baseball fans know by now, the website Deadspin has enjoyed an avalanche of
attention after publishing incriminating
information about Albert Pujols’ agent Dan Lozano. According to Deadspin, the
same content had been provided anonymously to traditional sports news sites ESPN.com, Sports
Illustrated and Fox Sports, yet only Deadspin ran with it.
article, “Dan Lozano: Albert Pujols’s Superagent, "King Of Sleaze Mountain," was
filled with juicy stories and embarrassing photos of the agent. Not a word of it
was attributed to any named individuals.
aside the non-revelation that agents can be sleazy, perhaps the most serious
accusation lodged against Lozano was that his troubled personal finances led him
to negotiate a hurried and unfavorable contract for the St. Louis Cardinals
first baseman in 2004.
article will look into that allegation using generally-available information –
something anyone could have done had they been motivated to question the claims
the Deadspin article:
“Albert Pujols was the best thing
that ever happened to Dan Lozano, who by 2004 was nearly broke, colleagues say.
A source familiar with the negotiations says the Cardinals knew of Lozano's
money issues (as did many GMs around baseball), and they knew he was desperate
to get a contract extension signed as soon as
"’How can you handle your client's
finances when you can't handle your own?’ asks a rival
“The result: eight years at $14.5
million a year. One executive called it ‘the best owner's contract in baseball,’
according to a baseball source.
“If it wasn't full market value,
but it was money right when Lozano needed it...” [sic]
In summary, the related
allegations appear to be as follows:
was desperate to get Pujols’ contract signed ASAP.
deal was below market value.
received needed immediate financial relief.
With the benefit of 20-20
hindsight, the Pujols contract became a great one for the Cardinals. There is no
doubt about that. I don’t recall anyone saying it, however, when the deal was officially
announced by Pujols and then-general manager Walt Jocketty in Jupiter,
February 20, 2004.
In fact, at that time, it
was celebrated for what it was – an unprecedented contract in Major League
It was only the ninth
$100 million-value contract in baseball history. Further, Pujols was the
quickest ever to receive such a huge deal, ESPN reported when the contract news was first
disclosed (on this very site, by the way).
What really distinguished Albert from the other eight was that he had played only three full seasons for the Cardinals to date and was first-time arbitration eligible. Pujols was still three years away from his first potential shot at free agency. The previous season, his $900,000 salary was then the record for a third-year
Pujols’ situation in
Specifically, it was
February 18, 2004 as players across MLB were about to report to spring training
camps. Pujols’ arbitration hearing was scheduled later that same week. Almost
immediately, he would be required come to terms on some kind of contract for the
Had Pujols/Lozano and the
Cardinals gone the arbitration route instead of agreeing to a multi-year deal,
Pujols would have been compensated at one of two rates. He would either have
been paid his submitted amount of $10.5 million or the team’s proposal of $7
million for the upcoming season, with no chance of anything in between. That
binary decision would have been made by the arbitrators assigned to hear his
Instead, the two sides
came to terms on the record-breaking, seven-year contract with an eighth-year
option. The kicker is that during the first year of that deal, Pujols earned the
same $7 million as if he had lost in arbitration.
Note that the terms were
not as Deadspin stated, “eight years at $14.5 million a year.” Pujols’ annual
salary actually began low and escalated over the term of the contract. That is
important to distinguish in the context of Lozano’s alleged desire to get his
hands on quick money in 2004.
contract called for him to receive $7 million in 2004, $11 million in 2005, $14
million in 2006, $15 million in 2007 and $16 million in each of the final three
years of the deal (2008-2010). The Cardinals also held a $16 million club option
for 2011 with a $5 million buyout. They later exercised that option for the
eighth and final season. Deferred money from years four through eight, award
bonuses and other perks were also part of the contract. There was no signing
bonus. Ultimately, Pujols’ base salary became $111 million over eight
If Lozano wanted more
money over time, it seems he would have shot for a bigger deal, instead of
allegedly settling for less. However, the focus of the Deadspin contention was
that the agent’s financial need was immediate in 2004 and it drove his
Pujols’ contract did not deliver
Consider this. Had
Lozano’s actions been fueled by a desire to maximize his short-term commission,
why did he not try to get a flat $14.5 million over eight years as Deadspin
In reality, acceptance of
that would not have been under the agent’s control, as the Cardinals could have
balked at such terms. However, the decision to take Pujols to arbitration
absolutely could have been made by Lozano.
Had they gone to hearing
and won, the agent would have gained his cut of $10.5 million rather than $7
million. There would have been no 2004 risk to him in making that attempt. Even
if he and Pujols had lost the hearing, the player’s salary that season would
have been identical to the $7 million amount for which they settled.
If Pujols himself wanted
the multi-year deal right then, which certainly could have been the case, why
didn’t Lozano demand a big signing bonus up front or at least more money in the
first year(s) of the deal to maximize his current cash flow? Perhaps he did and
the Cardinals gave him the thumbs down. We will never
The basic concept seems
pretty simple. More money for the player earlier means more commission in the
agent’s pocket sooner, as well. The reality is that Pujols’ deal is aligned
completely opposite from that approach.
Even if the two sides had
gone to arbitration in 2004, it would not have limited Lozano’s and Pujols’
options going forward.
Lozano could still have
turned around the next day or the next year and attempted to negotiate a
multi-year deal for Pujols. If cash in 2004 was the primary objective, as part
of a later multi-year deal, Lozano might have tried to convince the Cardinals to
adjust Pujols’ 2004 salary upward from what would have been established in the
There is no indication
that any of that actually happened.
To better understand the
mechanics of player-agent compensation, I contacted lawyer and agent Darren A. Heitner with a series of
inquiries. When doing so, I did not mention the subject of this article, but
instead posed general questions.
First of all, I asked
Heitner when MLB player agents receive payment.
do not pay their agents up-front on their salaries,” Heitner explained. “Agents
will earn their commissions as their clients receive their salary; however,
players and agents are permitted to agree to a structure whereby agents are
compensated at some later time. It is good practice for agents to send
invoices to players at the middle of the season and again towards the completion
of the season… It is not uncommon for agents to invoice their players on their
signing bonuses upon receipt of same.”
he is now on his own, Lozano was employed by the Beverly Hills Sports Council in
2004. I wondered if the firm might have given him extra compensation for the
Pujols contract. Again, Heitner responded to my generic question, without any
reference to this particular situation.
are certainly 'taken care of' by their employers when they are able to
successfully recruit a talented player and then negotiate a mega deal on his
behalf,” Heitner noted. “Many agencies pay their employee agents a commission on
deals procured for their clients in addition to a base salary. These payments
are often accounted for in the agent's employment agreement with the agency. It is not rare for agents who hit the jackpot on a deal to get a little
something special in their Christmas stocking.”
other words - and this is my summation, not Heitner’s - there is nothing to
indicate that Lozano received an immediate financial windfall as a result of
Pujols’ contract signing. Of course, only he knows that
answer for sure.
For subscribers: To read the full, exclusive
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Pujols’ 2004 contract was
not pushed through early. In fact, he was one of the last arbitration-eligible
players in MLB to come to terms for the season.
In the context of cash
flow, the timing of the deal appears insignificant, if not completely irrelevant. There seems no reason to
believe Lozano would have received his commission from Pujols’ big contract
sooner than customary – after the player was paid during the upcoming season by the
Further, the deal does
not appear to have been executed in a way to maximize 2004 earnings. Pujols made
the same that season under the mega deal as if he had suffered the worst-case
scenario, an arbitration loss. Finally, there was no signing bonus to generate quick
Lozano had personal financial problems in 2004 or maybe he didn’t. But the
contract Pujols signed doesn’t appear to be related, despite the allegations
In my view, the Pujols
contract-specific contentions in the Deadspin story simply do not hang
Team-friendly deal now, but it
Fast-forwarding six years into his eight-year contract, Pujols’ place in
baseball history had been cemented, with three National League Most Valuable
Player Awards and a World Championship to his credit. Then still two seasons
away from his current free agency, Pujols acknowledged that his 2004 contract
had benefited his club while making it clear the deal was good for him, as well.
Cardinals Winter Warm-Up fan festival in January 2010, the first baseman said
the following, as reported by the St. Louis Globe-Democrat.
people talk about my contract, but when I signed my contract in 2003, 2004,
whenever it was, people are talking about that now being a bad contract," Pujols
said. "But you know what? When I signed my contract back then, the Cardinals
didn't have to do that but they did it. And it was one of the best contracts at
"You can compare my contract now to Manny Ramirez, (Mark)
Teixeira, A-Rod, whoever you want, and it looks bad, but you know what, they
were free agents and I wasn’t. I only had three years in the league and the
Cardinals pretty much did me a favor, signing me for $100
thing is absolutely clear. The person who would have the most to lose, Pujols
himself, remained appreciative of the deal Lozano negotiated on his behalf.
Pujols had second thoughts about his handling by Lozano, he easily could have
changed his representation any time during the course of the last eight years.
Apparently, on multiple occasions, other agents have tried to convince him to do
September, Pujols told USA Today this:
all of the dirt about Danny from agents for the last 10 years, all trying to
sign me. They're wasting their time. Danny has been an open book. To me, he's
the best agent in the business, and I trust him with my
week, the St. Louis Post-Dispatch chased Pujols down on vacation in Hawaii, from where he
absolutely staying with Danny as my agent," Pujols said. "And he will continue
to negotiate my free agent contract. I am embarrassed for the people who are
behind this. I want to make sure that people hear
The bottom line is that Pujols remains satisfied with his
choice of representation. That is entirely his business, not ours.
Brian Walton can be reached via email at email@example.com.
Also catch his Cardinals commentary daily at The Cardinal
Nation blog. Look for his weekly minor
league column during the season at FOXSportsMidwest.com. Follow Brian
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