Rule prohibits lessening of pay
Even if Alex Rodriguez was so eager to come to Boston that he was willing to take a pay cut in the restructuring of his contract -- which is exactly what Mo Vaughn was willing to do to get out of Anaheim, according to one highly placed baseball official -- he won't be allowed to do so. Under the terms of the Basic Agreement between major league players and owners, a "greater benefit rule" governs the restructuring of a player's contract.
"The union's position is that under the terms of the Basic Agreement, Alex can restructure his contract, but only if a reasonable person can conclude that the new contract is worth as least as much as the old one," the official said yesterday.
A major league executive yesterday offered the example of outfielder Kenny Lofton, who while playing with the Chicago White Sox had a bonus clause pertaining to attendance. When the San Francisco Giants, who routinely sell out Pac Bell Park, wanted to trade for Lofton, they wouldn't do the deal with that clause intact, because it would have cost them considerably more than the White Sox would have had to pay Lofton. The deal was restructured, with Lofton having other performance-related bonuses vested in such a way that he would be paid about the same as he would have under the old contract with the White Sox.
A contract extension might also be one way to restructure a contract. Say a player was scheduled to be paid $50 million over two years. A club proposes a restructuring in which the player is paid $60 million over three years. "A reasonable person might conclude that was an additional benefit to the player, even though he would be paid less in the first two years of his extension," the industry official said.
Rodriguez's contract calls for him to be paid $21 million in 2004, $25 million in 2005-06, and $27 million from 2007 to 2010. He has $36 million in deferred compensation at 3 percent compounded interest. The Sox could propose to defer more money, or adjust the interest rate as a way of controlling costs in a given year. It's also conceivable that the Sox proposed an adjustment to the clause that states Rodriguez may void his contract after the 2007 season. Given the Sox' aversion to long-term commitments, they could propose that Rodriguez void his contract at an even earlier date in exchange for free agency and perhaps more up-front money, though it is dubious that the union would consider that a fair tradeoff.
But the fact that the contract was discussed yesterday by Rodriguez and agent Scott Boras with union officials suggests that a deal could be close.
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