AJ Burnett Deal Great for the Yankees, Financially Speaking

Much of the talk in the media revolves around how the Yankees are still paying $20 Million of the money due on AJ Burnett’s contract. This statement is accurate, however, misleading. The Yankees were on the hook for $33 Million over the next two years, regardless of whether AJ pitched for them or not. If they gave AJ the title of pie maker for post game celebrations, they would have paid him $33 Million. This economic reality is known as ‘sunk cost.’ Therefore, the Yankees aren’t still paying him $20 Million; they are only paying him $20 Million.

In order to access whether the return of $13 Million the Yankees received was a good deal, one only needs to look at the stats. Over the previous two years AJ Burnett was one of the worst pitchers in baseball. AJ had the third worst ERA for a qualifying pitcher both in 2010 and 2011 (5.26 and 5.15, respectively). In fact, the third worst finish was the only thing consistent about AJ Burnett over the previous two years. This begs the question, how much would a team spend on a comparable pitcher in free agency? Brad Penny, who had a similar year last season to AJ – not to mention a similar career path, was signed for $4 Million … by the Softbank Hawks of Japan’s Pacific League. Now, AJ has been a durable starter whereas Penny was injured in 2010, however, the similarities lead to AJ being exiled from MLB. Is this a fair assessment? Probably not, as AJ has shown flashes of his former self over the past two seasons, which is precisely the reason the Pirates are willing to take a chance on him.

The Yankees were left with a purely economic decision. What is AJ’s marginal value over the other available options, mainly Phil Hughes and Freddy Garcia? In the end, the answer was far less than $13 Million. In the end, the Yankees would have been justified outright cutting Burnett, if he did not return to form. Such is the harsh reality of a sunk cost. The Yankees just received $13 Million for an asset worth close to zero to them – and that is the business reality of the game.

Liverpool’s Carling Cup Magic Versus Cardiff City

For those who weren’t glued to the television on Sunday for a hot sports lineup which included the NBA all-star game, WGC match-play final, the Memphis ATP 500 series final, a rained-out Daytona 500 and the Academy Awards (sorry Moneyball), you might have missed one of the best soccer matches of the year. I know it’s still early in 2012, but this year’s Carling Cup final had a number of intriguing elements leading into the opening kickoff. And the emotions that come with a cup final turned this match into an instant classic.

On paper this final looked like David (Cardiff City) versus Goliath (Liverpool). The Championship versus the English Premier league. Wales versus England. Cardiff had the chance to become the first Welsh team to win a major trophy since 1927. And Liverpool has lifted the Football League Cup more than any other team, but had gone trophyless over the last six years. Thankfully, the game did not dissappoint.

Davis Cup Delirium in Fribourg

So the first post focused on the Superbowl, but I didn’t really have a dog in the fight (are we allowed to say that anymore?). I enjoyed the game as a moderately impartial sports fan. For my second post, I plan to reveal a little bit more of my fandom. There are two things I should make clear:
1) I love USA athletics.
2) I love tennis.
If the United States of America has a sports team that competes against other countries - I will watch. Team USA badminton? Yes, please. Team USA curling? Give me a double-helping with the hammer on the side. And when you start talking Team USA Davis Cup tennis, a combination of two sports passions, forget it – clear my calendar. Round one of this year’s Davis Cup competition saw Team USA travel to Fribourg, Switzerland, to battle Federer and Co.

Just Eli Being Eli

Heading into "Big game" XVLI, the New York football Giants were two and a half point dogs to the New England football Patriots. So when a 33 yard field goal from Lawrence Tynes pulled the G-men to within two points as time expired in the third quarter, the bookies nearly had it right. Unfortunately for Pats fans, the odds-makers fell 15 minutes short with their prediction.

Instead, the fourth quarter happened. Perhaps the most exciting six-point quarter in Superbowl history. It started with a turnover (those are always exciting) and finished with a hail Mary (also a very exciting play). But the game will probably be most remembered for Eli Manning's three minute drive that resulted in the most unwanted, game-winning touchdown in the history of American football (I know, that was the second superlative used in this paragraph alone). So I will give readers what they want... my take on the final 5 minutes of Superbowl XVLI.