On 11th December 2000, Alex Rodriguez (A-Rod) inked an agreementto join the Texas Rangers, worth at $252 million, making it the biggestcontract in American sports history at the time.
This signing, unsurprisingly,attracted a lot of attention and mixed reviews from the baseball world and themedia. In this paper, we aim to examine and analyze the negotiations betweenA-Rod and the Rangers and its implications in the world of baseball, and sportsin general.In 1993, A-Rod began hiscareer with the Seattle Mariners, after being drafted first overall in theMajor League Baseball draft.
In his seven years there, A-Rod played as ashortstop, hitting 189 home runs, an average of 0.309 and 595 RBIs. Over theseyears, the Mariners paid him $12 million in total, with his last season salarybeing $4.25 million. After the 2000 season, he became a free agent, andtherefore gained many suitors.
Being rather young – only 25 years of age – anda devastating power hitter, he was a Gold Glove caliber shortstop. Therefore,A-Rod had several sources of power and a strong leverage going into anegotiation. With Scott Boras – one of the legendary sports agents even at thetime – as his agent, A-Rod was expected to sign a lucrative contract.A-Rod, unsurprisingly, had astrong BATNA, or BATNAs to be exact.
Many franchises wanted to recruit him andwere willing to invest a significant amount of money. “His suitors included theMariners themselves, along with the New York Mets, Los Angeles Dodgers, AtlantaBraves, Chicago White Sox, Colorado Rockies and of course, the Texas Rangers”(Neumann 2015). Although it was well-known that A-Rod wished to play for theMets – a childhood dream of his – talks between the Mets and Boras failed.
“Borasassured the Mets that any offer not including the required perks would berejected, and the Mets did not counter his offer. His list of demands andinterests included an office in the stadium, a marketing staff, a merchandisetent at spring training, a luxury box, use of a private jet, and billboards bearingA-Rod.” (O’Connor 2011) For Boras, these perks were in fact his Reservationprice; without obtaining these, he was not willing to negotiate further.Consequently, the negotiations broke down due to his ‘hardballing’ tactics.Seattle, on the other hand, lost out by offering Rodriguez only five guaranteedyears; “Atlanta was the other finalist, but blew its chance by refusing togrant Rodriguez a no-trade clause” (Schulman and Shea 2000).The Rangers outbid the otherteams by agreeing to Boras’ demands and offering a higher – much higher – number.
The negotiation occurred directly between A-Rod and Boras, and the owner of theRangers, Tom Hicks. “Before the negotiations, A-Rod spent five days in Dallasmeeting with Hicks, touring the city and learning about the franchise” (Schulmanand Shea 2000). This schmoozing was perhaps essential on Hicks’ part, buildinggood rapport between the two and convincing A-Rod that at Rangers he would bevalued more. Hicks’ astounding offer of $252 million – $2 million more thanwhat he paid for the franchise 3 years ago – reflected that sentiment. Ourmarket research for that time time period indicates that this contract exceededother baseball contracts by around $100 million.
“Two days before A-Rod agreedto terms with the Rangers, the Rockies had given Mike Hampton the richest dealin baseball history at $121 million for eight years. That topped the nine-year,$116.5 million pact Ken Griffey Jr. had signed with the Cincinnati Reds inFebruary 2000. Hours after A-Rod committed to the Rangers, Manny Ramirezaccepted an eight-year, $160 million offer from the Red Sox” (Neumann 2015). Itappears that Hicks and the Rangers were over eager to obtain A-Rod and did notresearch the market thoroughly.
They could have provided A-Rod with a lowersalary, in exchange for the perks that his agent really wanted for him.Therefore, by the standardsof the time (and even today), A-Rod’s contract was perplexing. Just why werethe Rangers so desperate to acquire him? The Rangers had been a strugglingteam, ranked last in their League division. They had reached the playoffs in’98 and ’99, but lost in the first round both times. As can be observed, theydid not have a strong BATNA, nor any significant sources of power.
For them,acquiring A-Rod held several benefits. In order to take the Rangers to “thenext level”, the Rangers felt they needed “a very unique contract”, with A-Rodbeing “the only player in baseball who deserves this contract” (Reid 2000).They lacked prominence in the league, and perhaps acquiring A-Rod was a way toalleviate that. For his agent Boras, signing A-Rod was “the beginning of anational prominence for the franchise.” In the words of the then GeneralManager Doug Melvin, “We went into this with an ambitious plan after nothaving much fun last season.
Alex Rodriguez is the kind of player we feel sendsa message that the Rangers are serious about winning” (Reid 2000). For theRangers it seems, their perception and message to the fans and rivals was veryimportant. “Manager Johnny Oates said the contract makes sense in light ofRodriguez’s value to the team as a five-tool player and to the community as awholesome, bilingual athlete in a heavily Hispanic state” (Schulman and Shea2000). A-Rod was therefore more than a player for them: he became the face ofthe franchise.
As Oates added, “We’re talking about more than hitting abaseball. We’re talking about marketing an area.” Securing A-Rod from theMariners also had significance for Hicks, as the Mariners were their rivals inthe West League Division.
ReferencesO’Connor, I. (2011, May 20).A-Rod a Met? What might have been …
Retrieved December 13, 2017, from http://www.espn.com/new-york/mlb/columns/story?columnist=oconnor_ian&id=6567799 Neumann, T. (2015, December11). Fifteen things to know on 15th anniversary of Rangers’ $252 millionmegadeal with A-Rod. Retrieved December 13, 2017, fromhttp://www.espn.com/mlb/story/_/id/14330504/alex-rodriguez-252-million-contract-texas-rangers-remains-landmark-15th-anniversary Henry Schulman, John Shea,Chronicle Staff Writers.
(2000, December 12). $252 MILLION MAN / Rodriguezsigns with Rangers; contract doubles previous richest. Retrieved December 13,2017, fromhttp://www.
sfgate.com/sports/article/252-MILLION-MAN-Rodriguez-signs-with-Rangers-3238243.php Jason Reid | Times Staff Writer.
(2000, December 12). Texas-Sized Deal. Retrieved December 13, 2017, fromhttp://articles.latimes.com/2000/dec/12/sports/sp-64536