Baseball's Collective Action Problem

The following article is a guest contribution by written by Evan Zepfel.  Zepfel is a Portfolio Management Analyst at PAAMCO, is a graduate of Harvard College, was a member of Harvard’s Varsity Water Polo team and served a sports editor for The Harvard Crimson.

Alex Rodriguez will appeal his 211 game suspension.

On Monday, Major League Baseball announced an extended suspension for Alex Rodriguez in accordance with the Joint Drug Prevention and Treatment Program (JDA) and the 2012-2016 Basic Agreement (CBA).  The suspension is scheduled to last through the 2014 season (including playoffs), meaning that Rodriguez will be ineligible to compete for more than 200 games and lose over $30 million in salary if the suspension is upheld in the appeals process.  However, MLB based the suspension partially on violations of MLB’s drug policy, giving Rodriguez the ability to appeal the suspension and making him eligible to play until the appeals process is complete.

MLB’s JDA specifically delimits penalties related to usage of prohibited substances.  In this case, Rodriguez’s suspension is clearly greater than the pre-determined suspension for the use of a prohibited substance.  According to section 7(A) of the JDA, a player who “tests positive for a Performance Enhancing Substance, or otherwise violates the Program through the use or possession of a Performance Enhancing Substance” for the first time will be subject to a 50 game suspension.