Exploiting inefficiencies in the agent business: one agency lowers its commissions

4 Comments

This is interesting. Darren Heitner of Forbes is reporting that one agency which represents a lot of baseball players — Performance Baseball – is cutting its commission fees from the typical 5% to 1.5%:

”We saw a fiercely competitive landscape where everybody looked the same.  The agents basically offer the same services, pretty much the same fee structure whether it is 4% or 5%, and I could literally hear the sound in my ear from a meeting a couple of years ago where a guy was saying ‘you guys are all really the same.’  My partner and I said let’s focus on what we do best and what we really enjoy doing.”

The article notes that, in reality, not all agents are the same, as some provide different services to their clients. Scott Boras, for example, famously has an entire operation of training, personal business management and general hand-holding professionals on staff to be one-stop shopping for clients. Others, like the guys at Performance, are more about doing the deals and that’s it. Yet, for some reason, all still charged the same basic commissions.

Interesting to see some agents go to the budget model (though I doubt they’d call it that). Maybe it will help disrupt the pattern in which some agents do a ton of work for a player between the ages of 18 and 25 or something and then get tossed aside for someone else just before the player hits free agency.

Yankees acquire James Paxton from Mariners

Stephen Brashear/Getty Images
39 Comments

The Yankees announced that the club has acquired starter James Paxton from the Mariners in exchange for three prospects: pitcher Justus Sheffield, outfielder Dom Thompson-Williams, and pitcher Erik Swanson.

Paxton, 30, has been among the game’s better starters over the past few years. In 2018, he went 11-6 with a 3.76 ERA and a 208/42 K/BB ratio in 160 1/3 innings. The lefty has two more years of arbitration eligibility remaining after earning $4.9 million this past season.

Sheffield, 22, is the headliner in the Mariners’ return. He made his major league debut in September for the Yankees, pitching 2 2/3 innings across three appearances. Two of those appearances were scoreless; in the third, he gave up a three-run home run to J.D. Martinez, certainly not an uncommon result among pitchers. MLB Pipeline rates Sheffield as the Yankees’ No. 1 prospect and No. 31 overall in baseball.

Thompson-Williams, 23, was selected by the Yankees in the fifth round of the 2016 draft. This past season, between Single-A Charleston and High-A Tampa, he hit .299/.363/.546 with 22 home runs, 74 RBI, 63 runs scored, and 20 stolen bases in 415 plate appearances. He was not among the Yankees’ top-30 prospects, per MLB Pipeline.

Swanson, 25, was selected by the Yankees in the eighth round of the 2014 draft. He spent most of his 2018 campaign between Double-A Trenton and Triple-A Scranton/Wilkes-Barre. Overall, he posted a 2.66 ERA with a 139/29 K/BB ratio in 121 2/3 innings. MLB Pipeline rated him No. 22 in the Yankees’ system.

This trade comes as no surprise as the Yankees clearly wanted to upgrade the starting rotation and the Mariners seemed motivated to trade Paxton this offseason. To the Mariners’ credit, they got a solid return for Paxton, as Sheffield likely becomes the organization’s No. 1 prospect. The only worries about this trade for the Yankees is how Paxton will fare in the more hitter-friendly confines of Yankee Stadium compared to the spacious Safeco Field, and Paxton’s durability. Paxton has made more than 20 starts in a season just twice in his career — the last two years (24 and 28). The Yankees are likely not done adding, however. Expect even more new faces before the start of spring training.