Prince Fielder, Opt-Outs, And A Contract I Would Support

Dave · January 4, 2012 at 8:39 am · Filed Under Mariners 

It’s no secret that I’ve been generally opposed to the idea of giving Prince Fielder a long term, big money contract. I think his value on the field is fairly overrated and the side benefits of having him on the team are mostly made up and unsupported by facts. In general, I’d rather the team spread their money around to fill multiple holes and upgrade the roster rather than going all-in on Fielder, and have said that my maximum offer to Fielder would be something like $120 million over six years. Even if the market for Fielder never does develop in any real way, that seems unlikely to get it done, as it’s hard to see Boras letting Fielder settle for a contract less than what Adrian Gonzalez got back in March, when he wasn’t even a free agent.

Now, reports are beginning to surface that not only is Boras looking for a lot of guaranteed money, he’s also going to look for an opt-out clause for his client as well. This would give Fielder the duel benefits of long term security (if he performs poorly or gets hurt) as well as the ability to raise his future earnings if he performs well. It’s a win-win for the player, and in general, opt-outs are a terrible idea for an organization. In most cases, an opt-out for a player essentially eliminates any chance the contract has to turn out in the organization’s favor, while still saddling the team with all the risks of a long term guarantee to a player who might not be worth the price.

However, I do believe there is a way that the Mariners could satisfy Boras’ need to beat prior precedent (in this case, the Gonzalez extension), give him the opt-out clause that would let Fielder potentially increase his earnings by hitting free agency again in a few years, and make the contract work for the organization. In fact, including the opt-out might be the best way for the Mariners to make a run at Fielder while still keeping the contract offer to a reasonable price.

To help Boras save face, let’s put the total value of the contract at $155 million over seven years, $1 million more than what Gonzalez got from Boston on his extension. It’s not Mark Teixeira money, but Fielder isn’t as valuable as Teixeira was when he reached free agency and the Yankees aren’t involved in the bidding here, so Boras will just have to go pound sand if he’s set on beating that mark. 7/155 at least gets him a deal that won’t look like a total failure, especially if he can flaunt that he also got an opt-out for Fielder that could let him land another big deal in a few years.

How does 7/155 with an opt-out work for the Mariners? Simply put, you structure the salaries so that the organization gets a lot of the projected value from the contract up front, to the point where Fielder would have to perform at an elite level in order to want to use the opt-out. For instance, the annual salaries could go something like this:

2012: $13 million
2013: $16 million
2014: $16 million
2015: $25 million (player option for remainder of contract)
2016: $25 million
2017: $25 million
2018: $30 million
2019: $25 million (team option, $5 million buyout)

This contract would essentially break down into three parts – $45 million guaranteed over the first three years, then Fielder would have an option to exercise four more years for $105 million, with the team finally having the ability to void the eighth year for a final $5 million. It could shake out as being 3/45 (if Fielder opts out), 7/155 (if Fielder doesn’t opt-out and team buys out final year), or 8/175 (if Fielder doesn’t opt out and team picks up eighth year option).

By significantly backloading the salaries until after Fielder’s opt-out, it essentially transfers nearly all of the potential surplus value from the deal into the first three seasons. Most long term contracts are value for the team at the front end and value for player at the back end, but this kind of aggressive backloading would shift that even further, and would ensure that the team would have already received nearly 100% of the value of the contract before he opts-out. If he plays well enough to justify walking away from 4/110 in order to get another guaranteed year or two tacked on (much like what CC Sabathia just did with New York), then this deal will have almost certainly worked out for the Mariners, as he’d have had to have been a monster in his first three years to forfeit a $27.5M AAV from ages 31-34.

While an opt-out on a balanced salary contract is essentially lose-lose for the team, the terms could be structured in such a way that would greatly reduce the odds of there being much value lost by the organization if the opt-out is exercised. Essentially, you make Fielder walk away from so much money that there’s no real chance that the team would be losing a significant asset, even if Fielder had performed well and justified his price tag.

The opt-out would give Fielder the flexibility to say that he’s giving the organization a chance to turn themselves around while he and Felix are both on the team, but he’s not locked into a potential loser for the rest of his career. It would also give him a chance to opt-out and negotiate those last couple of option years into guaranteed years if he performs well, and Boras could sell the contract as having total potential value near Teixeira’s deal and being superior to what Gonzalez got. It might not be the contract of Boras’ dreams, but in this market, it’s probably at least a competitive offer.

Yes, it takes my 6/120 maximum and throws it out the window, adding an extra year and $35 million in guaranteed money that I think could probably be spent better by pursuing a different strategy. However, the low base salaries over the next three years reduce the strain of having two market value stars on the payroll at the same time, giving the team the flexibility to potentially still pursue other upgrades. In this scenario, the team could potentially still afford to go after a guy like Will Venable and perhaps a decent veteran third baseman as well.

It would also essentially give the team a three year window to win with Felix/Fielder as the core of the team. If they managed to turn it around and challenge for the AL West, attendance and revenues would likely improve, and the team could get a bump from their television contract in 2015 that would help them absorb another extension for Felix and Fielder sticking around for his big paydays at the back end of his contract. If it didn’t work, Felix would probably be trade bait, and Fielder might be more inclined to opt-out and go somewhere else, at which point the team would be free of both of their big money obligations, allowing the team to reboot and go in another direction.

It’s not the plan I would pursue if I was Jack Z, but if the team is serious about making Fielder a competitive offer without hamstringing the organization, this is probably the best path they could take. By dangling the opt-out clause to get an extremely backloaded contract and a lower AAV than Boras might want otherwise, the team might be able to make an offer that gives Fielder enough flexibility to accept the deal. If they’re dead set on getting closer to $200 million guaranteed, the team should just walk away, but if Boras is open to this kind of deal, then there might be room for a contract that could work for both sides.

Comments

64 Responses to “Prince Fielder, Opt-Outs, And A Contract I Would Support”

  1. Mariners35 on January 4th, 2012 9:00 am

    This is where the Nats come in with 8/160, $20m per year with a player opt out in year 4, and call it a day. “Other teams may be skittish about you and need to add all sorts of clauses to go after you, but we’re making it simple. We want you here, and this guaranteed money up front shows it.”

    I’m guessing that Boras is set on more than just 7/155, especially if he’s pitching this as the M’s counter to the Angels and Rangers, or if the richer teams are willing to overpay.

    I think I’m in the growing camp of fans who will be happy when Fielder signs somewhere else, so that the silly season is about done and we can see what the M’s are really willing to do. More upgrades are needed more urgently in starting pitching, LF, 3b, even C if they can find it…

  2. MKT on January 4th, 2012 9:24 am

    Clever idea. I also agree that this should not be the Mariners’ first choice, but if the team is dead set on pursuing Fielder, this is the way to do it.

    The scary part is those last four years at $25M+ per year; there’s a non-trivial possibility that the M’s would get stuck paying that amount to a player who would increasingly not be worth it. However as Dave says, that’s somewhat made up for by the M’s having benefited from below-market payments to Fielder the first three years.

  3. mymrbig on January 4th, 2012 9:27 am

    I’ve actually liked the idea of player opt-outs as a benefit to the team for a few years ago (even bringing it up when King Felix’s extension was negotiated as something that could work out for the M’s. I think they are of the most benefit for star players where you are worried about injuries or age-related decline later in the contract. The hope is that the player performs as expected the first few years of the contract, then opts-out of the riskier years of the contract.

    A number of folks across the internets have laughed at my suggestion (Dave’s idea of backloading makes it even more team friendly). But players who get an opt-out almost always op-out (Burnett, A-Rod) or get extended (CC). But in each case, I believe the team would have been better off lettig the player walk away (certainly true for Burnett and A-Rod).

    If you judge contracts from the time they were signed, rather than the time of the opt-out, then player opt-outs can work for the team. Sure, they benefit the player. But the times I’m arguing for an opt-out are when the team (at the time the contract was signed) would hope for the opt-out.

    Using Dave’s scenario above, if Fielder would sign for 7/155 like Dave recommends, but the salary is more evenly distributed (say 3/60, opt-out, 4/85 post-opt-out), would getting Prince at 3/60 be bad for the M’s? I don’t think so, I think that would be decent value for a slugger in his prime where you can potentially avoid his decline years.

  4. Leroy Stanton on January 4th, 2012 9:38 am

    Sure, if you can sell it to Boras then go for it. However, with this structure, it becomes an opt-out in name only.

  5. vertigoman on January 4th, 2012 9:46 am

    Pretty good
    Pretty pretty good

    Still risky and likely too light but the idea is elegant.

  6. onetreehugger on January 4th, 2012 10:14 am

    What I don’t like about this idea is, what if he turns out like other players we’ve given long-term contracts to because they were ‘hitters’? This is Safeco, The Park That Can’t Be Hit, and the Mariners, where great careers crash, the Graveyard of Home Runs and the Place Where Batting Averages Come To Die.

    Suppse he stinks after a couple of years. It’s easy to say we’ve got our value the first few years, but I can picture us with this $25 mil contract no one will trade for and us trying to decide if it’s worth $50 mil or so to just make him go away. This isn’t anything personal against him or his talent, it’s just the thoughts of a Mariners fan who feels like he’s seen this all before.

  7. Badbadger on January 4th, 2012 10:17 am

    I don’t know. It seems like this maximizes his value when we aren’t likely to be contending and then maximizes the chance that his contract is a big albatross around our necks when our young guys are ideally hitting their prime. It seems like it might be better to front load it while our prospects are developing and cheap, and then lighten up as they start drawing more salary.

  8. G-Man on January 4th, 2012 10:21 am

    Great proposal, Dave. Sure, it won’t hold up against a whopper from the Nationals, but we aren’t trying to sign him at all costs, we’re trying to sign him at a price that would work for Seattle.

    “Using Dave’s scenario above, if Fielder would sign for 7/155 like Dave recommends, but the salary is more evenly distributed (say 3/60, opt-out, 4/85 post-opt-out), would getting Prince at 3/60 be bad for the M’s? I don’t think so, I think that would be decent value for a slugger in his prime where you can potentially avoid his decline years.”

    Some problems here. Getting him for 3/60 wouldn’t be bad without the option, but it is insufficient reward for the risk that Prince will fade, NOT opt out, and saddle the M’s for several more years. OTOH, if he’s great, Dave’s 4/110 proposal is more likely to get him to stay than the 4/85. Plus, there’s more money left right now for Venable or some other needed piece.

  9. Miles on January 4th, 2012 10:26 am

    I say pay him big up front and less in the future. Pay him $25 a year for the first three and $15 to $16 the last 3. Want him to opt out. Then the M’s don’t have to worry about his regression.

  10. MrZDevotee on January 4th, 2012 10:28 am

    Onetreehugger

    “Suppose he stinks after a couple of years. It’s easy to say we’ve got our value the first few years, but I can picture us with this $25 mil contract no one will trade for and us trying to decide if it’s worth $50 mil or so to just make him go away.”

    I’ve been one of the folks pointing out that he’s only missed 1 game the past 4 years, but when you put it in the context you just described he suddenly looks suspiciously like Carlos Silva with longer curly hair.

    http://nbchardballtalk.files.wordpress.com/2011/02/carlos-silva.jpg?w=320

    http://ology.com/sites/default/files/imagecache/post-image/princefieldermilwaukeebrewersvarizonantyigltwp3vl.jpg

  11. The Ancient Mariner on January 4th, 2012 10:30 am

    Would the fact that Pujols’ contract is similarly backloaded make him more likely to take it?

  12. Dave on January 4th, 2012 10:32 am

    This is where the Nats come in with 8/160, $20m per year with a player opt out in year 4, and call it a day.

    8/160 is a worse offer than 7/155. There’s no reason for Fielder to just tack a final year at $5 million onto the end of the deal. He’d have to be a cripple to not be worth that much in 2019.

    I’ve actually liked the idea of player opt-outs as a benefit to the team for a few years ago (even bringing it up when King Felix’s extension was negotiated as something that could work out for the M’s. I think they are of the most benefit for star players where you are worried about injuries or age-related decline later in the contract. The hope is that the player performs as expected the first few years of the contract, then opts-out of the riskier years of the contract.

    Sorry, but they’re still bad ideas unless you’re getting a huge cost savings in return on the total value of the contract or you’re structuring the deal so that the value is all before the opt-out.

    But players who get an opt-out almost always op-out (Burnett, A-Rod) or get extended (CC).

    This isn’t true, and is likely why you’re thinking about this incorrectly. Most players who get opt-outs don’t use them, and they don’t use them because they’ve vastly underperformed their salaries. Vernon Wells, Todd Helton, Rafael Soriano.. this is the norm. Sabathia and Burnett were the exceptions.

    Using Dave’s scenario above, if Fielder would sign for 7/155 like Dave recommends, but the salary is more evenly distributed (say 3/60, opt-out, 4/85 post-opt-out), would getting Prince at 3/60 be bad for the M’s? I don’t think so, I think that would be decent value for a slugger in his prime where you can potentially avoid his decline years.

    It’s not enough value up front to justify giving him the ability to walk away from potential value down the line. You can’t just say “hey, 3/60, that’s cool”, you have to realize that if he’s opting out of 4/95, you’re probably losing some real tangible trade value. At 4/110, you’re probably not.

    Sure, if you can sell it to Boras then go for it. However, with this structure, it becomes an opt-out in name only.

    From a financial perspective, that’s mostly true. This kind of structure makes it very hard for Fielder to opt-out to get a big raise. It does give him the ability to change his mind about playing for Seattle, though, and that flexibility is worth something.

    This is Safeco, The Park That Can’t Be Hit, and the Mariners, where great careers crash, the Graveyard of Home Runs and the Place Where Batting Averages Come To Die.

    That’s really only true for right-handed hitters. It’s not a bad place to hit for LH hitters with pull power.

    Suppse he stinks after a couple of years.

    If you think he’s going to stink after a few years, then you just don’t want to sign him period. I’m sort of in that camp, but wrote this to try to lay out a position where I’d be okay with signing him. I’d rather just go another direction too, but there is a point at which signing him would make sense.

    It seems like it might be better to front load it while our prospects are developing and cheap, and then lighten up as they start drawing more salary.

    Front-loading is never a good idea. A dollar today is worth more than a dollar tomorrow. There’s no value in having a player’s salaries “align” with his performances – there is value in being able to save money in the present, which can then be invested into the team to help produce more money in the future.

  13. make_dave_proud on January 4th, 2012 10:41 am

    > In general, I’d rather the team spread their money around to fill multiple holes and upgrade the roster rather than going all-in on Fielder

    Dave, I agree with this in principle, but it assumes there are sufficient upgrades around the league to be had.

    Who are the alternatives to Fielder around which the M’s could upgrade?

  14. greentunic on January 4th, 2012 10:42 am

    I think this post further illustrates how damaging long term contracts can be.

    If things work out, we wouldn’t lose TOO BAD.

    If things don’t work out, we lose big time.

    Dave may have hit the nail on the head with this being the best situation for both parties in a signing, but it STILL does not allow for long term positive value for the team.

    More and more I’m drifting away from the idea of signing Fielder long term. Free agency is a one-way street and we’re dodging oncoming traffic.

  15. maqman on January 4th, 2012 10:57 am

    Creative writing at its best Dave. Sincerely doubt if Boras would buy it though. The simple answer to mega-contracts is NO.

  16. Dobbs on January 4th, 2012 11:01 am

    I’m with you on not signing him at all Dave, but your suggestion sounds scary for the last years of his deal.

    Having Fielder for his prime years and enhancing the opt-out option at the start of his declining years seems like a better bet than back-loading the money just to make sure he stays.

    His size obviously invokes thoughts of Mo Vaughn and whether Fielder will even be around another 7 years.

  17. coasty141 on January 4th, 2012 11:03 am

    I would have to think Boras is going to get Prince a higher AAV contract in his first 5 years. Something like a 5/125 and let him hit free agency again at 32. Rather than selecting the above plan.

    Even as team friendly as Dave’s plan is it scares the shit out of me.

  18. eponymous coward on January 4th, 2012 11:23 am

    This approach makes sense if the Mariner front office is thinking “Well, we can’t just sit here signing Sherrill and trading for Jaso, and effectively tell the fanbase our goal is to win 75-80 games in 2012 while Texas and LA decide to put their big boy pants on or 2012, and not do any harm to our ability to put together a real contending team 2013-2014, before Felix decides he’d like to go somewhere where they actually can contend EVERY year and pay top dollar. We’ll turn into what Oakland is today, before their move to San Jose, and what we were before Safeco- we risk having the fan base tune out, our ability to offer competitive salaries crash, and we won’t have any real leverage in 2015 when we can opt out of the Root contract.”

    I know Baker is about as popular here as bubonic plague, but if this is right, the team lost about a third of their operating capital from the 2011 debacle (going from around 27 million to 20). It is hard for me to see how a strategy where you settle for tinkering around the edges and waiting for the kids nets you more than 75-80 wins in 2012 in this division (basically, what Oakland’s done the last few years- still bad offense but not completely comically inept ofense, decent pitching and defense), and it could leave you with 70 wins in 2012 if you’re just not lucky with the kids, Ichiro ‘s done, Guti is really a 4th OF without a bat, and so on- and you’d have to think the Mariners would still be dying in attendance on the field, losing money and eating into their operating capital- or having to cut salary yet again going into 2013-2014 (and the easiest way to do that; dump Ichiro and trade Felix for a group of kids). So this may be what the Mariners are considering as the alternative.

  19. Valenica on January 4th, 2012 11:40 am

    I agree an opt-out is the best way to convince Fielder to sign here, but the structure you suggest doesn’t work. We’re effectively screwing Fielder over on salary if he doesn’t like it here, which is the main concern. There’s no reason Boras would accept such terms, for Fielder to take less money in his best years and more money in his worst, which would make an opt-out harder for him.

    The opt-out clause is in exchange for signing with Seattle. It’s a high price, but at least it’s not money. You can’t add a discount on his first 3 years on top of that. Then you’re asking too much for the opt-out.

  20. Steve Nelson on January 4th, 2012 11:52 am

    @coasty141 on January 4th, 2012 11:03 am

    I would have to think Boras is going to get Prince a higher AAV contract in his first 5 years. Something like a 5/125 and let him hit free agency again at 32. Rather than selecting the above plan.

    Not if Boras is concerned that Fielder is going to fade quickly in his 30′s. A 32-year old Fielder, starting to show evidence of aging, isn’t going to get anywhere near the contract that would remain from the Mariners offer. Remember that Boras is paid his commission during the life of the contract, so has to be concerned about the risk of Fielder going into major decline, and hedge his bets against that.

  21. eponymous coward on January 4th, 2012 12:01 pm

    The problem with frontloading Fielder’s money (aside from what Dave’s mentioned) is that assuming Baker’s correct on where the M’s finances sit, they’re not in a position to risk losing money in 2012-2014 by frontloading Fielder’s contract (I see the odds of GMZ going to ownership and successfully asking for things like capital calls as basically nil- he’d get fired instead. It’s not his money).

    Given that 2012 is probably a throw-away year in terms of anything other than “make the team respectable and pray to get lucky”, it’s hard to see a way that the team’s attendance really bounces back strong enough to justify boosting 2012 salary from 2011 levels- in fact, there’s probably a stronger argument to dump Felix for as much young talent as you can get, take salary down low Marlins-style for 2012, and lick your wounds- build up operating capital for a push in 2013-2014. The team will be doing well to break even on wins, profit and adding a couple hundred thousand fans back in 2012. Fielder possibly makes sense as a strategy in that, if you figure a way to work him into the team’s current salary structure, but I just don’t see a way that the team’s going to increase salary levels for 2012 from 2011- in fact, I wouldn’t be shocked that if we lose the Fielder sweepstakes that we end up cutting salary a few million to make up for last year’s losses…

  22. mymrbig on January 4th, 2012 12:09 pm

    Dave said – “Most players who get opt-outs don’t use them, and they don’t use them because they’ve vastly underperformed their salaries. Vernon Wells, Todd Helton, Rafael Soriano.. this is the norm. Sabathia and Burnett were the exceptions.”

    2 things: (1) less attention goes to the players who don’t opt-out, so I’m guilty of some of this! (2) Wells, Helton, and Soriano were all pretty questionable deals from the moment they were signed, regardless of an opt-out. Those guys just didn’t deserve the contracts they were given (or at least the length in Helton’s case). Those were all bad contracts regardless of the opt-out, as it was hard to make a case any of the guys would realistically opt-out when you really thought about it. So I don’t think they are comparable in that sense.

    Dave said – “It’s not enough value up front to justify giving him the ability to walk away from potential value down the line. You can’t just say “hey, 3/60, that’s cool”, you have to realize that if he’s opting out of 4/95, you’re probably losing some real tangible trade value. At 4/110, you’re probably not.”

    But when you say this, you are evaluating the contract at the time of the opt-out, rather than at the time the contract was signed. Right now if you knew the M’s were going to sign Prince for 7/155 (distributed evenly), wouldn’t you prefer 3/66? I mean, the expectation is that Prince performs very well for 3 years and the concerns is with years 4-7 as he ages. Maybe some other fool team will pay him more if he opts-out, but I still think the M’s should be happy if he opted out and they avoided the risk.

  23. Dave on January 4th, 2012 12:36 pm

    The opt-out clause is in exchange for signing with Seattle. It’s a high price, but at least it’s not money. You can’t add a discount on his first 3 years on top of that. Then you’re asking too much for the opt-out.

    It’s only too much to ask if you think Fielder is worth more than 7/155 to begin with. I don’t, and I think most of the evidence is on my side. Fielder’s a pretty overrated player, which is one of the reasons why no teams are beating down Boras’ door to sign him in the first place.

    Wells, Helton, and Soriano were all pretty questionable deals from the moment they were signed, regardless of an opt-out. Those guys just didn’t deserve the contracts they were given

    Easy to say that now, but beyond the Soriano deal, that’s now how they were viewed at the time. In fact, Wells was a pretty similar player to Fielder at the same age when he signed his deal.

    You can’t just retrospectively decide that the guys who got big contracts and sucked aren’t comparable situations.

    Right now if you knew the M’s were going to sign Prince for 7/155 (distributed evenly), wouldn’t you prefer 3/66?

    You continue to look at this incorrectly. You cannot say “oh, 3/66, that’d be a nice deal right?”, because the only reason he’d opt out of the final four years is if he had knowledge that he could get more years/money on the open market, and he can’t have that knowledge now. You’re comparing two different situations and pretending that the knowledge garnered over the next three years has no value.

    Think of it like this – would you be happy if Felix had an opt-out right now? After all, a five year deal for any pitcher is risky, and since Felix’s contract was backloaded, his salaries are just now beginning to escalate. If he opted out today, the M’s would have paid him just $20 million for the last two years of the deal, which is a freaking bargain. 2/20 for Felix? Awesome, right?

    No, of course not. Because we know that Felix was really good and really healthy the last two years, he’s established value for the next three years that wasn’t obvious at the time he signed the deal. So, now, the last three years of Felix’s deal are a highly valuable commodity, and the M’s would be big losers if Felix opted out and became a free agent.

    You can’t just look at Fielder’s deal and say “no matter what, if he opts-out of the last few years of the deal, we win!” That’s not how it works.

  24. terry on January 4th, 2012 1:02 pm

    I’d sign that deal in a heartbeat….

  25. jordan on January 4th, 2012 1:23 pm

    I don’t like it. If Fielder’s numbers drop and he doesn’t transition well to the AL and he never gets out of the buffet line, this could be the worst thing ever for this club. Worse than the Bedard trade.

    Think about it. Fielder starts to suck and isn’t worth the money.. what does he do at the option time? He accepts ofcourse. Now we have dead weight making 25-30 million a year. F

    Forget that, and forget Fielder.

  26. matthew on January 4th, 2012 2:21 pm

    In fact, (Vernon) Wells was a pretty similar player to Fielder at the same age when he signed his deal.

    I would like to see a future post about this. If for no other reason than to make people understand what they are asking for — and to shut hacks like Kelley and Baker up.

  27. PackBob on January 4th, 2012 2:40 pm

    With Boras the agent, it’s likely that the contract for Fielder will overpay for his skills. A certain amount of his batting is negated by his poor base running and defense. If his hitting slips, he has nothing to fall back on. In that sense he’s a greater risk in a long-term contract than a more complete player.

    Over the last 5 years Fielder’s WAR has been inconsistent and has been well down the list of top WAR in several years. He’s just not worth a monster contract. Even Dave’s proposal here, which is the best I’ve seen to try and compensate for the potential negatives, is too rich for my blood.

    Hopefully the Mariners will not be swayed by the spend money and keep up with the Jonses crowd and stick instead to the overall team improvement route.

  28. mymrbig on January 4th, 2012 2:55 pm

    Dave said – “You continue to look at this incorrectly.”

    I don’t think all player opt-outs are good for the team, just in very limited circumstances. Generally speaking, the younger the player will be when the opt-out ocurs, the less elite the player, the shorter the contract, and the later in the contract the player can opt-out, the worse an opt-out is for the team.

    Not many people are concerned about Fielder’s ability to crush the ball the next 3 years. The concern is whether he can still crush the ball in 6 or 7 years. He can crush it the next 3 years and it doesn’t really diminish the risk/concerns about him aging poorly.

    Richie Sexson is a good demonstration of my point, though his contract was a little short (4/50). Don’t you wish Richie Sexson had had an opt-out after 2 years? He signed for 4/50 and was worth 7 WAR during his first 2 years (age 30 & 31), hitting 73 HR and doing fine in Safeco. But wasn’t the concern always the last couple years of the contract? If he had opted out after 2 years, he might have been able to get a better deal on the open market (maybe not, just because of the backloading, but if the contract had been 12.5 M per year he might have beat 2/25 on the open market).

    I agree with you that a team might lose potential value if a player opts out. But if he is opting out of years the team considered dangerous & risky in the first place (as is often the case), then I think you can make the case the risk of the player opting out and then failing with another team (good for the team giving the opt-out) exceeds the risk of the player opting out and then succeeding under his new contract elsewhere.

    Again, I’m not arguing opt-outs are good for the team in all circumstances, or even most. But I think for certain players (pitchers, overweight DH/1B types, guys with nagging injuries that may accumulate as they age) and certain contracts, they can be to the team’s advantage. And I think Fielder is such a player.

  29. eastcoastmariner on January 4th, 2012 3:45 pm

    Dave,

    You wrote a nice post on Fangraphs a little while back detailing how the Marlins got a potential bargain in singing Jose Reyes. You outlined WAR and $/WAR projections for the life of his contract to further illustrate your point.

    Using this same type of concept for Fielder (assuming he signs for 7 years as you mentioned in this post), how many wins would you expect Fielder to be worth over this period of time? Is 30 Wins a reasonable prediction?

  30. just a fan on January 4th, 2012 3:56 pm

    It would be cool to see some dingers from Prince Fielder. That’s a fun part of the game.

    But I’d rather Prince stick to his east coast bias, the Natties make a ridiculous Werthian offer (in terms of overpaying) and Justin Smoak stays healthy and shows us what he can do.

    Come on, Nats, 8/$225M. Get it done!

  31. Mariners35 on January 4th, 2012 4:08 pm

    Eastcoastmariner – I assume you mean this article.

    I’m not speaking for Dave obviously, and I don’t know how many wins to project for Fielder – i.e. what his fair market value would be. But I can reverse-engineer a smidge and say that about 30 wins is a very reasonable prediction.

    Using that $5/win, 5% inflation thing from the fangraphs article, and applying it to Dave’s proposed contract above for a full 8 years, works out to 28.9 WAR. I.e. $5/WAR in 2012 and a salary of $13 mil means an expectation in the contract of 2.6 WAR. 5% inflation means 2013 is $5.25/WAR (in 2012 dollars), so $5.25/WAR and a salary of $16m is an expectation in 2013 of 3 WAR. And so on. Meaning the WAR that’s paid for each year is 2.6, 3.0, 2.9, 4.3, 4.1, 3.9, 4.5, 3.6, for a total of 28.9.

    If Fielder is healthy I’d expect to see those 4+ WAR years sooner in the contract than later, and if you’re taking a hit from the Boras bong you expect none of those pedestrian 3.6 or lower WARs, but whatever. It’s still paying Fielder on the assumption that over 8 years he’s good for at least about 29 WAR.

    It seems a bit conservative to me, but as Dave noted, “It would also essentially give the team a three year window to win with Felix/Fielder as the core of the team…. If it didn’t work (by end of 2014), Felix would probably be trade bait, and Fielder might be more inclined to opt-out and go somewhere else.”

  32. Steve Nelson on January 4th, 2012 4:34 pm

    @PackBob on January 4th, 2012 2:40 pm

    With Boras the agent, it’s likely that the contract for Fielder will overpay for his skills.

    Why do you say that? Is there evidence that Boras has some kind of Jedi power that causes owners and general managers to swoon and sign contracts that pay the player more than those team officials believe the player is worth???

  33. thurston24 on January 4th, 2012 7:23 pm

    I really wish I knew what insurance was availible for teams in case of a player injury. I don’t know that there is any availible, but in regards to expensive players deals such as these it would be nice to know if teams could purchase injury insurance and that we could know the terms and the premiums for said insurance. The reason I wonder is because it would greatly affect how I would feel about this proposal.

    I view this idea as very risky for the team because if Fielder were to get injured during any of the first three years, it could wash away any early surplus value that he could provide before his op-out. I know that fielder has not missed many games in his career but his is a very large man and very large people have higher rates of injury than average sized people. Given the rates of injury for people his size, the aging curve of big bodied sluggers and the contract demands, I would not sign him unless I could transfer a large portion of the risk to an outside entity (which may be and probably is not an option).

  34. lalo on January 4th, 2012 7:37 pm

    “#Mariners sign Hisashi Iwakuma. Could take a couple days to finalize because of complicated physical, but they have agreed.”

    “The Mariners have signed Japanese shortstop Munenori Kawasaki to a minor league contract, tweets Matt Eddy of Baseball America. Kawasaki, 30, was a free agent and could sign without a posting fee.”

    OK, we have our lefty reliever, a veteran arm and a backup SS, now get a middle of the lineup bat Z!

  35. djtizzo on January 4th, 2012 9:03 pm

    2012: $12 million
    2013: $16 million
    2014: $23 million
    2015: $24 million
    2016: $25 million
    2017: $26 million
    2018: $27 million
    2019: $28 million
    2020: $29 million
    2021: $30 million

    Look familiar? (Pujols Contract)

    Interesting considering he made $16MM in ’11 and won’t make more than that untill ’14!

  36. MrZDevotee on January 4th, 2012 10:20 pm

    Y’know, got to thinking about Prince and Seattle, and we really have nothing to worry about. If I was Fielder, unless everybody else dropped out of the game, I’m not coming to Seattle. And it’s simple really, simple as a little math and comparisons based soley on Safeco Field. I’m trying to be one of the best power hitters the game has known in recent years, and you really expect me to sign away 8-10 years of my career to play half my games at Safeco Field?

    I mean, the slippery slope of the Mariners woes have followed, almost to a tee, the acceptance that Seattle is a pitcher’s park, and a horrible place to hit. Left field is death to batters, but honestly, right field isn’t much better. And it’s nearly unanimously thought that the gaps are too deep, the weather features cold and heavy air, etc, etc. Safeco has basically beaten MLB into submission since it’s opening, to the glee of a bunch of otherwise ordinary pitchers we’ve had on staff here, too.

    If I was gonna ask a team to pay me $200+million to swing hard and try to break things, I would want to do everything in my power to provide them with the best results possible. And to provide MYSELF with those results, too, to keep any of those sorts of distractions to a minimum, and have the last half of my career be as enjoyable and successful as my first half.

    JEFF CIRILLO – lifetime .318+ hitter before Seattle. Mendoza-esque during his time here. Horrible horrible reputation in Seattle, to the point people thought he wasn’t really trying, but a career .300+ hitter otherwise.

    He didn’t improve when he left, sure… Well not for one season, because he went to San Diego, another horrible place to bat… Two years later? He went to Milwaukee (ironically) for two years where he batted .281 and .319. And doubled his OPS+ from his last season in Seattle (from 50 to 105).

    And the poster boy of Safeco Field futility:
    ADRIAN BELTRE (year before his Mariner years) .334, 28 HR’s, 121 RBI’s…

    We all know how those numbers fell when he got to Seattle. (5 seasons, .266 avg, never more than 26 homers, NEVER 100 RBI’s– again, NEVER 100 RBI’s, and whether you like that stat or not, he had a perennial 200 hit, stolen base leader, high OBP guy leading off two batters ahead of him in the lineup… and NEVER 100 RBI’s in Seattle.)

    So he had one good year, got paid big dollars because it came along in his contract year. But wait, his “contract year” at the end of his Seattle days was awful, and he ended up signing an incentive laden deal with the Red Sox when nobody beat his door down to sign him.

    And in the 2 years since leaving Seattle- y’know, after being “past his prime” and not drawing much interest from Seattle to resign-
    ADRIAN BELTRE (Sox/Rangers):
    .309 avg, 60 home runs, .911 OPS.

    An excellent reference, because he moved to two of the better “hitter’s parks” in baseball (Fenway, Arlington) in stark contrast to Safeco.

    Remember Mike Cameron? We loved the guy, and always wanted him to take that “next step” offensively (remember those 4 homeruns in a single game? yeah, NOT at Safeco Field, obviously)… But I never noticed while he was here:

    MIKE CAMERON
    (at home): .223 BA, .328 OBP, 30 HR
    (on the road): .286 BA, .370 OBP, 57 HR

    What about Chone Figgins, who is widely regarded to be proof that Z has flaws as a GM…

    CHONE FIGGINS
    (4 years pre Seattle)
    .291 BA, .372 OBP, .380 Slugg%… 42 SB avg
    (in Seattle)
    .236 BA, .309 OBP, .285 Slugg% (!)… 36 SB avg

    What sticks out to me for Figgins is that the one stat that isn’t affected by the ballpark is stolen bases, where oddly, in his freefall decline, if you figure in his drop in OBP he’s actually stealing bases at a HIGHER clip than in Anaheim. Legs are usually the thing that “goes” and effects hitters as they age… Legs seem okay in Figgins’ case.

    Conversely, how many middle of the road pitchers became solid middle of the rotation guys while here in Seattle (check Vargas at Safeco, or on the road). Or more to the point of excellence, a certain Cliff Lee pitched perhaps the best he EVER did in his career during his half season in Seattle, as contrasted to his 2nd half with Texas, which was still good, but relatively waned. And he was coming off an injury during that time he flourished at Safeco. He wasn’t even technically “at his best” early on that year.

    Sure park effects are minimal at best. But that’s really only when you consider players who come through town to play at Safeco the same number of games they play at any other ball park. What little effect it DOES have gets amplified incredibly if it’s your home field, because you play roughly 10 times as many games there as you play at any other park during the season.

    So long story short (sorry, really REALLY long story, I know)… If I’m Fielder (or Boras) I thank Seattle for their fine offer, and tell them how much I loved the field and city, “it’s one of my favorite places to play!”, and go somewhere else that likes baseball players more (y’know, ALL players, not just pitchers).

    I guarantee our beautiful beautiful ballpark has a very strong reputation around this league. And it grows every year (as Adrian Beltre comes through whatever town and can’t shut up about how much easier it is to bat ANYWHERE else– I mean, look for yourself, he’s got Hall of Fame numbers if he hadn’t played 5 years in Seattle).

    So it’s time to take off our coat and come back inside from the “We Want Prince Fielder” pretty-pretty snow storm outside. Here’s some hot chocolate. Put your feet by the fire and relax a bit. “Did you hear we signed a pretty nice starting pitcher out of Japan?”

  37. Dave on January 4th, 2012 10:48 pm

    Not many people are concerned about Fielder’s ability to crush the ball the next 3 years. The concern is whether he can still crush the ball in 6 or 7 years. He can crush it the next 3 years and it doesn’t really diminish the risk/concerns about him aging poorly.

    You’re still just viewing this incorrectly, and your tenuous relationship with facts is clouding your view. It’s absolutely not true that his performance over the next three years doesn’t alter the risks or the perceptions of the value of the final four seasons of the deal.

    Richie Sexson is a good demonstration of my point, though his contract was a little short (4/50). Don’t you wish Richie Sexson had had an opt-out after 2 years?

    Nope. Again, just like the Felix example, think through this, and try to see why you’re not getting it.

    Richie Sexson’s positive performance during his first two seasons (well, really, his first season – there was a pretty big decline between Year 1 and Year 2) reduced the risk of his performance in Years 3 and 4 from when the contract was signed. Because he established that his shoulder wasn’t a lingering concern and he could still hit for power, risk diminished and the contract gained value.

    If the team wanted to get rid of years 3 and 4 of that deal after year 2, they could have just traded him. Having him opt out wouldn’t have helped the team at all. Instead of having the choice of retaining him or flipping him for something else of value, they would have had no choice, and simply watched an asset with trade value walk away while getting nothing in return. Their position would have not been improved one iota.

    With any free agent contract, teams are essentially accepting a variety of possible outcomes. Just for ease of math, let’s say that 50% of the time those outcomes are good for the team and the player performs up to his salary, and 50% of the time those outcomes are bad and the player does not – this is obviously not true, as most free agent contracts turn out badly, but we’re just explaining a concept here.

    If you give a player an opt-out, it has no bearing on the 50% of outcomes that are bad. The player doesn’t exercise the opt-out and it’s entire existence is moot. It neither helps nor harms either party. However, the opt-out essentially voids the existence of the 50% of the outcomes that are good for the team, giving the player the ability to void a contract that could have otherwise been traded for value if the team so desired.

    These opt-outs never help the team, no matter how many times you try to use ex post facto logic to try and support your incorrect point. If a player plays well enough to justify using the opt-out, then he’s doing so because he understands his market value is greater than his contract price, meaning that the team could have necessarily traded him if they wanted to dump the remaining years of the deal. Having him opt out does not free them from years they were otherwise stuck with – it simply removes the value they could have gotten by trading him of their own free will.

    The only way to make an opt-out work for a team is to require a player to take a significant discount in overall earnings in order to “buy” the opt-out, or to structure it as suggested in this post so that the value is captured by the team before the opt-out occurs, making it essentially a non-financial option and one where the player would only exercise it for reasons not relating to his ability to earn a raise or an extension.

  38. MrZDevotee on January 4th, 2012 10:51 pm

    ADDENDUM- Via various outlets, Iwakuma (SP) and Kawasaki (SS) are both being reported as essentially signed, pending dotting of the final “i”s and/or physicals.

  39. Dave on January 4th, 2012 10:56 pm

    Y’know, got to thinking about Prince and Seattle, and we really have nothing to worry about. If I was Fielder, unless everybody else dropped out of the game, I’m not coming to Seattle. And it’s simple really, simple as a little math and comparisons based soley on Safeco Field. I’m trying to be one of the best power hitters the game has known in recent years, and you really expect me to sign away 8-10 years of my career to play half my games at Safeco Field?

    Your thesis is that no player is going to want to sign to play in Seattle, and then you list as your evidence three right-handed batters and a guy whose failures had absolutely nothing to do with the park? Seriously?

    Safeco is death to balls hit in the air to left center field, and it’s not overly kind to balls hit to straight away left or center either. This makes it a terrible fit for right-handed pull power hitters. Everyone knows this. This is obvious.

    Safeco is actually a better than average place to hit fly balls to right field, and right center ain’t bad either. This is why left-handed pull power guys, and right-handers who can drive the ball the other way with regularity, do just fine in Safeco. Need actual evidence? Read this list of the M’s top hitters at home over the last 10 years. The top 10? Seven left-handed batters, plus three RHBs (Morse, Edgar, Boone) with power to right field.

    Players aren’t idiots. Left-handed hitters don’t just look at Safeco and say “oh, crap, I can’t hit there, screw that place”. They know how the ball carries. Prince Fielder’s decision will have nothing to do with Safeco Field, no matter what kind of rhetoric you want to throw around.

  40. MrZDevotee on January 4th, 2012 10:57 pm

    Hey Dave,
    Thanks for those follow ups and more intricate explanations with MyMrBig. Seriously. It really helped clarify the various angles, options, and results of approaching longer term contracts with an eye/ear towards “opt out” clauses. And why teams are reluctant. I thought I understood the original post, but then I found I understood your entire concept much more “precisely” with the later finer details you provided.

    (thumbs up)

  41. MrZDevotee on January 4th, 2012 11:03 pm

    “Prince Fielder’s decision will have nothing to do with Safeco Field, no matter what kind of rhetoric you want to throw around.”

    Dave, I don’t think you can know this.

    Pretend you’re Prince Fielder (stick a pillow under your shirt or something), final offers come down to Texas or Seattle… Slightly more money from Seattle, along with 1 more year… Ballpark plays no role in your decision? I mean, sure, winning… travel… all that… But NOT anything related to Safeco? Really? (You don’t care what sort of computer you link to the internet on for your articles… Or your modem speed? Or whether it’s wireless or you have to be connected via ethernet? These are sort of your own “ballpark figures”… maybe not important in and of themselves, but if there are choices, I’m pretty sure you’ll weigh the differences somehow?)

    (PS- beside the point, but I have 1st hand evidence that says some players are idiots actually… Ever met Chad Curtis? Or Paul O’Neill?)

  42. Valenica on January 4th, 2012 11:22 pm

    Z and Boras have way more information on park factors at Safeco than anyone on the internet. If Fielder really can’t hit here, they’ll know, and either won’t make an offer/won’t accept an offer.

    Even if after that data, if he really can’t hit here he can just opt out. That’s the whole point of an opt-out clause.

    And if Fielder of all people can’t hit here (probably the strongest LHB in the game right now) then we’ll probably move the fences in.

    So yes, the fences have nothing to do with his decision. In the end it’ll be about location for his family and the money, like it is for everyone else. Not fences, not winning record, not anything else.

  43. mymrbig on January 4th, 2012 11:46 pm

    We are talking about two different goals. Your goal seems to be to maximize the return on the investment. My goal seems to be to reduce risk in a very specific way (obviously signing anyone to this kind of contract entails a lot of risk).

    Moreover, you are talking about PERCEIVED open market value at the time of the opt-out (i.e. how much the highest bidder would pay). Not the value the player is LIKELY to earn (WAR) (under either the remainder of the contract or under a new contract).

    Maybe I can give a quick summary of when I think a team might benefit from an opt-out – an opt-out might be a good idea for a team who thinks a very good player is likely to perform well before the opt-out but have a high risk of collapse or injury after the opt-out.

    Look at Prince. I absolutely believe he will earn his keep as a slugger for the next 3 years. K% and SwStr% trending down, draws plenty of walks, hits for power, and is entering his age 28 season. But I start to lose confidence 4 years out because he has a bad body and is already a poor baserunner and defender. I think there is a pretty good chance he is very diminished as a MLB player in 6 years. So I give him an opt-out with the expectation that he is a great slugger for 3 years, then opts-out so he can crash-and-burn with someone else. I’m fine taking a draft pick when he opts out and getting out of the risk of his collapse, which I currently believe is high. Prince staying healthy and productive for 3 years won’t change my concerns with a collapse in years 4+ (because I’m predicting good performance for 3 years, uncertain performance the next 2 years, then likely collapse by years 6 & 7).

    Really the risk is that he begins collapsing earlier than expected, and obviously I don’t hand out any contract to him without first evaluating this risk. Again, I’m hoping he opts-out. I’ll take the draft pick and be thrilled to get out from the risk.

    Felix is a terrible example to use since he had 2 arbitration years left when he signed his contract, the contract was only 5 years, and he was extremely young when he signed it. I would NOT have advocated giving Felix an opt-out in his current contract, as I agree 100% that it would have been bad for the M’s. I would not have even thought of advocating for an opt-out unless Felix had demanded at least a 7-year contract (maybe 8 years) or threatened to go year-to-year and leave via free agency.

    Dave said – “Having [Sexson] opt out wouldn’t have helped the team at all. Instead of having the choice of retaining him or flipping him for something else of value, they would have had no choice, and simply watched an asset with trade value walk away while getting nothing in return. Their position would have not been improved one iota.”

    Sure it would have helped the M’s if he opted out. They would have avoided years 3 and 4 of the contract. You remember, the years Sexson completely collapsed as an MLB-caliber ballplayer! An opt-out in this situation is about reducing risk, NOT about maximizing returns. Sure they lose some PERCEIVED value in that some team surely would have paid him more. But the opt-out is given with the belief the player is likely to underperform in those later years (evaluated at the time the contract is signed).

    Dave said – “Just for ease of math, let’s say that 50% of the time those outcomes are good for the team and the player performs up to his salary, and 50% of the time those outcomes are bad and the player does not – this is obviously not true, as most free agent contracts turn out badly, but we’re just explaining a concept here.”

    You kind of hint on my point here. Most free agent contracts turn out bad. And the longer they are, the higher the likelihood that the contract turns out bad (and the worse it potentially gets). So the opt-out can help a team avoid the bad, even if the team isn’t the one controlling the decision.

    Dave said – “These opt-outs never help the team, no matter how many times you try to use ex post facto logic to try and support your incorrect point.”

    This really ruffles my feathers, because I am absolutely NOT using ex post facto logic. I’m saying that the two possible contract outcomes (opt-out versus no opt-out) should be evaluated from the time the contract is signed. Yet you keep evaluating the outcomes at the time of the opt-out (mid-contract … I don’t know the latin for “middle of the fact”).

  44. mymrbig on January 4th, 2012 11:53 pm

    Dave, regardless of our disagreement, thanks for the civil exchange of ideas. I feel like you aren’t understanding my rationale. Maybe I’m expressing my point poorly in writing, or maybe I’m a crazy idiot. But it was fun. I tried to make the same point here before the Felix extension and have tried my arguments on Klaw as well (to similar tongue lashing).

  45. mymrbig on January 4th, 2012 11:59 pm

    Two final thoughts: (1) Absolutely your proposed opt-out is better than my proposed opt-out. I just don’t think there is a snowball’s chance in Egypt Prince/Boras would go for your proposal; and (2) This is mostly an intellectual exercise for me. I’d prefer the M’s not sign Fielder at all. But if they do and if it ends up being 7+ years (I would not advocate including an opt-out in a 5-year deal), I think including an opt-out after 3 would be better for the M’s (and certainly no worse).

  46. MKT on January 5th, 2012 1:14 am

    “So the opt-out can help a team avoid the bad, even if the team isn’t the one controlling the decision.”

    It only helps the team if the player makes the irrational decision to opt out, instead of doing the smart and safe choice of staying with his long-term contract which overpays him.

    An opt-out clause is an option (there are formal definitions in finance and economics of what an “option” is, but the standard informal definition works here), and options are valuable — to the party which owns the option, i.e. the one who gets to choose.

    Player opt-out options are valuable for the player, not for the team.

    Team options are valuable for the team, not for the player.

    You’re trying to argue that a player option is valuable for the team, creating a scenario where the player magically opts out, saving the Mariners the expense of the rest of the contract. That’s an unrealistic scenario; the Mariners’ can only make that magic happen if THEY own the option, i.e. they get to choose to cut the player loose.

  47. mymrbig on January 5th, 2012 7:03 am

    MKT said – “You’re trying to argue that a player option is valuable for the team, creating a scenario where the player magically opts out, saving the Mariners the expense of the rest of the contract. That’s an unrealistic scenario; the Mariners’ can only make that magic happen if THEY own the option, i.e. they get to choose to cut the player lose.”

    This is NOT what I’m arguing. What I’m arguing is that the player will opt-out because he and his agent believe (probably correctly) that the player can get more from another team in the open market. The team WANTS the player to opt-out because, even if the player can get more in the open market, the team believes the player is likely to underperform the remainder of the contract (either because of age-related decline or injuries).

    Its kind of a win-win if the player opts-out under these circumstances and the player definitely views the opt-out favorably. But under the narrow parameters I’ve described, where you expect the player to remain largely healthy and productive before the opt-out with significantly increased risk after the opt-out, it might be a good choice for the team. Particularly if granting the opt-out gives the team a few million dollar discount on the pre-opt-out salaries (Dave’s general point).

    Pujols’ contract is another good example. I don’t care how good he is the next 3 or 4 years, I fully believe that contract will be an albatross by year 7 or 8. If Pujols had an opt-out after 3 or 4 years and you are the Angels, don’t you hope and pray Pujols exercises the opt-out? He probably would not because his contract will be so bad toward the end that other teams wouldn’t beat it. But it would be good for the Angels if he did opt-out and including the opt-out doesn’t make the current contract any worse (particularly if including an opt-out knocks off a few million elsewhere in the contract).

  48. Dave on January 5th, 2012 8:03 am

    The team WANTS the player to opt-out because, even if the player can get more in the open market, the team believes the player is likely to underperform the remainder of the contract (either because of age-related decline or injuries).

    I’ll just say this one last time, and if you can’t get it, then I’ll just give up and let you continue believing something that is obviously not true.

    Read your sentence again, then think to yourself, “if the player can opt out to get more money elsewhere, couldn’t the team just trade the player to whatever team would sign him for more money, thus being rid of the risk of the final few years of the deal just as if he had opted out?”

    Now, hopefully, you can see that the answer to that question is yes. So the player opting out does not relieve the team of any future years that they were otherwise bound to. Any player who would exercise an opt-out of his contract could have easily been traded for value instead, so there’s zero benefit to the team by having him opt out.

    You keep arguing that the opt-out is good because it gets the team out of the final years of the contract, but in order to draw that conclusion, you have to believe that the team couldn’t have gotten out of those years if he didn’t opt out. That’s wrong, and it screws up your entire line of thinking.

    Hopefully, this makes sense. If it doesn’t, I don’t know what else to say. Good luck figuring it out.

  49. Mariners35 on January 5th, 2012 8:40 am

    After all this debate about what opt outs mean and how they get used, again, I go back to my original post about contract simplicity. Ignore the specific number I put up there; my point was, I wonder sometimes if contract simplicity can be a selling point.

    There’s obviously no way to prove it with data, and both front offices and agents have time and people to put a lot of detail and stipulation into even the most straightforward contract. And the more a team presents a simple contract, perhaps that’s how much they’re overpaying.

    But I do wonder if a team can frame a simple contract, even just in the media, as “we don’t have to get cute, or talk ourselves into doing this; we have a good organization to play for and this is what you’re worth to us, period”.

    Of course, if teams could and did generally have the final offer, take-it-or-leave-it mentality, and stick to it, agents like Boras couldn’t make a living.

  50. mymrbig on January 5th, 2012 8:57 am

    Dave, thanks, that is easily the most concise way you’ve made your point. And I do understand. No need to write down to me just because you think my idea is ridiculous.

    You keep acting like the M’s wouldn’t get any value if the player opts-out. Last time I checked, free agent compensation still exists. Prince opts-out, the M’s get picks. Am I missing something?

    Moreover, you are still talking about maximizing return, while I’ve repeatedly stated that my idea is about reducing risk. Not maximizing return. Different but related concepts. I fully admit that the team might be leaving some value on the table if the player walks. But the team has to be OK with that scenario to increase the likelihood the player walks away and takes the risk with him.

    Relying on a trade is more complicated than an opt-out. You need to find a team that both believes the guy is worth the remainder of the contract (when you don’t … otherwise you wouldn’t have given him the opt-out) AND has young talent they are willing to trade. Plus there can be additional complicating factors like no-trade or partial no-trade clauses, clauses that increase salaries or award a bonus if a guy is traded, etc. And when trading the player, the team also has to worry about what similar players are available to potential trade partners as free agents or via trade from other teams (I realize this is still a factor with the opt-out, but it is something the agent & player have to worry about, rather than something the team has to worry about).

    To some extent, the team is relying on the hubris of the player & his agent. Not that Prince or his agent have excessive hubris…

  51. Valenica on January 5th, 2012 9:07 am

    There’s obviously a benefit to contract simplicity because you’re not wondering how they’re trying to **** you over the entire time.

    They’re going to ask, how does this contract benefit me? Outside of the fact Fielder can opt-out, it doesn’t. I don’t think he’d appreciate that very much, and would actually feel offended. He might take a lesser deal from WSH or TEX in spite at that point.

  52. mymrbig on January 5th, 2012 9:19 am

    Going back specifically to Prince, let’s say the M’s sign him to 7/155 (only slightly backloaded, maybe 21, 21, 22, 22, 23, 23, 23).

    3 scenarios:
    (1) Prince stays all 7 years. Last 2-3 years the contract is quite risky.
    (2) (my argument) Prince most lkely opts-out after 3 years. M’s (probably) get compensation picks and avoid risk of later decline.
    (3) (your argument) Prince can’t opt-out and M’s try to trade him. This is better than #2 if the M’s find a trade partner and if the value of the players received exceeds the value of the comp picks. This increases the risk of #1 if they can’t find a trade partner. More potential value, but also some added risk compared to #2.

    Again, I’m trying to reduce risk and fully admit that in doing so, may leave some value on the table. But I’m OK with that because reducing the risk of an albatross contract is more important to me than squeezing out every last dime of value.

    If Prince walks and the M’s don’t get as much compensation as a trade, that is a small loss. Even with no comp picks, that is still just a small loss (because ultimately they probably got close to full value for the 3 years of the contract they paid). If they can’t trade Prince and he stays and collapses, that can cripple the franchise for a few years. I’m trying to avoid the franchise-crippling albatross.

  53. greentunic on January 5th, 2012 9:29 am

    Do M’s get compensation picks during an opt out? Thought that was only arbitration situations.

  54. Dave on January 5th, 2012 9:30 am

    Okay, really, this time I’m actually done with this. My last comment on the subject.

    There are NO scenarios where Prince Fielder could opt out of his contract but the Mariners could not trade him. None. Zilch. Nada. That situation can not exist.

    By definition, Fielder’s only opting out in scenarios where another team would want to sign him to a deal of equal or greater value to what he had in Seattle. So, the assumption of the opt-out usage requires there to be a team interested in not only assuming his contract as is, but almost certainly paying more than what he’s owed at the time of the opt-out.

    Guess what? That’s a trade partner. The M’s don’t have to look for one – they implicitly exist, or else Fielder wouldn’t opt out.

    You cannot create a scenario where Fielder would opt out but the M’s would not be able to trade him. It’s a fantasy world, and one you need to divorce yourself from, because it’s causing you to tie yourself into knots to come to an incorrect conclusion.

  55. eponymous coward on January 5th, 2012 9:57 am

    You keep acting like the M’s wouldn’t get any value if the player opts-out. Last time I checked, free agent compensation still exists. Prince opts-out, the M’s get picks. Am I missing something?

    You’re missing the fact that you must offer arbitration to a player with an expiring contract (and the player must decline the arbitration instead of accepting arbitration and staying with the team, which is when they become a free agent) to receive compensation, and the terms of opt-outs won’t allow that- the player IMMEDIATELY becomes a free agent.

  56. Mariners35 on January 5th, 2012 9:58 am

    Perhaps this SI article from October, about how C.C. Sabathia could have used his opt out for leverage with his existing club or to get a better contract as a free agent, and then this NYT article from the next day, about how it helped CC get a contract extension with his existing club under different terms, helps illustrate how opt outs can be used. Or at least, one common way they can be used. Certainly better than hypotheticals about Fielder.

  57. mymrbig on January 5th, 2012 1:21 pm

    Good grief, I just tried to post another (longish) comment and it isn’t appearing. Hopefully Dave is annoyed with me and is now monitoring my comments before posting them, rather than me having lost the post.

    To sum up my long (potentially lost) comment in case it doesn’t appear:
    (1) Teams do get free agent compensation if a player opts-out and signs with another team. At least they did in 2009 when the Blue Jays drafted James Paxton in the supplemental 1st round in compensation for Burnett signing with the Yankees.
    (2) I just realized that Matthew over at Lookout Landing made 2 posts on Prince & opt-out clauses. I’ve never read LL as often as USSM or PI. Matthew was essentially making the same argument as me, only doing so more eloquently and with more humor. So go search for those posts if my now missing post with the links doesn’t appear after being reviewed in comment purgatory.

  58. mymrbig on January 5th, 2012 1:28 pm

    Dave said – “There are NO scenarios where Prince Fielder could opt out of his contract but the Mariners could not trade him. None. Zilch. Nada. That situation can not exist.”

    That is a silly comment. First, at least 1/2 the teams don’t have the money (or wouldn’t spend the money) to take on that kind of contract. So cross them off. Other teams don’t have an opening because they already have Teixeira/Pujols/Howard/Votto/etc. Out of the remaining teams:
    (1) Prince has no-trade clause.
    (2) Prince has partial no-trade clause and blocks teams that might otherwise be trade partners (and compensation can’t be worked out to get around this).
    (3) The M’s demand too much in return and the potential trade partners go with their fall-back option before a trade is worked out (be it an internal fall-back like the Nats currently have with LaRoche or external fall-back by acquiring another player via free agency or trade).

    So there are at least 3 possible, realistic scenarios where Prince might be perceived to have some surplus value, but the M’s couldn’t trade him after 3 years (though maybe they could still end up trading him later in the deal).

    Seriously, go read Matthew’s LL posts from 12/16 and 12/20!

  59. stevemotivateir on January 5th, 2012 2:52 pm

    Maybe I can simplify the point a little for those who still don’t get it.

    If Fielder is likely to opt-out, it means he’s playing damn good, which means he will be in demand, which means….. (drum roll)….. he has trade value!

    Even if he became a hired-gun for the remainder of a season, there are always several teams looking for someone like that.

    A trade would work/happen, because there’s no other option for the Mariners in that case. The highest bidder would win him, even if it were for just a couple of prospects.

  60. stevemotivateir on January 5th, 2012 2:59 pm

    One more quick point… if it’s a back-loaded contract, it makes him even more likely to be attractive to a team in contention, as the remainder of his salary for that season, would likely be very affordable. Assuming the team isn’t stupid enough to sign him with a no-trade clause.

  61. psquared on January 5th, 2012 8:29 pm

    Since it’s not advisable for someone with a diminished immune system to bang their head against a keyboard, let me take a shot…..

    MyMrBig said:
    First, at least 1/2 the teams don’t have the money (or wouldn’t spend the money) to take on that kind of contract. So cross them off. Other teams don’t have an opening because they already have Teixeira/Pujols/Howard/Votto/etc. Out of the remaining teams:
    (1) Prince has no-trade clause.
    (2) Prince has partial no-trade clause and blocks teams that might otherwise be trade partners (and compensation can’t be worked out to get around this).
    (3) The M’s demand too much in return and the potential trade partners go with their fall-back option before a trade is worked out (be it an internal fall-back like the Nats currently have with LaRoche or external fall-back by acquiring another player via free agency or trade

    In order for Prince to Opt-Out, two things have to be true:
    1) Prince has to be willing to play for another team
    2) Another team has to be willing to pay Prince at least as much as his current contract.

    I suppose you could argue that after 3 years, Prince want’s to leave Seattle to play for another team at $24mil a year while his contract with the M’s is $25. This is a stretch as well because any team willing to pay $24mil a year for 4 years is likely willing to trade. You’d really have to be talking $5mil a year less and in that case I can’t see Prince opting out.
    So assuming the above 2 rules are true, let’s look at your possible scenarios:

    1) a no trade clause. — This won’t matter because we’ve already established that Prince is willing to play for another team. If he was willing to opt-out to play with the Astro’s, then he should be willing to be traded to the Astro’s and Prince will wave the no trade clause.
    2) a partial no trade clause. — Same answer as above. Prince want’s to play for the Astro’s so he waves his no trade clause.
    3) The M’s demand to much in return. — Remember, the whole scenario here is that the M’s think Prince is not worth his remaining contract. At that point, the M’s should be willing to take any A player and call it good. Really though, this is a weird scenario because you’re saying that the M’s want to get rid of him, yet the M’s wouldn’t be willing to give him away. This is also where the structuring of the contract makes a difference. You have to assume that the M’s got a ton of value with Prince, likely $15 mil, because of how heavily the contract was backloaded. It’s this extra value that allows them to essentially give Prince away for free. It even allows them to be willing to forgo any free agent compensation they would normally get.

    So I don’t see how you have any realistic scenario where Prince is willing to opt-out yet the M’s aren’t able to trade him.

  62. mymrbig on January 5th, 2012 9:40 pm

    Why is the assumption that whatever the M’s could trade him for is more valuable than the comp picks? I agree that they could probably trade him under the scenario described, but saying there is literally a zero percent chance that the M’s could not trade Fielder (i.e. a 100% chance they could find a trade partner) seems like hyperbole run amok. Relying on a trade is riskier than an opt-out. How much so is certainly up for debate. But again, there is no guarantee the player(s) you could get in trade would be better than the comp pick(s).

    I thought I’d throw in a few quotes from Matthew’s 2nd post over at LL to sum up my thoughts:

    “Mostly, my ire was raised by those who seemed to offhandedly dismiss the notion as not possibly beneficial to the team. That’s ludicrous. There is clearly a possible benefit to the Mariners and if someone can’t think of one, then I suggest that person retire from commenting about baseball until he or she gain some more experience in following it.”

    “A player opt-out does, under narrow circumstances, limit the upside of a deal. That criticism is far more applicable to up-and-coming players than players already at their peak, but I’ll grant it. However, the opt out, even though not under the team’s control, does lower their risk. And that’s a great benefit to a team.”

    “Frankly, given how (correctly) often it’s repeated that free agency is an awful way to build a team, I expected that anyone confronted with an opportunity to dabble in free agency with the hint of possibly escaping an excruciating collapse at the expense of a mild bit of upside would be, on the whole, for it. I assumed the debate would be more about whether it would be preferable after year three or four, or how much per year would be a suitable discount for offering him one”

  63. psquared on January 6th, 2012 8:26 am

    MyMrBig:
    I never said that what the M’s trade him for is more valuable than the comp picks. What I said is that you have to get enough value from him in the 3 years you have him to be more valuable than the comp picks and anything you’d get in return from another team. That’s why the contract is heavily back loaded; so you get huge value early on. Then, after 3 years, you could give him away for free. That’s why it’d be so easy to find a trade partner. You aren’t concerned about the return. So if there’s anyone that would be willing to sign him (if he opt’d out), that’s your trade partner. If you don’t have a trade partner, then he wouldn’t have opt’d out.

    Also, I don’t think I’m arguing that an opt-out is bad, just that you have other options (i.e. a trade). Because if a player is playing well enough to opt-out, then you’d be able to trade him – wait, isn’t that the sentence that started all this :)

  64. JoshJones on January 6th, 2012 11:31 am

    Sidenote, the cubs have acquired anthony rizzo.

    Now the crazy speculation about trading Pineda for a packaged centered around him can stop.

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