The Economics of A-Rod

I neither know nor care much about baseball, which means I don’t read Will

Leitch’s Deadspin. I did, however, read his

excellent article in New York magazine about what’s

going to happen to Alex Rodriguez’s contract at the end of this season.

Now the obvious outcome is that A-Rod will stay with the Yankees, even though

he does have an option to sign elsewhere. As I see it, there are three really

good reasons why he’ll stay:

  • The Yankees have a habit of winning the World Series.
  • The Yankees have more money than anybody else.
  • The Yankees have a $29 million headstart on any other bidder: that’s the

    amount of money they’ll be subsidized by the Texas Rangers towards A-Rod’s

    salary for the next three years of his contract.

And yet. There seems to be a feeling that A-Rod might well decamp elsewhere

at the end of this season, due largely to amorphous things like the absence

of an aggressive tabloid press in Chicago, or the fact that he still hasn’t

been fully accepted by the Yankees fans or players as a true member of the team.

So is this whole article an attempt by A-Rod’s agent, Scott Boras, to increase

the FUD

surrounding his star player, and thereby maximize the size of his next contract

with the Yankees? Or are there aspects of sports economics which I’m not even

close to understanding? Calling Allan Kreda!

Update: An anonymous commenter makes an excellent

point in the comments. For all the hundreds of millions that A-Rod gets paid

in salary, his total income is much higher still, thanks to sponsorships and

endorsements and the like. The better A-Rod’s public image, the more he’s worth

on Madison Avenue. So if his public image suffers in New York, it might well

make sense for him to move, even if the Yankees can offer more money.

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