To the New York-centric sports fan, the most newsworthy event of the past week was not the Boston Red Sox’ sweep of Colorado in the World Series, but the decision of Yankees third baseman Alex Rodriguez to opt out of his contract to pursue the siren song of free agency. Indeed, the opt-out decision was announced during the final Series game, at virtually the earliest possible moment under the contract.
Many believe that Rodriguez really means to leave the Yankees and has no class. From a bargaining perspective, however, the story up to now shows strong evidence of the reverse. Rodriguez wants to stay a Yankee — albeit after proving his open-market value — and has gone out of his way to make it possible for the Yankees to climb down from their posturing and match any offer.
Conventional wisdom is that Rodriguez willfully ignored the Yankees’ repeated public assertions that they could not rationally pursue him in free agency because they would lose $30 million from the Texas Rangers when they took over his contract. But the Yankees’ assertion is simply a bargaining gambit.
Assume some other team, call them the Dodgers, were to offer Rodriguez $32 million a year for eight years. Remember that the Dodgers are receiving no part of the Rangers’ booty. Is it really the Yankees’ position that Rodriguez is worth more to the Dodgers than to the Yankees? If the Dodgers can afford to pay the $32 million a year, can the Yankees — the richest franchise in sports — plead poverty?
The Yankees’ earlier protestation about the Rangers’ money was to make it appear their hands were tied, so that they could land Rodriguez at a lower cost. But that bluff has been called. The lost Rangers money merely puts them on the same ground as other teams. How far will the Yankees go with cries of wounded pride?
Now we understand why Rodriguez did not meet with the Yankees or return their calls. He did not want to give the Yankees an opening to make him a good offer, leaking the details to the news media. The expected news media circus would have added weight to the otherwise implausible Yankees claim that they could not negotiate in free agency without gaining a reputation as a weak bargainer and would have added more risks to a subsequent decision to opt out.
In other words, Rodriguez wanted to test the market and to make it easier for the Yankees to get back into the game. If he really did not want to return, why would he care about the news media circus? Why not hear the offer, then burn the bridge?
But here is the crucial piece of evidence that shows how much Rodriguez wants to wear pinstripes: the opt-out announcement during the final World Series game. We can assume that Rodriguez learned late last Sunday that Joe Girardi would be named the manager of the Yankees the next morning. If Rodriguez opts out after that announcement, his decision would be taken as a negative response to Girardi’s hiring.
This could sour his relations with Girardi and finally make it rational for the Yankees not to match a market offer. That would upset Rodriguez’s strategy. How does he credibly signal that he is fine with the choice of Girardi and wants a pathway back to the Yankees in free agency?
That is where the World Series announcement comes in. In bargaining lingo, it is a credible signal of his desire to remain a Yankee because it is costly. In other words, to show his Yankees preference, Rodriguez was forced to appear classless by disturbing the sanctity of the Series and by stepping on Boston’s triumph. That’s a cost.
He put it in terms of uncertainty about the return of much-admired teammates, which sweetens, not sours, relationships. But his behavior makes absolutely no sense unless it was timed to precede the Girardi announcement, and that in turn makes no sense unless Rodriguez wants to be on his lineup card.
There are two downsides for Rodriguez. First, it may well be that his open-market value is less than the Yankees’ best and final offer that he never heard. Second is that the Steinbrenner sons’ inexperience and anger could get in the way of the good judgment of the business people in the front office. If so, then a Yankees return to the World Series is further away than Yankees fans hope.
Does this sound too sophisticated for a fellow who makes his living hitting home runs? Remember that his agent, Scott Boras, is the black-belt negotiator. Why would Boras gratuitously expose Rodriguez to ridicule and scorn?
In short, unless the Yankees behave spitefully, there is a very good chance that Alex Rodriguez will be back at Yankee Stadium next spring.
Jeffrey N. Gordon is the Alfred W. Bressler Professor of Law at Columbia University Law School.