Re: Assessing A-Rod's worth
- From: Thermos <cfbltw@xxxxxxxxxxxx>
- Date: Tue, 24 Jul 2007 22:51:50 -0400
BadgerBC wrote:
http://www.nydailynews.com/sports/baseball/yankees/2007/07/24/2007-07-24_debate_is_on_the_money.html
A-Rod's worth to Yankees is key to monumental negotiations
BY ANTHONY McCARRON
DAILY NEWS SPORTS WRITER
Tuesday, July 24th 2007, 4:00 AM
Alex Rodriguez has been worth his weight in gold this season, leading
all of baseball in home runs and RBI.
Alex Rodriguez
In the playoffs, however, A-Rod has yet to carry the Yankees into a
World Series.
Someday soon a tableau of baseball power will emerge at the bargaining
table. On one side, Yankee suits armed with a checkbook and the most
recognizable brand in sports. On the other, agent Scott Boras, toting
statistical analysis, charts, graphs and glossy photos of his client
slamming home runs in pinstripes.
There will be number-crunching, negotiating and pronouncements over
the worth of Alex Rodriguez. Right now, he's the Yankees' third
baseman and best player, but he could be the biggest free agent in
baseball this winter if he uses an opt-out clause in his infamous $252
million contract.
Boras doubtless will note that the Yankees never drew four million
fans until A-Rod was a Yankee, that Rodriguez's talent and cache
deserve a new deal worth well over $30 million per year, that the
Yanks need a superstar for their cable network, for the new Yankee
Stadium that opens in 2009.
The Yankees likely will counter by saying that their brand, backed by
Ruth, DiMaggio, Mantle, Jeter, 26 world championships and the
distinctive uniform doesn't depend on one star, no matter who he he
is. Yankee fans, a pinstriped executive might say, will always watch
their team at the new stadium or on the YES Network, regardless of who
plays third. Heck, attendance dropped in Texas in the last two seasons
A-Rod was a Ranger.
But beyond all the rhetoric, what's A-Rod really worth to a club? One
consultant to a major league team says the revenue Rodriguez creates
yearly for the Yankees is $43 million. That's based on a formula that
judges Rodriguez's performance and his marquee value.
Other sports industry analysts say it would be difficult for a
superstar player to single-handedly bring in big bucks, especially for
a team that is already successful. If a star goes to a team that is
selling half their tickets, that's a different story.
"If Boras thinks there's some massive economic upside for the Yankees
to sign him, he's wrong," says sports business consultant Marc Ganis.
"They are one of those teams in baseball that has very little
incremental increase in revenue because of a single superstar. The Red
Sox are another. They sell most of their tickets, they have long-term
deals in place with sponsors."
Marcus DiNitto, the managing editor at Sports Business Daily, agrees
that it's difficult for one player to have "a real tangible impact on
the bottom line of a team like the Yankees.
"It'd be different if it were the Devil Rays, they're desperate for
star power," DiNitto says. "The Yankees brand isn't dependent on A-
Rod."
But Wayne McDonnell, a professor in NYU's sports management program,
argues that the YES Network could feel a ratings crunch if A-Rod is
elsewhere next year. One report said YES' ratings increased 35% the
year after Rodriguez arrived in New York, though it's impossible to
tell if A-Rod alone was responsible for the jump.
"Obviously, he is a big draw there," McDonnell says. "You want to make
sure you have quality programming and high talent to market. If you
lose his marketability on your network, it'd be tough to overcome.
"The Yankees need A-Rod more than A-Rod is going to need the Yankees.
Scott Boras will have the upper hand in negotiations. A-Rod's true
value is not just on the field."
A BARGAIN
Vince Gennaro started analyzing player values as a grad student at the
University of Chicago in the late '70s, building models to gauge
Catfish Hunter's worth. He has written a book called "Diamond Dollars:
The Economics of Winning in Baseball," which, in part, examines how
much players are worth to teams.
Gennaro, who is a consultant for major league teams, estimates
Rodriguez would create $43 million worth of value for the Yankees.
Using an advanced analysis of statistics, he converts a player's
performance into wins. He has A-Rod pegged as a player worth 10 wins
this season, which could help the Yankees reach the playoffs.
Ultimately, his performance could be worth $35 million in value,
Gennaro says, supplemented by an additional $8 million per year for
the Yankees when he begins to chase milestones such as 600, 700 or 800
homers.
"You could certainly rationalize another $3 million-$4 million per
year for helping to build the YES Network, wearing a Yankee cap in the
Hall of Fame," Gennaro says.
GREAT SCOTT
Boras has represented Rodriguez since he was the first pick in the
1993 draft and negotiated what is probably the most famous contract in
sports history, the $252 million pact he signed with the Rangers
before the 2001 season.
Boras says the Rangers' television contract jumped from $4 million to
$35 million per year with Rodriguez aboard. Though attendance fell two
of the three seasons, the Rangers were able to raise ticket prices.
With a marquee player, Boras says, the Rangers got more respect from
the Dallas-Fort Worth business community, which helped owner Tom Hicks
make money on his real estate holdings around the Rangers' ballpark.
Maybe that's why Hicks recently was quoted saying he would sign the
Rodriguez contract again.
"If you buy an octopus, you don't just use one tentacle," Boras says.
"(David) Beckham is a great example. His soccer performance is frankly
10% of the grade of what his relative worth is to the franchise and
the league.
Fans have to draw a bit of an understanding of this: when they say no
player is worth $30-40 million, if it's only about winning, I'd agree.
Sports is about winning, but the business side has a lot to do with
it, too. One marquee player may make your franchise grow."
To Boras, A-Rod's position among the game's greats - he likely will
become the player to reach 500 home runs the quickest (he's two away
and turns 32 on Friday) - creates "iconic value.
"That has more relevance today because of the need for content for
teams with regional sports networks," Boras says. "Any team with a
network needs a reason for people to watch."
Rodriguez, Boras says, is a rare player because he will be
recognizable for years because of his resume and his likely assault on
some of baseball's great records.
A BRAND NAME
On Friday, when Rodriguez signed copies of his children's book at FAO
Schwartz, there was a long line of fans, some wearing No. 13 Rodriguez
jerseys. ARod is a successful pitchman of products r a n g i n g from
Topps, Rawlings and Louisville Slugger to Pepsi and Nike. He has been
on a Wheaties box and worn a milk mustache in ads. Oasys, a mobile
company, will soon introduce an A-Rod video game for mobile phones.
Every two weeks, the inbox at his personal Web site, www.arod.com,
gets about 10,000 e-mails, says Steve Fortunato of Fortch Unlimited,
Rodriguez's marketing representative. They come from as close as the
Bronx and as far away as military stationed in Iraq. He has his own
charitable foundation and his own logo, which graces the site.
Two years ago, Sports Business Daily ranked Rodriguez second to Jeter
in survey of the most-marketable players in baseball. In 2003, both
players held the same spots in SBD's rankings. His jersey was the
third-best selling individual one among baseball players, according to
SBD, and Sports Illustrated once estimated that he makes $6 million
per year in endorsements.
He might offer a sizzle factor to a club, too, some say. His
foundation hosted fundraiser with Jay-Z last year. He was on the Most
Beautiful People list in People magazine in 1998 and 2004 and was
listed as one of People's 100 Most Eligible Bachelors in 2000, before
he got married, although staff editor Larry Sutton questions his
crossover appeal with casual fans.
"He's really concentrating on baseball, which is probably good for
him," Sutton says. "You don't really get a glimpse of the personality.
Can he come up with a one-liner? What makes him laugh? He's just not
out there."
But his talent does draw interest, says Mike Haupert, a professor at
the University of Wisconsin-La Crosse, who is an expert in sports
economics.
"I think A-Rod is a big enough name that there are marginal fans who
will go just to see him, like what Barry Bonds is now," Haupert says.
What Boras is counting on is that by the time ARod's next contract is
complete, he'll be bigger than Bonds.
And without the controversy.
I was just thinking the other day about what it would be worth to the Yanks and MLB to have Rodriguez wipe Bonds from the record books.
.
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- Assessing A-Rod's worth
- From: BadgerBC
- Assessing A-Rod's worth
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