News
Business of Baseball
10/14/07
By PETER ABRAHAM
From THE JOURNAL NEWS
Baseball beat: A-Rod, Yankees need each other
There's a Business Of Baseball class at Manhattanville College in the sports business management graduate program. The students recently divided into four groups for a case project called "The A-Rod Sweepstakes."
One group represented Alex Rodriguez and agent Scott Boras. The other groups represented the Yankees, Red Sox and Dodgers. Armed with financial analysis of the three teams, mock negotiating sessions were held.
At the end, Rodriguez landed with Boston for seven years and $231 million.
Based on what he has been saying lately, Boras would flunk the class. He has told anybody who would listen in recent days that Rodriguez would command a 12-year deal worth at least $300 million. He has labeled Rodriguez an "IPN" player.
Insane Payments Now? Close. IPN stands for Icon, Performance and Network.
In Boras-speak, Rodriguez is an iconic player whose performance drives up the value of a regional cable network. He said a few days ago that Rodriguez's presence in the lineup is worth up to a billion dollars over the passage of time. Boras said Rodriguez would be the most valuable free agent in baseball history and that his advice would be to opt out of his contract with the Yankees.
We are among those who believe Boras is simply posturing in an attempt to get the Yankees to bid against themselves when they offer Rodriguez a contract extension later this month. Unless he has been lying for seven months, Rodriguez enjoys playing in New York and recognizes the value of being in a lineup with so much protection.
Just last month he said that the Yankees felt like home and it would be "so weird" to play for another team.
Beyond that, going to his fourth team in nine seasons would stamp Rodriguez as a player who cared more about money than winning. He will be wealthy regardless. But he can be wealthy and respected or wealthy and reviled. That's the choice he has to make.
Vince Gennaro, who teaches that class at Manhattanville, believes Rodriguez and the Yankees need each other and will make a deal.
"In terms of on-field performance, the Yankees desperately need A-Rod. Clearly they would have not made it to the postseason this year without him, and his production will not be that easy to replace in the offseason should they let him walk," Gennaro said. "The Yankees cannot afford a hiccup as they prepare to move into their new stadium.
"Also, A-Rod has much to gain by continuing to play on baseball's biggest stage. He's on a trajectory to be the best player in baseball history. Being a Yankee will help him achieve that recognition. The bottom line is both sides have every incentive to get a deal done before he opts out."
Gennaro is the author of "Diamond Dollars" and a consultant with the Cleveland Indians. He believes a five-year extension worth $33 million a year would be a winner for both sides.
"Boras needs to be careful on this one," he said. "His mentality of trying to squeeze every last dollar out of some team to sign A-Rod could really backfire in the bigger picture of A-Rod's career. It will only create a bigger burden and inflict more pressure on A-Rod to perform."
Gennaro ran the numbers and believes Rodriguez is worth $48 million a year in revenue and asset appreciation to a team. This includes his value to the YES Network and even the financial impact of his breaking the all-time home-run record.
But given that the Yankees will be paying a 40-percent luxury tax on his salary, they can afford no more than $34 million a year in salary. After that, Rodriguez is not cost effective.
We also believe Brian Cashman's vow that the Yankees will not pursue Rodriguez as a free agent if he opts out of his deal.
The gamesmanship is just starting. As Boras tries to create a high ceiling, the Yankees would be wise to stand firm. Boras may consider Rodriguez to be an iconic player. But icons win on the field, not just at the bank.
Around baseball
Torre twists: So much for Don Mattingly's insistence that Joe Torre be treated with respect. Today marks the manager's sixth day in limbo and the Yankee decision-makers aren't expected to meet until Tuesday in Tampa, Fla.
Given all that needs to get done in the next few weeks, why has there been such a long delay?
It's uncertain whether the delay is simple cruelty or whether the Yankees have become disorganized with so many "young elephants in the tent," as George Steinbrenner likes to put it.
The other possibility is that something is going on behind the scenes that could result in Torre returning to the team.
At some point, the Yankees should realize that changing managers would be change only for the sake of change. Clearly Torre is still the best man for the job. Replacing him with Mattingly or Joe Girardi is a risk not worth taking.
Brian Cashman said before the season that the Yankees were in transition. Not many teams in transition win 94 games and make the playoffs.
The midges attacked Joba Chamberlain, and Chien-Ming Wang turned into the Taiwanese Tim Redding for two starts. How is that Torre's fault?
The Mitchell Mess: On Friday came word that the Mitchell Report will be released before the year is over and that it will name names.
Teams were warned via conference call that the details would become a major story.
What is the point of all this? Baseball seems almost determined to ruin itself at times, and this is the latest example. Hiring former U.S. Senator George Mitchell to investigate the steroids era will accomplish nothing other than to further degrade the game.
By now we all understand that steroids were a part of the game. Deep down, even the most naďve fan knows his or her favorite player was probably on something.
Players implicated will deny they did anything and point out they never failed a drug test. There will be the usual bold headlines, hand-wringing columns and television babble and then every park will be sold out for Opening Day.
Baseball needs to stop looking back and work on creating a stronger testing program free of loopholes. That will solve the drug problem, not dredging up the past.
Around the horn: Now that Walt Jocketty, Terry Ryan and John Schuerholz are no longer general managers, San Diego's Kevin Towers has the most seniority in that position. He has been on the job since Nov. 17, 1995. Brian Sabean of San Francisco (1996), Billy Beane of Oakland (1997) and Cashman (1998) are next in line. ... You have to think that somewhere in a conference room at Shea Stadium, the idea of hiring Torre to replace Willie Randolph has come up. ... Free-agent pitching coach Leo Mazzone could get a look from the Yankees if Ron Guidry is let go. But Dave Eiland would be a better choice given his history with the young pitchers in the organization.
Reach Peter Abraham at pabraham@lohud.com.