A-Rod's Dollars Make Sense for Yankees
It is the largest deal in professional sports history, and both A-Rod and the Yankees stand to get significantly richer because of it. A-Rod is likely to generate $450 million of "value" for the Yanks. Assuming they will exceed the luxury-tax threshold in each 10 years and face the 40% tax, the total cost for Rodriguez will be $427 million. The true economic value of A-Rod is based on the Yankee's growth and his Marginal Revenue Product. The article talks about other places the Yankees could have spent their money, broadcast revenues, increased ticket prices and demand for games. All of these topics are because of Rodriguez. After our class discussions, what is everyone's opinions on one of the biggest sports contract to ever exist.
5 comments:
It is obvious that A-Rod is the going down in the history books as one of the greatest ball players of all time. In his new contract he has a bonus if he breaks the home run record with the Yankees. There is no doubt he will break it if he doesn't get injured. That being said Can the Yankees really raise price because they RE-SIGNED him? Its not like he is moving there and is going to be a new player with them. They haven't won the world series in over 3 years. All years he has been there. Hes not bringing anything new. So should fans really have to pay more for this? I'm inclined to disagree, but when you have the largest market of fans, and price doesn't really matter, i guess you can do what you want.
$427 million sounds like a lot of money to pay a single player, but if he really generates $450 million then the yankees would only be exploiting him if they were paying him any less.
A-Rod is of course one of the best baseball players of all time, and he still has a lot of playing time left in him. I don’t think that the Yankees should be able to raise the prices of tickets and other prices, just because they RE-signed A-Rod. I do see that they can raise the prices because he is coming back off of a great year, and is expected to do even better next year. Also he is getting closer and closer to the homerun record. By the way, A-Rod is worth ever penny to have him on your team, as long as he’s making you a profit.
I can't believe that the yankees will give up 122 million dollars in luxury tax to their competitors. That is very unlikely to be seen in any other monopolistic market.
Because A-Rod is one of the best baseball players of all time the Yankees can up the prices of the tickets. Although its not ethical or in the best intrest of the people, the Yankees managers knows that even though people dont like the price they will still pay it to see A-Rod play.
Post a Comment