ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Tuesday, July 30, 2013

Still Mystified by Long-Term Baseball Contracts

BaseballToday's New York Times features a lengthy article about the Los Angeles Angels' contract with Albert Pujols, the once-mighty St. Louis Cardinals slugger to whom the Times now refers as a faded star.  Between now and 2021, the Angels are contractually obligated to Pujols to the tune of $212 million.  In the last year of his contract, when Pujols will be 41, he is scheduled to earn $30 million.  The article explores the reasoning behind these contracts to some extent.  The Angels found that they could not compete with teams like the Yankees in the post-season without the marquee players whom one could only attract with hefty long-term contracts.  

But the Yankees' model of buying up the top players in the league does not look so effective right now.  They won the World Series in 2009, and they have been contenders most years, but the 1996-2000 glory days are long behind them.  The Times article on Pujols notes that the Yankees may well be secretly hoping to get out of their comparable contract with Alex Rodriguez through the deus ex machina of a life-time ban due to Rodriguez alleged involvement in the Biogenesis doping scandal.  

The Times implies that the Yankees at least got their money's worth out of Rodriguez, whom the Times credits with "leading" the Yankees to a championship in 2009.  But baseball doesn't work that way.  Rodriguez was a part of an extremely strong team.  Just on the offensive side, arguably, Rodriguez was about the middle of the pack among the Yankees' starters that year, who included: Derek Jeter, who hit .334 and had 30 stolen bases; Robinson Cano, who hit .320, with 25 home runs; and Mark Teixeira, who hit 39 home runs, drove in 122 and batted .292.  Johnny Damon, Hideki Matsui and Jorge Posada all posted offensive numbers not too different from Rodriguez's highly respectable ones.  Given their offense, the Yankee' didn't really need great pitching, but C.C. Sabathia won 19 games, and Mariano Rivera saved 44, while posting an E.R.A. of 1.76.  The only category in which Rodriguez led the Yankees that year was salary.  

Mad StacksPujols career is far from over.  He is suffering from a foot injury that has hampered his performance this year.  But has there ever been a Pujols-like power hitter (other than the tainted Barry Bonds) who continued to perform at All-Star levels after age 35?  Does it make sense to pay a designated hitter a top salary?  

As we have argued over and over again, to no avail, the solution is to design contracts that pay players for performance (rather than rewarding them for past performance).  Alfonso Soriano got hot at just the right point in the season, and now he is wearing the Yankee pinstripes again.  But Cubs fans should just be overjoyed to have been relieved of about $7 million of the psychotic $24.5 million the Cubs would otherwise have had to pay a guy who will struggle to hit .250 for the rest of the year.  I would love to like Soriano, but his salary has hurt his team more than he can help it.


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