What Is A-Rod Doing?

The latest event in the A-Rod saga with the Yankees is almost too bizarre to believe. Alex Rodriguez opted out of his contract to become a free agent without giving the Yankees the opportunity to negotiate. Supposedly, the Yankees were willing to extend Rodriguez’s deal five years for $150 million in their initial offer. Adding this to the remaining three years and $81 million owed on his current contract, that would guarantee him $231 over the next eight seasons. That translates to $29 million per year, which is about five million less than than I predicted, so I was not surprised that he didn’t think this was enough to keep him. However, I thought it was a bad move to opt out so soon, because the Yankees could up their offer and had the advantage of having the Texas Rangers subsidizing any extension. I assumed that A-Rod was just ready to leave.

Last week, Jeff Gordon argued in the NY Times that A-Rod’s opt out was part of a strategy to make the Yankees respond to competing offers from other team, and that the Yankee’s refusal to negotiate further was not credible. When higher offers came in , the Yankees would cave and match the offer. I disagreed, because of the damage this would do to the Yankees bargaining power in the future. I also felt an actual free agent bidding war wasn’t necessary to determine Rodriguez’s value; the Yankees and Scott Boras could make close approximations and then move on if the numbers didn’t match. But, neither of us anticipated what seems to be transpiring.

Alex Rodriguez is now willing to return to the Yankees for a longer time but for less money per year (ten years and $270 million, according to published reports)—his penance for keeping the Yankees on the hook for $20-30 million dollars that the Texas Rangers would be contributing to his salary had he just extended his deal.

An already wealthy man who has a reputation for being greedy and childish goes through the ordeal of upsetting everyone by opting out to get more, but then returns to get less? Why didn’t he just extend the deal? It’s not like this was a rushed process; it seems like we’ve been discussing the opt-out for years. Going back on a well-planned strategy at this time seems…well, childish and something only A-Rod is capable of doing. It certainly isn’t a move that will endear him to Yankee fans, even if he does make the team better.

There is still the possibility that this is a marketing ploy to up the offers of other free agent suitors. I still think that there is a decent chance that he will sign somewhere else, but the media reports that are coming from all sides make the think that this deal is more likely to go down than not. The end result of this entire process is that a great baseball player who is hard to like is poorer and less-likable than he once was. Nice move, Alex.

8 Responses “What Is A-Rod Doing?”

  1. Marc Schneider says:

    Well, it appears there weren’t really any better offers out there and that A-Rod really does go where the money is. I find it hard to believe that he really wants to stay in NY but he apparently cannot stomach leaving a dime on the table even if he might be happier. If he doesn’t hit fifty home runs every year, he will be crucified in NY forever–he might be even if he does unless the Yankees win three straight World Series and A-Rod hits .500 in the playoffs. I think he’s an idiot for going back under these circumstances even if it is the best offer. What is this guy thinking? And, frankly, while the Yankees are physcially much better with A-Rod, it is just going to be a continual circus from now on with that team. I wonder if this will dissuade some players from going to NY.

  2. JC says:

    I think it’s too early for A-Rod to have given up on the market. The free agent signing period started two days ago and the winter meetings are two weeks away. This is one of those stories where something doesn’t smell right. In the end, A-Rod is going to come out looking like a jerk or a wuss. The former is probably more preferable, since everyone already thinks of him as a jerk.

  3. Phil says:

    Maybe he just wanted to get the Rangers off the hook? I guess that kind of makes him a jerk for favoring his former employer over his current employer, but it’s not like the $20-$30 million is wasted. It just goes to the Rangers instead of the Yankees.

    Maybe he had some kind of informal agreement with the Rangers that he’d take them off the hook for that money if they traded him? No idea if this is plausible or ludicrous, just throwing it out.

  4. Aaron says:

    If his new deal ends up being as reported, $275 over 10, I don’t think this is necessarily a worse offer than the $231 over 8 on the table before. Sure, he might have been a bit premature in opting out, but I don’t know that he ended up losing that much money on the deal. Considering that not many players age like Bonds, being paid $44 mil for his age 42 and 43 years seems pretty good, even in real dollars, and they’re guaranteed in case he’s injured. Taking less per year for a longer contract isn’t unusual for older players. See: Jones, Chipper.

  5. Jason says:

    How does the news that A-Rod, not Boras, is apparently the one making contact with the Yankees factor into this? (I’m not sure it does, actually — it seems as likely as not that this is simply part of the Boras grand strategy. But I’m hoping to hear the opinions of others.)

  6. Byomtov says:

    It’s possible Boras felt all along he could go back to the Yankees without giving up much, and decided to see if he could find a another Tom Hicks. So he lost his bet. OTOH, it didn’t cost much.

    The early opt-out gave him time to get a feel for the market, and go back to NY if it didn’t look good. Of course he may have wound up with less than if he hadn’t opted out, but maybe not much less, so it might have been a reasonable gamble.

    Still, highly aggressive negotiators like Boras overdo it sometimes. It goes with the territory. So maybe it was a misjudgment on his part. What’s clear is that there was no big rush from other teams anxious to meet Boras’ terms.

  7. Marc Schneider says:

    It’s not much of a gamble considering that A-Rod will make “only” $27 million per year. He was playing with house money. If JC is right about it being too early to give up on the market, I don’t understand why A-Rod would want to go back to NY under these circumstances. He is never going to be a “true Yankee” in the minds of fans unless he wins several World Series. And the pressure on him in the playoffs is only going to get more intense. I guess a lot of money can soothe feelings but considering that A-Rod’s personal life is being splattered over the tabloids, I really have a hard time understanding him wanting to come back, other than he is willing to endure pretty much anything for enough money. Well, more power to him if that makes him happy.

  8. Hawkmoon says:

    Makes perfect sense to me. A-Rod gives up $2 million a year for 8 years ($16MM total) to make $27 million for 2 years ($54MM total). He comes out $38 million ahead.