Future Shock

Pedro-gate Update

by Kevin Goldstein

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When Pedro-gate first began, all eyes were on September 10, the day when arbitrator Shyam Das would hear the case, and after which he would likely make his ruling within 30 days following the submission of written arguments from both sides. The day before the hearing, sources revealed that the witness list was "surprisingly long," and on the next day during the hearing itself, none of the major parties involved in the case were even in attendance: the Pirates brass was with their team in Houston, Scott Boras was in his Southern California office, and Alvarez was working out with his former teammates at Vanderbilt. In fact, only two people even testified last week; Commissioner Bud Selig, and Dan Halem, Major League Baseball's number two labor lawyer, who didn't even finish his time on the stand. Now we know that the next days (note the plural) for the hearing will take place on September 23 and 24, and both sides are already talking about Das' October calendar, since we won't be nearly done after those next two meetings.

In other words, kick up your feet and grab some popcorn, because this might take awhile. These developments have led to a number of phonecalls and e-mails asking me what's going on. What has happened to a case that looked on the surface to be a simple matter of MLB going against the rules of the collective bargaining agreement? Discussions with multiple sources close to both sides of the table have revealed that we're no longer talking about a simple rule infraction; we're now talking about a conspiracy.

As one source surmised, the union is going "all-out" on this issue, and will attempt to prove that not only did MLB break the rules of the current collective bargaining agreement, but that teams like the Pirates joined with MLB in a conspiracy to break the rules with malice and forethought, and thus deserve a significantly stronger penalty than they've received in the past. This could include what is becoming an ever-growing range of possibilities, including free agency for the players involved, a public apology and admittance of guilt from Selig himself (one source joked that, "Selig would probably rather make Alvarez a free agent than do that"), as well as the possibility of Pittsburgh forfeiting any compensation pick they might expect for losing Alvarez should the arbitrator rule that he goes back into the draft next year. Two key points to the union's argument could be:

1. We've Been Here Before, And To No Avail. Because we have been. On multiple occasions, MLB has been brought in front of an arbitrator due to the draft. Time and time again, the arbitrator has ruled in favor of the union, and at the same time has provided little or no real remedy to the situation, other than repeated stern warnings to not do it again. Yet, they did do it again, and the union will argue that the teams, in conjunction with MLB, decided to go this extension route with full knowledge that they were in violation of the CBA, and that they didn't care, as the arbitrator's response to such action in the past has been little more than a slap on the wrist. In other words, the crime was pre-meditated because when weighed against the expected punishment, it would be well worth it. One goal here is to anger the arbitrator, and to show that MLB has no respect for his judgment or for the process-and as anyone who has been through a legal proceeding knows, you do not want to be on the wrong side of a judge who feels that she or he is not receiving proper respect.

2. The Concept Of 'Best Interests Of All Parties' Is A Farce. MLB has all but admitted to providing extensions in this year's draft, but they have argued that doing so was in the best interest of both sides. On the surface that makes sense: it's good for the team to sign their draft picks, it's good for the player to get his career going, and it's good for MLB to add more talent to the pool. However, the union will argue that there are a pair of key issues in the granting of an extension that proves that such an action was not in the best interest of the union.

If MLB was so convinced that granting extensions was an innocent act in the best interests of all parties, why did they at no time call the MLBPA and inform them of the decision? If it was such a no-brainer, the union would have surely agreed to it, correct? Wrong, as the union understands that extensions add imbalance to negotiations once the deadline becomes a moving target with only one side having real knowledge of when that new deadline expires, and only one side having the ability to get such extensions in the first place.
The second that the extensions were granted, MLB took the right of representation away from the players. Agents are not part of the union, but they are certified by them, and that certification requires agents to follow the rules of collective bargaining in their dealings with a team. That means that technically they could not negotiate on behalf of their clients after midnight without breaking their own rules. Now what happened between the Pirates, Boras ,and Alvarez, only those three parties truly know, but the union has a pretty compelling case on this issue, and there is little argument that Pedro Alvarez agreed to the deal, and that the Pirates were no longer talking to Boras (who was with Alvarez in his California office) when the deal was agreed upon.

Another open question involves the connectedness of other players, primarily number three overall pick Eric Hosmer. Stories here differ, as some believe that the union will claim that Hosmer agreed to terms before the deadline, but that the deal was not communicated until after the deadline, while other versions of Hosmer's night point to him signing well after the deadline. MLB will stick to that side of the story in order to provide the linkage. While Alvarez has been placed on the restricted list, Hosmer's status within MLB's eBIS information system is "pending active," which is normally reserved for players who have agreed to terms but have not had their contract approved by the commissioner's office.

There has also been some mention of Julio Borbon, a Rangers farmhand who was a supplemental first-round pick in 2007. Initial reports had him going unsigned at last year's deadline until the next afternoon, when it was revealed that he had signed a major league deal worth $1.3 million. Discussions with multiple sources from both sides of the fence have this one likely not being germane to the case, as it seems somewhat clear that Borbon at least agreed to terms before the midnight deadline, and that any delay from then on was a matter of miscommunications. Multiple sources have complained that the Memorandum of Understanding-which detailed the new draft rules that began in 2007-does not have any specificity as to manner of communicating agreements. The union complains that it's a one-sided aspect of the system that is only between teams and MLB, with the MLBPA shut out of the process.

We'll know more about the constantly changing angles in this case following the two days of hearings next week, but it seems that from most perspectives the case is becoming far more complex, rather than simpler, as it goes on. At one point, it was hoped that we'd have a quick resolution to this issue, but now both sides are merely hoping for this to be worked out by the time we flip the calendars in three and a half months.

As it stands right now, even that seems a bit optimistic.

Kevin Goldstein is an author of Baseball Prospectus.
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