Is A-Rod Worth a Billion Dollars?

On Tuesday, October 9 2007, Scott Boras, who is the agent for New York Yankees third baseman Alex Rodriguez, proclaimed that his client will be worth between $500 million and $1 billion to the team that pays for his services over the next decade. That's not a joke. Nor is it a misprint. Boras actually made that claim.

What Scott Boras Said to ESPN

In a telephone interview with ESPN 1050 radio station on October 9, Boras stated:

"One of the things that Alex has that few players have is he has network value," Boras said. "That means for a regional sports network he has an impact on in that may allow that regional sports network to increase by a half-a-billion to a billion dollarsover a 10-year period because of the ratings increase that he will bring. His fan base will subscribe to that network to watch him play and they will sell more advertising. This has certainly been evidenced in New York."

As evidence for his claim, Boras cited the hefty ratings increase experienced by the Yankees regional sports network since Alex Rodriguez came to town. Specifically, he pointed out that in 2003, the year before A-Rod arrived at Yankee Stadium, the YES Network averaged a 3.2 rating.

The next year, which was A-Rod's first in the Bronx, that number jumped to 4.6, and has held fairly steady during each of Rodriguez's four seasons with the Yankees. That increase of nearly 50%, Boras claims, is worth mega-bucks to the Yankees, or to any team that wants his services. Perhaps as much as "one billion dollars" over a ten year period, the super-agent told ESPN.

And while Boras didn't specify how much money he wants for his client, it's clear that by advancing that argument at this pre-negotation stage, he will argue to the Yankees (or to another suitor) that Rodriguez should be paid roughly equal to the amount that he adds to the team's income over the length of his next contract. In other words, Boras is suggesting in a not so subtle manner, that if you want A-Rod for the next decade, get ready to pony up a lot money. A lot more than the $252 million contract the Texas Rangers extended to the superstar in 2001.

Is A-Rod Really "Worth" a Billion Dollars?

For the sake of argument, let's set aside the fact that since Rodriguez came to the Yankees, the team suffered the worst loss in playoff history when it blew a three games-to-none lead in the 2004 ALCS to the Boston Red Sox, and was then knocked out of October baseball in the first round in each of the 2005, 2006 and 2007 seasons.

Let's also set aside the fact that prior to Rodrguez's arrival, the team won six American League pennants and four World Series rings in just eight years.

Let's also set aside the fact that since the beginning of the aforementioned playoff meltdown against the Red Sox, A-Rod's postseason statistics read as follows: 60 At-Bats with a .133 Batting Average, 1 Double, 1 HR, 1 RBI, and 19 strikeouts.

Let's set all that aside, and just look at the economics of Boras's claim of A-Rod's immense "value" to the Yankees, and by extension, to any team seeking his bat and glove for the next decade.

YES Network Ratings Increase, But Not Solely Due to A-Rod

Boras cites the increase in the YES Network's ratings from 3.2 in 2003 to a fairly steady 4.6 during the A-Rod era to support his claim for a potential ten-figure contract. This increase, Boras is implies, must be attributable to A-Rod, and therefore, A-Rod should capture the lion's share of the revenue generated by such increases.

Hogwash.

Boras's argument is thinner than Calista Flockhart during the last season of Ally McBeal. It's more flawed than former President Bill Clinton's sense of sexual morality. It's more worthy of ridicule than Ben Affleck's performance in Gigli. It's more outrageous than Al Sharpton holding himself out as a legitimate Civil Rights activist.

It's patently absurd, and here's why.

First and foremost, the YES Network did not even debut until the 2002 season. That year, it earned just a 2.1 rating. The next year it increased to 3.2. And then in '04, it jumped to a level where it has remained for the past four years.

In other words, there was a natural progressively upward trend in ratings as the YES Network became more established. It's a common concept in any business called "ramping up." During the first season, people tied it out. In the second year, fans who had not yet jumped aboard realized that this was going to be the only place too see most Yankee games, and also signed up. Same thing for the third year.

But now it seems that the audience has hit a critical mass, and it has not expanded in the last four seasons. The ratings increased as more people became aware of the Network and more people resigned themselves to the fact that if they wanted to see the Yankees, they had to pay up for YES.

Secondly, the Yankees have become a more attractive team to national and international viewers over the past five years. Importing so many stars from other teams and other countries has broadened the fan base, and the ratings leap is attributable to not just Rodriguez, but to Hideki Matsui and Chien-Ming Wang and free agents who've arived from teams located in other parts of the United States.

Using the Scott Boras logic, shouldn't Hideki Matsui, who arrived in New York before the 2003 season and brought with him hundreds of thousands of Japanese-American viewers, claim that he was the real driving force behind the ratings jumps? How about Chien-Ming Wang, who has attracted Taiwanese-American and Chjines-Americans to the team?

Another reason for the increase it viewers is that since its inaugural season, the YES Network greatly expanded its programming, offering more choices and more shows to viewers in 2004-2007 than it did in 2002 or 2003.

In sum, there are many factors that have boosted viewership, only one of which is A-Rod.

The Yankees Don't Need A-Rod From a Financial or a Baseball Perspective

The bottom line is this: the New York Yankees will draw fans to the Stadium and eyes to the screen regardless of who plays third base. A-Rod is a wonderful player, but with the team's roster full of international stars, and its storied history, and its vault full of championship hardware, the business will keep its ratings and its attendance regardless of whether A-Rod stays or goes.

Now to the real crux of the matter. The one thing that could hurt attendance and viewership, and the resultant revenue, is failure on the field. The team is so popular right now because fans believe that every year, the Yankees could win it all. That hope is what brings asses to the seats and eyeballs to the TV screen. Therefore, it's quitle likely that if this ccontinued october futility continued, the idea that the Yankees were the best thing in the game might subside, and with it might go millions of dollars.

So what Steinbrenner, the fans and the YES Network really want and really need is a championship. They need to win one to keep up the hype and the excitement and to keep up the revenue. A few more first round playoff losses might take the luster out of the whole thing, and that could actually hurt the team's pocketbook.

Unfortunately for Steinbrenner and the fans, A-Rod has demonstrated that he doesn't bring titles with him. He doesn't even bring ALCS berths with him.

The conclusions are self-evident. The team is still going to make gobs of cash with or without Rodriguez, and A-Rod is not a difference-maker when the season is on the line.

So why would the Yankees pay him a nickel, let alone a billion dollars, when they can probably get the 24-year old Miguel Cabrera -- who has won a World Series -- for one-tenth the cost?

Yankee fans watch to see the Yankees -- not A-Rod.

Look for the man to show up in an Angels uniform in 2008.

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