Goldman's long arm reaches NY Yankees baseball

By Joseph A. Giannone

NEW YORK (Reuters) - Goldman Sachs Group Inc, which has played leading roles in government and business, helped broker one of the biggest deals in baseball.

Two Goldman executives this week cleared the way for the All-Star third baseman Alex Rodriguez to negotiate a deal with the New York Yankees that could be worth $300 million over 10 years.

The bankers helped restore ties that were severed after A-Rod, as the player is known, last month declined to negotiate a contract extension with the Yankees and instead opted out of the last three years of his contract. His plan, as guided by agent Scott Boras, was to test the market as a free agent.

Rodriguez, already baseball's highest paid player, this year led the major leagues with 54 home runs, 156 runs batted-in and 143 runs scored. He was twice named the American League's most valuable player and is heavily favored to win a third award for his 2007 campaign.

But Rodriguez's tenure with the Yankees has been stormy. Although he is consistently one of the most successful hitters during the regular season, he has come under fire for falling short in playoff series over the past three years.

He and Boras were also criticized for announcing his decision to opt out during the deciding game of the 2007 World Series, violating a long held policy that no baseball news should upstage the annual championship.

Rodriguez never sat down with the Yanks to hear the team's offer before declaring his free agency, creating more ill will between Rodriguez and the Yankees.

So Rodriguez, 32, reached out to John Mallory, a former Miami neighbor who works in Goldman's private wealth management business, according to a person familiar with the matter. Rodriguez asked whether Goldman, which owns a stake in the Yankees' cable network YES, could intervene on his behalf and arrange a meeting.

Mallory in turn contacted Gerry Cardinale, an executive in Goldman's principal investing business, which makes direct investments with the bank's own money.

Cardinale played a lead role in helping create the YES Network, which broadcasts the team's games and has become a major revenue source for baseball's wealthiest team. Cardinale also is a member of the YES board.

Goldman's intervention in the A-Rod talks comes as some YES Network owners are currently mulling the sale of their stakes in the business, sources have told Reuters. The Yankees own a controlling 40 percent stake in the network.

The Rodriguez talks are still in progress and no deal has been signed, though an agreement could be announced Friday.

Cardinale and Mallory did not receive fees for their efforts, the person familiar said.

Goldman Sachs declined to comment. Boras and officials from the Yankees did not respond to messages seeking comment.

The intervention of Goldman Sachs marks yet another moment in the spotlight for the secrecy-obsessed bank. On Wednesday former Goldman co-president John Thain, chief executive of the New York Stock Exchange for the past four years, was named CEO of Merrill Lynch.