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Help Me With My Math

OK, so I am reading all these various reports about this whole mess and I am beginning to think that Scott Boras knew exactly what he was doing here.

Consider that before the opt-out, the Yankees were on the hook for at least $81 million for the next three years. With escalator clauses it would have probably worked out to $91 million. Then add in the proposed extension they were going to offer, supposedly $28 million a year for 5 years. which works out to an additional $140 million. That means you have the Yankees originally on the hook for $231 million and eight more years or $28.75 million per year- but $21 million of that was paid by Texas which makes it $210 million and $26.25 million per season. If the deal that has been reported is signed ($275 million at 10 years) the Yankees increase their obligation by another $44 million and 2 years and the average value is $27.5 million a year. And, many reports peg the potential deal at around $300 million with incentives.

So, the Yankees end up extending a deal for two more years than they were originally prepared to do and actually increase their annual outlay by $1.25 million a season. Boras also gets his client another $44 million and sets another record for biggest contract in sports history. How is this a "win" for the Yankees? Maybe I give Boras too much credit, but I can't help but wonder if this was his plan all along. Sure, he looks bad, but does he care when he grabs his 10% of the deal? Could he have realized all along that $350 million was absurd and the Yankees were his best shot so it was just about grabbing a bigger amount of Yankees' dollars?

I still think this all ends up for nothing and until I see a signed contract I will maintain that, but the final details of a potential Yankee contract would be fascinating to see.

Comments

Does he still receive 10% of the deal if he isn't in on the contract. I think the Yankees could have gotten away with 8 years and I hope that the reports are misleading. Just doesn't seem like a Cashmanesque deal with the 10 years. Was he in on the negotiating, or was it just the Steinbrenners? Definetily seems like a Steinbrenner contract.

Tripp

Until A-Rod officially fires him, Boras, or better put, his agency gets the fee. So, I imagine somoene from that agency, maybe the guy who gets the coffee is sitting in on the negotiations to staisfy the player's union and Boras' quest for riches.

BTW- have you ever seen a more inviting website than this? http://www.borascorp.com/home/

Peter,

The math probably goes something like this:

PayRod gets to eat the Texas money the first N years of his contract, then his salary goes up towards the end as he is would then be getting paid with a fixed dollar that is eroded by inflation. Yup, the old "discounted future value of a series of cash flows" for those CFO types out there. It's still a huge number, but the richest franchise is now being run by the young turks who seem just as aggressive as their old man. Good for Yankees fans, bad for the rest of the teams.

Now if only we can translate all this "stuff" this into something like a few more WS rings, we'll be good to go.

Mitchell

Thanks, shame on me for not taking into affect present value. You're absolutely right because even at 3% a dollar is worth about 25% less in ten years than it is now.

Fellas, the money is still huge. But more importantly let me inside the mind of a Yankee fan right now. So much was said about ARod after he opted out (I've been reading the comments on the posts, interesting). What is being felt right now? Let's assume the deal is done for the purpose of this question. If ARod is back, you have the best regular season offensive player in baseball. But his personality has been questioned, his playoff record has been questioned, he has so much baggage (to carry all that $$$), just what do you guys feel right now?

As a Red Sox fan, I am happy for some reason that he is returning to NY. I have felt all along that his presence just makes it impossible for the team concept to come out. Maybe this recent experience will change that, but no one can say that with any confidence. Anyway, just curious.

Andy

I am really struggling with that right now. for me, I think it is really going to come down to what the deal is and what he says when they announce it. I am assuming that whatever deal he signs will be it, no opt-out clauses, etc. So, the Yankees and A-Rod will be stuck together for 10 more years. If so, we are all going to have to figure out how to get along.

Classic high-low stategy, say $350 mil, now that's the bar, even if you knew all along you wouldn't get it. So Boras looks bad, that's his job, and so long as he is nt fired, he will get his $27.5 mil off the deal whether he is in the room or not. If Arod sold me an autographed ball for $100 bucks he'd have to give Boras a 10 spot.

How does a Yankee fan feel? I think of this as sports theatre at a level that gets its own mini-series like "The Bronx is Burning".

I find it tiring as can be. I wish he would have gone away and let us go back to the star-less team that got us through the late 90s.

Yup, NYC is the biggest stage in the bigs, with the loudest, pushiest media muffins - so it requires players who can revel in the glare of it all. A-Rod is perfect for NY as is Boras - unfortunately.

Well said both of you.

Peter, you are right, you'd better get along. I do question why you care about what he says when/if they announce it. Don't you fully expect a prepared/canned statement that says how much he loves NY and the Yankees tradition?

Mitchell, I agree that had he gone away, it would have been better for the Yankees. Any semplence that the Yankees might be an underdog (as crazy as that sounds) would have been a good thing for Yankees players, management and fans to grasp onto.

Andy

It's a good question, I don't know why, but I do.

And the Yankees will never be considered the underdog as long as they have the highest payroll.

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