New Contract Rules Are The Right Call

The MLB and the MLBPA announced today that contracts like those of Albert Pujols, Alex Rodriguez, and Ryan Zimmerman will no longer be allowed. Pujols’ and Rodriguez’s deals include bonuses for career milestones like the 3000th hit or 764th home run while Pujols’ and Zimmerman’s deals include ‘personal service’ options for 10 and 5 years after the player retires, respectively. I whole heartedly agree with the powers that be in this decision.

First off, the ‘milestone’ clauses like A-Rod’s and the personal service agreements like Zimmerman’s are against the spirit of both the MLB Collective Bargaining Agreement and the very idea of player contracts. In theory, players sign lucrative contracts with teams in an effort to help the organization achieve a measure of on-field success. Teams can afford to do this because, presumably, on-field success will lead to off the field profitability as fans will more likely want to watch the team, allowing the organization to charge more for advertising and TV rights as well as tickets and merchandise. Basically, teams can afford to pay a premium for players because they believe that the on field performance of the player will generate enough revenue to cover the multi-million dollar cost. Both personal service and milestone clauses fly in the face of this theory.

I can see the appeal of milestone clauses from a financial point of view. The marketing done by the New York Yankees when Derek Jeter got his 3,000th hit makes clear the value of these benchmarks to teams. When and if A-Rod or Pujols become the All-Time homer leader, their respective organizations can make a fortune in t-shirt sales and other promotions, it makes sense that they would want to encourage players to reach these statistical goals. However, stats are not supposed to have any place in contracts. The language of the CBA says as much. Contracts are supposed to be based on overall performance, not statistical achievements. Stats in baseball are nice because they quantify the game so well and they can give you a really good gauge of a player but they are supposed to be ancillary to on-field performance. Contracts should understand this and value the player’s ability to contribute to a win over any stat.

Personal service agreements are a little different. In this regard, the MLB drew a distinction between players and retired players. The announcement today says that contracts signed by players should pertain to their playing days only. I agree with this too. For me though, its more of a gut feeling. One the one hand, I think that any player should be able to commit themselves to anything they want to, that’s their prerogative. On the other hand though, something makes me very uncomfortable about ballplayers signing 20 year deals pledging themselves to serve teams well after their playing days are over. I think that there should be a distinction between players and former players. If any player wants to sign a lucrative personal services deal after their career ends, they should have every right to do it…. after their career ends.

Maybe I’m a little bit conservative and old-fashioned when it comes to this stuff but clearly, I’m not alone. Both the Major Leagues and the Players Union agree that contracts should be relatively simple and should keep their focus on on the field success rather than accomplishments in the front office, signing autographs, or in the stat book.

-Max Frankel