Superagent Scott Boras has made waves again this offseason as the agent of Mark Teixeira. He's also still negotiating for Derek Lowe and Manny Ramirez, among others.
This morning on "Squawk Box," I sat down with Boras for a wide-ranging interview.
Darren Rovell: With your client Mark Teixiera, a lot of people were saying you were waiting too long. The Angels are out, the Red Sox are out, now here come the Yankees. Can you take me behind the scenes on that one?
Scott Boras: I think from the start, the type of player that Mark is and what he means to a major league team, there were really as many as ten teams that were trying to employ him from the start of free agency...And how it unfolds really is that you have a player meeting and the teams, and the teams are making evaluations and through that really four or five-week process, Mark came up with a decision. And I think the marketplace and Mark had a meeting of the minds.
DR: Did the Yankees really come out of nowhere, though?
SB: No. The Yankees were involved the whole time. They had met with Mark up to four or five weeks ago. They had been involved in the process throughout.
DR: Let's talk about the Yankees' free agents. When you add C.C. Sabathia, A.J. Burnett and Mark Teixeira, that's $423.5 million. Everybody says how, in this economy, do the Yankees do this? You argue they have to do it. Why?
SB: I think it's simple. The Yankees have their own economy and they have their own fan base. I think the people in New York are tremendously excited about what's coming for the New York Yankees and that's really what their job is. They set up a plan and a system whereby they would only lose one draft pick and sign three major free agents...
This way, by calculating both their payroll deduction of $88 million and placing themselves in a marketplace where there wer three extraordinary players to sign. I think it was an excellent strategic plan and their budget will be arguably less than last year.
DR: It also has to do with the YES Network. They need to keep that going, a reason to get the ratings up and the advertising revenue up.
SB: I think their whole system, like I say they have their own economy, their regional sports network, the value of their team going into a new stadium, the fact that they weren't in the playoffs last year. Keeping their brand as being the New York Yankees and the way they do business is very different than a lot of other teams. There's about four or five different methods in Major League Baseball for winning and the Yankees and maybe a couple of other teams have their method, which frankly development is less of a factor than free agency.
DR: Brewers owner Mark Attanasio says the Yankees signings are ridiculous and that baseball needs a salary cap. I have a feeling I know what your reaction is to that. Why does that not make sense?
SB: I'm not sure what a salary cap does other than it prevents choices. And I think what makes sport exciting is that you have owners at particular times and really at any time they can make a choice to improve their team or make a choice just to decide that they're not going to attempt to win in a particular year. That, I think, creates a mystery about the sport.
I think when you look at sports that have salary caps, if you look at the NBA, they talk about parity. I don't think there's any question that at the start of the season, everyone knew the Celtics and the Lakers were going to be the two to beat and they were going to contend. They've had a salary cap for years.
DR: You have so many clients and, especially during this free agency period. A lot of people could say the Mark Teixeira deal compromised Manny Ramirez' option because now he can't go to the Yankees. We know he's not going to the Red Sox. Now he can only go to the Dodgers or somewhere else. How do you play that, where you have a lot of clients and you don't want the big money guys to take away from what other people can make?
SB: Well, I think our clients, they want the best information and teams offer contracts and we're not involved in that. What we try to do is certainly understand what the team's choices are, communicate those to our clients and then whatever choices our clients make in response to the team offers.
And then we go with the next step from there. So a player like Manny, who is an extraordinary offensive player, a Hall of Fame athlete, certainly for those clubs who are truly interested in winning and having that kind of player available, I think the marketplace will be quite broad for him.
DR: What do you think the outlook for baseball in general is on revenues?
SB: Well, when we go back historically and we look at baseball in times of recession, it's done quite well. Only in the sense that we have a wide base of ticket pricing. I think the barometer for baseball is always going to be a couple things.
One is that we have a security blanket if you will in the game because our television contracts and many other vendor contracts relating to the rights of the game are fixed over a five- or six-year period. So when we see recessionary trends usually the baseball teams have a large amount of money that comes forward to them from their vendors and they're somewhat recession proof because they have those contracts in place.
I think the second thing is that the fans, in much like going to the movies or such that they have the opportunity to go to, games because the pricing on the seats are so variable and that we're able to have 81 games and the ability to keep the fan base intact.
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