Following a week where he negotiated nearly $1 billion in Major League Baseball player contracts, super-agent Scott Boras says the model teams have used for years has failed, leading to a return to a more traditional model that calls for organizations to spend money.
Appearing on CNBC's "Squawk Alley," the founder of Boras Corp. said baseball's attendance was proof the Moneyball model "didn't work" and fans demonstrated by staying away from the ballparks.
"We've had attendance drops four years in a row," Boras said. The "moneyball" theory of baseball relies on statistical analysis to give small-market teams an edge by signing players that are undervalued by other teams. Michael Lewis's 2004 book "Moneyball: The Art of Winning and Unfair Game" that was later made into a movie chronicled the strategy used by the Oakland Athletics general manager Billy Beane. He took the team to the playoffs from 2000 through 2003 on a relatively modest budget.
Earlier this year, USA Today reported the MLB suffered a 4% decline in attendance in 2018, which carried over to start the season in 2019. Following a less-than-stellar free agent period last year, Boras said teams are more willing to spend on star veteran players this off-season.
"The fanbase in baseball has spoken about the models baseball is using, and that is these predicted models where they felt that the successes of teams were going to be measured by something other than I think the fans perception in the ballpark about who great players are," Boras said.
Boras negotiated two of the biggest deals in MLB history for pitchers at the 2019 MLB winter meetings in San Diego this week. He helped right-handed pitcher Gerrit Cole get a 9-year deal valued at roughly $324 million with the New York Yankees.
Days prior to that news, Boras won a 7-year deal valued at $245 million with the Washington Nationals for World Series Most Valuable Player Stephen Strasburg. Boras then finalized the same contract terms for third baseman Anthony Rendon with the Los Angeles Angels during the final hours of the meetings in San Diego.
The total value of deals he negotiated at the Winter Meetings: roughly $878 million. And with other top-name players like pitchers Dallas Keuchel and Hyun-jin Ryu remaining on the free-agent market, Boras should surpass $1 billion in contracts negotiated this offseason.
Boras said after team owners reviewed the use of sabermetrics to build rosters and determined the model wasn't working, they returned to a more "traditional" approach.
"They felt that they had a model that allowed them to use younger players, avoid free agents, and they thought the clubs would be more successful doing it," Boras said. "And it's illustrated that did not work."
Boras feels the traditional approach is scouting, growing and developing younger players, and signing big-name veteran players to substantial contracts if necessary. According to Boras, the fans respond better to the traditional roster-building model.
"Teams who employ great players, veteran players, are being very successful," Boras said. "The need for them is something that the fans identify with; they want known commodities to go see. They want competition at the ballpark."
Once official, Cole's contract will be the fourth-largest deal in MLB history behind Yankees outfielder Giancarlo Stanton, who has a $325 million contract. Philadelphia Phillies outfielder Bryce Harper, who's also represented by Boras, has a $330 million contract and Los Angeles Angels outfielder Mike Trout's contract is worth $426.5 million.
The deal pays Cole an average of $36 million a year, the highest average annual payout in the MLB, according to Spotrac, surpassing Strasburg's $35 million average yearly pay.
Other pitchers earning an average of at least $30 million a year include Astros pitcher Justin Verlander at $33 million, Boston Red Sox lefty David Price at $31 million, Dodgers' Clayton Kershaw at $31 million and and Nationals pitcher Max Scherzer at $30 million.
With $2.4 billion in managed contracts and $118 million in commissions, Boras is ranked the second-most powerful sports agent in the world by Forbes.