When $114 MILLION is Chump Change

Share Button
A-Rod & Cashman, a Saga of Bad Terminations

Image credit: Nydailynews.com

The A-Rod Saga.  Once a surefire hall of  famer, now the poster child for a circus in sports.  It’s painful to watch, and must be more painful to be on the team.  $114mm left on the worst contract signing in sports history (with the benefit of hindsight of course).  I wrote in February 3 options for Yankees Management to deal with this saga.  Surprisingly, they didn’t listen!

You have to wonder, when does a massive sum of money, even $114mm become irrelevant?

Said another way, when do you know you are better off saying good-bye, even if it means EATING the cost?

Some sure-fire signs you’re better off parting ways….

  • When the cost of paying it (and keeping the player) is  less than the negative consequences of KEEPING the employee

  • When the intangible “value” of the brand is far greater than the cost of maintaining a contract

  • When the economic value and/or cash flow generated of franchise  is far greater than the contract at hand

  • When eliminating the contract (eating it) re-enforces “what’s right.”  The moral high grand.  A principled stand on values that are non-negotiable.  Can you put a price tag on your organizational values?

  • When removing a contract becomes the equivalent of removing 20lb ankle weights for a team running a marathon.

Substitute “contract” with “salary” to apply the A-Rod Yankees saga to any difficult employee situation.

Leaders need to be concerned about $’s and cents.  But they need to be MORE concerned when $’s and Cents trump what makes broader organizational SENSE.

No one individual trumps the greater good of the organization.  Or the Team.

Individuals matter.  Sometimes, in the case of the highest price individual, their cost is far greater than what the contract reads.

Superstars, by definition carry risk.  They can take you to a championship.  They can also take you down.  Thinking through worst case scenario before bringing superstars on is smart planning.

If you can stomach worst case scenario and have a plan to deal with it should it unfold, jump in!  If this scenario unfolding makes you ill, think twice!
Share Button

Speak Your Mind

*

Follow

Get every new post delivered to your Inbox

Join other followers: