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.


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

  1. 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.

  2. 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.

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

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

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. 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!

  9. 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.

  10. 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.

  11. 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.

  12. 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”

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

    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 🙂

  14. 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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