The Brewing Dispute over Alex Rodriguez’s Bonuses
When reports emerged in January that the Yankees were intending to contest the home run milestone bonus agreement the team entered with Alex Rodriguez back in 2007, it was unclear whether or not the matter would ever actually come to a head. Following a season-long suspension for performance enhancing drug use, no one knew for sure whether Rodriguez would even make the Yankees’ opening day roster, let alone be given enough playing time to hit the six home runs necessary to tie Willie Mays at 660 (triggering the first of five potential $6 million milestone bonuses under the 2007 agreement).
Rodriguez, of course, did make the team and ended up hitting his 660th career home run on Friday evening in Boston. As a result, attention has once again focused on whether the Yankees have any realistic hope of escaping the milestone bonus agreement.
As I noted back in January, because the bonus agreement has never been released publicly, it is difficult to fully assess the Yankees’ chances of escaping the $6 million payment. However, while there is still much that we don’t know about the contract, recent developments have shed some additional light on the legal arguments the Yankees will likely rely on when attempting to avoiding paying Rodriguez under the agreement.
Following Rodriguez’s 660th home run on Friday, the Yankees publicly confirmed for the first time that the team did not intend to pay Rodriguez a bonus for the milestone. Brian Cashman, the Yankees’ general manager, told reporters on Saturday that the team did not believe it was obligated to pay Rodriguez under the terms of the 2007 agreement.
It appears that the Yankees’ position is based on one provision in the milestone agreement in particular, a clause that was revealed over the weekend during a game broadcast on the YES network. Specifically, the contract reportedly states that:
“It is the sole discretion of the New York Yankees to determine whether each of these milestones is commercially marketable as the home run chase. … The Yankees have the right, but not the obligation, to determine whether it’s a commercially marketable milestone.”
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In other words, the bonus agreement would appear to give the Yankees the right to decide whether or not to designate each of the specified home run thresholds as a milestone. So, from the team’s perspective, if the Yankees elect not to declare Rodriguez’s 660th home run a milestone, then the team does not have to pay him the $6 million bonus.
This revelation certainly strengthens the Yankees’ case. Whether it ultimately proves to be enough to win a potential grievance, however, remains uncertain.
As an initial matter, while the provision does indicate that the Yankees have the “sole discretion” to decide whether to designate a particular home run as a milestone, the clause does not allow the team to apply whatever standard it may choose when making that decision. Instead, as Michael McCann recently noted over at SI.com (in a piece that is well worth reading), the phrase “commercially marketable” is relatively well defined legally, with courts holding that an opportunity should be considered commercially marketable if it carries “the prospect of substantial sales with the possibility of a profit.”
The key question under this provision, then, is whether or not the Yankees could reasonably conclude that a marketing campaign centered on Rodriguez’s 660th home run would not carry the possibility of turning a profit. And while the contract gives the team the sole discretion to make this determination, the Yankees must act in “good faith” when exercising this discretion.
Along these lines, Rodriguez could argue that the Yankees’ decision not to designate his 660th home run a milestone was not made in good faith, but was instead wrongly intended to punish him for his prior conduct (whether it be his PED suspension, his decision to sue the team’s doctor for malpractice, or something else). Rodriguez could assert, for example, that the fact that the Yankees have been preparing for months to contest the milestone bonus itself suggests that the team was acting in bad faith.
If the team was genuinely trying to decide in good faith whether his 660th home run would be commercially marketable, Rodriguez could contend, then the Yankees would have waited to see how fans responded to him once he returned to the field. Indeed, considering that Yankees fans gave Rodriguez a relatively warm reception on opening day – as well as the significant media attention that the 660th home run generated – he can plausibly argue that the milestone was more marketable than the Yankees allege.
It is also possible, of course, that the team revealed a bad faith motive for the decision not to designate the home run as a milestone during some of its communications with Rodriguez. If so, these statements would provide further support to the argument that the team was not acting in good faith.
Beyond the issue of good faith, Rodriguez could also assert that the history of the milestone bonus agreement undercuts the Yankees’ interpretation of the contract. When Rodriguez was a free agent back in 2007, he and the Yankees had originally negotiated a set of performance bonuses directly linked to Rodriguez surpassing various home run marks.
Major League Baseball refused to approve the agreement, however, citing league rules prohibiting teams from awarding players bonuses for on-field accomplishments (as opposed to MVP awards, etc.). As a result, the parties instead recharacterized the bonus provisions as a marketing agreement, with the Yankees compensating Rodriguez for the use of his name and image – rather than the designated home run milestones themselves – in any related marketing campaigns.
So Rodriguez could potentially argue that the true intent of the parties was not to give the Yankees the discretion to decide whether or not to market his 660th home run, but instead simply to reward him for reaching each of the designated milestones. And while this sort of negotiating history normally would not trump the plain language of the contract in a court of law, any dispute in this case would be resolved by an arbitrator, not a judge. So it is possible – albeit rather unlikely – that this historical context could persuade an arbitrator to exercise a greater degree of discretion in this case and rule in Rodriguez’s favor.
Even then, though, the Yankees would likely argue that Rodriguez is effectively trying to transform what has been clearly designated as a marketing agreement into the sort of performance bonuses prohibited by MLB. The team would thus contend that the arbitrator cannot interpret the agreement in such a way that would render it a direct violation of league rules. This could very well be enough to convince the arbitrator to rule in the Yankees’ favor on the matter.
Finally, it is also possible that there is other, yet-to-be-disclosed language in the bonus agreement that supports Rodriguez’s position. Sources within the Major League Baseball Players Association have reportedly suggested that such language does in fact exist and helps strengthen Rodriguez’s case.
So it is still too early to predict who would win if Rodriguez elects to challenge the Yankees’ decision. Based on the contractual language released to date, however, it would appear that the team has a stronger basis to avoid paying the milestone bonus than may have initially appeared to be the case.
Moving forward, the bonus agreement reportedly gives the Yankees two weeks following Rodriguez’s 660th home run to decide whether to officially declare it a milestone. Assuming that the team does, in fact, elect not to designate the home run as a milestone, Rodriguez and the MLBPA would then have 45 days to file a grievance against the Yankees. At that point, the team would have 10 days to review the complaint and notify Rodriguez of what, if anything, it will do to resolve the issue.
Assuming that the Yankees do not reverse course at this stage – and agree to pay Rodriguez the $6 million – he would then have 15 days to file an appeal with MLB’s Labor Relations Department (“LRD”). The LRD would have 35 days to confer with union representatives in an attempt to settle the case. Assuming the case can’t be resolved at this stage, Rodriguez (or the MLBPA) would then be given 15 days to request that a neutral arbitrator decide the matter. That arbitration would be scheduled sometime within the next year, most likely during the off-season.
Rodriguez and the Yankees could, of course, agree to settle the matter at some point during this process. But considering the acrimonious history between the parties, we are probably unlikely to see this dispute resolved anytime soon.
Nathaniel Grow is an Associate Professor of Business Law and Ethics and the Yormark Family Director of the Sports Industry Workshop at Indiana University's Kelley School of Business. He is the author of Baseball on Trial: The Origin of Baseball's Antitrust Exemption, as well as a number of sports-related law review articles. You can follow him on Twitter @NathanielGrow. The views expressed are solely those of the author and do not express the views or opinions of Indiana University.
Yeah, it’s all just speculation without the language of the contract, and we can reasonably assume the Yankees public description if it is a bit prejudiced.
A-Rod’s success on a ‘true intent’ argument would hinge on whether or not the contract is clear on it’s face – you don’t get to just walk into court and say ‘yeah, the contract says X but we really meant Y’ unless the language in the contract itself is deficient.
They’d have a better case for the non-marketability of A-Rod’s home run chase if they weren’t also retiring admitted-steroid-user Andy Pettitte’s number this season in an elaborately marketed ceremony.
For Yankee fans, steroids don’t really have anything to do with this. The perception was always that A-Rod (for reasons that don’t totally make sense to me) was not a REAL YANKEE in the same way Rivera, Jeter, Pettitte etc were. The Yankees aren’t wrong to think his home run chase isn’t marketable but good luck explaining why in court.
One question seems pertinent on that — how much are the Yankees marketing ARod’s milestone approaches? Did they market the week leading up to 660? Or was it a non-event as far as the team marketing their games, using “Be there for #660” to draw in more fans?
Of course by not making any effort to market the milestone the Yankees could be strengthening ARod’s case that they’re not acting in good faith to hold up their side of the deal. It would interesting to know whether, in the language that has not been disclosed, there’s anything suggesting the Yankees have an obligation to market those milestones (using ARod’s name and image) as they arrive.
Take a look at the press notes for Yankees upcoming milestones.
http://www.baseballessential.com/news/2015/04/22/new-york-yankees-players-reach-significant-milestones/
ARod’s career runs scored, and SBs as a Yankees are on there, but the Career Homeruns are not….
It was nice of the Yankees to make ARod seem like the good guy for once.
How are they making A-Rod seem like the good guy? “Rich boy fights for ill-gotten payday” is not the stuff good guys are made of.
It’s all relative. “Rich boy fights for ill-gotten payday” makes him the good guy compared to “Even richer guys try to weasel out of an agreement.”
I don’t see the Yankees denying that their 2009 WS win happened. They want to have their cake and eat it too.
Oh I think there’s a lot of cake having and eating on both sides. Let’s see, the Yankees want A Rod to help carry their team this season, but want to pretend that he’s not there. Oh, and also that he wasn’t on the PEDs they are so outraged about now when he was winning them games a few years ago.
A Rod wants to cheat and lie to the public (and presumably the team), repeatedly, screw his team over by getting suspended yet still get paid huge money, and now demand that he also get paid his at least somewhat ill-gotten performance incentives granted to him by a team that foolishly bid against itself when he opted out of his contract in the first place.
Yeah, no one looks good here.
But “Billion dollar sports team tries to be cheap on a 6 mill contract bonus it signed” is the stuff good guys are made of? I hate A-Rod as much as the next guy, but it’s beyond stupid the Yankees are even doing this.
I think we can safely say neither has come out well here. It’s amazing, considering the presumably buckets of money both parties spend on PR, that this has been handled so poorly.
Honestly, how has Rodriguez not come off well in this situation, or this whole season? He’s said all the right things, which is that he’s focused on helping the team win and isn’t interested in talking about it. He’s well within his rights to file a grievance if they don’t pay him, but he’s not taking it to the media. You might not like what he has done, but you can’t argue he’s been villainous in basically any way this season.
Oh, he’s well within his rights to file a grievance, and he’s got a good shot at winning based upon what little we know of his contract. But contractual right and Right are two different things sometimes. And I don’t really see the value of throwing out his entire history and saying ‘well, he’s been nice recently’. The history is the point, and it’s exactly what makes this look bad for him.
Now, I could see making the argument that the Yankees knew what they were getting into with him, so pretending to be outraged now would be disingenuous, but that’s different from trying to rehabilitate ARod as a person.
I’m not trying to do that, nor is that what you’re original comment said. “Neither the Yankees or A-Rod are well-liked” is probably true, but “Neither has come out well here” is what you said, and I think in this situation, Rodriguez has looked fine.
It’s not all relative – there’s a not so subtle difference between being the less bad guy and being the good guy. To put it another way – in a room full of ugly people one person necessarily will be the most attractive, but that doesn’t make them beautiful.
I don’t get how we can sympathize at all for a guy who’s demanding to be paid what are basically performance incentives when (1) said incentives were at least partially attained by cheating and (2) said cheating has already cost the team quite a bit in lost time, money and performance. A Rod seems absolutely tone deaf if he’s going to make this case, and I think the only winner here is whoever comes out and says ‘just give the money to charity’ first.
I’m surprised neither side has come up with the “donate the milestone $$ to your favorite charity”. Given how rich Arod is, and the team is, the only substantial concern here is “public face”. BOTH sides could take an ugly situation and make it look good, by each side naming their favorite charity and splitting the $6m between the two.
Good? He’s the best.
Voted up, up, a thousand times up!
“It STINKS!”
The basis for the Yankees decision is sound. There was no commercial value in a convicted PEDs player reaching a minor milestone. It could be debated that passing Aaron or now Bonds would slightly tick up interest if A-rod approached that milestone. Maybe a compromise is in the wind, by giving A-Rod some bonus for passing Bonds…
“There was no commercial value in a convicted PEDs player reaching a minor milestone.”
Really? The “forgive” (sorry, “forg1v3”) movement among Yankees fans is in full swing. Just like with Bonds, there will continue to be marketing potential among the home crowd (and given that it’s New York City, that crowd’s size is pretty substantial).
Who says you can only market angelic boy scouts? Other sports market heels all the time – some teams have built their entire image around it.
This is just not the case. Barry Bonds continues to be marketable in SF. As mentioned in the article, Andy Pettite is marketable on NY, and I would imagine that Nelson Cruz is pretty marketable in Seattle right now. The idea the idea that Arod isn’t marketable seems to be totally false.
Yes, but dirty Bonds is no where near as marketable as clean Bonds would have been. Same with Arod. I’m pretty sure Yankees’ fans already worship Satan, so it’s not stretch for me to think that Arod might be marketable there, but he certainly lacks the universal appeal he would have had if he had done this before he was found to be dirty.
Nelly Cruz? Oh, he hit 50 some homeruns for my team. He’s cool.
“no where near as marketable” is not the same as “not marketable”, because the former statement implies that there is still a residual market value. Otherwise you would simply use the latter.
Based upon the nearly imperceptible media response for reaching/passing Mays; there was no marketing or attendance gain by the Yankees.
Imperceptible media response? ESPN interrupted every broadcast of other games to show each of Arod’s at-bats while he was at 659.
Yeah, I was gonna say, I saw mention of the lead up to 660 all over the place, and then when he actually hit it, it was covered on basically every national sports media site.
Did anyone care that ESPN gave updates? More like irritated by them. Who cares about a 2nd loser award? It was a non-entity at the game.
There was definitely an increase in media attention. One could argue that the focus was more on the controversy of whether the Yanks will pay and less about the achievement of matching/passing Mays.
Of course ESPN was going to cover it breathlessly. They are owned by the Red Sox, and it behooves the Red Sox to make the HR appear marketable.
They even forced Tazawa to throw him a cookie.
There’s no such thing as bad press though right? The focus is on a player from the Yankees passing the historical greats, isn’t that ultimately what the Yankees wanted?
If his bonus is permitted to stand, this would seem to open the door to MLB finally being able to base contracts based on performance. If the payout is based on a the projected results of a hypothetical marketing campaign, pretty much anything could be used. This would be a bit of a win for the owners as it would give them the ability to limit their risks a bit.
I think MLB tightened up deals like this. I know they did for the “player service” type deals that were being signed that paid players after retirement under the auspice of being a team ambassador (as opposed to deferred money). Anyway, if they didn’t, the only result of this would be that MLB would in fact tighten things up.
Yeah, I was thinking the same thing. There isn’t an apparent difference between this and a performance bonus. Can players sign contracts with teams outside of the union rules?
Also, the article says “the Yankees [are] compensating Rodriguez for the use of his name and image”. But they already had the right to use his name and image, didn’t they? So they’re compensating for something else, too.
A standard performance bonus wouldn’t be very marketable, though, except for single season records.
Few people would buy tickets specifically to see an average player get his 500th PA.
my unsolicited suggestion that may help both the Yankees and A-Rod come out of this not liking terrible for the first time in years: have the Yankees donate the $6m to the Say Hey Foundation on Rodriguez’s behalf.
That makes too much sense for either party to agree to it.
That’s… a pretty great suggestion, actually.
yes, but the Yankees have treated A-Rod like shit, and such an agreement would allow the Yankees to take at least 50% of the credit of donating to charity
Corporate taxes and personal taxes are nothing alike. Paying ARod the bonus has the same affect on their corporate taxes as giving it to charity.
Yes, the Yankees forced A-Rod into this situation.
I swear, it’s like the public’s collective memory is 2 weeks long. When A-Rod is on the DL in August with a pulled hamstring, no one will ever believe how hard they were arguing for him now.
I was thinking a charitable contribution would be a good compromise. Sending it to the Say Hey Foundation is simply brilliant.
So yeah, unlikely, but it would be great if it happened.
That’s a great idea. That’s probably better than me hoping both the Yanks and Arod spend $6M in legal fees fighting over this.
This sucks. A conversation about legal-eze on a baseball website. BOO!
Are you new here?
Nathaniel is the Fangraphs legal expert, he always writes about these things, and I think it’s awesome to get an inside look at this kind of stuff. Just off the top of my head I remember getting great insight from him about the Wrigley-Rooftops legal battles, and the Josh Hamilton case. There aren’t a lot of other places to easily get this kind of info, and I think a lot of people here appreciate Nathaniel’s work, and the work Wendy did before him.
Well, if you’re bored, I recommend tuning into Sportszilla and the JabberJocks. I hear they are having a scintillating argument over whether or not Arod is a real Yankee.
I know! And there was nothing in the title to suggest that’s what it would be. We were tricked!
There is no reason I should not be unhappy about it regardless of the title. The only way this trash fades away is through taking action. This is exactly the non-sport related trash that gets more press than it ever has before. If you are an aspiring lawyer, then this may be the dribble for you!
You should stick to bleacher report then.
Well, I was an aspiring lawyer 10 years ago and I like this. But keep fighting the good fight, man. In the meantime, the word you were looking for is drivel, not dribble. Have a nice day.
I find the business/legal side of the game fascinating (sometimes the games the teams play with the money are more interesting than the teams themselves — see the Marlins for most of the last decade, for instance).
I enjoyed these kinds of articles when Wendy Thurm was writing them and have been very pleased that Nathaniel has carried on that high standard of quality.
They may not be everyone’s cup of tea but there is an audience for them; if it’s not for you there’s plenty of other material on the site. I’m sure you’ll find something that you enjoy (and it may not even be marred by rude commenters making inane complaints).
What they all said.
Also, die.
I find the Yankees position to be pretty pathetic. The intent behind the language was to give A-Rod the extra 30 million or so dollars that would convince him to sign there, and word the bonuses in a way that got around CBA language.
I think A-Rod has done the classy thing so far in saying that he’s not commenting on family business. The fact that he’s perceived by most as a parasitic scumbag is the only reason this is even a thing.
There is absolutely no argument that makes sense to say that tying Willie Mays is not a marketable milestone. Had someone like Jeter done it, there would be a bloody parade and the media would fill the airwaves with nauseating Yankees/Jeter propaganda for a year.
They are choosing not to market the milestone because of A-Rod’s unpopularity like they don’t want to be associated with the guy anymore, yet they still hold Pettitte in high regard for cheating just the same. The only difference is Pettitte admitted it, didn’t lie his face off and get busted trying to cover it up.
The Yankees are acting like two-faced weasels and should pay every cent.
That’s the point though isn’t it?
If Jeter had done it there would have been a parade. There would have been a media circus. They would have made bats, shirts, hats, all commemorating the occasion. And most importantly, that marketing blitz would have brought in new revenue (which off-sets the $6M bonus payout).
And that should have been A-Rod. He could have had all of that. Yet, that won’t happen because who wants to buy A-Rod crap? Nobody wants to celebrate his “accomplishments”. The Yankees receive ZERO value from what would otherwise be a huge milestone.
That said, the suggestion above is the best. Make the Yankees pay but don’t give it to A-Rod. Have the Yankees AND A-Rod make a joint contribution to a worthwhile charity.
“If Jeter had done it there would have been a parade.”
Better yet, in the movie “The Other Guys”, if it had been Arod shot instead of Jeter, they guy would have been given a parade instead of a demotion.
What I was really hoping was that when ARod hit this HR in Boston, they would have trotted out a little stand and then honored ARod for completing this milestone with a little plastic trophy or something. They could have appeared like great guys compared to the Yankees, while also giving ARod some fuel to get his 6 million dollars from their hated opponents. It would have been perfect! Completely legal, utterly indefensible, and a hilarious low blow in the ongoing battle. I would have laughed and laughed.
I think it makes the most sense, and other people have mentioned it as well, to donate the money to charity, or build some baseball parks around the city. ARod has done the smart thing by keeping quiet since the start of spring training. Have an understated press conference, or even better, just a press release saying ARod and the Yanks have come to an agreement to donate the money. Obviously one side has the legal right to the money, but neither needs it and do they really want the bad PR of a summer long legal battle?
Yankees are off to a 17-10 start, if they choose to quibble over 6m dollars to their 3 hitter to their 3 hitter…
I believe this is our first ever message board post from Johnny two times, from Johnny two times.
http://www.imdb.com/character/ch0026907/
You bungled the line, stupid.
Nice analysis. I work in the area of contracts law, and this is a nice description of the likely legal factors and standards in play. Based on what little we know, it does seem like the Yankees’ argument is a spurious one, but again, we can’t know that for certain until we see the contracts language at issue.
Minja, curious to know how we both look at the little bits of contract language that’s been leaked and reach different conclusions – you think the NYY argument is invalid but I think the NYY position is incredibly strong. I’m open-minded to understand your opposing perspective.
The phrase “right, not obligation” would seem to give the Yankees the upper hand in the matter, at least to this non-lawyer. However, by going out of their way to downplay the upcoming milestone (while listing many other lesser milestones), haven’t the Yankees shown that they didn’t even make a good faith effort to determine whether or not the milestone was marketable?
Don’t the yanks have more leverage here? Can’t they just say, “if you don’t agree with us on this, we’ll just stop playing you altogether and you’ll never hit these other landmarks and won’t be able to keep rehabilitating your image”?
Admittedly that’s a little tougher to do with them playing pretty well this year and A-rod tearing the cover off the ball…but how long do they expect him to be a great player? If they want to save the money all they have to do is not play him. Yes, it takes a spot on the 40-man…so it’s not a perfect solution…but what would A-rod’s response be? I doubt he’d take them up on it.
dw
So, to avoid paying $6 million, they’d bench Arod and get absolutely no value for the ~$60 million they still owe him? That makes sense.
“Admittedly that’s a little tougher to do with them playing pretty well this year and A-rod tearing the cover off the ball…”
He does have 6 HR…but he’s also hitting .231 as of this morning – the only way he’s tearing the cover off the ball is if he’s trying to feed the thing to CC Sabathia in the dugout…
140 wRC+, that qualifies as tearing the cover off the ball for a 39 year old.
Except it’s not just 6 million…if that was it, I’d agree with you. But if you read the first paragraph, this is just the first of five potential bonuses. And if they agree the first one is marketable you have to think they are on the hook for the rest. So we’re talking about 30 million dollars here. At the very least they Yanks could take that position and then use it as leverage to settle?
dw
Chances are real small that AROD hits the next milestone (54 more HR’s over the next ~2.8 seasons) and basically nil that the he gets the one after that (95 more HR’s). Yankees would would be downright giddy to deal with that “dilemma.”
Problem is, it’s not a credible position.
Plus 50% luxury tax.
So $9M for this bonus…
First, good piece by Nathan. Second, I’m going to assume that John Heyman’s piece & the NYP pieces were reports – not opinions – and use that for my take. Until we see the contract, everything is hypothesis & conjecture.
The “right, not obligation” & “commercially marketable” verbiage gives NYY a huge leg up. It doesn’t matter what NYY did for Pettitte or Jeter, they’ll follow the ARod contract because that’s what they are obligated to do. Mariano Rivera’s contract has no impact on an ARod contract.
The only question is if it’s a decision made in good faith as to if it’s a commercially-marketable (profitable) event. And that one’s pretty easy too – go to Sotheby’s auction house, determine how much #660 paraphernalia will be worth at auction. If all that is less than ~$9.2m ($6m + 50% tax + cost of milestone marketing event), it’s not a commercially marketable event and don’t pay him the money. By using Sotheby’s there’s a knowledgeable, neutral 3rd party making an independent, expert opinion on the value of those “milestone” items. So they’ve now made a good faith effort to determine if the “660” event is a profitable enterprise and once it was clear it is not, they satisfied the good faith requirement and exercised their right to not designate it a commercially marketable event.
And of course MLBPA is fighting it – ARod has already sued MLBPA once before for non-performance of duties, so they’re going to (begrudgingly) defend his rights. I read nothing into the fact that they’re planning to fight the Yankees on this.
PS. The Yankees have some pretty good lawyers. I’d be confident they spent the time to look at all angles of this situation over the past 18 months to ensure they could avoid paying the bonus. They may have even been tracking the value of “660” paraphernalia for the past 3 years to determine if this is a marketable event.
Forget Sotheby’s, Judge John Hodgeman is the man to sort this out.
Your definition of what is commercially marketable is ludicrous. An auction of the ball must get 9.2 million?. There are many more revenue streams to be tapped in to, not that the ball is the property of the Yankees. Increased ticket sales, concession sales, merchandise sales, parking, ratings, etc. Like I said earlier, the 1st milestone was the weakest one, with less revenue potential than the others, but that’s what the Yankees agreed to.
Also, under no circumstances is the 50% LT tax to be taken into account. Arods commitments were made in 2008, long before any of the other players. His salary and bonuses come with no luxury tax, since its all under 189. Its the players contracts who came on later that boosted it over 189, the burden is on them for whatever tax is paid . If the Yankees did not want to pay so much tax, they should have signed cheaper players after Arod and taken into account the fact Arod would hit the milestone they agreed to
from Heyman’s article “It is also worth mentioning amid everything that each bonus could cost the Yankees $9 million due to their 50 percent luxury tax rate, as David Waldstein of the New York Times recently noted.”
from OP “#660 paraphernalia”. Never limited revenue-generation to home run ball #660.
I dislike Arod the man. I love Arod the player. Yeah, he used PEDs, so did a lot of players. Get over it. I think he should be paid. It’s sad to see Willy Mays’ record broken by PED users, but Bonds already did it. I just want to watch a fantastic player play baseball. And if anything else, Arod is and has been a fantastic player to watch.
“It’s sad to see Willy Mays’ record broken by PED users.”
It would be more sad is Willie didn’t use his own PEDs.
The key is the definition of what is commercially marketable. I am sure that would be defined in the contract. Since all of Arods costs are fixed costs (except the bonus), the only expenses to market Arods milestone would be miniscule. You can’t tell me they would not sell some T-shirts on Arods, or that they have not sold some additional seats and got increased ratings even w/o any marketing.
In fact, the Red Sox fan who caught the ball said he bought his ticket and paid 150 bucks just to sit in the monster seats so he would have a chance of catching his 660th HR. Going to be hard to argue the milestone was not commercially marketable, even if it was not what they might have hoped for after 2007.
Mays 660 milestone was always the weakest one of the 4, but all paid out the same. But that was the agreement, 6 million for each one or none. Remember, Arod would have preferred it all guaranteed but this was a compromise to settle the difference between what he asked for (300) and what he got (275)
I would say any player who is fit to play and helps his team win is commercially marketable. Arods has been one of the teams best hitters. If you can’t market one of your best hitters, you should not own a MLB team. Yankees will also have Arods 3000 hits and 2000 RBI’s to market without paying a dime.
I believe fans came out to see Bonds beat Aarons record even though his reputation was tarnished by Balco. I think the Yankees could of marketed Arods milestone. Instead they engaged in anti-marketing by having YES announcers be quiet about it, and not mentioning his early HR’s on twitter. Of course, everyone still knew so it did not hurt their returns in increased ticket sales and ratings.
Fans would not necessarily have to root for him to break the milestone to be marketable and potentially profitable. Many would come out to root against him breaking it, or just to be at the park when he did since when even a villain does something historical, its worth witnessing.
Without seeing the actual contract, this is all speculation. We have only heard one side since Arod is taking the high ground and saying nothing, not wanting to interfere with the chemistry of the team in a pennant race. If he says anything people will call him a distraction. Its Ok for Cashman and Hal to be a distraction though.
If the Yankees have to play their case in the media and perhaps bias a future arbitrator, maybe its not as strong as you might think. That’s the other question though, how much integrity does the arbitration process have. That was a pretty shaky ruling on his suspension length, and the arbitrator who ruled against MLB in the Braun case got fired. MLBPA should make sure Horowitz goes nowhere near this case.
I dunno – it seems to me that if the Yankees thought they could turn a profit by marketing ARod, they would be doing it. What would the point be of turning down money to spite a player?
People/companies can be surprisingly petty.
I wonder if the Yanks settle with ARod for a little more than $6M. Maybe they’d save the $3M luxury tax hit by characterizing it as a legal settlement instead of a payout under his contract.
The Yankees could really use the leadership of a Mark Buehrle or a RA Dickey in this situation.
I keep going back to the comments from Buck Showalter two years ago when A-Rod was about to be suspended. I know the details are different but to me the crux of the story is pretty similar.
http://espn.go.com/new-york/mlb/story/_/id/9527967/buck-showalter-guarantees-new-york-yankees-sign-matt-wieters-alex-rodriguez-suspended-2014-season
I don’t like A-Rod or the Yankees, so I’m not about to take sides. But I think the bottom line is that if you sign players to these mega-contracts, you shouldn’t get to weasel out of them when the inevitable decline/other bad things happen. Is Cashman going to forfeit all the wins A-Rod’s juicing contributed to, including the World Series title*? Of course not. So why should he get out of honoring the contract now? He wants to have his cake and eat it too. That shouldn’t be allowed to stand.
But in addition to that, from a competitive balance standpoint, it really can’t be allowed to stand. Not every team is able to entice the top, top free agents with $200+M contracts. If those few teams can use their higher revenues to get the last few good years of those players AND get out of paying the rest of the contract when it turns south, then baseball would have a real problem. Does a team who tried to build through the draft get to push a “reset” button if one of their top prospects is a bust and go back and pick again? If you build through free agency, you need to bear the full risk of that model.
Also, I personally believe even in cases of suspension the team should pay the full salary; the salary should just be paid to the League, not the player…
**Yes, I know players on other teams used steroids too.
Why aren’t teams allowed to give bonuses for on field performance? Is this common in all professional sports?