Ok, here is my solution, ready?
The Sox announce that they are selling a very limited edition Alex Rodriguez t-shirt for $500 million dollars.
As part of A-Rod's restructuring, he will receive one such t-shirt in exchange for re-negotiating his option years. There, he gets something of value, and thus it is not a "reduction", since the total value of his contract it now worth hundreds of millions of dollars more than it was before!
And how could the player's union claim that the t-shirt wasn't worth $500 million if the red sox choose to sell it at that price and A-Rod values it as such?
Go on, flame me, I think it's no less absurd than the actual situation.