On and were willing to invest a significant

On 11th December 2000, Alex Rodriguez (A-Rod) inked an agreement
to join the Texas Rangers, worth at $252 million, making it the biggest
contract in American sports history at the time. This signing, unsurprisingly,
attracted a lot of attention and mixed reviews from the baseball world and the
media. In this paper, we aim to examine and analyze the negotiations between
A-Rod and the Rangers and its implications in the world of baseball, and sports
in general.

In 1993, A-Rod began his
career with the Seattle Mariners, after being drafted first overall in the
Major League Baseball draft. In his seven years there, A-Rod played as a
shortstop, hitting 189 home runs, an average of 0.309 and 595 RBIs. Over these
years, the Mariners paid him $12 million in total, with his last season salary
being $4.25 million. After the 2000 season, he became a free agent, and
therefore gained many suitors. Being rather young – only 25 years of age – and
a devastating power hitter, he was a Gold Glove caliber shortstop. Therefore,
A-Rod had several sources of power and a strong leverage going into a
negotiation. With Scott Boras – one of the legendary sports agents even at the
time – as his agent, A-Rod was expected to sign a lucrative contract.

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A-Rod, unsurprisingly, had a
strong BATNA, or BATNAs to be exact. Many franchises wanted to recruit him and
were willing to invest a significant amount of money. “His suitors included the
Mariners themselves, along with the New York Mets, Los Angeles Dodgers, Atlanta
Braves, 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 the
Mets – a childhood dream of his – talks between the Mets and Boras failed. “Boras
assured the Mets that any offer not including the required perks would be
rejected, and the Mets did not counter his offer. His list of demands and
interests included an office in the stadium, a marketing staff, a merchandise
tent at spring training, a luxury box, use of a private jet, and billboards bearing
A-Rod.” (O’Connor 2011) For Boras, these perks were in fact his Reservation
price; 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 guaranteed
years; “Atlanta was the other finalist, but blew its chance by refusing to
grant Rodriguez a no-trade clause” (Schulman and Shea 2000).

The Rangers outbid the other
teams 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 the
Rangers, Tom Hicks. “Before the negotiations, A-Rod spent five days in Dallas
meeting with Hicks, touring the city and learning about the franchise” (Schulman
and Shea 2000). This schmoozing was perhaps essential on Hicks’ part, building
good rapport between the two and convincing A-Rod that at Rangers he would be
valued more. Hicks’ astounding offer of $252 million – $2 million more than
what he paid for the franchise 3 years ago – reflected that sentiment. Our
market research for that time time period indicates that this contract exceeded
other baseball contracts by around $100 million. “Two days before A-Rod agreed
to terms with the Rangers, the Rockies had given Mike Hampton the richest deal
in 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 in
February 2000. Hours after A-Rod committed to the Rangers, Manny Ramirez
accepted an eight-year, $160 million offer from the Red Sox” (Neumann 2015). It
appears that Hicks and the Rangers were over eager to obtain A-Rod and did not
research the market thoroughly. They could have provided A-Rod with a lower
salary, in exchange for the perks that his agent really wanted for him.

Therefore, by the standards
of the time (and even today), A-Rod’s contract was perplexing. Just why were
the Rangers so desperate to acquire him? The Rangers had been a struggling
team, 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, they
did 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 “the
next level”, the Rangers felt they needed “a very unique contract”, with A-Rod
being “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 to
alleviate that. For his agent Boras, signing A-Rod was “the beginning of a
national prominence for the franchise.” In the words of the then General
Manager Doug Melvin, “We went into this with an ambitious plan after not
having much fun last season. Alex Rodriguez is the kind of player we feel sends
a message that the Rangers are serious about winning” (Reid 2000). For the
Rangers it seems, their perception and message to the fans and rivals was very
important. “Manager Johnny Oates said the contract makes sense in light of
Rodriguez’s value to the team as a five-tool player and to the community as a
wholesome, bilingual athlete in a heavily Hispanic state” (Schulman and Shea
2000). A-Rod was therefore more than a player for them: he became the face of
the franchise. As Oates added, “We’re talking about more than hitting a
baseball. We’re talking about marketing an area.” Securing A-Rod from the
Mariners also had significance for Hicks, as the Mariners were their rivals in
the West League Division.

 

References

O’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, December
11). Fifteen things to know on 15th anniversary of Rangers’ $252 million
megadeal with A-Rod. Retrieved December 13, 2017, from
http://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 / Rodriguez
signs with Rangers; contract doubles previous richest. Retrieved December 13,
2017, from
http://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, from
http://articles.latimes.com/2000/dec/12/sports/sp-64536

 

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