MLB trying to exempt minor leaguers from labor laws

soxhop411

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Thanks @jon abbey for breaking this out...

This is an absolutely disgusting move By MLB, and I hope it backfires on them tremendously....

This upcoming labor war between MLBPA and the owners is going to be ugly, and I wouldn't be shocked if there are multiple lost seasons at risk (due to a strike)

Edit: from the same story comes this gem


 
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richgedman'sghost

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Would the strike take place this year? Honestly asking.. what is preventing them from walking out on opening day even for just a dsy in a symbolic gesture ? Why do you think it will take 2 or more yesrs to solve these issues? The labor climate is worse than in 1994?
 

jon abbey

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Would the strike take place this year? Honestly asking.. what is preventing them from walking out on opening day even for just a dsy in a symbolic gesture ? Why do you think it will take 2 or more yesrs to solve these issues? The labor climate is worse than in 1994?
I can't find a precise citation, but basically players are not allowed to strike while there is an agreed-upon CBA in effect, so if they did, it could/would be ruled illegal in court and the players would be ordered back and have to pay damages (I think?).

It's unfortunate, even for the owners, because the current CBA is doing a lot of damage to the game and having it in effect for the next four years is really bad for the sport.
 

soxhop411

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I can't find a precise citation, but basically players are not allowed to strike while there is an agreed-upon CBA in effect, so if they did, it could/would be ruled illegal in court and the players would be ordered back and have to pay damages (I think?).

It's unfortunate, even for the owners, because the current CBA is doing a lot of damage to the game and having it in effect for the next four years is really bad for the sport.
Agreed
 

maufman

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Would the strike take place this year? Honestly asking.. what is preventing them from walking out on opening day even for just a dsy in a symbolic gesture ? Why do you think it will take 2 or more yesrs to solve these issues? The labor climate is worse than in 1994?
“No strike” and “no lockout” language are the core of any collective bargaining agreement — in exchange for agreement on wages, hours, and working conditions for a period of time (usually a few years), the union agrees not to strike and the employer agrees not to lock employees out.

Now, if you’re saying the owners wouldn’t have a practical legal remedy for a one-day “wildcat” players’ strike, that might be true — but the owners wouldn’t be foolish enough to reward an illegal strike by making concessions.

Presumably, owners would insist in negotiations that any increased pay for minor leaguers would count toward the players’ share of total revenue, so anything MLBPA negotiates for minor leaguers would come out of current major leaguers’ pockets. Maybe Marvin Miller could have persuaded the players to do something selfless like that, but those days are long gone — which is why this well-known problem has gone unfixed for years, and veteran minor leaguers have given up hope of MLBPA help and are taking their arguments to the courts.
 

brs3

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Since it's unlikely that a strike will happen, it'll be interesting to watch if we see more contract extensions like Jose Altuve's, which bumps his next 2 years salaries, and then adds 5 years. He'll be 34 by the time he's a FA. We saw the Red Sox buy out a few years of FA for Dustin Pedroia to keep him around. If the trend becomes a thing where the last 2 years are being negotiated for contract extensions, perhaps when the time comes to negotiate the labor agreement they'll shave 2 years off formally. Easier said than done, but with teams looking to get younger and older players are waiting for their big payday that isn't coming, it may need to happen.
 

bosox79

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This upcoming labor war between MLBPA and the owners is going to be ugly, and I wouldn't be shocked if there are multiple lost seasons at risk.
Maybe, but the MLBPA doesn't care at all about minor league players and is in agreement with owners on this one.
 

Fred not Lynn

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This seems like something the nfl would do. Not MLB
Well, the NFL just does it even better than MLB by downloading prospect development to entities who make billions off their efforts, and not only doesn’t pay them minimum wage, but actually has and enforces strict rules against them getting paid a penny...
 
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trekfan55

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Well, the NFL just does it even better than MLB by downloading prospect development to entities who make billions off their efforts, and not only doesn’t pay them minimum wage, but actually has and enforces strict rules against them getting paid a penny...
Well, assuming you mean NCAA here's the thing. Baseball players get drafted and sign with a professional team, but then have to endure the Minor Leagues where they are severely underpaid. They play towards a goal, being drafted and signed, and now with all the draft pool limits even for international players, they don't get paid until they can make it to the Show, and percentage wise, many do not.

In the NFL, once a guy is drafted he joins the big team immediately (doesn't mean he plays but he's on the team, not their minor league affiliate) and gets paid accordingly. The rookie contracts have changed things but they still get paid. Let's just think how much money Drew Henson made as a pro baseball player and how much he would have been paid (pre rookie contract) had he chosen football.
 

Fred not Lynn

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Well, assuming you mean NCAA here's the thing. Baseball players get drafted and sign with a professional team, but then have to endure the Minor Leagues where they are severely underpaid. They play towards a goal, being drafted and signed, and now with all the draft pool limits even for international players, they don't get paid until they can make it to the Show, and percentage wise, many do not.

In the NFL, once a guy is drafted he joins the big team immediately (doesn't mean he plays but he's on the team, not their minor league affiliate) and gets paid accordingly. The rookie contracts have changed things but they still get paid. Let's just think how much money Drew Henson made as a pro baseball player and how much he would have been paid (pre rookie contract) had he chosen football.
So basically a football player works for free, then gets drafted and a baseball player gets drafted then works for (almost) free...

...Ignoring signing bonuses...
 

timlinin8th

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So basically a football player works for free, then gets drafted and a baseball player gets drafted then works for (almost) free...

...Ignoring signing bonuses...
Thats assuming a player doesn’t play college baseball, in which case he plays by the same NCAA rules a football player does, and THEN has to go through MiLB making nothing, hoping to crack the Show.
 

mauidano

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We are watching this happen within our own extended family. My nephew is in the Diamondbacks organization. Played college ball and was drafted. $100K bonus. All but gone now. High Single A last year. Pretty good player and has a shot. Has a wife (finishing up college this year) and daughter. If not for the generosity of his mom and dad and his in laws, he would be living in near poverty. Now think about the kids from other countries who can't speak English or have no family. And the odds that these kids "make it" are slim to none.

It is truly remarkable that this happens in an incredibly obscenely wealthy business.

For the love of the game and dream of a guaranteed contract. Shattered dreams mostly.
 

trekfan55

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So basically a football player works for free, then gets drafted and a baseball player gets drafted then works for (almost) free...

...Ignoring signing bonuses...
Here's the thing, foitball players playing in the NCAA make nothing. True. But in theory they are getting their eductaion and in many cases, get scholarships. If they are good enough and get drafted then they are immediately part of the team and roster (with some "red shirt" and inactive exemptions). They also get paid and immediately get the benefits of being in the NFLPA.

Baseball players do not get paid for playing high schoo, or College Baseball. If they are good enough and get drafted they are paid a bonus (which now is capped) and sent to the minors. They are not part of the big league team, they are not represented by the MLBPA and they must endure this AFTER being drafted in hopes of making the team. @mauidano , your example is key.
 

Sampo Gida

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The article linked below is a must read. One comment nailed it


http://camdendepot.blogspot.tw/2018/03/baseball-booms-minor-leaguers-still.html?m=1

“This is a great post. I want to hone in on one statement you made and connect it to the concerns about baseball’s inability to attract black players.
You write, “Based on unpublished research, the typical minor league baseball player comes from a white, upper middle class home and by the age of thirty has half the earning potential and assets as a similar person from the same background that did not go into baseball.”

Many of the white, upper middle-class players are able to pursue the dream because they are getting support from mom and dad. In other words, their family is sending them spending money, letting them drive their old car, helping them line up a decent job in the off-season, etc.

Players whose families don’t have money – which would mean lower-middle and working-class players of any racial background, disproportionately black players – are less likely to choose minor-league baseball or to stick with it. If they are American citizens, then they almost certainly have better options. You could make more money and better provide for your family even in relatively low-prestige jobs like restaurant service, for example.

Immigrant players are a bit different calculus. You maybe don’t have a better option as a poor kid from the Dominican Republic or Venezuela. So they’re more like to struggle through the minors.

But basically, if baseball genuinely wanted to attract a more diverse set of players, they would pay better in the minor leagues.”

Minor league pay has significantly declined when adjusted for inflation since 1976. Its increase of 75% is far less than inflation (330%)

As for minimum wage. Its been awhile since the last imcrease (2009). About due for another. CPI already understates inflation, but minimum wage does not even track that. 2.30 in 1976 is 9.90 today if adjusted by CPI. More reasonable measures probably double that.

Looking at the economics, the link above mentions minor league attendance at 41 million and average MLB team pays 1.1 million in minor league salaries (presumably non 40 man roster players) . Doing the math on 5 bucks a ticket plus concessions, advertising , milb.tv and minor league players are taking a pretty good haircut.

Granted, perhaps 20% of players take in significant bonuses of 100K or more, but the majority receive bonuses of 2500 or less per a THT article

Only 10% of minor leaguers ever make MLB and many of them don't ever reach arbitration and make more than the minimum. As indicated above - by age 30 the average minor leaguer who never made MLB has assets and future earning potential less than half that of a person who did not pursue baseball a career.

I guess we should ask are the economic obstacles MLB imposes on poor and low income athletes who wish to be baseball players , so as to earn more profits and which may disproportionately affect African Americans, any worse than those teams in the 1950's who did not wish to bear the higher operational costs of scouting and logistical expenses in signing and developing of African American players?
 

Infield Infidel

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Here's the thing, foitball players playing in the NCAA make nothing. True. But in theory they are getting their eductaion and in many cases, get scholarships. If they are good enough and get drafted then they are immediately part of the team and roster (with some "red shirt" and inactive exemptions). They also get paid and immediately get the benefits of being in the NFLPA.

Baseball players do not get paid for playing high schoo, or College Baseball. If they are good enough and get drafted they are paid a bonus (which now is capped) and sent to the minors. They are not part of the big league team, they are not represented by the MLBPA and they must endure this AFTER being drafted in hopes of making the team. @mauidano , your example is key.
FWIW, schools started paying some athletes cost-of-attendance stipends a couple years ago, it's not much, usually between $2000 and $6000 depending on the school and sometimes depending on whether the athlete is out-of-state. (NCAA and the conferences also got sued by former athletes and have to pay COA stipends to some of them). All the power 5 schools give the stipends and some of then non-power schools give them. It's nowhere near their value for most players, hopefully it goes up from there.
 
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uncannymanny

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We are watching this happen within our own extended family. My nephew is in the Diamondbacks organization. Played college ball and was drafted. $100K bonus. All but gone now. High Single A last year. Pretty good player and has a shot. Has a wife (finishing up college this year) and daughter. If not for the generosity of his mom and dad and his in laws, he would be living in near poverty. Now think about the kids from other countries who can't speak English or have no family. And the odds that these kids "make it" are slim to none.

It is truly remarkable that this happens in an incredibly obscenely wealthy business.

For the love of the game and dream of a guaranteed contract. Shattered dreams mostly.
His $100K bonus, at high A, is “all but gone”?! I don’t mean to sound callous but that sounds like extremely poor planning. Why is MLB to blame for essentially a child spending 6 figures in a couple years? Again, none of this is to say MLB is on solid moral (or even business) ground, just interested. I grew up “poor” and probably didn’t make $100K cumulatively until I was in my mid-late 20s.
 

Joe Sixpack

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His $100K bonus, at high A, is “all but gone”?! I don’t mean to sound callous but that sounds like extremely poor planning. Why is MLB to blame for essentially a child spending 6 figures in a couple years? Again, none of this is to say MLB is on solid moral (or even business) ground, just interested. I grew up “poor” and probably didn’t make $100K cumulatively until I was in my mid-late 20s.
Did you miss the part about the player has a wife still in college and a daughter? I wouldn't really expect $100k to last very long in those circumstances, even if they are extremely frugal and the situation certainly doesn't describe someone who is "essentially a child".
 

mauidano

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His $100K bonus, at high A, is “all but gone”?! I don’t mean to sound callous but that sounds like extremely poor planning. Why is MLB to blame for essentially a child spending 6 figures in a couple years? Again, none of this is to say MLB is on solid moral (or even business) ground, just interested. I grew up “poor” and probably didn’t make $100K cumulatively until I was in my mid-late 20s.
You’d be surprised at how fast that money can go after agent and taxes. Now this is his third year in pro ball. Stretch that even further over three years with a one year old daughter and the wife gonna have some student debt after she graduates. Gone. Poor planning?

Thank God he can hit.
 

Fred not Lynn

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One possible outcome hinted at by MLB is a reduction in the number of MiLB teams - and a corresponding increase in players in college and on Indy league teams...

...and conversions of teams in former MiLB markets into college summer and indy league teams - more college summer I would suspect; Why choose a league where you pay players over one where you don’t (and in many cases THEY pay you...)?
 

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His $100K bonus, at high A, is “all but gone”?! I don’t mean to sound callous but that sounds like extremely poor planning. Why is MLB to blame for essentially a child spending 6 figures in a couple years? Again, none of this is to say MLB is on solid moral (or even business) ground, just interested. I grew up “poor” and probably didn’t make $100K cumulatively until I was in my mid-late 20s.
Not to pile on, but this is essentially an example of shaming the player. If mauidano's nephew had been one of the players drafted for a $5K bonus and had managed to claw his way up to high A, would your still look at it as a case of poor planning? I fail to see how the player's bonus excuses MiLB/ MLB from paying minor league players a living wage, especially when so much money is going back into owners' pockets.

I expect we'll see a lot of similar arguments with a similar theme (i.e. the players should be happy they get paid so much to play a kids game) without calling into account how much the owners make in relative obscurity.
 

sean1562

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100k is like three years of 33k a year, plus his minor league “salary”. Not like he blew a million in six months
 

shaggydog2000

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... before agent's fees & taxes. It's a quick race down to the poverty line, especially if the player has a family.
He's also paying taxes on the bonus at once, which is significantly different than paying taxes on 30k a year in income.

The teams want you to think that the minor leagues would be on the hook for this, and that it would hurt their financial stability, but don't the Major league teams pay the salaries? The difference is minimal for an MLB team, a rounding error on the MLB salary bill.
 

uncannymanny

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Did you miss the part about the player has a wife still in college and a daughter? I wouldn't really expect $100k to last very long in those circumstances, even if they are extremely frugal and the situation certainly doesn't describe someone who is "essentially a child".
In fact I did.

You’d be surprised at how fast that money can go after agent and taxes. Now this is his third year in pro ball. Stretch that even further over three years with a one year old daughter and the wife gonna have some student debt after she graduates. Gone. Poor planning?

Thank God he can hit.
Heh, yeah I made the mistake of not considering those factors.

Not to pile on, but this is essentially an example of shaming the player.
No it isn’t. That I made oversights in how much that means to take home pay and that I was shocked that sum of money had been gone through has nothing to do with shaming anyone. It does say I should read better.

I fail to see how the player's bonus excuses MiLB/ MLB from paying minor league players a living wage, especially when so much money is going back into owners' pockets.

I expect we'll see a lot of similar arguments with a similar theme (i.e. the players should be happy they get paid so much to play a kids game) without calling into account how much the owners make in relative obscurity.
I didn’t make any assertions about this, and definitely not contrary ones because I agree.
 

uncannymanny

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To that last paragraph OCD, I wonder if that’s because the owners are “business” people and “people are supposed to make money in business, dammit!” There’s very little distaste in the United States for owners and executives of businesses making gobs of money.
 

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To that last paragraph OCD, I wonder if that’s because the owners are “business” people and “people are supposed to make money in business, dammit!” There’s very little distaste in the United States for owners and executives of businesses making gobs of money.
That's certainly part of it, although I tend to think it's mostly because the players are out in front of the cameras, and their salaries are a matter of (mostly public) record. By contrast, the amount of revenue MLB generates is not out in the open, and neither are team revenues. Owners can pretty easily throw up their hands and say "you don't expect us to loose money, do you?" and most people can't refute the claim or don't care to wade through the financial minutiae.

Eventually teams and ownership groups won't be able to perpetuate the flimsy excuse that they're in a small market and their revenues don't justify higher spending, especially as more and more of the revenues come from new streams like digital media.
 

Fred not Lynn

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I think another thought is; Are they being paid as necessary tools in the small businesses that make up MiLB, where margins and profits are much smaller, or are they being paid as cogs in the multi billion dollar enterprise that is MLB?
 

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MLB was crowing a couple of years ago about how awesome it was that its revenues were topping $10 billion, so it's not a complete secret.
 

shaggydog2000

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I think another thought is; Are they being paid as necessary tools in the small businesses that make up MiLB, where margins and profits are much smaller, or are they being paid as cogs in the multi billion dollar enterprise that is MLB?
This is related to what I was driving at above. To me the players are paid by the MLB teams, and those salaries are part of the player development overhead for those teams. That they are providing free labor to MiLB teams in return for player development opportunities is a side deal for the MLB teams. There are maybe 200 players in the US based minor league teams for the Red Sox. 25 per A to AAA, 35 each on the 2 short season teams. Add in some injured and otherwise inactive players. The wages vary from 1100/month to 2150 in AAA. Lets just average that at 1500 and say the season is 5 months. That's about $1.5 million total for minor league salaries. That's not even 1% of their MLB payroll. They could triple the MILB salaries and still have it be less than they would be spending in an uncapped international free agent market for example. It's less than they've saved by having a draft signing bonus limit as well. If the MILB players had a place at the table when the CBA was drafted, they may have been able to extract higher salaries in return for that money disappearing from their pockets, but since they had none they are now making less than minimum wage and less compensated up front for it.
 

Dewey'sCannon

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The minor league players need a union of their own. They really need representation to get a fair shake. Sure, the MLBPA could organize them and represent them, probably as a separate bargaining unit, but they've never shown an inclination to do so, and the major leaguers might well be disinclined to do much to help them.
 

santadevil

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While doing my Google research, I just found out that AHL hockey players (equivalent of AAA players in baseball), make a minimum of $45,000/year and the parent NHL club pays the salary, just like the parent MLB club pays the salary of their MiLB players. This makes shaggy's math above about tripling everyone's salary, which is still really low, seem even crazier. I know there are less minor league players for NHL clubs, but wow.

Rookie ball or Low A should start at a minimum of $20,000, and even that seems low.

Something definitely needs to happen here.
 

santadevil

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I don't think this totally fits here, but man on man, these up and coming players need better guidance to be provided from their parent clubs.

http://www.espn.com/mlb/story/_/id/23155146/cleveland-indians-prospect-francisco-mejia-files-lawsuit-disputed-loan

Essentially, Francisco Meija, an Indians prospect was given a loan of $360,000 in 2016. He apparently signed over 10% of his future earnings to this company, Big League Advance, which is ran by former Major League players and lists Paul Depodesta on its Board. This feels very wrong to me, especially getting someone who doesn't have the education or background to know how to deal with what they are signing.
 

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That's a bit of an odd story, because the use of 'loan' repeatedly is trying to give a certain implication (i.e. predatory payday loans), but from that article I can't tell if it's actually a 'loan' or an investment - basically, if he flames out and never makes anything in MLB, does he have to repay the $360k or not?

loaned him $360,000 in exchange for a 10 percent stake in his future earnings.
...
"These runners [usually former baseball players] advise prospects that Defendant BLA will advance them considerable sums of money, to be repaid by a percentage of the player's future earnings.
Because if the terms are 'you have to pay back $360k AND we get 10%', that seems to me to be crazy. If the terms are 'we give you $360k and we get 10% of future earnings', that to me isn't necessarily improper - people sell 10% equity shares in start-up companies all the time for valuations that ultimately are way above what they paid.

Now, some stuff in the allegations are clearly improper regardless if true (and suggest why having any involvement with current MLB teams is problematic), as they're civil issues and not things that should effect status with MLB:

Mejia claims BLA representatives threatened to sue him and prevent him from playing baseball if he did not pay.
 

trekfan55

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That's a bit of an odd story, because the use of 'loan' repeatedly is trying to give a certain implication (i.e. predatory payday loans), but from that article I can't tell if it's actually a 'loan' or an investment - basically, if he flames out and never makes anything in MLB, does he have to repay the $360k or not?



Because if the terms are 'you have to pay back $360k AND we get 10%', that seems to me to be crazy. If the terms are 'we give you $360k and we get 10% of future earnings', that to me isn't necessarily improper - people sell 10% equity shares in start-up companies all the time for valuations that ultimately are way above what they paid.

Now, some stuff in the allegations are clearly improper regardless if true (and suggest why having any involvement with current MLB teams is problematic), as they're civil issues and not things that should effect status with MLB:
This sounds fishy all around, but the article does state that if Mejia did not make it to the Major Leagues he would not owe them anything. (and if he earned 500 million dollars he would owe them 50 million). IANAL, but is such an agreement enforecable? On the face of it it may be because the company does stand to lose something if the kid doesn't make it.

As for the bolded, selling a stake in a corporation is normal, it is possible to sell a piece of a company for $1 and then have said company be worth billions. Does it work the same when accounting for future salary earnings from an individual?
 

wade boggs chicken dinner

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You’d be surprised at how fast that money can go after agent and taxes. Now this is his third year in pro ball. Stretch that even further over three years with a one year old daughter and the wife gonna have some student debt after she graduates. Gone. Poor planning?
Prospects should structure their bonuses with payouts over time to minimize taxes. I know no one is really thinking of it when they are drafted, but three $33K payments I would think would have much less taxes than one $100K payment.

This sounds fishy all around, but the article does state that if Mejia did not make it to the Major Leagues he would not owe them anything. (and if he earned 500 million dollars he would owe them 50 million). IANAL, but is such an agreement enforecable? On the face of it it may be because the company does stand to lose something if the kid doesn't make it.

As for the bolded, selling a stake in a corporation is normal, it is possible to sell a piece of a company for $1 and then have said company be worth billions. Does it work the same when accounting for future salary earnings from an individual?
We're about to find out. The basic of the bargain is enforceable but the court will end up ruling on whether there were a set of facts that made the bargain unconscionable or whether any fraud was committed.

Note: I've seen these kind of contracts in the music business too.
 

Gdiguy

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Fangraphs has an article with a few more details:
https://www.fangraphs.com/blogs/francisco-mejia-and-the-legal-limits-of-brand-contracts/

As already noted, Mejia has alleged that BLA hired a lawyer for him — and paid that attorney to advise him — solely so that it could put in the contract that he had the benefit of counsel. If that’s true, that goes beyond a disparity in bargaining power and into active manipulation and deception of Mejia by BLA. Now, BLA doesn’t seem on the surface to be a fly-by-night organization; its staff and board are a who’s who of baseball bigwigs, including CEO Michael Schwimer, himself a former major leaguer, and Paul DePodesta, a former front-office executive. And BLA, for its part, denies Mejia’s allegations of wrongdoing in its answer, saying, for instance, that there was no interpreter because “the signing was conducted in Spanish.” And it’s worth noting that the contract is in Spanish, too, so the language barrier isn’t as big of a problem as the Complaint makes it out to be.

But the biggest red flag appears to be the counterclaim filed by BLA against Mejia — and, more precisely, the reason for that counterclaim. BLA’s counterclaim alleges that Mejia violated the contracts between them by even disclosing their existence because the contracts are confidential by their own terms.
...
BLA, in its counterclaim, is asking not only for money from Mejia for breaching the confidentiality agreement, but also for an order from the Court barring Mejia from mentioning the BLA contracts ever again, in any context. But the fact that BLA is even trying this speaks volumes — and not in a favorable way for BLA. If anything, a finder of fact is likely to look at BLA’s tactic as evidence of the disparity in bargaining power between it and Mejia at the time the contract was made; after all, if everything is as above-board as BLA says, why all the secrecy? Now, I would understand if BLA was simply trying to protect the terms of the agreement. But arguing that the existence of the agreement itself is confidential simply doesn’t seem lawful in this context. And the more BLA pushes it, the more they may make Mejia’s argument for them.
 

Doug Beerabelli

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Technically speaking, another party can pay for a lawyer a particular client without it being unethical. If the hired lawyer a) didn't ever represent the payer* , b) made clear to payer that it was not the the client and would not work in their interests, and c) actually did that, then not an ethical violation per se.

The proof is in the pudding, of course. Mejia certainly will faces in regard to that issue into evidence, assuming they are admissible.


*or got proper waivers of a conflict of interest if he did, and didn't have a situation where there was an unresolvable conflict of interest that would disqualify representing Mejia regardless of such waivers.