Monday, November 25, 2013

The Psychology of a $300 Million Contract

So Jay-Z wants $300 million over 10 years for his new client, the one and only Robinson Cano.

What is the reasoning behind such an outlandish offer?  The richest contract ever signed was for a player in the same clubhouse by the name of Alex Rodriguez valued at $275 million over 10 years.  Prior to that signing (in which the Yankees were bidding against themselves the whole time), A-Rod...performance-enhancing drugs or not...was putting up monster numbers and MVP seasons.  Is Robinson Cano even close to the baseball player A-Rod was in his prime?  The second richest contract was for $252 million over 10 years, also to A-Rod...and that was when he was REALLY mashing it (and really taking PEDs according to him).

Besides those 2 contracts you will have to visit the ones signed in the last few seasons for Albert Pujols (10 years, $240 million), Joey Votto (10 years, $225 million) and Prince Fielder (9 years, $214 million).  Robinson Cano is clearly the best second basemen in the game, but is he Pujols, Votto, or Fielder? The short answer is no.  The best comparison for Robinson Cano would be his counterpart from the Red Sox, Dustin Pedroia, who signed a very rich contract for a 2nd basemen at $110 million over 8 years.  Do I think Cano is better than Pedroia...obviously.

So who in their right mind would give Robbie that $300 million over 10 years.  In 10 years my oldest son will be in college...and there might not be a United States by then either.

The answer one in their right mind will give Cano $300 million dollars.  He knows it and Jay-Z knows it.  So why ask for that much??  Simple, it is all a ploy to set up Cano as the hero.  The hero that takes a huge cut in his demands to take the "hometown" discount.

"I can be your hero baby..." (compliments of Enrique Iglesias)
Every blog I've read about Cano states something to this effect..."I wouldn't pay more than $180 million over 7 years for Cano..." and so on and so forth.  So the expectation is that Cano will be somewhere between $180 and $300 million.  Does anyone for a second think that he would be unhappy with a 8 year, say $190 million dollar contract to re-sign with the New York Yankees...or $200 million to go across town to don the Orange and Blue?  That's between $23.75 million and $25 million a year.

THAT'S BETWEEN $23.75 MILLION AND $25 MILLION A YEAR...which would almost double the average value of Pedroia's $13.75 million per year.  Is Cano twice as good as thinks not.

The Yankees currently have 3 players making that kind of money a year, which amounts to higher than 8 major league baseball teams' entire payroll for 2013.  If Cano was signed for that money as well, the Yankees would be paying 4 players (pending A-Rod's suspension) more than 17 major league baseball teams' entire payroll.

Cano is going to get a big contract, no question about it.  Whether he stays with the Yankees or not depends on whether he wants to play the part of the villain or the hero...a villain making a ton of money as a Dodger or Met or Blue Jay, or a hero making a ton of money (albeit it less) and looking good while doing it.

However...if he won't accept anything less than that $300 million...let him walk.  The Yankees have a former 2nd basemen playing left field that has more rings with the Yankees than Cano anyways...


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Sorry for the Capatcha... Blame the Russians :)