If the mere thought of sports turns you off, you can go ahead and skip this article. However, if you’d like to read about local folly, please, allow me to elucidate.
Tom Hicks is the owner of the Texas Rangers and the Dallas Stars. He is a very wealthy man who has done lots for the state of Texas, namely sink his investment company’s hooks into the teacher’s retirement fund to use in investments. I’m not entirely sure if he’s doing the same for the Texas School Trust Fund, but suffice to say he’s made his money by investing other people’s. Mr. Hicks is a relatively good bidnessman, except in the area of baseball.
3 years ago, Hicks announced the largest ever contract for a professional athlete: $250 million over 10 years to Alex Rodriguez. Alex is a phenomenal athlete when it comes to baseball. Many people think he might be the best to play the game. Ever. Is he worth $25 million a year? That’s the question that has dogged and plagued the best of minds since he got here. On the field, Alex is a great player, but when the other investments in Hicks’ portfolio took a beating in the stock market, it came time to clamp down on the expenses of his sports teams. When one player is taking up a third of what you expected to pay in salaries for an entire 40 man roster, something’s gotta give, and the Rangers gave. The New York Yankees, the team with already $180 million in payroll on their roster, took.
The contract’s been reported elsewhere, but as it turns out, the Rangers are still paying Alex money UNTIL THE YEAR 2025. (Cue the Zager and Evans music.) Texas will have had Alex for 3 years at a total cost when they’re done paying him of $140 million. New York gets him at $117 million for 7 years.
Can anyone see the logic in this deal? Not only are the Rangers giving up the best player in baseball, but they’re paying him to play on another team. I’ll be 54 when the Rangers stop owing Alex money, and I’m pretty sure I won’t be going to any games until then just as a matter of protest.
Baseball as a business makes very little sense. For more info on the right way to do things, read the book Moneyball. Very very good.