ARod news may be good for Yankee bottom line

Alex Rodriguez #13 of the New York Yankees.

Major League Baseball announced the biggest punishments yet in the ongoing scandal over performance enhancing drugs in connection with the Biogenesis clinic in Florida. A dozen players will be suspended for 50 games. But one player will be suspended for a whopping 211 games: Alex Rodriguez

A-Rod is facing unprecedented punishment, because he tried to cover up his drug violations. A suspension for the rest of this season and the 2014 season could be a career-ending blow for the 38-year-old player. But the impact on his team -- the New York Yankees -- may be the opposite. 

“The Yankees stand to save anywhere between $60 million and $100 million, which is a fair amount of change even for the new York Yankees,” says Alan Milstein, an attorney who has represented professional athletes.  

That huge sum represents the balance of the record-breaking $275 million contract he signed in 2007. Its 1o-year term was structured to pay out generously even as Rodriguez became an older, less able player. 

“The Yankees made a gamble,” says Michael McCann, director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law. “They decided in the short-term that this made a lot of sense for us, but now they’re probably hoping that they don’t have to pay him.” 

The extra money from Rodriguez’s salary could be used to avoid the “luxury tax,” which the Yankees have paid in recent years thanks to total salary spending exceeding an MLB-set threshold. (The current limit is $178 million.) They might also use the extra cash to go after free agents, beefing up their pitching staff or snapping up Baltimore Orioles catcher Matt Wieters.

“The Red Sox, Orioles, Rays and Blue Jays are not going to be happy to see Alex Rodriguez suspended, because now their rival can go spend money on other needs,” says McCann. 

The Yankees can’t break out the checkbook just yet, however. Rodriguez will be allowed to play while he appeals the suspension, and in a statement he indicated he planned to do just that. "They’ll still have to pay him as long as he’s in the line-up, as long as he’s on the roster,” says Webster University professor and SportsImpacts director Patrick Rishe. 

While the timetable is uncertain, Rishe believes the appeal process should conclude before next year’s season.

About the author

Stan Alcorn is a multimedia journalist in New York City. He has reported for NPR and WNYC, where he has focused on business and the New York tech scene.

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