro will not sign the contract to which he agreed on August 15.
Boras further informed us that Pedro will not report to the Club unless
we renegotiate his contract and agree to pay him more than the $6
million signing bonus to which he agreed.”

Scott Boras, for his part, has referred us to the Players’ Association, saying it is their grievance and not his. The contention is that the agreement was made after the midnight deadline, something Mr. Coonelly flatly denied.  It seems fairly clear, both in the statement and in other information I have gathered that the original deal (whether it was pre- or post-deadline) was actually hammered out between the Pirates and Pedro Alvarez (and his family) directly, without the benefit of Mr. Boras’ counsel. There has been a parallel made to the drafting of Alex Rodriguez in 1993. According to Baseball America, “Rodriguez signed with the Mariners shortly before
going to class at the University of Miami in late August, and on Oct.
14, Boras submitted a grievance, backed by the union, that the Mariners
didn’t make clear the terms of the contract he signed. The grievance
asked that Rodriguez should be allowed to renegotiate his contract or
void it and become a free agent.”

There have been some rumors and reports of deals being consummated after the deadline, most notably the one between the No. 3 pick Eric Hosmer (also a Boras client) and the Kansas City Royals. The biggest difference, of course, is that Hosmer signed his contract and has already begun his pro career, while Alvarez has yet to sign on the dotted line.

Here’s how the process seems to work in these down-to-the-wire cases. The two sides come to a verbal agreement on a net value for the deal. Using the Alvarez case as the example, that value was $6 million. By 11:59 p.m., both sides notify the Commissioner’s Office a deal has been struck for that amount. After midnight, it’s fairly common for some of the smaller details to be ironed out — things like when/where the physical will take place, smaller benefits like college tuition (if it’s applicable), etc.

It’s become apparent that there have been instances when negotiations have indeed extended past midnight. The Rangers evidently negotiated with outfielder Julio Borbon, also a Boras client, past midnight at last year’s deadline. That wasn’t brought to light, it seems, because Mr. Boras liked the terms of that agreement, which included a big-league contract. With this situation (see below), it appears he is not pleased with the outcome.

There are a few big questions that still need to be answered:

1. Is that pre-deadline verbal agreement legally binding? The  Collective Bargaining Agreement did not expressly state that a
written agreement was needed when it was ratified in 2006. Since that
time, the Commissioner’s Office released a bulletin that said an email
or fax had to be sent to the Commissioner’s Office by the deadline.
This correspondence would come only from the club after the club had
reached a verbal agreement with the player and/or his agent. If Alvarez claimed he never agreed to a deal, then this case could head straight to court. But he’s not arguing that, but rather that the negotations extended past the deadline. It’s possible it could be argued that the verbal agreement, since it’s the usual course of conduct  and has always served as binding in past practice, is then legal. But you have to wonder that if a written contract is not signed by a certain time — even if it’s because the player has stalled the process — then maybe all bets are off. 

2. Can such a deal actually be re-negotiated? There seems to be a paradox within all of this. If the contention is that the deal was agreed to after the deadline, that would make it void, right? If it’s void, what is there to be re-negotiated? My guess is that even though Mr. Boras has removed himself from the proceedings currently by pointing all inquiries to the Players’ Association, a certain search for new loopholes is taking place. If this grievance ends up carrying weight, a new avenue for re-negotiating contracts would now exist.

3. Why has Pedro Alvarez decided to go this route? According to the statement from Mr. Coonelly, “Mr. Boras refused to engage in any negotiations at all until shortly
before the August 15 deadline and even then an agreement was reached
only after Pedro took control of the negotiations.” If Pedro stepped in and got this done, seemingly showing that he’s his own man and wanted to get going on his pro career, what has caused this seeming change of direction? The source cited in the story says that it might be over $200,000, an amount that would put Alvarez on par with Buster Posey and his deal — the biggest in the draft — with the Giants at No. 5. I’ve had several people — and none directly involved in this situation — strongly imply that this sounds a lot like the Boras Corp. being ticked off about being bested by Posey’s agency, CAA. If that’s the case, how did Alvarez, after making a strong stand by taking over negotiations, allow himself to get caught up in such pettiness?

4. What happens now? The Players’ Association has filed a grievance, which starts out by saying, “The Major League Baseball Players Association
today filed a Grievance challenging the unilateral decision of the
Commissioner’s Office to extend the August 15, 2008 signing deadline for drafted
players.  The Association and the Commissioner’s Office have agreed to expedited
processing of this Grievance, with the intention of bringing the matter to
hearing as early as September 10, 2008.” The main bone of contention is not so much that an extension was given — and I’ve received no confirmation that it was —  but rather that the Players Association wasn’t informed of an extension as required by the CBA.

6:30 p.m. ET Here’s an official statement from Major League Baseball, courtesy of Pat Courney, VP of Communications. The statement comes from Rob Manfred, Executive Vice President, Labor Relations and Human Resources:

“We believe the grievance is entirely without merit.  The deadline was extended to accept minor league contracts voluntarily entered into by the clubs and the players with the help of their agents.  It is settled law that the arbitration panel has no authority to disturb such minor league contracts.”

Whether this could lead to a re-negotiation, Alvarez becoming a free agent or going back into the draft class a la Aaron Crow, remains to be seen. I think we’re just getting started here and I’ll be sure to be back with any information as I get it.