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More A-Rod Chat, I'm Sorry
Wednesday, July 18, 2007
I've dedicated quite a bit of time and energy to A-Rod's woes (the past few post-season series...boooooo...) and heroics (all the other times, especially now) on this here blog, and while I would love to discuss any of the many other glorious aspects of my favorite sport (like the fact that our boys have at last hoisted themselves out of loser dungeon and climbed atop winners' hill like a real live team!) there are just too many A-Rod tales to tell. Last week I expressed my concern over the fact that A-Rod will most likely declare free agency and subsequently be signed by another team to a contract that could feed every starving man, woman, child, and puppy in Africa, but it his current contract that has many people scratching their heads. I received several emails inquiring about the nature of this contract - how long the Yankees have to resign him, for instance, and how many blond strippers he is allotted per month - and while I am by no means a lawyer specializing in contracts (or a writer specializing in writing, for that matter), I am a whiz with the ol' Google so I did a little research and learned enough to pass a RCSAT (Ridiculous Contracts Standard Aptitude Test) with flying colors. For your learning pleasure, here is the abridged version of my findings:
  • Signing bonus: Paid in $1 million installments on March 1 and Dec. 1 from 2001-2005
  • Opt Out: He can terminate his contract and become a free agent after the 2007, 2008 or 2009 seasons, 10 days after the World Series is over.
  • Escalator: The Yanks must increase A-Rod's salary for 2009 and 2010 by $5 million each year or $1 million greater than the average annual salary of the highest paid non-pitcher player that year - whichever is greater.
  • Deferred Payments: A portion of A-Rod's salary will not be paid until after his contract is up after the 2010 season. Deferred money accrues interest at 3% annually and will be paid from 2011 through 2020, some by the Texas Rangers (see below).
  • No Trade Clause: Self-explanatory. He can't be traded unless he waives this clause and approves it.
  • Award Bonuses: For the record, A-Rod could theoretically earn an extra $2,100,000 just in bonuses in one year if he won all these awards this year (he's already got 1 MVP with the Yanks and got the most All-Star votes...).
    Most Valuable Player — $500,000
    Second MVP — $1 million
    Third or more MVP — $1.5 million
    MVP voting second-fifth — $200,000
    MVP voting sixth-10th — $100,000
    All-Star selection or election — $100,000
    Most All-Star votes in league — $100,000
    Baseball America/Sporting News/UPI/AP/USA Today All-Star team — $100,000
    Baseball America/Sporting News/UPI/AP/USA Today MVP or player of year — $100,000
    World Series MVP — $200,000
    League championship series MVP — $150,000
    Division series MVP — $150,000
    Gold Glove — $100,000
    Silver Slugger — $100,000
  • Texas's Contribution: Lo mas importante! When Texas traded A-Rod to the Yanks they agreed to pay a healthy portion of his salary throughout his contract - $67 million, to be exact. They will pay $8 million of his salary in 2008, $7 million in 2009, and $6 mil for the 2010 season. In addition, the Rangers will be paying a chunk of that aforementioned deferred money after A-Rod's contract is up. In other words, if A-Rod were to stay with the Yanks, the team would, because Texas is picking up some of the tab, be getting quite a discount on a player that could easily sucker another team into paying $30 million a year.

From these details and the power of deductive reasoning, we can see that there is quite a sizable advantage in resigning A-Rod before he gets the chance to opt out, as they will lose all that cash that Texas is chipping in.

In other words, if the Yanks have ANY sense at all, they will offer A-Rod a major extension before he opts out so that they can continue paying him a reduced rate until 2011. Since A-Rod said he would not discuss his contract until the season is over, that means the Yankees will have just 10 days after the World Series (well... that is if the Yankees were to make the World Series by some stroke of luck/magic/witchcraft/sabotage; it is much more likely that A-Rod's season will end before that and therefore give the Yanks a few more days to work with...) to convince A-Rod to stick around in the NYC. Mark it on your calenders.

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posted by Yankees Chick @ Wednesday, July 18, 2007  
7 Comments:
  • At 2:16 AM, Anonymous Anonymous said…

    yes he will get a high salary.. though not as high as you might think, and that would be soley to the cause of the yankees not being in the bidding, yankees seem to drive up players price by quite a bit.. lol

     
  • At 1:54 PM, Anonymous Anonymous said…

    Mo,
    very enlightening, thank you for your research. just a couple points i'm not clear on - should the Rod leave the Yanks, are the Rangers taken off the hook for their prior contribution commitment, and would the Yanks be able to walk away without picking up any or all or more of the travelling contribution, if it does follow the Rod. If no contributions follow a-rod should he go free agent, it would seem the Yanks would be in the driver's seat to use the Ranger $ to negotiate best salary to Rod.
    Thanks mucho,
    m.eddy

     
  • At 2:27 PM, Blogger Yankees Chick said…

    m.eddy.... i believe that if a-rod declares free agency, he is voiding the entire contract - so Texas should be crossing their fingers that he DOES opt out, because they would no longer be on the hook for that money!!!

    if anyone knows differently, fill us in...

     
  • At 3:05 PM, Blogger MikeyBronx said…

    I think Mo is correct in noting that everyone is off the books for the original contract if he indeed opts out.

     
  • At 12:45 AM, Anonymous Anonymous said…

    ARod is going nowhere. He wont opt out cos the Yanks have already said if he does they drop out of the race. Another team would essentially have to offer about $8m more per season than the Yanks. Not going to happen.

    If the thought of a $30m per yr contract gives Cashman a cold sweat, even with the new stadium and George behind him, imagine how it makes every other GM in the league feel.

     
  • At 9:19 AM, Anonymous Anonymous said…

    Looking at this from A-Rod's point of view, unless the Yankees make an offer which prices in some of that Texas money, he has little to lose by opting out.

    Let's say that he's worth 8/220 on the open market (or 27.5million/year). To match that, the Yankees need to offer him a 5/139 extension (to go with the 3/81 left on his current contract -- not counting escalator clauses, but those only kick in if another position player makes $27 million or more, which no one currently does).

    The problem with only offering 5/139 is that there is no purely financial reason for him to take it if other teams are likely to offer 8/220, so it would be banking on A-Rod preferring to stay. Perhaps he does want to stay, but after the way the fans treated him in 2006, I'd rather offer more money just to be sure.

    If, instead, Cashman offers 5/154 (in effect splitting the Texas money with him by adding $15million to the estimated market price), then it's a lot less likely that any other team can match that deal (which would require offering 8/235), so A-Rod will also have a purely financial incentive to stay.

    Telnar

     
  • At 7:09 PM, Anonymous Anonymous said…

    Yankees are going to make the World Series. Win it too. They are going to have a short, and painful, negotiating window.

     
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