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Thursday, December 2, 2004
Updated: December 3, 12:11 PM ET
Giambi may have breached contract

By Jayson Stark
ESPN.com

Jason Giambi may have given the New York Yankees an opening to attempt to void his contract by admitting he took illegal steroids, according to an attorney familiar with the language in baseball's guaranteed contracts.

Major League Uniform Player's Contract
The following segment came from Article 3 of the uniform player's contract under Major League Baseball's 2003-2006 Basic Agreement:

Termination
By Club
7. (b) The Club may terminate this contract upon written notice to the Player (but only after obtaining waivers of this contract from all other Major League Clubs) if the Player shall at any time:

(1) fail, refuse or neglect to conform his personal conduct to the standards of good citizenship and good sportsmanship or to keep himself in first-class physical condition or to obey the Club's training rules; or

(2) fail, in the opinion of the Club's management, to exhibit sufficient skill or competitive ability to qualify or continue as a member of the Club's team; or

(3) fail, refuse or neglect to render his services hereunder or in any other manner materially breach this contract.

All guaranteed contracts, the attorney told ESPN.com, contain clauses that could be applied to a case such as Giambi's -- specifically these two:

  • The player must agree to keep himself in first-class physical condition and adhere to all training rules set by the club.

  • The use or misuse of illegal or prescription drugs can be interpreted to mean the player is not keeping himself in first-class physical condition.

    If the Yankees can prove that Giambi misrepresented himself by failing to admit that his performance was enhanced by the use of illegal drugs, they can attempt to convert the remainder of the contract to a non-guaranteed deal by claiming Giambi was in breach of contract, the attorney said.

    However, all those issues appear to be academic for the moment -- if only because neither the Yankees nor major-league baseball feels they can take any disciplinary action based solely on a newspaper story, according to one MLB source.

    "This is still a democracy," the source said. "So the whole thing is problematic right now. You can't discipline anybody based on an alleged reading of a transcript that was supposed to be sealed. ... Not only is there no viable proof, but he gave this testimony under a grant of immunity and a promise of confidentiality that is protected under a federal statute (banning the leak of grand jury testimony)."

    At some point in the next few months, though, the BALCO case is expected to go to trial. And what happens if Giambi's grand jury testimony is ever read or cited during that trial -- or if he is asked the same questions under oath?

    "Then," the source said, "this becomes a different case."

    And rest assured it is a case that MLB and the Yankees will be following very closely -- because given the uncertainty hovering over Giambi's future even before this story broke, there is every reason to suspect the Yankees would pursue all possible avenues to get out from under the massive Giambi tab they still have to pay.

    Giambi has more than $80 million still owed him on the seven-year, $120 million deal he signed in December 2001 -- $11 million in 2005, $18 million in $2006, $21 million in both 2007 and 2008, a $5-million buyout of a $22 million option in 2009 and a prorated portion of his $17 million signing bonus.

    In order to void the contract, the Yankees would have to link Giambi's health problems this season to his steroid use, the attorney said. Or they would have to prove he misrepresented himself and his abilities by failing to disclose his steroid use in advance.

    But two lawyers on the players' side said Thursday that if the Yankees ever do attempt to pursue those allegations, they would be wasting their time.

    "The Yankees may well try to make those arguments," said one. "But they don't have any legitimate chance of flying."

    The biggest problem in proving those claims, said the second lawyer, is that all drug-related cases are supposed to be dealt with only under baseball's drug agreement. So specific clauses can't be hand-picked out of the standard player contract and used to dodge an IOU a team no longer feels like paying, the lawyer said.

    But how will that drug agreement deal with someone like Giambi? There is a potential dispute looming over that, too.

    The union would likely argue that whatever Giambi did took place in a period not covered by this agreement.

    MLB, on the other hand, would claim that the steroid agreement was already in effect in 2003 -- so Giambi could be subject to discipline because he admitted to using substances that were specifically prohibited by that agreement.

    But even if the union were to concede that point, it could still argue that Giambi should be considered only a first-time offender. And first-time offenders aren't named or disciplined under the agreement. They merely enter a treatment and counseling program.

    The MLB source contends, however, that this is a hazy area.

    "The agreement specifically says what happens with a positive test," the source said. "It also says what happens if you can prove probable cause. But it doesn't say what happens if you just admit it."

    So MLB is expected to summon Giambi, at some point, for a meeting with the commissioner. And eventually, depending on where this story goes from here, baseball could consider trying to impose a suspension.

    Or the Yankees could attempt to address this matter on their own -- starting with an exploration of whether it would be possible to void the contract.

    But voiding the contract isn't the Yankees' only option. They would also have two other potential avenues, according to the MLB source:

    1. Attempting to convert Giambi's deal to a non-guaranteed contract (ostensibly by claiming breach of contract).

    Or 2. refusing to pay Giambi for time missed while injured (ostensibly because they would allege that that time missed resulted from steroid use).

    But you don't need to do a 200-page study of baseball's labor history to know the union would fight any of those measures.

    The union has always argued that, in cases like this, the basic agreement supercedes any specific language in individual player contracts. And the basic agreement would protect Giambi's guaranteed money in virtually all cases.

    Jason Giambi
    Jason Giambi has four years left on his contract.

    However, the union did not fight the Yankees when they negotiated a buyout of Aaron Boone's contract last winter, after Boone blew out his knee playing basketball -- an activity specifically prohibited by his contract.

    The Yankees, according to sources, also looked into the possibility of attempting to void Kevin Brown's contract after Brown broke his hand in September by punching a wall in the clubhouse -- but chose not to act.

    This, however, would be a much more high-profile and much more volatile case.

    "This is a huge, huge, huge issue," the first attorney said, "on all fronts. First and foremost, it would mean that any player who negotiated a megadeal and then was proved to have used steroids would be putting himself at risk of voiding his contract."

    And that's why this could turn into a battle much more far-reaching than how it affects those 80 million bucks Jason Giambi has coming. Potentially, this is a case that could open a can filled with enough worms to stretch from the Bronx to McCovey Cove.

    Jayson Stark is a senior writer for ESPN.com.