Alvarez holding out, on restricted list
Pirates' No. 2 overall pick wants to rework signing bonus
PITTSBURGH -- Answers as to why Pedro Alvarez, the No. 2 overall pick in this year's First-Year Player Draft, had not reported to Pittsburgh yet came to light on Wednesday. However, those answers bring anything but a resolution to the situation.
Early on Wednesday afternoon, the Pirates released a statement saying that Alvarez's advisor, Scott Boras, had informed the club that his client will not sign what was believed a binding contract in which the Pirates would have paid Alvarez a $6 million signing bonus, spread over a two-year period.
The reason, as stated by the Pirates, for Alvarez's holdout is that the former Vanderbilt third baseman and Boras want the agreement to be reworked in order for Alvarez to receive a larger signing bonus. According to the Pirates, Boras is now contending that the agreement reached on Aug. 15 was done so after the deadline, therefore not making his client bound to it.
The Pirates emphatically deny that claim.
"This claim was not raised on the evening of the 15th when we informed Mr. Boras that Major League Baseball had confirmed that the contract was submitted in a timely fashion," Pirates president Frank Coonelly said in a statement. "Mr. Boras asserted this claim several days later, after all of the draft signings had become publicized."
"The Office of the Commissioner has assured us that we have a valid contract with Pedro and that it will vigorously defend any claim to the contrary," Coonelly added.
Boras, in speaking with MLB.com, responded to Coonelly's statement.
"The Pirates should come clean to the Pittsburgh fans as to their dealings with Pedro Alvarez," Boras said.
However, this issue has quickly become more than just a war of words between the Pirates and Boras.
Hours after Coonelly released his statement, the Major League Baseball Players Association filed a grievance against the Commissioner's Office, stating that it granted extensions -- past the Aug. 15 midnight ET deadline to sign drafted players -- to clubs and then approved signings of players without consulting the MLBPA.
"Within hours after this year's Aug. 15 midnight deadline passed, the Players Association learned from several sources that the Commissioner's Office had extended the deadline for negotiating and reporting signings with drafted players," Major League Baseball Players Association general counsel Michael Weiner said in a statement. "This was done without notice to or consultation with the Players Association, despite a firm deadline having been established through collective bargaining.
"The Players Association, after discussions with the Commissioner's Office, players, agents and other parties, viewed it necessary to file a Grievance challenging this plainly unlawful unilateral act by the Commissioner's Office. The grievance was not filed on behalf of any particular player. It is the union's obligation, on behalf of all players, to defend the integrity of its collectively bargained agreements and to ensure that those agreements are respected and honored by the Clubs.
"Moreover, based on information gathered to date by the Association, Frank's statement is inaccurate in a number of respects. While the Association will not respond specifically through the press, we are confident that, at hearing, the Panel will agree that the Commissioner's Office acted improperly when it unilaterally changed the terms of the deal it struck with the Association in 2006."
The Commissioner's Office responded to the grievance with this statement:
"We believe the grievance is entirely without merit," said Rob Manfred, Executive Vice President, Labor Relations & Human Resources. "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."
As a result of all this, Alvarez has been put on the restricted list for not signing his contract.
Under Major League Baseball rules, any player who refuses to sign an agreed-upon contract and report to an organization can be put on the restricted list. While a player is on the restricted list, he may not sign a contract with or play for another organization.
The MLBPA and Commissioner's Office have agreed to expedite this grievance process. The next case set to go before a MLB arbitrator is scheduled to take place on Sept. 10, and this grievance is expected to also be heard at the same time.
While the grievance filed against the Commissioner's Office does not specifically cite the Pirates, it clearly addresses the issue at stake in the dispute between the Pirates and Boras.
Under the Collective Bargaining Agreement reached in 2006, MLB agreed to change certain Draft rules. Among those was changing the signing deadline for all drafted players who still had collegiate eligibility remaining. An Aug. 15 midnight signing deadline was set and agreed to.
In the CBA, there was no specification made as to how that agreement would be made binding. As a result, the Commissioner's Office later administered a bulletin that said that teams would be required to e-mail or fax the terms of an agreement with a Draft pick to the Commissioner's Office in order for the Commissioner's Office to approve that an agreement was made prior to the deadline.
As a result, there should be tangible proof -- time stamped -- of when the Commissioner's Office is notified of an agreement.
This written agreement would come after an oral binding agreement had been made between a drafted player and/or his agent and the team. It is common practice, then, that a fully executed contract is not written up until well past the midnight deadline once details are finalized. According to the CBA, a drafted player is considered signed once he orally agrees.
Coonelly, in his statement, said that all these necessary processes on the night of Aug. 15 were completed.
"The Pirates are confident that the contract reached with Pedro Alvarez was agreed to and submitted to Major League Baseball in a timely fashion and properly accepted by Major League Baseball," he said.
On Wednesday, Coonelly did not specify the exact time with which the deal was made. Back on Aug. 16, Pirates management talked about the deal going through in the final minutes before midnight.
Neither Alvarez nor Boras is disputing the fact that an oral agreement was made. The issue now is that the MLBPA is contesting the time in which the Alvarez deal was consummated.
MLB.com also attempted to get in touch with Alvarez, but was unsuccessful. Boras said that his client won't speak until after all litigation. Alvarez could be called upon to testify in front of an arbiter.
While the ruling now lies in the hand of an arbiter, the Pirates maintain that the grievance process was set in motion by Boras in order to get his client more money.
Multiple sources with knowledge of the dissension claimed that Boras was asking for an increase in Alvarez's bonus. While not directly citing a specific amount, these sources pointed to Giants Draft pick Buster Posey's $6.2 million bonus as being the amount Boras wished to match or exceed.
Doing so would ensure that Alvarez equaled Buster as the highest-paid player in the Draft.
The Pirates, a source said, balked at this demand. It was at this time that Boras informed the Pirates that Alvarez would not be reporting to Pittsburgh for the required physical.
Boras denied those claims.
The Giants and Posey, the No. 5 overall selection, agreed to a $6.2 million bonus just moments before the midnight signing deadline. That signing bonus was the highest among the 2008 Draft class, just slightly higher than the $6.15 million top pick Tim Beckham received from Tampa Bay.
Interestingly enough, there seem to be cases in the past where Draft picks and clubs have agreed to deals after the midnight deadline.
Though no proof has been made public, the Pirates claim that Eric Hosmer, the No. 3 overall pick who was selected by the Royals and also represented by Boras, had his contract submitted to the Commissioner's Office after the Pirates sent in Alvarez's. As a result, if the Pirates were in fact past the deadline, so was Hosmer, Connelly stated.
Regardless, Hosmer signed his contract without any details of the timing of the negotiation being contested.
"Mr. Boras is apparently satisfied with the $6 million bonus that he secured for Mr. Hosmer and has not challenged the validity of that contract," Coonelly said. "Mr. Boras has been informed that if he pursues a claim that our contract with Pedro was not timely, he puts Eric Hosmer's contract with Kansas City in jeopardy."
Royals general manager Dayton Moore had this to say in response to the validity of Hosmer's $6 million agreement: "We had an agreement by the deadline and the terms were submitted in a timely manner, so I'm not uncomfortable with the situation."
Weiner, referencing the grievance, addressed both Alvarez and Hosmer in his public statement as well.
"I have read the statement issued by Frank Coonelly, President of the Pittsburgh Pirates, regarding Pedro Alvarez," Weiner said. "Frank's statement also refers to the contract between Eric Hosmer and the Kansas City Royals. The Association, after further investigation and the processing of the Grievance, will determine what relief it will seek from the Arbitration Panel, including whether it will seek relief related to agreements accepted by the Commissioner's Office after the collectively bargained signing deadline."
Coonelly's release also revealed that the Pirates' were willing to offer as much as a $6 million signing bonus. However, Coonelly said that efforts to sign Alvarez immediately were impeded by Boras' presence.
"The Pirates made several attempts to commence negotiations immediately following the draft and were willing and ready to agree to pay Pedro a $6 million signing bonus from the very outset," Coonelly said. "Predictably, however, 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.
"Regrettably, we are not surprised that Mr. Boras would attempt to raise a meritless legal claim in an effort to compel us to renegotiate Pedro's contract to one more to his liking," he added. "We are, however, disappointed that Pedro would allow his agent to pursue this claim on his behalf. Pedro showed tremendous fortitude and independent thinking when he agreed to his contract on August 15."
While the Pirates have said they will not renegotiate the contract, the organization is still hopeful of having Alvarez in its system once all these legal issues are untangled.
"Despite our disappointment, we continue to believe in Pedro Alvarez the person and the baseball player and remain excited to add Pedro to our system," Coonelly said. "We will sit down with Pedro and his family as soon as Mr. Boras' claim is rejected to chart a new and much more productive start to Pedro's career with the Pittsburgh Pirates."
Jenifer Langosch is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.