Case study: Major League Baseball
This week you will prepare your first case studies. To better assist you, an example of a case study analysis is included in this weeks Canvas information. (I always like examples when I’m doing things for the first time!) As you approach the case study, read through the information, and note the key negotiation points for all parties involved.
Please write your analysis in this format:
Section I. Overview of the Case
- Provide an overview description of the case. The reader should not have to have read the case to understand the analysis. Summarize it for the reader.
- Identify the key ideas, concepts, principles, actions.
- Think of the first paragraph of a newspaper article and provide the who, what, where, why, and how. Just the facts and identify what the case centers around.
Section II. Background
Provide a historical general background summary of the case.
Section III. Situation
Discuss the people/groups involved and highlight the situation being negotiated. Provide details and tell the story of what the main points involved with the case are.
Section IV. BATNA and Aspiration Point (Best Alternative to a Negotiated Agreement):
In this section, discuss the agreement.
- What are the terms being negotiated?
- What might occur if the negotiation falls apart?
- What would happen to each side and their positioning?
- What options would each side have?
- What actions might they take? Continue discussion? Fail to reach an agreement? Other?
- What is the optimistic goal for the negotiation? What would appease both sides? How can a win-win for both parties occur?
Section V. Strategies/Tactics:
What approach should be taken to resolve this situation? Why would that approach be beneficial?
Rubric
2020_Writing Rubric_AS/VS/Online (1)
| Criteria | Ratings | Pts |
|---|---|---|
|
This criterion is linked to a Learning OutcomeContentRubric Weight – 45% |
|
20 pts |
|
This criterion is linked to a Learning OutcomeOrganizationRubric Weight – 30% |
|
15 pts |
|
This criterion is linked to a Learning OutcomeMechanicsRubric Weight – 15% |
|
10 pts |
|
This criterion is linked to a Learning OutcomeAPA FormattingRubric Weight – 10% |
|
5 pts |
Total Points: 50
Case Study: Major League Baseball
Directions: Read the following case study and prepare an analysis of this case study using the
format template provided. See Example Case Study Analysis Paper- Case Analysis for 500
English Sentences on the previous page.
Much of the key information for this case study is highlighted to assist you. Remember to
address the following areas: overview, background, situation, BATNA and aspiration point,
strategies, and tactics used to reach an agreement.
Major League Baseball (MLB) is a professional sports league where contract negotiations
between players and teams are a common occurrence. This case study involves a high-profile
contract negotiation between a star player, Alex Rodriguez, and the New York Yankees.
Alex Rodriguez, commonly known as A-Rod, has had a storied career in Major League Baseball
(MLB). Born in 1975 in New York City, he showed extraordinary baseball talent from a young
age and quickly rose through the ranks of amateur and minor-league baseball. A-Rod made his
MLB debut in 1994 with the Seattle Mariners, where he gained a reputation as a powerful and
versatile player. His impressive skills on the field made him one of the most sought-after players
in the league.
In 2000, A-Rod signed a historic contract with the Texas Rangers worth $252 million over ten
years, making it one of the most lucrative sports contracts in history at the time. This landmark
deal signaled a shift in player salaries and set high expectations for future contracts.
In 2004, A-Rod was traded to the New York Yankees, a team with a rich history and an
established winning tradition. His tenure with the Yankees was marked by impressive individual
performances, including MVP awards and numerous records broken.
However, by the time of this contract negotiation, A-Rod had been with the Yankees for almost a
decade and was nearing the end of his current contract. At the age of 37, he faced questions
about his long-term performance, and concerns about his age were becoming a factor in
negotiations. A-Rod’s agent pushed for a multi-year extension with a salary increase, while the
Yankees’ management was cautious due to A-Rod’s age and the desire to manage their payroll
within a budget.
The New York Yankees had a tradition of fielding highly competitive teams but also faced
financial constraints due to salary cap considerations and the desire to avoid luxury tax penalties.
They had been balancing their commitment to winning with the need to manage their budget
effectively.
The negotiation between A-Rod and the Yankees became a high-profile event, closely followed
by fans, the media, and the entire baseball community. Given A-Rod’s history of groundbreaking
contracts and the Yankees’ reputation as a flagship team in the league, this negotiation had
broader implications for the future of baseball player contracts and team finances.
Both parties entered the negotiation with clear objectives. A-Rod wanted to secure his future and
financial stability, while the Yankees aimed to maintain competitiveness while managing their
budget. The negotiation process was a complex interplay of contractual, financial, and personal
considerations, with both sides ultimately seeking a mutually beneficial agreement that satisfied
their respective needs and concerns.
Key Players Involved:
1. Alex Rodriguez (Player): One of the most prolific and highly paid baseball players, A-
Rod is nearing the end of his current contract with the New York Yankees.
2. New York Yankees (Team): One of the most successful baseball franchises, the Yankees
are eager to retain A-Rod’s services but within a budget.
3. Player’s Agent: Representing Alex Rodriguez’s interests and working to secure the best
possible contract.
4. MLB Commissioner’s Office: Overseeing the negotiation to ensure it adheres to league
rules and guidelines.
5. Media and Fans: Watching closely, with high expectations and opinions about the
negotiations.
Issues to Address:
1. The length of the contract extension.
2. The annual salary needs to be competitive yet reasonable.
3. Performance-based incentives, given A-Rod’s age and performance concerns.
4. Protection clauses in case of injury or declining performance.
5. Public relations and fan sentiment, as this is a high-profile negotiation.
Challenges:
1. A-Rod’s previous contracts have been among the largest in MLB history, setting high
expectations for this negotiation.
2. The Yankees are determined to maintain a competitive team while managing their
payroll.
3. A-Rod’s age and performance concerns have raised doubts among the team’s
management.
4. Public scrutiny and media attention can impact negotiation dynamics.
Alex Rodriguez (Player) Wants:
a. Long-Term Security: A-Rod desires a multi-year contract extension to secure his future
with the Yankees and ensure financial stability in the later stages of his career.
b. Higher Annual Salary: As a high-profile player with a history of impressive
performances, A-Rod expects a significant increase in his annual salary compared to his
previous contract.
c. Performance Incentives: A-Rod wants to include performance-based incentives in his
contract, which would reward him for exceptional achievements, such as home runs,
RBIs, and All-Star selection.
d. Recognition and Legacy: A-Rod values his legacy and wants to continue playing for a
prestigious team like the New York Yankees, where he can maintain his status as one of
the all-time greats in the sport.
New York Yankees (Team) Wants:
a. Budget Management: The Yankees want to maintain a competitive team while
managing their payroll within a set budget to ensure financial stability and allocate
resources to other aspects of the team.
b. Mitigated Risk: Given A-Rod’s age and concerns about his long-term performance, the
Yankees are looking for protection clauses that would safeguard them from potential
financial burdens in the event of injury or severe decline in A-Rod’s performance.
c. Shorter Contract: To balance budget constraints and mitigate risk, the team prefers a
shorter contract term that provides more flexibility in the future.
d. Public Relations and Fan Support: The Yankees are aware of the public relations
aspect and the impact on fan sentiment. They want a contract that, while cost-effective,
doesn’t alienate fans or create negative media attention.
Key Negotiation Points:
1. Contract Length: A-Rod seeks a long-term extension (4-5 years), while the Yankees
prefer a shorter contract (2-3 years) for budget flexibility.
2. Annual Salary: A-Rod is aiming for a high annual salary (comparable to previous
contracts), while the Yankees want to manage payroll by offering a lower base salary.
3. Performance Incentives: A-Rod is interested in performance-based incentives to earn
more, but the Yankees want to ensure the team’s financial stability by limiting additional
payouts.
4. Protection Clauses: The Yankees insist on protection clauses that would reduce
financial risk in case of injury or performance decline, while A-Rod may resist overly
restrictive terms.
5. Public Relations: Both parties need to consider public relations and fan sentiment,
striving for a contract that maintains a positive image for both A-Rod and the team.
Final Negotiation Agreement:
1. Contract Length: The parties agree to a three-year contract extension. A-Rod’s desire
for long-term security is acknowledged, but the Yankees prioritize flexibility in the event
that A-Rod’s performance declines or other opportunities arise.
2. Annual Salary: A-Rod receives an annual base salary of $15 million, which is lower
than his previous contracts but still competitive. The Yankees managed to stay within
budget constraints while retaining a star player.
3. Performance Incentives: The contract includes performance-based incentives to
motivate A-Rod to excel. These incentives include bonuses for reaching specific
milestones, such as home runs, RBIs, and All-Star selections. A-Rod is incentivized to
maintain high-performance levels.
4. Protection Clauses: The Yankees include protection clauses to mitigate risk in case A-
Rod faces a serious injury or a sharp decline in performance. These clauses offer a
reduced salary if he becomes unable to play due to specific injury-related circumstances.
This provides the Yankees with some financial safeguards.
5. Public Relations: Both parties understand the importance of public relations and fan
sentiment. A joint statement is issued to the media, emphasizing A-Rod’s commitment to
the team and the Yankees’ dedication to maintaining a competitive roster. This
cooperative approach fosters a positive image for both A-Rod and the team.
The negotiation process was complex, involving several rounds of discussions, concessions, and
compromises. Ultimately, the finalized contract extension balanced A-Rod’s financial
expectations with the Yankees’ budgetary constraints and risk management priorities.
This agreement allowed A-Rod to continue his career with the New York Yankees while
preserving the financial stability of the team. It served as a testament to the intricate nature of
contract negotiations in Major League Baseball, where both parties must find common ground to
reach a mutually satisfactory agreement.
Negotiating these key points effectively was crucial for achieving a balanced contract satisfying
both A-Rod’s financial expectations and the Yankees’ budgetary constraints and risk management
priorities. This negotiation illustrates the intricate nature of contract negotiations in Major
League Baseball, where the desires and concerns of both parties must be carefully considered.
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