A-Rod and the Morality Clause

Come on, you knew I couldn’t completely avoid it.  How could I?  To date, it’s the biggest off-the-field sports story of 2009.  The photos of American wonderboy Michael Phelps taking bong hits is a close second — and I haven’t written about that one either.  Not sure if I will.

Alex Rodriguez

As for A-Rod, I was listening to Mike & Mike on ESPN Radio yesterday and they were discussing a very interesting topic.  Greeny and Golic were bantering back and forth about whether or not the Yankees could get out of A-Rod’s contract based on his use of steroids.  Each of them concluded that they probably could not, but cited fraud and misrepresentation as one possible approach that they could take.  Their reasoning was that A-Rod used steroids when he was in Texas and the Yankees accepted A-Rod’s $250,000,000 contract based on his performance in Texas.  However, since he was violating MLB’s rules by using steroids to enhance his performance, he was in fact misrepresenting his ability by cheating.  The problem with this reasoning, which Greeny and Golic acknowledged, is that A-Rod’s performance did not deteriorate when he went to the Yankees. ….and supposedly stopped using steroids.  Thus, the fraud and misrepresentation claims would be hollow, as the Yankees suffered no damage.

This got me to thinking.  Maybe A-Rod didn’t defraud the Yankees, but he may very well have hurt their reputation, as well as his own.  This brings me to my point (…which I’m sure Hank & Hal Steinbrenner have already thought of) if you really want terminate A-R0d, or just negotiate his salary down, the morality clause is the key.  You see, in just about every professional sports contracts, and most employment agreements for that matter, there is a clause that says something along the following lines:

Athlete agrees to conduct himself with due regard to public conventions and morals, and agrees that he will not do or commit any act or thing that will tend to degrade him in society or bring him into public hatred, contempt, scorn or ridicule, or that will tend to shock, insult or offend the community or ridicule public morals or decency.

A-Rod’s relatively squeaky clean image has most certainly been significantly tarnished by his admission to the use of steroids.  In fact, he has been scorned and ridiculed by just about every newspaper in the country over the course of the last week.

The question is, will the Steinbrenners do anything about it?  I doubt it.  Sure, they might be successful in negotiating his contract down, but if they do that are they going to get 100% effort from A-Rod?  Maybe, maybe not.  It’s an interesting legal exercise, but unless the player was clearly on the downslide or had done something that would truly impact the image of the team, I don’t think they’re going to go down that road.

Agree, disagree, or think my writing stinks? Let me hear about it.

Matt Breeden (SportsLawGuru.com) is an internationally respected business advisor and attorney based in Indianapolis, IN. His practice is focused on Sports & Entertainment, Intellectual Property, Commercial and Corporate Law. He represents Sports & Entertainment properties, as well as many other businesses, in a variety of matters, including: Broadcast & Digital Media Agreements, Licensing Agreements, Sponsorship Agreements, Commercial Agreements, Athlete/Driver Contracts, Insurance & Risk Management, Employment Agreements, Litigation Management, Mergers & Acquisitions, Business Formation and Corporate Governance.