What’s A-Rod worth to the Yankees? Here’s two suggestions via a report in USA Today:
Rodriguez’s contract could be worth $304 million with incentives, according to a person familiar with the negotiations. Gennaro, a consultant to the Cleveland Indians and author of the new book Diamond Dollar$— The Economics of Winning in Baseball, lists six teams that could have afforded to pay Rodriguez up to $30 million a year and still break even on that investment, provided they made the playoffs every year: the Yankees, Boston Red Sox, New York Mets, Chicago Cubs, Los Angeles Dodgers and Los Angeles Angels.
The Yankees stand to make the most from his presence — about $45 million annually, by Gennaro’s calculations, based on a formula that takes into account attendance, broadcast fees, concessions, merchandising and other forms of revenue. They’re also likely the only club that can afford to pay a luxury tax and still recoup its investment on Rodriguez.
The biggest factor in the equation?
“A-Rod’s ability to contribute eight or nine wins on the playing field to a team that can turn those wins into a playoff spot,” says Gennaro, adding that it makes no financial sense for non-contenders to take on such a high-salaried player. “When a team reaches the postseason, there’s a windfall of revenues that get unlocked within the next three, four, five years.”
Citing statistics in the ESPN Baseball Encyclopedia, which he edits, Gillette said A-Rod ranked second in the AL last season in “player wins” above the average performer with 5.2. So a .500 team would be boosted to 86-76 with him and a 90-win team would improve to 95-67, possibly the difference between making the playoffs and staying home.
Hmmm…but, what about in years like 2004 and 2006, when A-Rod has a “player win” total closer to three than above five? Does Alex have to have an MVP season to cover his expense?