Baseball’s last massive payout came on Wednesday, this time in the form of a $ 340 million 14-year extension by Fernando Tatis Jr. with the San Diego Padres.
The deal is the longest in baseball history, the third largest in terms of total money committed and will keep a potential face of MLB in San Diego for the long term. It is a transformative business for the Fathers and the league as a whole. Tatis, however, will not be able to enjoy it as much as you would expect.
The reason: a deal he made at age 19, more than a year before his MLB debut.
What is Big League Advance and why is it part of Fernando Tatis’ contract?
As Ken Rosenthal of The Athletic noted on Thursday, a part of Tatis’ deal with the Fathers will go to the Big League Advance, a company with a very specific business model, and some would say predatory.
Essentially, Big League Advance is an investment company, but instead of investing in businesses and properties, it invests in players. The company addresses players from smaller leagues and offers them a one-time payment in exchange for a small but significant reduction in their earnings as an MLB player.
If the secondary league player’s career does not work out and he never gets to the lucrative free MLB agency, it is a good deal for the player. However, if that player, say, becomes a MVP candidate and signs one of the biggest contracts in baseball history, it’s a bonanza for Big League Advance.
The latter is exactly what will happen in the case of Tatis, who would have signed a contract with the Big League Advance during the 2017-18 off-season. The exact amount that Tatis will pass on to Big League Advance is unknown, but the company’s website offers the following payment structure as an example:
For example, Big League Advance can offer a player $ 50,000 for every 1% of their future professional earnings. If a player wanted to sign a 5% deal, he would receive $ 250,000, or if he wanted to sign a 10% deal, he would receive $ 500,000. Although the values of our offer are not negotiable, the percentage that the player would like to give up is up to the player.
Therefore, if Tatis received the highest payout, he would have to pay Big League Advance $ 34 million over 14 years. Not every player who buys the Big League Advance will make it to the majors, but the possibility of getting a player like Tatis seems to make it all worthwhile.
Tatis signed the agreement for a reason
Obviously, many people will not feel bad about Tatis about this business. Even after Big League Advance and his agents receive his cuts, he will still have enough money to live in luxury for the rest of his life. At the same time, however, it may be worth discussing how a player who seems to have been marked for greatness for years would sign a deal that could cost him up to $ 34 million.
For a start, the timing of the Tatis’ Big League Advance deal is important. During the 2017-18 offseason, Tatis had just finished a season spent mainly on the Class A ball, in addition to 14 Double-A games. He was still a prospect – MLB Pipeline ranked him as the No. 4 prospect in the San Diego system and the No. 52 prospect in general – but he was not Fernando Tatis Jr., baseball destroyer and bat flipper.
At this point, Tatis was known mainly for being the return of the Fathers in the James Shields trade, who has since become famous among Chicago White Sox fans.
More importantly, Tatis was still earning a minor league salary, which was and remains scandalously low for the beginning employees of the MLB player base. The pay scale for Class A players in 2017 was $ 1,300 per month, and only for months during the season. Tatis received a $ 700,000 signing bonus with the White Sox as an international perspective in 2015, but working to become an elite player is expensive, and Tatis told Rosenthal that this was what his Big League advance payment was for. :
[Tatis] said after signing with the BLA that he wanted to hire a personal trainer, eat better and get a better apartment. He used the money to update not only his training regime in the United States, but also his off-season field of practice in his native Dominican Republic.
It may also be worth asking yourself why the Fathers were not paying for their No. 4 prospectus to get the training and nutrition he wanted, but let’s face it, we all know the answer there. MLB teams will fight tooth and nail to avoid giving less powerful employees more than the bare minimum, and giving a guy like Tatis the resources he wants would be an admission for them, not an investment.
Once again, Tatis will hardly suffer from this, although the MLB Players Association is not happy to watch this game. Tatis knew this was a possibility, telling Rosenthal that he saw it as an insignificant price if his career took off:
“If I am a successful player and make a lot of money, I will not worry about donating that money,” he said. “That will be nothing if I make so much money.”
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