Alex Rodriquez made history by tying Willie Mays with the 660th home run of his career. This milestone would also have been financially lucrative for Alex Rodriquez as his contract provided for a $6 Million bonus for reaching this milestone. Unfortunately, Alex Rodriquez also made history by having to sit out an entire season due to violations of the league’s performance enhancing drugs policy. As a result, the New York Yankees have taken the position that they will not be paying this bonus.

The Yankees contend that the bonus was based upon the added publicity and marketing opportunities that accompany such a historic feat. Alex Rodriquez’s suspension tarnished that feat and put a black cloud over his career numbers. However, there has been no indication that the performance bonuses within the contract were conditioned upon Alex Rodriquez’s “good behavior.”

The position taken by the Yankees could lead to a dangerous precedent for Major League Baseball, and other sports as well. “A-list” players are compensated not only for their skills, which could translate to a title, but also for their marketability. The NBA has, on more than one occasion, publicly apologized to fans when visiting teams did not use their star players.

If A-Rod’s bonus can be nullified because of a suspension, what other contract payments can owners avoid? Could the Yankees terminate the remaining years on the contract? If the contract can be nullified based on the suspension, can it also be nullified based on rumors? Although never proven, these rumors have cast the same doubt on his career that has prevented other players from being inducted into the Baseball Hall of Fame?

And where would it end? Could a team refuse to pay a bonus if a player were found to have committed spousal abuse? What if the player were accused of repeated marital infidelity? To understand the slippery slope upon which an open ended morality provision leads, remember that in a different era, homosexuality would be on the list of unmarketable traits for an athlete.

The case should be resolved by the terms of any “Morality Clause” contained within the contact. These clauses are common in the endorsement/marketing field. Whether they can be included in a player contract, well that might just be a subject for the next collective bargaining agreement negotiations.

For questions, comments or additional information, please contact Robert Foster, Partner in our  Entertainment, Hospitality & Sports Law Group, at rfoster@regerlaw.com or via phone at 215.495.6514.