Baseball Contract Liabilities: A-Rod?
It's with a bit of Schadenfreude that a White Sox fan like me reads about the NY Yankees being straddled with A-Rod's bloated contract. (Remember, A-Rod was one of the largest unsecured creditors of the Texas Rangers.) But I can't help but wonder if there isn't a legal out for the Yankees.
Let me state up front that I have no idea of the kinds of representations and covenants in MLB player contracts or what might be layered on through understandings between MLB and the player's union. I really don't know how those contracts work.
Yet absent some unusual provisions in the contracts or CBA, I would think the Yankees would have a possible case for terminating their contract with A-Rod and possibly even trying to claw back some money. Let's assume that the Yankees contracted with A-Rod on the belief that he was a "clean" player--that his on-field performance was based on his natural abilities alone and not on the juice and that the issue of his drug use wouldn't subject them to negative publicity. I would think that alone might be grounds for contract rescission due to unilateral mistake or fraud. Maybe there's a misrepresentation issue too. Of course, the Yankees might have suspected or known that A-Rod was juicing and just didn't care, which would be a different case altogether.
Again, there are lots of possible twists here that would impede the Yankees' ability to take action against A-Rod. But the possibility of a suit might give the Yankees some of leverage to negotiate an early retirement.
And going forward, I wonder if professional sports contracts will start to include "no doping" representations that enable the team to terminate the contract upon a positive drug test.