Friday, November 16, 2007
The Worst Contract In History - And I’m Thrilled
Now wait, why am I thrilled if I think this is the worst contract in history?
Well, first of all, that seems to be what it was going to take if the Yankees were going to keep Alex Rodriguez, and for the next few seasons he may well be worth every penny. But the problem is that the contract is going to pay him over 27 million dollars when he’s over 40 years old. He might be a great player then, but he’ll probably just be a good player then. Maybe even a bad player. Definitely not close to a 27 million dollar player, even considering salary inflation.
This is different than the Yankees paying Roger Clemens a pro-rated $28 million salary last season: first of all, the Yankees didn’t pay nearly that much for him—less than $20 million in real money—and second, it was a one-year deal signed when they had a reasonable idea of what to expect. They paid a premium because they needed him and needed the Red Sox to not have him (yes, they overpaid), but it’s only a comparable situation if the Yankees had signed Clemens to last year’s contract—for last year—in 1998.
The Yankees are wagering that A-Rod is going to be great for most of this contract, and good for the entirety of it, and they’ll suck it up and live with it at the end of the deal. That’s the price you pay for the best player in the game—you pay a premium and you don’t get much of a shot at it turning into a bargain (for this to be a bargain, A-Rod would have to be a gold glover every year, and average over 60 homers a season).
So, you know, bad contract, good deal.
You know who wins this one? Both sides. A-Rod gets a raise—nobody in March thought that he’d get more than $25.2 yearly if he’d opted out, just that he’d get more overall now than he would if he became a free agent in three years. The Yankees get the best player in baseball, fill their 3rd base need and don’t have to give up anyone to fill it, while not backing down in any significant way from their stance at the end of the season. They didn’t pursue A-Rod, they didn’t negotiate with him—he came back to them and there was no haggling.
And no matter how you spin it, Scott Boras loses.
Sure, he got the biggest contract in history for his client. And maybe the whole “A-Rod crawls back” thing was a ploy by Boras after he realized he misread the market for A-Rod, and got him the best deal possible—probably for a lot more than anyone else would pay. But here’s the irrefutable fact: A-Rod COULD have gotten more if he hadn’t opted out. Would he have? That depends on how good a negotiator Scott Boras is, but there can be no doubt: there was more money to be had.
The Yankees essentially bid against what they were willing to pay in this one. They weren’t competing against any other teams, because nobody else had bid, and A-Rod wasn’t shopping this bid around. They paid $275 million because they were willing to spend $275 million on this deal. And if A-Rod hadn’t opted out, that same deal they were willing to make would have been $21.3 million richer without costing the Yankees any more money. It might have even been more, since that $21.3 million wouldn’t have been taxed by baseball—A-Rod might have blown a shot at a guaranteed $300 million deal by opting out (rather than the “guaranteed if he doesn’t get injured to be worth $300 million” deal he got). And that’s Scott Boras’ fault, because he advised his client to opt out without even negotiating with the Yankees. It didn’t theoretically cost him money, it literally cost him money. There’s no way around that, because they only thing that really changed between the end of the season and now is that the Yankees had $21.3 million less to spend on A-Rod.
So, you know, good job there, Scotty.
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