The occasion was the Governor's annual Christmas party for the media, the guest list swollen this year by the presence of the national big shots who were in town covering the president-elect. The protocol quickly became apparent. George W. Bush stationed himself in a corner, and the media, groupies for a night, approached him in a mass that slowly rotated counterclockwise, like a hurricane trying to make landfall. Eventually the motion would bring everyone close enough to ask a single question. I had time to ponder what to ask. Do you think you would have won a statewide recount in Florida? How do you plan to get along with the Democrats? Is the economy going to collapse? No, no, no. These are trivial matters. When my turn came, I made it count.
"What do you think about A-Rod's $252 million contract?" I asked the former managing general partner of the Texas Rangers.
"When you pay more for your shortstop than you paid for your team," said the next president of the United States, "that ought to be a warning sign that your labor costs are out of control."
No fuzzy math here: Bush and his fellow owners sold the Rangers to Dallas investment and media mogul Tom Hicks for $250 million in 1998, forsaking baseball for easier pursuits—at least for Texans. Bush is the third Texan to make it to the presidency since the Houston Colt .45's brought major league baseball to the state in 1962, to be joined ten years later by the Rangers. In those 38 years, the Cowboys have won five Super Bowls and the Rockets and the Spurs have won NBA championships, but neither the renamed Astros nor the Rangers have ever won a playoff series, much less the World Series. Who would have imagined back in 1962 that Texas would have a hockey champion—Hicks's own Dallas Stars won the Stanley Cup in 1999—before it would have a baseball champion?
By signing 25-year-old Alex Rodriguez to a ten-year contract, Hicks is trying to replicate the strategy he pursued with the Stars, a mediocre team that he fashioned into a champion by buying players who, like A-Rod, were free agents. But A-Rod's contract is so bloated by comparison—Hicks gave three-year deals to forward Brett Hull and goalie Ed Belfour worth $17 million and $10 million, respectively—that in professional sports it stands in a league of its own. The $252 million figure represents one third of Hicks's own net worth of $750 million, as estimated by Forbes magazine, which is enough to tie for 382nd on the publication's latest annual list of the 400 richest Americans.
Is A-Rod worth it? He is a great player, no question about it. He can be counted upon, season after season, to bat over .300, reach base more than 40 percent of the time, slug more than 40 homers, and drive in and score well over 100 runs—and he's young enough that he should get even better. The guy can play. But the question of whether he's worth $252 million is not answerable by statistics alone. It depends on the answers to three additional questions: (1) Is the A-Rod deal good business? (2) Is it good baseball? (3) Is it good?
Good business? To find out, I called Andrew Zimbalist, a professor at Smith College who until 1990 specialized in comparative economics. As he tells it, he had just finished a book on Panama when his eleven-year-old son, who was worried that the baseball season would be lost because the owners had locked the players out of spring training, suggested that his dad write about the business of baseball. So Zimbalist got his priorities straight, putting baseball first, just as I had when I saw Bush. I told him about the question I had asked and Bush's answer. "It's rhetorically valid," Zimbalist said of Bush's response about labor costs, "but analytically vapid. There's no relationship between the $250 million Hicks paid then and the $252 million that he'll pay A-Rod in the future. Among other things, the present value of the contract is $180 million because much of the compensation is deferred."
Zimbalist believes that the contract could pay off for Hicks. "Beyond the obvious, that A-Rod could make this a winning team, he's charismatic, young, handsome, well behaved; he brings people to the ballpark," he said. "He contributes beyond the playing field. If the Rangers find themselves in need of a new manager, he makes them more attractive. The luxury boxes and suites will sell out. The value of naming rights to the stadium could go up by ten million to fifteen million dollars. The value of signage in the park goes up. Hicks is developing the real estate around the stadium, and the value of that will go up. His investment management company may take a fee for managing the deferred income."
Critics of the deal say that Hicks got caught up in the chase for Rodriguez, that other suitors had dropped out of the bidding, and as one writer for ESPN's Web site said, Rodriguez's agent "hoodwinked" the Rangers into thinking they had "to pay at least sixty million more than any other club was offering." But Hicks's résumé suggests that he does not hoodwink easily. He made his fortune doing buyout deals, and he has amassed a three-continent empire of radio and TV stations, media and communications companies, and real estate. A-Rod is another deal, an acquisition that will enhance the bottom line. The naming rights for the Ballpark in Arlington could bring in as much as $100 million. Fans will pay more to see him play—or so the Rangers are betting: In early January the club announced that the price of a single-game ticket will be going up by an average of $2, yielding as much as $6 million in new revenue every year of A-Rod's contract (and you can bet that more ticket increases lie ahead), and in ten years Hicks will have taken in as