There might actually be a way for the Yankees to avoid paying most of, if not all of, the rest of Alex Rodriguez‘s contract which will pay him $114 million over the next five years. According to Wallace Matthews of ESPNNewYork.com and Ken Rosenthal of Fox Sports, the Yankees could potentially be covered by insurance for at least 70 and up to 100 percent of his contract if he’s injured and can’t play.
There are two major catches here. The first is that A-Rod would have to sit out all of this season for the Yankees to collect any money. The other is that even if the Yankees were to collect even the full $114 million he’s owed that money would still count against the luxury tax which means we shouldn’t expect the Yankees to spend that money on payroll — they would just pocket it.
The other thing about these reports is that they don’t know the full extend of A-Rod’s policy. It’s unconfirmed if it covers his entire contract or just part of it. It’s also unconfirmed if he’s even covered for this type of hip injury, for which there was a preexisting condition or if there are any other exclusions. There was also a previous report that said that most contracts are approved beyond five years, but that A-Rod’s contract could have been covered by multiple insurance companies.
All of this is probably meaningless because Yankees GM Brian Cashman said that doctors told him that A-Rod would eventually return around June or July and be free of restrictions. So in all likelihood, the Yankees will not collect a dime of insurance money.