A-Rod's “Performance Incentive” or “Marketing Incentive”

Here’s a great article by Jayson Stark from May 7 that I missed the first time around. In it, he questions a provision that guarantees Alex Rodriguez $6 million each time he hits home run milestones 660 (Willie Mays), 714 (Babe Ruth), 755 (Hank Aaron), 762 (Barry Bonds) and 763, the new record. The total is a possible $30 million in bonus money.

According to the basic agreement between the Players’ Association and the Owners, Rule 3 (b)(5) states that any contract that "contains a bonus for playing, pitching, or batting skill" is impermissible.

A number of small-market owners have complained about the clause in A-Rod’s contract, stating that the Commissioner’s Office would never have approved such a contract in one of their players' contracts. According to Stark, even some agents agree that the A-Rod provision most likely violates the basic agreement.

The fig leaf MLB is using to justify the ARod provision is that it is a "marketing" provision. The Yankees, when they signed the deal, intended to market the daylights out of A-Rod’s chase of the HR record, and this provision give A-Rod a cut of that. As Stark’s article points out, that is a pretty thin reed on which to rest the weight of A-Rod’s contract.

Now, the issue is just how much A-Rod’ s chase of the HR record is worth in marketing to the Yankees, now that A-Rod is a known steroid-abuser.  Obviously, a lot less than at the time that the deal was struck.

Some suggest that the Yankees simply refuse to pay the bonuses even if A-Rod reaches the marks and force A-Rod to sue to enforce the potentially unenforceable provision. I doubt that the Yankees will do so unless A-Rod’s performance has fallen so dramatically that his main value to the Yankees is as a potential HR record setter.

Also, it does not surprise me that the Yankees, as baseball’s wealthiest and most powerful team, and A-Rod as baseball’s biggest star (at least until just recently), get to play by their own rules. When Michael Jordan was playing, the NBA and their players union agreed on a deal that basically applied a salary cap to every player in the league except Jordan.

Also, I really don’t feel too bad about any deal which requires the Yankees to pay out even more money to an aging star. The Yankees’ profligacy when it comes to free agent contracts is essentially all that keeps the Yankees from being a lock on the post-season (at the very least) every single year.