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 much as $60 million to pay off A-Rod’s salary. The $180 million present value of the contract is within reach.
Good baseball? The contract may make more business sense than baseball sense. A single player can change the fortunes of a basketball team or, in the case of a quarterback, a football team, but not a baseball team. The Cubs have Sammy Sosa, but they don’t win. The Reds added Ken Griffey last year, but they didn’t win. Last year the Rangers won 71 games and lost 91. The main deficiency was pitching. Yet the Rangers went after A-Rod instead of pitchers in a year when some very good pitchers were free agents, such as Mike Hampton, the former Astros ace.
The A-Rod contract is about business, not baseball. That is why I find it hard to get too excited about the deal. It is an attempt to give the Rangers an injection of pizzazz, something they have always lacked except on days when Nolan Ryan was pitching. It is not an attempt to build a ball club that can win the World Series. Indeed, the contract is so expensive that it may hinder the Rangers’ ability to assemble a championship team. What will happen in 2002, when the Rangers’ other Rodriguez, Pudge, is eligible to become a free agent? Will Hicks be able to find another pot of gold for his all-star catcher and the American League’s most valuable player in 1999?
And so we come to the final question about the A-Rod deal: Is it good? The news of the contract reinvigorated the ongoing debate in baseball about escalating salaries and their impact on small-market teams. The National Football League imposes a salary limit upon teams and divides revenue equally among all teams. These provisions allow franchises like Green Bay to compete on even terms with those in New York. Baseball has no such arrangement. The big-revenue teams, most of which have lucrative regional TV arrangements, can pay high salaries to attract and keep talent. The small-revenue teams can’t. Even if one happens to win—as the Florida Marlins did in 1997—it can’t afford success; barely a year later, the Marlins had been sold and stripped of their best players. The Astros, a mid-revenue team, won their division in 1997 with a payroll that ranked eighteenth among the thirty major league teams. They won in 1998 with a payroll that ranked twelfth. They won in 1999 with a payroll that ranked tenth. But then they had to trade Mike Hampton, because they couldn’t afford him. They couldn’t even afford to keep Ricky Gutierrez, a shortstop who was a free agent. Adios, first place. A-Rod’s contract didn’t create the cleaving of major league baseball into semi-permanent camps of haves and have-nots, but it will accelerate it. The salary scale will follow his contract upward.
The reaction of some people, I suppose, will be, Who cares? It’s just sports. But our games do matter because they are mirrors of ourselves. They bring to the forefront that fundamental mystery of life: What separates winners from losers? All sports do this, but none does it so starkly as baseball, a game in which batter and pitcher face each other, over and over, surrounded by teammates but alone. A round bat meets a round ball, with a fraction of an inch determining the difference between success and failure; it seems random, but statistics verify that it is not. We know that some players will succeed more often than others. But we don’t know why. Is it talent alone? Or is it something else—concentration, dedication, will? Do winners win because they have superior skill or because they have superior character? We watch the game, fascinated, hoping that the secret will be revealed.
To complete this morality play, there has to be a villain. Baseball offers one: the New York Yankees. They have no regard for mysteries about winning and losing. In their case, there is no mystery. We know why they win: money. They’ve been doing it ever since they bought Babe Ruth from the Red Sox. The A-Rod contract means that the Rangers are trying to become the new Yankees, and the worst part is that in baseball today, that may be the only way to win.