• Jacqueline Borrelli

A Broken Contract Worth Paying

Updated: Apr 14


[1]


On February 1st, Boston Red Sox fans were heartbroken when Dustin Pedroia announced his retirement from his playing career in the MLB. The 37 year old second baseman won three World Series, was a four-time All-Star, and four-time Gold Glove winner. He was also awarded 2007’s American League Rookie of the Year and 2008’s American League MVP.[2] Over his 17 year career, he accumulated 140 home runs and 51.7 Wins Above Replacement.[3]


Pedroia retired due to a chronic knee condition, which came to fruition in April 2017, when Manny Machado, then the Baltimore Orioles third baseman, slid into Pedroia’s left knee.[4] Later that year, Pedroia underwent cartilage restoration surgery in the injured area, which unfortunately limited him to playing only three games that season.[5] Another surgery followed in July 2018, and he played only six games in 2019.[6] Continuing knee issues between the 2019 and 2020 seasons fueled retirement rumors.[7]


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The Remainder of Pedroia’s Contract


Pedroia may have retired, but there is still a year remaining on his eight-year $110 million contract that he signed back in 2013. [8] The question now is: how Boston will handle this breach of contract?


It turns out that Boston will not use Pedroia’s retirement to create extra payroll space.

As first reported by Boston Sports Journal writer Sean McAdam, Pedroia will be paid $12 million for the final year of his contract.[9] $2.5 million of his salary is deferred without interest and is payable in July 2028, which is similar to his deferred payments from previous wages that are also payable mid-July in 2022, 2023, 2024, 2025, 2026, and 2027.[10] Moreover, his $13.3 average annual value will count against the Competitive Balance Tax 2021 threshold of $200 million for the Red Sox.[11] The average annual value of every player on the roster’s contract, including additional player benefits, determine the Competitive Balance Tax, also known as a luxury tax.[12]


Mutual Respect

Paying an employee for a year of work they are not going to do seems odd, but the Boston Red Sox are paying Pedroia out of respect. Before Pedroia signed his contract extension in _____, he disclosed, in the Red Sox clubhouse, that many teams did not draft him because of his size and that he wanted to work hard to prove that the Red Sox made the right decision in drafting him.[13] In the same conversation, he said, “this is my home. I love being here, I love my teammates, I love the city . . . I want to make sure I’m playing my last game here. It’s important.”[14]


Recall that just a few months after Pedroia signed his contract in 2013, second baseman Robinson Cano signed a 10-year $240 million contract with the Seattle Mariners, though he was later traded to the New York Mets in 2018.[15] The New York Yankees even offered Cano a seven-year $175 million contract extension, but his greed got the better of him, proving to be a blessing in disguise for the Yankees in hindsight.[16]


Cano’s deal not a bother to Pedroia, nor did he regret his decision. Upon hearing the news of the $240 million contract, the Red Sox player wrote in a text, “Couldn’t be happier for him and for us.”[17] After all, Pedroia already signed an extension with the Red Sox, which he prized more than any amount of money.


Next Steps


Since he has played in only nine games over the past two years, the Red Sox are accustomed to not having their first choice player on second base.[18] However, the club is not familiar with having an open roster spot and less than $10 million to below the tax line to fill that position.[19]


Though this is financially problematic for the Red Sox, no one is upset at their former second baseman for his decision. Pedroia has an army of loving supporters from Boston who honor his 17-year presence on the team’s roster. This may not be the last of Pedroia’s official time with the team as many are hopeful for a potential return as a special assistant, like many other former players (including David Ortiz, Pedro Martinez, and Jason Varitek).[20] For now, said Pedroia on the day of his announced retirement, “I want to enjoy being a dad and having fun with my boys.”[21]



References:


[1] See Jason Duanie Hahn, Boston Red Sox Legend Dustin Pedroia Retires from MLB at 37: 'Forever Grateful’, People (Feb. 1, 2021), https://people.com/sports/boston-red-sox-legend-dustin-pedroia-retires-from-mlb-at-age-37-forever-grateful/


[2] See Dustin Pedroia Stats, Baseball Reference (Feb. 2021), https://www.baseball-reference.com/players/p/pedrodu01.shtml

[3] See Id.


[4] See Joon Lee, Boston red Sox's Dustin Pedroia announces retirement from MLB, ESPN (Feb. 1, 2021), https://www.espn.com/mlb/story/_/id/30816259/boston-red-sox-dustin-pedroia-announces-retirement-mlb


[5] See Alex Speier, Dustin Pedroia undergoes another major surgery on knee, The Boston Globe (Aug. 7, 2019), https://www.bostonglobe.com/sports/redsox/2019/08/07/dustin-pedroia-undergoes-another-knee-surgery/sbtu3uOPCVAdpMYddGhgsO/story.html


[6] See Id.


[7] See Brendan Mizgala, Red Sox second baseman Dustin Pedroia unlikely to make 2020 return, BoSox Injection (Apr. 15, 2020), https://bosoxinjection.com/2020/04/15/red-sox-dustin-pedroia-unlikely-2020/


[8] See Dustin Pedroia Contract Details, Spotrac (Feb. 2021), https://www.spotrac.com/mlb/boston-red-sox/dustin-pedroia-102/


[9] See Sean McAdam, McAdam: Dustin Pedroia refused to quit – until he had no choice, Boston Sports Journal (Feb. 1, 2021), https://www.bostonsportsjournal.com/2021/02/01/mcadam-dustin-pedroia-announces-retirement-released-week/;See also Sean McAdam, Twitter (Feb. 1, 2021), https://twitter.com/Sean_McAdam/status/1356272292519665666


[10] See Boston red Sox's Dustin Pedroia announces retirement from MLB, supra note 4


[11] See Christopher Smith, Dustin Pedroia retires: Boston Red Sox second baseman’s $13.3M average annual value will count toward 2021 CBT, which is at around $200M, Mass Live (Feb. 1, 2021), https://www.masslive.com/redsox/2021/02/dustin-pedroia-retires-boston-red-sox-second-basemans-133m-average-annual-value-will-count-toward-2021-cbt-which-is-at-around-200m.html


[12] See Competitive Balance Tax, MLB Advanced Media, LP (2021), http://m.mlb.com/glossary/transactions/competitive-balance-tax


[13] See Dustin Pedroia On Reported Seven-Year Contract Extension: ‘This Is My Home’, CBS Boston (Jul. 23, 2013), https://boston.cbslocal.com/2013/07/23/dustin-pedroia-on-reported-seven-year-contract-extension-this-is-my-home/


[14] Id.


[15] See Robinson Cano Contract Details, Spotrac (Feb. 2021), https://www.spotrac.com/mlb/new-york-mets/robinson-cano-576/


[16] See Robinson Cano finalizes deal, ESPN News Services (Dec. 12, 2013), https://www.espn.com/mlb/story/_/id/10125503/robinson-cano-seattle-mariners-finalize-huge-contract


[17] See Nick Cafardo, Dustin Pedroia reacts to Robinson Cano deal with Mariners, Boston Globe Media Partners, LLC (December 6, 2013), https://www.boston.com/sports/extra-bases/2013/12/06/dustin_pedroia_reacts_to_robinson_cano_deal_with_m


[18] See Dustin Pedroia Stats, supra note 2.


[19] See Dustin Pedroia reacts to Robinson Cano deal with Mariners, supra note 7.


[20] See Chris Cotillo, Dustin Pedroia open to managing or coaching in future, but Boston Red Sox star ‘wants to enjoy being a dad and having fun with (his) boys’ first, Mass Live (Feb. 1. 2021), https://www.masslive.com/redsox/2021/02/dustin-pedroia-open-to-managing-or-coaching-in-future-but-boston-red-sox-star-wants-to-enjoy-being-a-dad-and-having-fun-with-his-boys-first.html


[21] Id.