The Yankees have reached agreement with Alex Rodriguez on a settlement regarding the payment of a home run milestone bonus clause in his contract, as the Associated Press reports (via ESPN.com). New York will pay out $3.5MM to charitable organizations under the settlement.
Rodriguez and the MLBPA had reportedly planned to contest the team’s refusal to pay a $6MM bonus for his 660th home run, the first of several that trigger such bonuses under his deal. The club cited the fact that the bonus was termed a discretionary marketing opportunity under the contract in asserting that it was not obligated to make payment. (Click here for the contract’s details.)
The settlement avoids a potentially ugly grievance proceeding, which all involved were surely motivated not to undertake. It is unclear whether the parties have reached any agreement or understanding regarding future milestones. The next one up is Babe Ruth’s 714 mark, though that seems a long shot for this season with Rodriguez sitting at 669 long balls. Of course, his contract does promise him another $40MM after this season, covering the 2016 and 2017 campaigns.
Notably, the deal means that the Yankees will avoid paying any luxury tax on the $6MM bonus, which would have cost the club $3MM. That adds to the savings achieved on the actual payout.