A-Rod Situation Highlights Risks of Long-Term Contracts

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A-Rod Situation Highlights Risks of Long-Term Contracts

by Gary S. Young on August 16, 2013

The two contracts previously awarded to Alex Rodriguez are widely regarded as being the two worst contracts in the history of professional sports. The second contract with the New York Yankees was signed in December 2007, replacing a 10-year, $252 million deal with the Texas Rangers. The earlier package produced three straight last-place finishes, a 2004 trade to New York and a 2010 bankruptcy that left Rodriguez as the Rangers’ biggest creditor.

The current deal, which preceded Rodriguez’ admission of past doping, has spoiled the Yankees plan to capitalize on his eventual climb to the top of all-time home run leaders. Despite seriously declining play precipitated by two hip operations and the inevitable negative effects of the aging process, the current deal guarantees Rodriguez $275 million over 10 years, plus $30 million in performance bonuses without regard to his current production.

While A-Rod helped the Yankees win the World Series in 2009, this fading achievement provides little consolation for the Yankees and the fans, never mind the turmoil of the scandal that currently rages over his use of performance enhancing drugs. The 2007 mega-deal has also significantly hampered the team’s efforts to revamp their line-up and sign younger players.

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