Mar
03

The next Yankee owner

By

Derek Jeter is all smiles during his Spring Training press conference. (AP Photo/Kathy Willens)

When Derek Jeter signs his next contract, it will represent his last big payday. He might not retire at the end of the three- or four-year extension he’ll sign with the Yankees in eight or nine months, but by the time 2015 rolls around, Derek will be 40 and playing on a year-to-year basis.

But what if the Yankees and Derek reach a different kind of agreement? In a Post column that makes serious use of a RAB meme, Kevin Kernan suggests that Jeter, who wants to be a part-owner of a baseball team one day, should be given an ownership stake in the Yankees and thus be a Yankee For Life®. The crux of Kernan’s article rests on this concept that Jeter bleeds pinstripes and that he always should and always will. It’s similar to false dichotomy between those who are True Yankees in the eyes of a judgmental media and those who are not.

If we wade through that argument, however, Kernan may have presented a solution to the Yanks’ needs to retain Derek Jeter but not as a salary that ties up too much of the team’s payroll on players who are fast approaching 40. Jeter, according to Kernan, told him that being an owner of a team is “definitely a goal of mine.” Jeter has never mentioned the Yankees, and considering that he’s building a massive mansion in Tampa, he could easily target a Florida team. But aren’t the Yankees’ team offices also based in part in Tampa? It almost makes too much sense.

In probing Jeter, Kernan got the usually taciturn captain to open up. Jeter wants to “get to call the shots,” he says, and he wants to oversee a disciplined organization similar to the Yankees. After all, it’s all he has known throughout his baseball career.

Those who know Derek can see the owner in him emerging. Team adviser Reggie Jackson has worked with Jeter for the better part of his career. “Jeter will be an owner one day,” Jackson said to The Post. “That will happen. He wants to be an owner. I’m sure he knows enough people to help with money. He knows the path.”

That path might be even easier than Jackson or Jeter think right now. If Jeter is intent on becoming an owner, the Yankees could figure out a way to include that in his next contract. Jeter may be a wealthy man. After all, he’s in the last year of a deal that will pay him $189 million, and he earns a little bit less than $10 million a year in endorsements. But that still leaves him approximately $1 billion short if he wants to purchase the Yanks outright.

So what are the Yankees to do? In an ideal world, the team would be able to give him an ownership stake in his next deal. They could start to line him up for an adviser role with the team that includes a nice title and some real power and retains him within the organization. It would make him a Yankee for Life® indeed.

The Collective Bargaining Agreement has another take on the matter. Per the CBA and the Uniform Players Contract, Jeter is barred from having an ownership stake in the team. Term 4.(c) of the boilerplate cannot “own stock or have any financial interest in the ownership or earnings of any Major League Club” and will not, “while connected with any Major League Club, acquire or hold any such stock or interest except in accordance with Major League Rule 20(e).”

According to my research, there is a way that the Yanks could give Jeter some ownership stake. I don’t have the full text of Rule 20, but sources indicate that a player may have an ownership stake with the express permission of the Commissioner and as long as that stake is sold if if the player leaves that team.

The Bombers might not be able give Derek an outright share in the team. But the team could work something out with Bud Selig or the two parties can work out something agreeable to both teams. After all, would we want to see Derek owning any other team?

Categories : Musings

126 Comments»

  1. pete c. says:

    If anyone can pull it off he can.
    I wonder if he’s had any input from Wayne Gretzky or Mario Lemieaux(sp)?

  2. SamVa says:

    Has any baseball player ever been given a share of ownership in a contract?

  3. Isn’t it against MLB rules for a player to have either a present ownership stake or to negotiate for a future ownership stake in a team?

    • I want to say yes. I’m almost certain of it, but the fact that Kabak wrote a piece about it makes me question my assumption. i.e. i would assume he researched it before posting.

    • Darren Rovell:

      “The bigger part of the story is the ownership angle. It’s against the rules. This from Page 213 of the Collective Bargaining Agreement under ‘Interest in Club.’

      ’4c. The player represents that he does not, directly or indirectly, own stock or have any financial interest in the ownership or earnings of any Major League Club, except as hereinafter expressly set forth, and covenants that he will not hereafter, while connected with any Major League Club, acquire or hold any such stock or interest.’

      That means that not only can a player not get a percentage of the team while he’s playing, but he can’t agree as part of his contract to get a piece of the team in deferred compensation either.”

      http://www.cnbc.com/id/20954479

      • What if we signed Jeter to a 4 year, 120M contract with 40M of it “deferred money” that wasn’t scheduled to be paid to Jeter until, say, 2016, and then when 2016 comes, we just roll that 40M into an ownership stake instead of a cash payout?

        Meh, that’s probably contractually barred as well.

        • “… and covenants that he will not hereafter, while connected with any Major League Club, acquire or hold any such stock or interest.”

          I think that means the contract has to expire (i.e. Jeter has to receive all the deferred money) before he can acquire an ownership stake.

            • Still, though, there’s this:

              January 1, 2016
              Hal Steinbrenner: Here’s the 40M we still owe you, Derek.
              Derek Jeter: Thanks. Send the paperwork that I’ve been paid to the league office, will ya?
              Hal Steinbrenner: No problem.

              January 2, 2016:
              Hal Steinbrenner: Hey Derek, would you be interested in buying a piece of the Yankees?
              Derek Jeter: Why yes, I would. How nice of you to ask. What’s the price?
              Hal Steinbrenner: 40M should cover it.
              Derek Jeter: Deal. I happen to have 40M with me right now. Do me a favor and send the paperwork to the league office, will ya?
              Hal Steinbrenner: No problem.

              … aaaaaaaaaaaaaaaaaaaaaaand, SCENE!

              • Ok, so, here’s a question:

                Why would Jeter want to give up 40M? So he could own, what, 1% of the team? What good is that?

                40M is a lot of scratch.

                • king of fruitless hypotheticals says:

                  You know what else is a lot of scratch? 1% of the Yankees.

                  If the NYY’s are a billion dollar organization, $40M would be 4%.

                  And since he’s doing pretty well for himself, I bet he could probably come up with another $60M for an even 10%.

                  My question is ‘how much for one rib?’

                • Well, the original point is this: what good does owning 1% or 2% or 4% of the Yankees do? Why would you give up $100M in cash? What’s the economic incentive?

                • rex manning day says:

                  1. $100 million is not a lot of cash, because nobody keeps $100 million in cash. If the Yankees paid that money to Jeter, it would be invested somewhere, either in a baseball team or in another business or in stocks/bonds/etc. So setting up a dichotomy between “ownership” and “cash” is misleading- this money *will* be invested in something, the question is what.

                  2. If that money’s going to be invested in something, and Jeter wants to invest in a baseball team at some point, investing it in the Yankees is not a bad idea. The Yankees are far and away the safest baseball team to invest in. According to Forbes, the Yankees have tripled in value since 2000, and team revenues have doubled. Just for comparison’s sake, an investment in the stockmarket is considered pretty good if it makes a 10% return. So the Yankees are a pretty strong investment.

                  3. So, ultimately, the question really isn’t about the money. If he were interested and allowed to do this, Jeter would make a lot of money out of the deal. Not many investments can make owners as much money as the New York Yankees. The question is a)will this be allowed (and regardless of the existing rules, I have no doubt that Selig could make this ok if he wanted), and b)will this give Jeter the ownership control that he wants? Jeter clearly doesn’t want to be a baseball owner just for the money, he wants to be able to control and influence a teams long-term direction. If the Yankees gave him the level of control he wanted, then the monetary upside will be there.

                • Chris says:

                  If the Yankees’ team value has tripled since 2000, that equates to slightly less than 12% return per year. Certainly not a bad investment, but not as ridiculous as it sounds.

                • king of fruitless hypotheticals says:

                  Math. Ur doin it wrong :(

                  heh…you’re math isnt actually wrong, but if you compare it to the s&p 500, which i think is actually negative for that ten year block, that’s a pretty decent excess return.

      • That’s actually not in the CBA itself, but in the Schedule A attachment. That’s a term from the boilerplate for the uniform player contract. Still, Jeter can’t own part of the team while a player on that team.

        • Rose says:

          Any chance this topic gets tackled at all in the next CBA meetings? Or do you think they have much bigger tasks at hand and this gets left alone…

          • I don’t think it will be addressed because I don’t think anyone wants to change the current rule, and if anyone does, they probably don’t care enough that they’re will to compromise in other areas of interest in order to win a concession on this issue.

            • And actually, the Yanks could get permission from Selig to give Jeter an ownership stake. Rovell’s reporting up there was very half-hearted.

              • Sure, but in the absence of any additional evidence about how Selig would respond, I think it’s pretty safe to say that he wouldn’t allow such an arrangement to stand. He has absolutely zero incentive to allow this to happen, and he’d be opening a massively awful can of worms if he were to allow it. I also think he’d be under intense pressure from the other owners to not allow a deal like that to stand.

                So… Sure, technically, Selig could allow it, but I think it’s pretty unrealistic to think he would.

      • Rose says:

        Who needs a piece of ownership as incentive to win? Just call up the bookie and let it ride!

        Sincerely,
        Pete Rose

  4. SamVa says:

    Arod should just buy the mets or the marlins…

  5. A.D. says:

    Would be a very interesting strategy, though not sure if the Steinbrenner boys want to give up any of the control they posses, assuming that they are enjoying running the team, which certainly seems to be the case.

    Otherwise seems difficult that Jeter would ever be the controlling owner of a team unless he can head up a fairly large ownership group, where he is the head without having to put up a very significant part of his piggy bank and thus would suddenly become pretty illiquid.

  6. I like Jeter and all that, but I’m not really wild about him being a “special adviser” with “real power”. He’s a great shortstop, but why would we assume that he’d have any FO skillz?

  7. How much of the team could Jeter actually afford, though? What would that salary compensation package earn him, like, 2%? I’m not saying he wouldn’t be interested, but were they ever sold, the Yankees would have to be the most expensive sports property on the planet. I wonder if Jeter would rather be the ACTUAL owner of a less-expensive team elsewhere than a distant minority owner of the behemoth Yankees.

    Compare Jeter to Michael Jordan; the two of them (along with Tiger Woods) are probably the most highly paid athletes in North American history by far, when you include all the money they earned in endorsements. Jordan just barely had enough money to buy the Charlotte Bobcats, and I wouldn’t be shocked if he bought them at a below market rate thanks to helpful nudges from David Stern and Bob Johnson to put the franchise in his hands rather than to the actual highest bidder’s hands.

  8. Rose says:

    Now it’s time for SAT Analogies, ladies and gentlemen!

    George Steinbrenner : Derek Jeter :: Night : Day

  9. Even with the correction made above, I still don’t understand why the Yankees would want to sell a part of the team to Jeter. What possible motive would they have for doing that?

  10. I think there’s a greater likelihood that Jeter takes the Michael Jordan/Larry Bird routes and just sits back, waiting for a team to be sold, and puts together an ownership group and tries to buy an entire franchise. He’d probably only initially get like 10-20% of whatever team he gets, but hey, that’s how Steinbrenner got started. Get a foot in the door, then try and buy your partners out.

    2024: Derek Jeter’s group buys the Miami Marlins. Book it.

  11. Andy in Sunny Daytona says:

    I know that everyone on here, including me, are huge NASCAR fans, but many drivers own teams that they don’t even race for. I could never understand how the powers that be in racing could let that happen. It probably has something to do with imbreeding.

  12. “After all, would we want to see Derek owning any other team?”

    Maybe I’m in the minority here, but I really don’t care one iota. After his playing days are over, I’m not sure why anyone would care if Derek Jeter, Businessman Extraordinaire, were to purchase a stake in an MLB team. Personally, if the guy wants to purchase a stake in a team, I say more power to him.

    I mean… If we can get used to seeing Don Mattingly in a Dodgers uniform, actively participating on the field and pursuing a post-playing career in on-field management with teams other than the Yankees, why would we care if 50 year old Derek Jeter wears a suit and makes a business deal to own a stake in a team? I don’t think Bulls fans care that MJ has been involved with other organizations and now will own the Charlotte franchise.

  13. Jramey says:

    how bout Jeter + Arod + Jorge + Andy + Pauly + Mo. that should cover about half.

  14. Bo says:

    Why would the ownership group want to sell?

    If they do and he has the money, fine.

    • king of fruitless hypotheticals says:

      hey stupid question: would jeter owning part of and being the public face of another team actually be BETTER for baseball? if it were the marlins or nashville met or the expos, would it draw more casual fans or w/e?

  15. [...] a part-owner of the Yankees after he retires. Interestingly though, Ben Kabak of River Ave Blues ponders whether or not the Yankees could actually include an ownership share in his next contract. To be [...]

  16. [...] fans disagree. Benjamin Kabak at River Avenue Blues has advocated the ideaand even proposes a way around the CBA rules. But, on the evidence of the blogs most fans seem to be [...]

  17. Joe says:

    40 mil for an ownership stake in the Yankees? Please. You can’t buy Legend Seat Season tickets for $40 Mil. Jeter needs about a quarter of a billion dollars ($250 Mil) just to buy a minority share and be a silent partner.

  18. [...] it ad nauseum here, addressing issues like the possibility that Jeter will ask for six years, or an ownership stake, and that extending him now would be a mistake. Mike Vaccaro came up with another angle today, [...]

  19. [...] Derek’s interest in team ownership. In fact, just a few weeks ago, I talked about how Jeter could become a part-owner of the Yankees. Suddenly, that zany idea doesn’t seem as far-fetched as it once did. Whether Jeter would be [...]

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