How the A-Rod negotiations ended with Red Sox shut out
Alex Rodriguez was alone when he walked past the magnificent Christmas trees that adorned the lobby of the Four Seasons Hotel and went out into the bracing chill of the Manhattan night.
How the A-Rod negotiations ended with Red Sox shut out
Alex Rodriguez was alone when he walked past the magnificent Christmas trees that adorned the lobby of the Four Seasons Hotel and went out into the bracing chill of the Manhattan night.
It was after 1 a.m. on Tuesday, Dec. 16, and East 57th Street had long since emptied of the throngs of shoppers that had filled its exclusive boutiques. The bars and restaurants were quiet, too, so Rodriguez, dressed in a camel-colored overcoat, went unnoticed as he pondered the possibility that had kept much of New England in thrall for weeks: that the best young player in baseball was about to become the new shortstop of the Boston Red Sox.
Fenway Park was where he had made his major league debut, as an 18-year-old for the Seattle Mariners in 1994, and it was Boston that Rodriguez had handpicked as the place where he intended to pursue his dream of winning a World Series, an ambition that had become a distant hope for his current team, the downsizing Texas Rangers.
The Red Sox wanted him, too. Theo Epstein, the general manager who was less than two years older than the 28-year-old Rodriguez, had flown to New York that night from baseball's winter meetings in New Orleans. For the previous two hours, Epstein and his young assistant, Jed Hoyer, the man crunching numbers on a laptop computer, had presented their proposals to Rodriguez, modifications on the offer Sox owner John W. Henry had made when he traveled through rainstorms to visit Alex and Cynthia Rodriguez in their Miami home a day earlier. We can make this work, the Sox told him, if you are willing to let us rework your contract, which called for Rodriguez to be paid a stunning $179 million over the next seven years.
After three straight last-place finishes in Texas, Rodriguez was willing. For this trade to happen, Epstein was telling Rodriguez, he would have to agree to reduce the value of his contract by $28 million, or $4 million a year for seven years, an unprecedented proposal. There was another financial component: Rangers owner Tom Hicks, who just two days after the Sox lost the American League Championship Series to the Yankees had offered Rodriguez for Nomar Garciaparra and a young pitcher, was demanding that the Sox not only deliver superstar Manny Ramirez but subsidize slightly less than $25 million of Ramirez's contract as well.
That's where matters stood in the early morning hours of Dec. 16, when Rodriguez returned to the Four Seasons suite where his wife, Cynthia, was waiting, their annual vacation trip to the city yielding to the urgent business at hand. He picked up the phone and called Epstein in his room. "I'm ready for Round 2," he recalled saying.
An hour later, the men had reached an agreement. A weary but excited Rodriguez felt that the most significant trade in baseball history, the first involving a reigning MVP, was at hand.
But Cynthia Rodriguez had her doubts, which she expressed to Epstein as he was about to leave.
"Gene will never go for this," she recalled saying.
The next day, Cynthia's prediction was proven true. Gene Orza, associate general counsel for the players' union, rejected the Red Sox' proposal on the grounds that it violated collectively bargained rules against reducing the value of an existing contract. Red Sox CEO Larry Lucchino blasted the union a day later, after the Sox had turned down a union counterproposal, and pronounced the deal "dead." Hicks, furious at what he perceived as being misled by Lucchino, blew up at the Sox CEO, having lost confidence in Lucchino's ability to close the deal, and refused to talk further with Lucchino, dealing with Sox chairman Tom Werner instead.
And by the following Tuesday, Dec. 23 -- despite an extraordinary, legally questionable offer by Rodriguez to pay Hicks out of his own pocket in order to facilitate a trade -- the deadline Hicks had set for a deal passed without an agreement. The deal, he said, was "totally, totally dead."
This trade failed to happen, even though nearly all of the principals were in agreement it was a good thing: Rodriguez, the Red Sox, the Rangers, baseball commissioner Bud Selig, and the union. During the negotiations, the futures of five All-Star players were in limbo, as another trade, one in which the Red Sox would have sent Nomar Garciaparra and relief pitcher Scott Williamson to the Chicago White Sox for outfielder Magglio Ordonez, was kept on hold, a no-go if Ramirez and Rodriguez did not switch teams.
In the end, the deal collapsed under the weight of too much money, by far the most involved in a proposed player transaction. Rodriguez could not buy his way to freedom, no matter how willing he was to sacrifice millions to play for the Red Sox. The Red Sox, as intrigued as they were with Rodriguez, refused to deviate from a business model that calculated the cost of A-Rod as too high. Hicks, a dealmaker of the first order, could not close this one, frustrated in part by having to negotiate with a Sox ownership group that in his view did not speak with one voice. And Selig, despite taking unprecedented measures to help along a deal he felt was in the game's best interest -- Hicks had called Selig in early November to approve a secret get-acquainted lunch meeting between Henry and the Rodriguezes -- was powerless to make it happen.
Hicks starts ball rolling There were stone crab claws, a Florida delicacy, on the menu when Alex and Cynthia Rodriguez were treated to lunch at Henry's Boca Raton mansion on a Sunday afternoon in early November. Rodriguez surprised Henry with his knowledge of hedge funds, the money market in which Henry had amassed his fortune, and joked with Henry about sharing some of the secrets that had made him a billionaire. They spoke of their mutual connections to Florida -- Rodriguez grew up in Miami and lived there in the offseason; Henry had owned baseball's Florida Marlins -- but mostly, Rodriguez was impressed with the passion and affection Henry expressed for the Red Sox and New England.
They spoke little that afternoon, Rodriguez would say later, about the topic that would dominate headlines for weeks to come, the possibility that A-Rod would soon be playing for the Red Sox.
The Red Sox, frustrated by losing to the Yankees when they had come within five outs of advancing to the World Series, were faced with a number of critical offseason decisions, none bigger than this: Would Garciaparra, the face of the franchise for the past seven years, agree to a contract extension beyond 2004, when his current contract was due to run out? In the spring, Garciaparra had turned down a four-year extension that would have paid him $15 million a year for four years. His agent, Arn Tellem, was asking for $17 million a year over the same span.
The Red Sox also had grown weary of Ramirez, despite his prolific hitting. Since coming to the Red Sox after signing just two days after Rodriguez signed with Texas in December 2000, Ramirez apparently had never been happy in Boston. Last summer, he repeatedly told teammate David Ortiz, a friend and fellow Dominican, that he wanted to be traded. Ramirez's actions were not consistent with what the Sox ownership expected of a player being paid more than $20 million a year; their tolerance was pushed to the near-breaking point when he missed a Yankees series in late August because of a sore throat, did not show up at the ballpark for a doctor's appointment that same weekend, then refused to pinch hit on Labor Day in Philadelphia.
When the regular season ended Sept. 28, the Sox took the virtually unparalleled step of placing a superstar on irrevocable waivers, giving the other 29 major league teams the chance to claim Ramirez for the waiver price of $20,000. Ramirez's agent, Jeff Moorad, commended the Red Sox for creating an opportunity for Ramirez to go to the archrival Yankees, for whom he'd openly expressed a desire to play, having grown up in the upper Manhattan neighborhood of Washington Heights. But the Yankees, like every other team, passed on Ramirez.
When the Red Sox' postseason hopes again had been crushed in the early-morning hours of Oct. 17 in Game 7 of the ALCS by the extra-inning loss to the Yankees, Texas's Hicks moved quickly. On Sunday, Oct. 19, Hicks called Henry and Lucchino, asking if they would consider trading Garciaparra and young pitching to the Rangers for Rodriguez, the six-time All-Star who was two weeks away from being named the American League's Most Valuable Player.
The Sox asked for a few days to think it over, then called Hicks and asked to see Rodriguez's contract, the richest in sports, a 10-year, $252 million deal signed on Dec. 12, 2000. On Sunday, Oct. 26, the day after the Florida Marlins beat the Yankees to win the World Series, Hicks and Rangers general manager John Hart met with Lucchino in Hicks's suite in the St. Regis Hotel in New York. Hart already had been told by Yankees general manager Brian Cashman that New York was not interested. Epstein, who was back in Boston preparing to announce that Sox manager Grady Little was not being rehired, and Henry participated by phone.
The Sox told Hicks they would not part with Garciaparra, even though they feared losing him to free agency, but would consider dealing Ramirez. The Sox saw a chance to rid themselves of their $20 million-a-year player while gaining Rodriguez, whose skills on the field were augmented by a polished, PR-conscious personality, ideally suited for marketing as the team's franchise player. At that time, Hicks called the Rodriguez-for-Ramirez swap a "nonstarter," but he and Hart would later determine that such a trade had merit, and Hicks called Lucchino to request that Henry meet with Rodriguez.
Garciaparra in the crossfire After Selig took the unusual step of allowing the Sox to talk with Rodriguez even though a deal was not in place, Henry issued his invitation to Alex and Cynthia. He was reluctant to do so, fearing that he might alienate Garciaparra, whom he insisted he still hoped to re-sign.
"Prior to agreeing to the meeting, I naively assumed that either Nomar or Alex might agree to play second base or third base," Henry wrote by email in response to questions about the meeting by email. "I later learned from Theo that it was not realistic to ask either of these future Hall of Fame shortstops to change positions.
"I am not sure of the exact date, but almost immediately after this meeting, I heard from Theo that the gulf between Arn Tellem's demand and the club's view of the right number for Nomar was so wide that he felt we were not going to be able to re-sign our shortstop.
"Negotiations between Mr. Tellem and Theo deteriorated and Mr. Tellem suggested that it would be best to trade Nomar now. After that, the Rodriguez/Ramirez trade began to gather steam.
"The media frenzy began when Tom Hicks publicly acknowledged my confidential lunch with Mr. and Mrs. Rodriguez. Mr. Tellem went on the offensive against the Red Sox publicly. I answered back. Nomar went on the radio. And the Red Sox began to look at what it would take financially to bring Alex Rodriguez to Boston given he had the most expensive contract in sports, signed at the peak of the `New Economy' bubble." The Red Sox insist they were not happy with the breakdown of their relationship with Garciaparra, who called the team's flagship station, WEEI, while on his honeymoon with Mia Hamm to express his dismay at the negotiations with Rodriguez.
"I had a hard time imagining finally winning a World Series in Boston without Nomar being there at that great moment," Henry said. "Nevertheless, we faced the realities such as they were and determined to move forward."
While Tellem, according to Henry, was asking in the wake of Boston's reduced offer that Garciaparra be traded, Rodriguez was taking steps to facilitate the trade. Early in the process, he contacted Orza, who is generally considered second in power in the Players Association to executive director Donald Fehr.
Rodriguez told Orza he intended to approach Boston and that the club initially wanted to speak directly to him, circumventing his agent, the powerful Scott Boras, who had clashed in the past with Lucchino.
On the weekend before Thanksgiving, Rodriguez also ran into Selig at Sammy Sosa's 35th birthday party in La Romana, a swank beach resort in the Dominican Republic where rhythm and blues singer Mya performed along with several merengue bands, the party lasting into the wee hours of the next morning. Once Selig heard directly from Rodriguez how much he wanted to play in Boston, he felt justified in making an exception for the Rangers, and the game's best player, to try to reach an accord with the Red Sox.
Customarily, a team is not allowed to negotiate with a player under contract to another unless the teams have reached an agreement on a trade. At that point, Selig will grant a 72-hour window for the team and player to work out whatever salary issues the deal depends on. In Rodriguez's case, Selig felt the stature of the player and the complexity of the financial issues involved justified giving the teams and the player what amounted to an open-ended window.
Stern warning from union With some reservations, Orza encouraged Rodriguez to meet with the Red Sox under those conditions, but reminded him that any restructuring of his contract would have to be approved by the Players Association. Orza then picked up the phone and called Robert Manfred, the executive vice president of labor relations for Major League Baseball.
"I want you to get word to Larry," Orza told Manfred according to a source involved in the negotiations, "that we'll do everything within our power to get this thing done -- it's great for baseball and we love Alex -- but I hope Larry doesn't abuse the process, as he is wont to do."
Soon thereafter, Orza received a call from Lucchino, who told Orza that the Sox were planning to restructure Rodriguez's contract in such a way that it would reduce the average annual value of the last seven years. Orza said the union would tolerate some reduction in the AAV, whose importance to the club is related to the calculation of a luxury tax for teams that go over a certain payroll threshold. But, Orza said, only if the player is compensated in a way that the union recognizes as an "added benefit" for agreeing to a reduced salary.
Lucchino assured Orza that all parties understood that "all roads lead through the Players Association," but Orza nonetheless warned Lucchino not to take advantage of the union's willingness to see an agreement worked out. The "added benefit" clause was ironclad, in Orza's view. When the Mets had attempted to reduce the contract of former Red Sox first baseman Mo Vaughn by $2 million when they acquired him from the Anaheim Angels on Dec. 27, 2001, the union refused to allow it. The Mets then tried to reduce the contract by $500,000, which Orza consented to only after the Mets allowed Vaughn to add two more teams to the no-trade provisions in his contract, That was the added value Vaughn received for taking $500,000 less.
Rodriguez had assumed, as many in baseball did, that Garciaparra wanted to leave the Red Sox, so he was upset when he heard of Garciaparra's radio interview, in which Garciaparra claimed that he'd always wanted to remain with the team. Rodriguez asked Epstein for an explanation; Epstein informed him that the Sox had no confidence in their ability to re-sign Garciaparra.
Terms get hammered out In Boston's view, trading for Rodriguez made sense only if these conditions could be satisfied: They could come to terms with the Rangers, they could ease the burden of Rodriguez's contract (with the union signing off on their plan), and they could turn around and trade Garciaparra and receive value in return.
Two days before Thanksgiving, when Hicks met with Lucchino in San Diego, he not only outlined the money he wanted from the Sox along with Ramirez, he said the Rangers also wanted lefthanded pitchers Casey Fossum and Jorge de la Rosa and a minor leaguer. Three days later, the Sox shipped Fossum and de la Rosa to the Arizona Diamondbacks in exchange for ace pitcher Curt Schilling, satisfying their desire for a front-line starter.
The Sox argued that Hicks would not get any financial relief beyond the approximately $80 million in savings he would realize in exchanging the remaining seven years of Rodriguez's contract for the five years left on Ramirez's deal. Hicks, however, maintained it made no sense for the Rangers to deal Rodriguez unless they received immediate financial relief that would allow them to obtain more pitching. Free agent pitcher Sidney Ponson was a prime Texas target.
Angered by the public airing of the negotiations, and his belief that most of the leaks were coming from the Texas side, an annoyed Henry shut down negotiations for almost a week. But in the meantime, the Sox worked on a restructuring of Rodriguez's contract. Hicks and Lucchino asked Henry, who had never negotiated with a player, to present the Sox' proposal to Rodriguez.
"I am a poor negotiator," Henry said. "I am not a dealmaker. Dealmaking in the world of high finance takes as much talent as playing baseball in the major leagues. It takes posturing. It requires you to hold back from making your best offer until the deal is ready to die.
"I am a poor negotiator because I always start at the end of the process. I always start with the best offer I can make if it's something I really care about. I want to be forthright and not play games. I want the other side to know exactly where I am, exactly what I am willing to pay and not waste everyone's time trying to ascertain where my bottom line is."
The day after Henry went to see Rodriguez, Epstein called from the winter meetings in New Orleans to tell Henry and Lucchino he had struck a deal to send Garciaparra to the White Sox for Ordonez. Williamson was also in the deal in exchange for two White Sox pitching prospects.
Henry had phoned Arturo Moreno, the Anaheim Angels owner, in an attempt to interest him in a deal for Garciaparra, while satisfying what he believed was Garciaparra's wish to play in his native Southern California. But Moreno didn't bite, and talks with the Dodgers proved unproductive, though the White Sox were in talks with Los Angeles to flip Garciaparra for some pitching help.
But the Garciaparra-Ordonez deal would proceed only if the Sox succeeded in getting A-Rod. The proposal the Sox made to Rodriguez, which he took to the union, was this: In exchange for giving up an average of $4 million a year over the last seven years of his contract, the Sox were offering Rodriguez the opportunity to become a free agent after two years and every year thereafter, whereas his existing contract allowed him to opt out of the last three years, in which he was due to be paid $27 million a year.
They also offered him a signing bonus up front, as well as marketing rights to the Red Sox logo, much like the deal Cal Ripken had when he was playing for the Baltimore Orioles.
Counterproposal, then collapse When Orza was presented with the proposal, he was dumbfounded, though he'd been apprised of the Red Sox' plans by Manfred, the management lawyer. In his view, giving Rodriguez the right to opt out of his contract early was essentially worthless, because the way the market for players was headed, Rodriguez could not be expected to match the money his contract called for. The Red Sox, hoping to stay close to the luxury-tax threshold, were attempting to lower the average annual value of Rodriguez's contract to $20.25 million, nearly a 35 percent drop from $27 million.
If he allowed the Sox to do so, Orza reasoned that the bargaining position of every player in the game would be affected, as general managers could point to Rodriguez and say, "Look at the direction the market is going if the best player in baseball is taking a 35 percent cut." It did not matter, Orza believed, that such a cut would still leave Rodriguez the highest-paid player in the game. It violated what the union considered a basic principle, even if Major League Baseball thought differently and said it was contemplating a legal challenge to the union's position.
"You should understand, I have a great deal of respect for the Players Association and for the principals and principles of the Association," Henry said. "I am not a labor lawyer. But from my standpoint, as an American, I have a hard time understanding the reasons for killing this deal. I don't know how you value in dollars a person's happiness, a person's desire to live and work somewhere."
Orza proposed a restructuring of the deal that lopped off an average value of $2 million a year from the last seven years and deferred an additional $1 million a year off the last three years. The added benefit for Rodriguez? The same deal for tickets in the .406 club and a suite on the road that Schilling had in his Red Sox contract, and an assigned value of $10 million to the licensing deal (though when Orza asked Ripken whether he thought that was fair value, Ripken laughed at the inflated value).
The union's proposal and the Sox' proposal were approximately $16 million apart. Orza thought the Sox might be able to accept the union's amount; the Sox insist they made it clear to the union they could not move off their proposal. Lucchino ripped the union, and Hicks, who felt Lucchino had given him reason to believe the Sox would address the Rangers' need for cash, lost his temper with the Sox CEO and refused to talk with him further, which is when Werner stepped in. Lucchino and Hicks have not talked since.
Selig, who had given the Sox a 72-hour window to negotiate directly with Rodriguez, closed that window after the Sox rejected the union counterproposal, furious at what he perceived was a union power play to break the deal.
Rodriguez, meanwhile, still had not exhausted his efforts to make the deal work. Even as Hicks heard Werner express a willingness to find some way to bridge the gap, Rodriguez offered to relieve Hicks of an obligation to pay $3 million of his signing bonus.
Most remarkably, on Dec. 23, the day Hicks had set as the deadline to get the deal done, Rodriguez and Hicks talked of a plan in which Hicks would drop his demand for $15 million from the Red Sox if they paid Rodriguez the full value of his contract. Rodriguez would then pay back Hicks $15 million. Hicks called Selig to see if such an arrangement was acceptable; Selig expressed some uncertainty. Hicks insisted he would not go along with such an arrangement unless it was all done openly.
That afternoon, a few minutes before 5 Eastern time, Hicks called Rodriguez and told him that the sides had failed to produce an agreement. By then, Rodriguez had accepted the likelihood he would remain with Texas.
Dead or alive? One Red Sox official insists the deal could still be resurrected before the start of the 2004 season.
"Dead? I think it's more accurate to say it's in a coma," the official said. "How dead was Glenn Close when she was at the bottom of that bathtub in `Fatal Attraction' ?"
But Close's murderous character, who sprang frighteningly to life just when Michael Douglas thought he had killed her off, ultimately expired, and none of the principals directly involved in the A-Rod matter publicly share the view that a deal still can be struck.
"I think the Red Sox thought the Rangers were going to blink, and that the Players Association was going to blink," said one of the principals in the negotiations. "That was never going to happen. Ever."
Hicks sent a letter to Rangers season-ticket holders, declaring that Rodriguez would return as the team's Opening Day shortstop in 2004, even as he also acknowledged the need to address the strained relationship between the player and Rangers manager Buck Showalter. Rodriguez, who is under contract with the Rangers for four more years before he can become a free agent, faces a fan base not likely to be happy that he wanted to leave.
Ramirez and Garciaparra remain with the Red Sox, the team that was prepared to jettison both of them. Garciaparra is a year away from free agency, and the likelihood that he will sign a contract extension with the Red Sox is in serious doubt after the bitter public exchange between Tellem and Henry. Ordonez, the White Sox outfielder who had hoped to be united with his good friend Rodriguez in Boston, remains in Chicago, like Garciaparra a year away from free agency.
A young woman, a Red Sox fan, e-mailed Orza just before Christmas. "You've ruined my summer," she wrote, "and it's not even winter."
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