AROD'S UNPAID $6 MILLION HOMERUN

Last night, Alex Rodriguez passed Willie Mays for fourth place on Major League Baseball’s all-time homerun list. Much like the baseball fans that deny Rodriguez’s achievements due to his performance enhancing drug use, the Yankees are denying Rodriguez his $6 million bonus for likely the same reason.

Rodriguez’s contract with the New York Yankees contains a rare provision known as a milestone-marketing bonus. This type of provision pays the player a substantial sum for the marketing rights related to milestone accomplishments. The only players to receive such provisions in their contracts in recent memory are Rodriguez and Albert Pujols. Following Pujols’ contract, such milestone-marketing bonuses were banned by Major League Baseball. However, to Pujols’ and Rodriguez’s delight, the ban on such clauses was not retroactive, thus allowing such clauses to remain enforceable.

Pursuant to Rodriguez’s milestone-marketing clause, he was to be paid $6 million for passing Willie Mays on the all-time homerun list.  However, Brian Cashman, the Yankees General Manager, has publically stated that they will not pay Rodriguez the $6 million bonus. The Yankees argument is presumably that the bonus payment is contingent upon being able to market the milestone achievement and since Rodriguez was suspended for the 2014 season due to performance enhancing drug violations, the milestones no longer have marketability.

Interestingly, the contract is reportedly clear that the Yankees agree to pay the sum of $6 million, and that “Such payment will be made within fifteen (15) days of its designation of the Milestone Accomplishment under Paragraph 1, above.” The Yankees still have some time to make the payment as indicated in the contract, but if Rodriguez is not paid, he would have to take legal action against the Yankees to get his bonus. This matter would be especially important to Rodriguez, as he may be able to achieve additional designated milestones in his contract, and thus be entitled to more moey.

If Rodriguez were to sue the Yankees, once the fifteen day period expires, he would allege (amongst other causes of action) that the Yankees breached his contract. In order to prove a breach of contract, the following elements must be proved:

1.       The existence of a binding contract
2.       One of the parties to the contract materially breached the contract
3.       The material breach caused damages

Rodriguez’s potential case hinges on element 2. A breach occurs when a party fails to perform its obligations under the contract. However, that definition immediately calls for clarification as to what obligations the breaching party has under the contract. Cashman’s statement, that “We (the Yankees) have the right but not the obligation to do something, and that’s it,” is particularly interesting, as such rights are usually explicitly stated in contracts. Unfortunately, it is impossible to ascertain the validity of such a statement without seeing Rodriguez’s contract.

Understandably, the Yankees are upset that Rodriguez has been implicated in multiple performance enhancing drug scandals. However, whether or not he is owed the $6 million milestone bonus is determined solely by the language of this milestone-marketing addendum to his contract. If the language is as clear as reports have stated, an argument that the bonus is not owed would have to be quite creative, and still may not pass legal muster.

Rodriguez can also file a grievance with the Major League Baseball Players Association. Greg Bouris, spokesman for the Players Association, has already stated “The Union is prepared to intervene on Alex’s behalf.” Despite Rodriguez’s past drug use, the Union would not want any team to establish a precedent of refusing to pay any player a contractually agreed upon amount.

Of course, there is still time for the Yankees to make good on Rodriguez’s bonus. The contract allows for the bonus to be paid within 15 days of the milestone being achieved. Despite Cashman’s comments, it would not be surprising for the Yankees to pay Rodriguez the bonus within the designated window. In effect, the comments would then serve as a way of publically shaming Rodriguez for his conduct. Given Rodriguez’s litigious history, the Yankees have to expect him to take action if he is not paid.