Saturday, July 27, 2013

A-Rod and The True Cost (or Profit) of Professional-Level Hubris

JULY 26th-2013-With A-Rod in the news, of late, my thoughts are not as much about his 'alleged' PED use and pending banishment from the game, as they are about the contract under which he plays. More to the point, Rodriguez's contract is the perfect example of how far down the rabbit hole that MLB has allowed free agency to lead them.

In essence, the players finally gained financial power over their future and the teams for which they play, thanks largely to the work and eventual sacrifice of Curt Flood. This, in turn, caused the teams to fight one another for the services of free agents, at times upping the ante for the rights of a player and drastically increasing the costs of said services which they hoped to obtain. Rodriguez was able to manipulate the system so greatly to his benefit that he is now earning 20 million in a season which may not see him on the field for a single at-bat. According to Baseball Reference, he has earned over 353 million in his career to this point.

Keep in mind, he only used the system set in place by professional baseball to get to where he is, financially. Never mind all the PED nonsense; the Rangers and Yankees saw fit to pay him roughly the GNP of a small country to play for them, so that's on them.

However, I thought it would be interesting to note that he is not, in fact, the highest-paid player in the history of professional baseball, at least in terms of the total value of any single season. As much as he is 'earning' on his current abominable contract, his gains from it pale in comparison to one which is being paid out even now to a player who has been out of the game as a player since 2001.

That 'honor' belongs to Bobby Bonilla.

Bonilla had returned to the Mets in 1999, where his lackluster play (along with 'personality issues') caused him to wear out his welcome. In response to this revelation (whatever), the Mets actually paid him to leave.

Keep in mind that in his previous stint with the Mets in 1992, he had already threatened sportswriter Bob Klapisch with a beatdown, telling him that he would "show him the Bronx". I can only assume that one would not wish to see the Bronx, or at least not the part that Bonilla wants to visit.

Hindsight being what it is...
At the time, they still owed him 5.9 million bucks. In order to get him off their books, they worked out a deal which would defer the remaining money over a 25-year period. They already owed him 500,000 dollars per year, which started in 2004, that would continue over a 25-year period. This was separate from the deferred payments agreed upon for the 5.9 mil contract they were ridding themselves of from the beginning of the 2000 season.

Considering the payments beginning from 2004 of half a million per year, in addition to the 1.1 mil+ payments beginning in 2011 (which will continue to 203-freaking-5), all of which assumes an annual 8% interest rate, the Mets would essentially owe him a total of over 42 million for that one-year contract of 2000. The Mets will be paying Bobby Bo until he turns 73. Celebrity Net Worth has a much better explanation of this whole mess.

The annual interest rate comes into play because Bonilla was being paid from an investment account which the Mets set up for him. In short, what this means is that the Mets actually earned interest on the principal from Day One, from which they paid Bonilla (obviously), but also from which they increased their initial investment. That means (again, reference Celebrity Net Worth's page on this) that they actually came out ahead in this whole mess.

Of course, it also means that they were paying a player who no longer suits up, and hasn't done so for 13 years. And counting.

Convoluted, to say the least. And all to remove the cancer which had invaded their clubhouse. Sadly, no universal health care system can treat a Bonilla infection.

Nowadays, teams often back-load contracts in order to keep their annual budgets lower. That means there will be a number of players (potentially) who will be drawing paychecks long after they've either left the team or retired altogether. It takes a steady mind to keep all of this crap straight.

Gee. When I work, I just get a plain ol' check. Should have been a ballplayer.

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