ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Wednesday, July 31, 2013

One-Day Contracts

Today's New York Times features an article on a relatively recent sports phenomenon -- the one-day contract.  In a nutshell, the one-days permit a retired player to re-sign with the team he played for in his prime, so that he can retire as a member of that team.  The player then shows up at the stadium and the fans can cheer him one last time (until the next opportunity comes around).    The team may benefit from the one-day contract in that fans may show up to cheer a retired star and re-experience a team's glory days.  The Times charaterizes these contracts as effecting for the players "a meaningless return to a team so they can reflect on how meaningful that team was to them." 

Jerry_RiceThis characterization strikes me as unfortunate.  The return is far from meaningless.  In fact, the contract is all about meaning and not at all about playing a particular sport or even about money for the athlete.  San Francisco 49er star Jerry Rice (pictured) was given a one-day contract that actually specified an amount, consisting of his rookie year (1985), his number (80), his retirement year ('06) and then 49, totaling $1,985,806.49.  But according to the Times (and Wikipedia), the amount was ceremonial.  Rice was not actually paid anything when he re-signed with the 49ers.  In baseball, the actual contracts are with farm teams, as teams cannot afford to give up a roster spot during the season -- even for one day.  This too is evidence that the contracts are not meaningless.

One blogger thinks the one-day contract phenomenon has gone too far, arguing both that it is meaningless and trivial and that it is an attempt at revisionist history.  These players did not actually end their careers with the teams that meant the most to those careers, and so the one-day contracts perpetrate a fraud.

Another way to look at it is that sports is imitating art, at least if the television series Lost is art.  Like the characters on Lost, these players get to return to a virtual reality in which they share experiences with the people who meant the most to them at the time in their lives when they had their biggest impact.

[JT]

July 31, 2013 in Celebrity Contracts, In the News, Sports | Permalink | Comments (0) | TrackBack (0)

New in Print

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.

[JT]

July 30, 2013 in In the News, Sports | Permalink | Comments (0) | TrackBack (0)

Weekly Top Tens from the Social Science Research Network

SSRNRECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal 

May 31, 2013 to July 30, 2013

RankDownloadsPaper Title
1 166 A Psychology of Choice of Laws 
Gary Low
Singapore Management University - School of Law, Maastricht European Private Law Institute
2 145 Ice Cube Bonds: Allocating the Price of Process in Chapter 11 Bankruptcy 
Edward J. JangerMelissa B. Jacoby
University of North Carolina (UNC) at Chapel Hill - School of Law, Brooklyn Law School
3 90 Contracts as Technology 
Kevin E. Davis
New York University (NYU) - School of Law
4 79 Interpreting Investment Treaties as Incomplete Contracts: Lessons from Contract Theory 
Wolfgang Alschner
Graduate Institute of International and Development Studies
5 72 In Quest of the Arbitration Trifecta, or Closed Door Litigation?: The Delaware Arbitration Program 
Thomas Stipanowich
Pepperdine University School of Law
6 54 An Analytical Framework for Legal Evaluation of Boilerplate 
Margaret Jane Radin
University of Michigan Law School
7 50 Mediation at the Intersection with Contract Law: The Settlement Agreement 
Anna Giordano Ciancio
Unaffiliated Authors - Independent
8 50 Duties of Love and Self-Perfection: Moses Mendelssohn's Theory of Contract 
Helge Dedek
McGill University - Faculty of Law
9 49 Sticky Covenants 
Gus De FrancoFlorin P. VasvariRegina Wittenberg MoermanDushyantkumar Vyas
University of Toronto - Rotman School of Management, London Business School, University of Toronto - Rotman School of Management, University of Chicago - Booth School of Business
10 44 Carve-Outs and Contractual Procedure 
Erin A. O'Hara O'ConnorChristopher R. Drahozal
Vanderbilt University - Law School, University of Kansas School of Law

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  

May 31, 2013 to July 30, 2013

RankDownloadsPaper Title
1 166 A Psychology of Choice of Laws 
Gary Low
Singapore Management University - School of Law, Maastricht European Private Law Institute
2 90 Contracts as Technology 
Kevin E. Davis
New York University (NYU) - School of Law
3 79 Interpreting Investment Treaties as Incomplete Contracts: Lessons from Contract Theory 
Wolfgang Alschner
Graduate Institute of International and Development Studies
4 61 Disclosing Corporate Disclosure Policies 
Victoria L. Schwartz
Pepperdine University School of Law, University of Chicago - Law School
5 54 An Analytical Framework for Legal Evaluation of Boilerplate 
Margaret Jane Radin
University of Michigan Law School
6 50 Mediation at the Intersection with Contract Law: The Settlement Agreement 
Anna Giordano Ciancio
Unaffiliated Authors - Independent
7 49 Sticky Covenants 
Gus De FrancoFlorin P. VasvariRegina Wittenberg MoermanDushyantkumar Vyas
University of Toronto - Rotman School of Management, London Business School, University of Toronto - Rotman School of Management, University of Chicago - Booth School of Business
8 34 Revisiting the Efficiency Theory of Non-Contemplated Contingencies in Contract Law 
Yuval Procaccia
IDC Herzliya - Radzyner School of Law
9 32 State Contract Law and Debt Contracting 
Gil SadkaSharon P. KatzColleen Honigsberg
Columbia University - Columbia Business School, Columbia University - Accounting, Business Law & Taxation, Columbia University - Accounting, Business Law & Taxation
10 30 In Defense of Surrogacy Agreements: A Modern Contract Law Perspective 
Yehezkel Margalit
Tel-Aviv University

 

[JT]

July 30, 2013 in Recent Scholarship | Permalink | TrackBack (0)