Feb
26

Orlando Hudson’s Creative Contract

I am a big fan of Orlando Hudson.  In a baseball world where analysts sweat over “prospects” who often never bring back any return on the huge investments teams pump into attaining them, it is nice to see a player make it who was selected in the 43rd round of the draft.

Tony Jackson of the Los Angeles Daily News broke the news on the terms of Hudson’s contract with the LA Dodgers.

  • $380,000 signing bonus, deferred without interest to a time not designated
  • $3 million base salary for 2009
  • $150,000 each for 150 and 175 plate appearances
  • $200,000 each for 200, 225, 250, 275 and 300 plate appearances
  • $250,000 each for 325, 350, 375, 400, 425, 450, 475, 500, 525, 550, 575 PAs
  • $10,000 for EVERY plate appearance from PA #576 through PA #632. That’s 57 PAs for total of $570,000.
  • also, BEGINNING WITH 550 PAs, every one of these incentives, including that $570k, is deferred without interest to a time not designated. And the contract requires Hudson to donate $25,000 to the Dodgers Dream Foundation.

Creative structuring by Hudson’s agent, Paul Cohen Greg Genske, who had the unpleasant job of finding a place for his client in this troublesome economy.  Hudson is not a superstar like Manny, A-Rod, or Peavy, but he is a solid role player.  That type of player has had trouble finding teams willing to spend money on him this offseason.

If Hudson reaches each benchmark, he will end up with a one-year salary of $8 million, which does not seem all-that unlikely (pending he stay healthy throughout the season).  In 2008, he made $6.25 million with Arizona.  The year before that, Hudson made $3.9 million.

This is not the first time that I am giving Even though Paul Cohen did not negotiate Hudon’s contract, I am going to keep my props up here anyway.  So, props on this blog to Cohen for his former negotiating skills.  On May 8, 2008 I praised Cohen for securing his client, Troy Tulowitzki, a six-year, $30 million contract with the Rockies.  Tulowitzki had an unimpressive first year in the MLB in 2006, but put up very strong numbers in 2007.  Cohen decided to make sure his client got paid for that work and not allow a bad season (like 2008) lower Troy’s value.

I hope that Orlando Hudson also ends up benefitting from Cohen’s Genske’s creative negotiation tactics.

(Gotta love the strikethrough button)

  • Lee

    Darren,

    Just an fyi. Orlando is not a typical late round draft, as he was a DNF back when those were allowed at a JC, and he signed for 2nd/3rd round money after his sophomore season at JC.

    • http://sportsagentblog.com Darren Heitner

      Very good point. But it’s nice to think that late round guts/non-drafted guys have a chance even though teams may not be “pot-committed” as they are with early round guys that they spend tons on in signing bonuses.

      follow @Darren_Heitner on twitter

  • Jake

    Orlando Hudson is not represented by Paul Cohen.

  • Johnny Magodoo

    Greg Genske I was told.. I heard Griffey also has a very unique contract structure tied to various incentives (including game attendance). Any chance you can get ahold of that contract? When do you plan on becoming a certified baseball and basketball agent? Thanks.

  • Jake

    Legacy Sports Group

  • Parrish

    Darren,
    Where did you find the details to Orlando Hudson contract?

  • Johnny Magodoo

    Darren, as an MLB agent, doesn’t the union send you details of the player contracts? Or is this stuff made public? Let’s say Hudson was offered the deal above and also a guaranteed $5,750,000, wiich deal would you prefer? Thanks.

    • http://sportsagentblog.com Darren Heitner

      First of all, I am not an MLBPA registered agent. I do not become one until I represent a player on a team’s 40-man roster (which will hopefully occur by the end of this year). Please make your question a little more clear.

      follow @Darren_Heitner on twitter

  • Johnny Magodoo

    Thanks, Darren. A couple follow up questions: Don’t you have to apply to be an MLBPA registered agent and pay annual dues? I hope one of your current clients or a new client is on the 40-man roster of a team – that would be a huge accomplishment. I was trying to put you in a position of an agent who had the option to structure the deal like Hudson’s or take a large guaranteed base with not as much upside. What are some other creative incentives that players can have in their contracts; like what is a vesting option and what besides PA and awards can be used in bonuses? Thanks.

    • http://sportsagentblog.com Darren Heitner

      You apply to be an MLBPA registered agent once you have a player on a 40-man roster, not beforehand. It would definitely be a huge accomplishment to get a 40-man guy. In due time, my friend. You have to look at a lot of factors when deciding on a higher potential heavy incentive based contract or a lower K with a larger guarantee. You look at age of player, possibility of injury, types of incentives, players surrounding your client, etc. The most creative incentives are those that are made specifically for your client. An example: You have a very talented client who dominates for his team but the manager can’t get over the player’s weight. You and the player have talked about it, and he firmly believes that he can drop 10 pounds in a year. You put it in the K as an incentive, which should be easy to reach, and makes both sides happy.

      For information on vesting: http://en.wikipedia.org/wiki/Vesting

  • Bill

    Daren – I have looked through bios of your baseball guys and all of them seem like Rookie or Low-A Ball guys. Who is that you feel will be on the 40-man this season?

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