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Restructuring Arod's contract

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Restructuring Arod's contract

Postby Transmogrifier » Wed Dec 10, 2003 10:31 am

Alright, maybe you're all sick of this, and I can understand that. So, what do the Sox do? I can't see them adding in $5 million or so as the Rangers want, unless they knock off some of his salary, but that can't happen. See article below.

But all signs point to this deal happening... so, someone smarter than me have any idea? I can't see the Sox paying Arod 32 million (27 plus five) towards the end of the contract. So where does this go?

Rule prohibits lessening of pay
By Gordon Edes, Globe Staff, 12/10/2003

Even if Alex Rodriguez was so eager to come to Boston that he was willing to take a pay cut in the restructuring of his contract -- which is exactly what Mo Vaughn was willing to do to get out of Anaheim, according to one highly placed baseball official -- he won't be allowed to do so. Under the terms of the Basic Agreement between major league players and owners, a "greater benefit rule" governs the restructuring of a player's contract.

"The union's position is that under the terms of the Basic Agreement, Alex can restructure his contract, but only if a reasonable person can conclude that the new contract is worth as least as much as the old one," the official said yesterday.

A major league executive yesterday offered the example of outfielder Kenny Lofton, who while playing with the Chicago White Sox had a bonus clause pertaining to attendance. When the San Francisco Giants, who routinely sell out Pac Bell Park, wanted to trade for Lofton, they wouldn't do the deal with that clause intact, because it would have cost them considerably more than the White Sox would have had to pay Lofton. The deal was restructured, with Lofton having other performance-related bonuses vested in such a way that he would be paid about the same as he would have under the old contract with the White Sox.

A contract extension might also be one way to restructure a contract. Say a player was scheduled to be paid $50 million over two years. A club proposes a restructuring in which the player is paid $60 million over three years. "A reasonable person might conclude that was an additional benefit to the player, even though he would be paid less in the first two years of his extension," the industry official said.

Rodriguez's contract calls for him to be paid $21 million in 2004, $25 million in 2005-06, and $27 million from 2007 to 2010. He has $36 million in deferred compensation at 3 percent compounded interest. The Sox could propose to defer more money, or adjust the interest rate as a way of controlling costs in a given year. It's also conceivable that the Sox proposed an adjustment to the clause that states Rodriguez may void his contract after the 2007 season. Given the Sox' aversion to long-term commitments, they could propose that Rodriguez void his contract at an even earlier date in exchange for free agency and perhaps more up-front money, though it is dubious that the union would consider that a fair tradeoff.

But the fact that the contract was discussed yesterday by Rodriguez and agent Scott Boras with union officials suggests that a deal could be close.

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Postby Madison » Wed Dec 10, 2003 12:07 pm

Interesting read Transmo. Thanks. ;-D

Something that hasn't been mentioned yet is that Arod would have to agree to not having a "no trade clause". Boston doesn't give out contracts that include no trade clauses. Not even Schilling got a no trade clause. That could be part of the sticking point right now. I'm sure Arod wouldn't want to be dealt to a lower team a few years down the road.
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Postby Madison » Wed Dec 10, 2003 1:42 pm

Here's another interesting update about the restructuring of Arod's contract:

Alex Rodriguez - SS - Texas Rangers Dec 10

Alex Rodriguez and his agent, Scott Boras, reportedly spoke with union officials yesterday regarding a proposed restructuring of his contract with the Red Sox to make sure it conformed with the terms of the Basic Agreement.
Rodriguez isn't allowed to take less money to join the Red Sox, but the MLBPA couldn't stop him from voiding the final three years of his deal. It's uncertain whether the talks between Boras and the union indicate that a deal is close, but things still seem to be moving in the right direction. Source: Boston Globe
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Re: Restructuring Arod's contract

Postby j_d_mcnugent » Wed Dec 10, 2003 1:59 pm

i didnt really read through the whole thing but the assumption is that the red sox will trade nomar for prospects or someone that is making less money than they are actually worth. so then, from the redsox persepctive, it is like paying a-rod 25 million and applying that 5 million a year that they are paying of manny's contract to the costs of the players acquired in the nomar deal (not to the cost of a-rod).

so if the red sox got two players in return for nomar, it would like like this:

a-rod - 25 million a year
player a - small salary + 2.5 million
player b - small salary + 2.5 million

so long as the small salary + whatever portion manny's contract that the red sox are paying is less than or equal to the fair market value of the player acquired then it all works out nice for the bosox. but if the players that the red sox acquire have substantial salaries then it doesnt make sense to take on that 5 million of manny's contract.
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Postby Sox FANatic001 » Wed Dec 10, 2003 2:44 pm

I know that nomar wants to stay in Boston, Is there anyway that we could keep him and Arod, possibly by moving one to 2B or DH? Is that even a possiblity $ wise? I'm not sure what kind of financial situation the team is in, or hom much much more thery are willing to spend. Is there a chance of this happening , or not in your minds?
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Postby trevisc » Wed Dec 10, 2003 2:57 pm

the sox won't have money enough to keep Arod AND Pedro. Much less Nomar and Schilling too.
It'll be interesting to see what they do if they get Arod...
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Postby mikcou » Wed Dec 10, 2003 4:31 pm

Madison wrote:Here's another interesting update about the restructuring of Arod's contract:

Alex Rodriguez - SS - Texas Rangers Dec 10

Alex Rodriguez and his agent, Scott Boras, reportedly spoke with union officials yesterday regarding a proposed restructuring of his contract with the Red Sox to make sure it conformed with the terms of the Basic Agreement.
Rodriguez isn't allowed to take less money to join the Red Sox, but the MLBPA couldn't stop him from voiding the final three years of his deal. It's uncertain whether the talks between Boras and the union indicate that a deal is close, but things still seem to be moving in the right direction. Source: Boston Globe


so it seems the trade will go through
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Re: Restructuring Arod's contract

Postby wrveres » Wed Dec 10, 2003 7:08 pm

j_d_mcnugent wrote:a-rod - 25 million a year
player a - small salary + 2.5 million
player b - small salary + 2.5 million


slice it and dice it anyway you want ... The Sox wil still be paying 30 mill + for the SS position ....
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Re: Restructuring Arod's contract

Postby Madison » Wed Dec 10, 2003 7:17 pm

wrveres wrote:
j_d_mcnugent wrote:a-rod - 25 million a year
player a - small salary + 2.5 million
player b - small salary + 2.5 million


slice it and dice it anyway you want ... The Sox wil still be paying 30 mill + for the SS position ....


Don't forget to factor in the $5-$10 million of Manny's salary too. B-)
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Re: Restructuring Arod's contract

Postby wrveres » Wed Dec 10, 2003 7:32 pm

Madison wrote:
wrveres wrote:
j_d_mcnugent wrote:a-rod - 25 million a year
player a - small salary + 2.5 million
player b - small salary + 2.5 million


slice it and dice it anyway you want ... The Sox wil still be paying 30 mill + for the SS position ....


Don't forget to factor in the $5-$10 million of Manny's salary too. B-)


isn't baseball a wonderful thing ... 35 million for a MI ...
I imagine Grady Little is just sitting home giggling :-)
In all honesty ... how much of an upgrade is it ..??
Theo, who had a week of brillance in trading for Curt is about to tarnish it forever .... IMO
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