Baseball’s latest massive payday arrived on Wednesday, this time in the form of Fernando Tatis Jr.’s 14-year, $340 million extension 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’s a transformative deal for the Padres and the league as a whole. Tatis, however, won’t be be able to enjoy as much of it as you would expect.
The reason: a deal he made as a 19-year-old, more than a year before his MLB debut.
What is Big League Advance, and why is it getting part of Fernando Tatis’ contract?
As The Athletic’s Ken Rosenthal noted Thursday, a portion of Tatis’ deal with the Padres will be going to Big League Advance, a company with a very specific, and some would say predatory, business model.
Essentially, Big League Advance is an investment company, but instead of investing in businesses and properties, it invests in players. The company approaches minor leaguers and offers them a one-time payment in exchange for a small but significant cut of their earnings as an MLB player.
If the minor leaguer’s career doesn’t pan out and he never makes it to MLB’s lucrative free agency, it’s a good deal for the player. However, if that player, say, becomes an MVP candidate and signs one of the largest 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 reportedly signed a deal with Big League Advance during the 2017-18 offseason. The exact amount Tatis will be handing over to Big League Advance is unknown, but the company’s website offers the following pay structure as an example:
For example, Big League Advance may offer a player $50,000 for every 1% of his future professional earnings. If a player wanted to sign a deal for 5%, he would receive $250,000, or if he wanted to sign a deal for 10%, he would receive $500,000. While our offer amounts are non-negotiable, the percentage the player would like to give up is up to the player.
So if Tatis took the largest payment, he would be set to pay Big League Advance $34 million over the course of 14 years. Not every player Big League Advance buys into will make the majors, but the possibility of landing a breakout player like Tatis seems to make it all worth it.
Tatis signed the deal for a reason
Obviously, not many people are going to feel bad for Tatis about this deal. Even after Big League Advance and his agents take their cuts, he’ll still have enough money to live in luxury for the rest of his life. At the same time, though, 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 starters, the timing of Tatis’ Big League Advance deal is important. During the 2017-18 offseason, Tatis had just finished a season spent mostly in Class A ball, plus 14 games of Double-A. He was still a real prospect — MLB Pipeline ranked him as the No. 4 prospect in San Diego’s system and No. 52 prospect overall — but he wasn’t Fernando Tatis Jr., destroyer of baseballs and flipper of bats.
At that point, Tatis was mainly known for being the Padres’ return in the James Shields trade, which has since become infamous among Chicago White Sox fans.
More importantly, Tatis was still making a minor league salary, which was and still remains outrageously low for the entry-level employees of MLB’s 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 prospect in 2015, but working to become an elite player is expensive, and Tatis told Rosenthal that’s what his Big League Advance payment went toward:
[Tatis] said after signing with BLA that he wanted to hire a personal trainer, eat better food and get a better apartment. He used the money to upgrade not only his training regimen in the U.S., but also his offseason practice field in his native Dominican Republic.
It may also be worth wondering why the Padres weren’t paying for their No. 4 prospect 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 their least powerful employees more than the bare minimum, and giving a guy like Tatis the resources he wants would be an admission to them, not an investment.
Again, Tatis is hardly going to suffer from this, though the MLB Players Association won’t be happy watching this play out. Tatis knew this was a possibility, telling Rosenthal he just saw it as a negligible price if his career took off:
“If I’m a successful player and make big money, I’m not going to care about giving that money away,” he said. “That will be nothing if I make all that big money.”
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