Wednesday, March 3, 2010

Now owning... Number 2%... Derek...Jeter...Number 2%

Craig Calcaterra over at Hardball Talk posted an interesting link today, citing to Kevin Kernan over at the NY Post:

The Yankees need to find a way to make Derek Jeter a Yankee for Life. There's really only one way. At some point the Steinbrenner family would have to take him into the ownership group.

Jeter, of course, is in the final year of his 10-year, $189 million contract. The Yankees and Jeter will come together on a new deal at some point, but Jeter needs to be a Yankee for Life and there is a way to make him one. The Yankees need to work out a deal with Jeter where they allow him to become part of Yankees ownership after his playing days are complete. Players cannot be part of ownership, so this would have to be a separate deal.

Craig questions the need for this:

First thought: why do the the Yankees need to find a way to make Jeter a Yankee for life? He's important, sure, but I think the Yankees are more important to him than he is to them. The team has done just fine without making Babe Ruth, Joe DiMaggio, Yogi Berra, Mickey Mantle, or Reggie Jackson an owners, so I tend to think they'll survive just fine if they were to hold the line at "special assistant to the general manager" or "spring training instructor" when it comes to Derek Jeter's future role with the team.

First of all, I think Craig is missing that times have changed just a little bit since Babe, JoeD, Yogi, Mickey and even Reggie played. Back in "the day", players' salaries were a tiny fraction of what they are today and, even though franchise values were also a tiny fraction of what they are today, I don't think you'd find a period of time where one players contract has a total value comparable to the value of an entire franchise (see ARod - 10 years $277 million; Florida Marlins - $277 million).

Second, today's players understand that they are a business unto themselves, and do look to other business ventures beyond their playing days. A player or former player owning a piece of the franchise with which he is most identified is not unprecedented. Magic Johnson bought a small percentage of the LA Lakers in 1994 (which he had to sell when he made his comeback in 1996). And Mario Lemieux bought the
Pittsburgh Penguins in 1999
to keep them out of bankruptcy.

If the Yankees franchise has a $1.5 billion value as reported in Forbes, then a two percent ownership interest would be worth $30 million. Not huge by today's standards, and this could likely be worked into a new contract. And this would be a symbolic percentage for The Captain, #2.

As a short aside, I remember going to a Yankee game in 1993 or 1994 and seeing an advertisement in Yankee Magazine for the sale of a 3% limited partnership interest for $2 million. (My memory isn't that precise - it might have been 2% for $3 million...) I remember talking with my father-in-law about how cool it would be to buy that and get to sit in the owners' box, meet the players, and someday get a World Series ring. At the time it seemed like a pipe dream, but to this day I wish we had figured out a way to pull it off.

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