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Sunday, May 06, 2007
 
The Abbreviated One-Year Contract Strategy: Roger Clemens signs with New York Yankees

Red Sox fans received some discouraging news earlier today, when 44-year-old free agent pitcher Roger Clemens announced that he has agreed to a one-year, $28 million contract with the New York Yankees. The contract is prorated for the remainder of this season, meaning that Clemens will "only" earn $18 million (or about $4.5 million a month). The Red Sox apparently offered Clemens $10 million less than the Yankees, while the Houston Astros--the other team competing for his services--offered even less. In adding Clemens, the Yankees' 2007 player payroll will rise to about $218 million, the highest in baseball and a rather pricey sum for a team with a middling 14-15 record.

Clemens and his agent, Randy Hendricks (pictured to right), have employed a unique and apparently effective free agent negotiating strategy the past couple of seasons: wait until May or June (or whenever large market teams become unexpectedly desperate for pitching), create a bidding war between rival teams without having to compete against other marquee free agents for those teams' attention, sign a massive one-year contract, and then do it again the next year.

I'm not sure how many players could pull this strategy off, but it will be interesting to see if other star free agents try it in the future. Not only has it provided Clemens with a string of incredibly-lucrative one-year contracts, but it has enabled him to both avoid the wear-and-tear of spring training and considerably shorten his working year. It has also allowed him to obtain valuable employment perks, such as routinely being excused from traveling with the team and thus being able to spend more time with family. On the other hand, by using a one-year contract strategy, Clemens probably amplifies the risk of injury or under-performance on future earnings (although after a spectacular 23-year Major League career, I suspect that he has a decent chunk of change in the bank should either of those risks materialize).

Despite Clemens joining the Yankees, all is not lost for Sox fans. Buoyed by 40-year-old Curt Schilling, their team won today and now enjoys a 20-10 record, tops in the American League. Even better (perhaps, maybe), Jon Hanson and I published an article on The Situationist today entitled "Red Sox Magic." It examines the "faith" of Sox fans in their favorite team. Here is an excerpt:
But what about fans who merely wish ? Does wishing make a difference? And if not, why would they still wish? [Princeton University social psychologist Emily] Pronin’s research, again, indicates that wishing satisfies our urge for control at those times when actual control over outcomes we care about is in short supply.

This phenomenon was certainly apparent in the buildup to Red Sox victory in 2004. Consider the classic thread “Win it For” on the popular Red Sox fan messageboard Sons of Sam Horn (also known as “SoSH,” of which principal owner John Henry and ace pitcher Curt Schilling are members). The thread was started by high school teacher and diehard Sox fan Shaun Kelly right before Game 7 of the Sox-Yankees American League Championship Series. By urging fellow fans to dedicate the game to “the special people in their lives who had loved the team through thick and thin,” Kelly hoped that he would create some “mojo” for the Sox. He concluded his message with . . .
We hope you read the rest of our article on The Situationist.





7 Comments:

One of the guys over at Highbrid Nation wrote a very interesting post about Roger Clemems and and the "real" reason he has come back to play for the Yankees. Good Stuff.

Anonymous Evorgleb -- 5/07/2007 10:52 AM  


I find the Clemens situation to be a complete joke. Arguably the best pitcher in the game is tarnishing the integrity of the sport. He is a rent-a-player. I wonder what the other big stars think of Clemens and his antics.

In comparison, the year-long contract given to Clemens by the 14-15 Yankees is 2 TIMES the payroll of the entire 2006 Florida Marlins team that finished a shade under .500 and was in the penant race for awhile.

Instead of shelling out $218 Million to field a contender, here's an idea: develop a minor league system, hire a new coach, and learn to play as a team.

Blogger Adam W -- 5/07/2007 3:43 PM  


Hey mike, do you know the legal reason why it needs to be 28 million prorated salary as opposed to just a 19 million salary which he will be getting?
Kenny

Anonymous Anonymous -- 5/08/2007 9:36 AM  


probably cause if it takes him 3 months to build up his strenght in the minors they aren't on the tab for $18 mill

Anonymous Anonymous -- 5/08/2007 3:24 PM  


anon,

roger would be under the major league salary during his time in the minors. sending a player with a major league contract to the minors has no effect on salary.

salary only fluctuates with guys that are signed under minor league contracts that get called up to the show. the players in that situation get the prorated league minimum for each game they play.

Blogger Adam W -- 5/08/2007 10:50 PM  


Arguably the best pitcher in the game is tarnishing the integrity of the sport. He is a rent-a-player.

Free agency set this ball in motion a long time ago. Clemens is merely carrying it out to its logical conclusion. MLB has bigger problems, in my opinion, than Roger Clemens. Namely, its unwillingness to do something substantive about the steroid issue. The Barry Bonds and Mark McGwires of the world have hurt the sport's integrity more than Roger Clemens ever could.

Blogger hully -- 5/08/2007 11:19 PM  


Adam W, Roger signed a minor league contract. His contract will be purchased when he is called up.

Anonymous Anonymous -- 5/10/2007 10:37 AM  


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