Alex Rodriguez completed his stay at the Southern California home of Scott Boras, departing yesterday with his wife, Cynthia, and also with what his agent believes is the information necessary to make the huge decision about his future.
Boras termed the three-day visit as an “academic exercise” to brief Rodriguez on all his options in regard to his opt-out clause. Rodriguez can either re-up with the Yankees between now and 10 days after the World Series or declare himself a free agent.
Yankees officials have pledged that they will make a substantial extension offer to A-Rod, but that if he declares free agency and the team loses the $21 million-plus subsidy from the Rangers on the star’s current contract, they will cease negotiations. Boras has been circumspect about that claim and has indicated he expects a robust bidding process if Rodriguez does enter free agency.
It seems the negotiations with the Yankees are going to hinge on whether the two sides can come to peace with what Rodriguez’s value is beyond the field, especially as it pertains to the YES Network. Boras puts great value on Rodriguez’s star power when it comes to YES’ strong ratings.
In fact, Boras asserted he had an epiphany of how to frame the issue after seeing former Los Angeles Kings owner Bruce McNall at a Dodgers game in August. He said McNall’s acquisition of Wayne Gretzky in August 1988 from Edmonton was facilitated by the team’s TV partner, Prime Ticket, helping to defray the cost. McNall was able to sell how hockey’s greatest star could elevate ratings and franchise value, especially as he chased historic records.
“Is there a network value to Gretzky? Definitely,” Boras said. “We want to bring this historic player there. We want [the network] to contribute. The equation became clear. An iconic player has network value.”
In Boras’ strategy, A-Rod is now that history-chasing iconic player, and YES can help defray his ultimate cost to the Yankees. But the Yankees seem unwilling to accept that view. And two executives who have had extensive dealings with both the Yankees and YES said yesterday they do not anticipate the network providing a subsidy to abet the Yankees in retaining Rodriguez.
“It is not impossible, but is not easy,” one executive said. “Maybe [YES] could be convinced that if something is good for the Yankees, it is good for everyone.”
Both executives stressed that YES draws the majority of its revenue from having 10 million subscribers paying $2.50 a month to get the network on a basic cable package. “And is one person going to stop subscribing to basic cable if Alex is, say, an Angel?” the second executive said.
Both executives also reasoned that Yankee ratings might slip without Rodriguez, but not to a significant enough level to motivate a pre-emptive financial package to Rodriguez to keep him. In addition, the Steinbrenner family owns 37 percent of YES, so this would necessitate the other major investors shifting money to the Steinbrenners. And both executives said they believed the major investor, Goldman Sachs, which owns 47 percent of YES, is much more likely to sell off its portion of the network in the next 12 to 36 months rather than increasing its outlay.
“I can’t conceive where [the] Yankees go to YES and ask to be underwritten on a player,” the first executive said. “If Alex leaves, YES is fine. That would not cripple the network.”