Around Baseball Offseason Thread

Carp said:
Opt outs can be very beneficial to the team. For one, it keeps the players from getting complacent. We all know players tend to perform better in contract years. If a guy is playing for another large payday, he's likely to not get complacentm.

Secondly, if the player plays well enough to warrant the opt out, then he has done what you signed him to do. And depending on the circumstances of your team and the players age/health you could simply let someone pay for his decline years.
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That would make sense if baseball contracts weren't fully guaranteed. There is substance to your thinking line, but I don't see it applying to baseball players though. Most players are financially set after their first non rookie contract. To think someone is gonna try harder when they are gonna get paid the same no matter how they perform makes no sense me.
 
bravesfanMatt said:
they really are..

If the player stinks after 2 years and he doesn't have an opt out.. the team is stuck with that player for the remainder of the contract. But if he does have an opt out, then the team is still stuck with the player for the remainder. However, if the player is good enough to opt out then the team received max benefit from the contract while the player was there. Sure he opts out and you either loose his services or have to pay him more.. the only negative is that you don't get the draft pick if the player opts out.. I don't think anyway...

**I am wrong.. if a player opts out, the team can still offer a QO to him***
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This is, quite simply, wrong. An opt out clause is ALWAYS beneficial to the player, and is usually worth about $20M on these size contracts.

If a player decides to opt out that means he is signed to a team friendly deal (no player has ever opted out and signed for less than he was already guaranteed and agents are too good at their jobs to allow it to be any other way), at which point the team would rather keep the player or trade the player than have him opt out of his team friendly contract. If the player does not opt out it means he is not worth the money he is still guaranteed, which is also bad for the team.

Opt outs provide teams with a way to limit the downside risk in exchange for increasing the upside potential for the player. JUp would have signed for well over $150M if the opt out was not included.

This doesn't mean opt outs can't work out for a team. The example many folks cite: JUp opts out after 2 years, and then signs another 6 year deal for his decline years that Detroit is happy to not be paying him for. However, at the time he opted out he was only signed for 4 more years, not the new 6 years he theoretically signed for at age 30, and Detroit would have rather traded him and his team-friendly 4 years remaining than lose him to FA.
 
Enscheff said:
This is, quite simply, wrong. An opt out clause is ALWAYS beneficial to the player, and is usually worth about $20M on these size contracts.

If a player decides to opt out that means he is signed to a team friendly deal (no player has ever opted out and signed for less than he was already guaranteed and agents are too good at their jobs to allow it to be any other way), at which point the team would rather keep the player or trade the player than have him opt out of his team friendly contract. If the player does not opt out it means he is not worth the money he is still guaranteed, which is also bad for the team.

Opt outs provide teams with a way to limit the downside risk in exchange for increasing the upside potential for the player. JUp would have signed for well over $150M if the opt out was not included.

This doesn't mean opt outs can't work out for a team. The example many folks cite: JUp opts out after 2 years, and then signs another 6 year deal for his decline years that Detroit is happy to not be paying him for. However, at the time he opted out he was only signed for 4 more years, not the new 6 years he theoretically signed for at age 30, and Detroit would have rather traded him and his team-friendly 4 years remaining than lose him to FA.
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I wouldn't mind the opt-outs if they also included a team buyout option for players who Melvin once they sign a long term deal. Sure, if you kick ass you can opt out after two years, but if you suck ass we can opt you out after three years for 1/4 of your remaining salary.

There's no way the union would go for that though, and we all know that the MLBPA truly runs baseball.
 
DirkPiggler said:
I wouldn't mind the opt-outs if they also included a team buyout option for players who Melvin once they sign a long term deal. Sure, if you kick ass you can opt out after two years, but if you suck ass we can opt you out after three years for 1/4 of your remaining salary.

There's no way the union would go for that though, and we all know that the MLBPA truly runs baseball.
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There have been team opt out clauses for many years...they are called team options. Lots of contracts end with a team option year or 2.

The team is compensated for giving a player an opt out by lowering the total overall value of the contract. This serves to limit the downside risk for the team if a player tanks. JUp's contract would have been over $150M in total value if he wasn't given the opt out clause.
 
Enscheff said:
This is, quite simply, wrong. An opt out clause is ALWAYS beneficial to the player, and is usually worth about $20M on these size contracts.

If a player decides to opt out that means he is signed to a team friendly deal (no player has ever opted out and signed for less than he was already guaranteed and agents are too good at their jobs to allow it to be any other way), at which point the team would rather keep the player or trade the player than have him opt out of his team friendly contract. If the player does not opt out it means he is not worth the money he is still guaranteed, which is also bad for the team.

Opt outs provide teams with a way to limit the downside risk in exchange for increasing the upside potential for the player. JUp would have signed for well over $150M if the opt out was not included.

This doesn't mean opt outs can't work out for a team. The example many folks cite: JUp opts out after 2 years, and then signs another 6 year deal for his decline years that Detroit is happy to not be paying him for. However, at the time he opted out he was only signed for 4 more years, not the new 6 years he theoretically signed for at age 30, and Detroit would have rather traded him and his team-friendly 4 years remaining than lose him to FA.
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No one said this didn't benefit the player. Of course it is most beneficial to the player. But teams are seeing rewards in these opt outs too. Otherwise we wouldn't see such a dramatic up swing in them. a team that uses opt outs in a contract are basically saying we hope to sign you for two to three years at a lower per year value. Then hope you opt out so another team can reward you for the production you gave us. If you can't see benefit in this to some degree then please explain all the player options we are seeing recently. I also posted an article about this up a few spots.
 
Yes, teams are seeing the benefits the opt out clauses brought the Yankees with ARod and Sabathia and thats why they are including them. No wonder we are seeing more of them.
 
NinersSBChamps said:
That would make sense if baseball contracts weren't fully guaranteed. There is substance to your thinking line, but I don't see it applying to baseball players though. Most players are financially set after their first non rookie contract. To think someone is gonna try harder when they are gonna get paid the same no matter how they perform makes no sense me.
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Well they aren't going to be paid the same, which is the point. I mean on per year basis nay be they will, but a player with an opt clause could stand to make an extra 50 million or more over the life of the new contract, rather than staying on his current contract.

Take Greinke for instance. His new deal with the DBacks guarantees him 140 million more money than the contact be opted out of in LA.
 
bravesfanMatt said:
No one said this didn't benefit the player. Of course it is most beneficial to the player. But teams are seeing rewards in these opt outs too. Otherwise we wouldn't see such a dramatic up swing in them. a team that uses opt outs in a contract are basically saying we hope to sign you for two to three years at a lower per year value. Then hope you opt out so another team can reward you for the production you gave us. If you can't see benefit in this to some degree then please explain all the player options we are seeing recently. I also posted an article about this up a few spots.
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There is a dramatic upswing because players are demanding them and some teams are offering them. Once certain teams cave and offer them, everyone has to jump on board or be left behind.

Opt-outs are not beneficial to teams. You reduce the upside while still assuming all of the risk.
 
smootness said:
There is a dramatic upswing because players are demanding them and some teams are offering them. Once certain teams cave and offer them, everyone has to jump on board or be left behind.

Opt-outs are not beneficial to teams. You reduce the upside while still assuming all of the risk.
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This is mostly correct with a slight change in the last sentence: you reduce the potential maximum upside while assuming all the risk, but less risk than if the opt out were not included.

That's why teams are doing them. They give up potential upside in exchange for taking on less risk of downside. I imagine the rationale from teams perspective is they would rather lose a stud on a team friendly contract if they can lessen the impact of a crippling albatross contract.
 
Enscheff said:
This is mostly correct with a slight change in the last sentence: you reduce the potential maximum upside while assuming all the risk, but less risk than if the opt out were not included.

That's why teams are doing them. They give up potential upside in exchange for taking on less risk of downside. I imagine the rationale from teams perspective is they would rather lose a stud on a team friendly contract if they can lessen the impact of a crippling albatross contract.
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Yeah, and there are a lot of variables that I assume are taken into consideration--the risk of a particular player cratering based on age, injuries, etc, and the team's payroll constraints (i.e. their ability to replace a given player) being among them.
 
Enscheff said:
This is mostly correct with a slight change in the last sentence: you reduce the potential maximum upside while assuming all the risk, but less risk than if the opt out were not included.

That's why teams are doing them. They give up potential upside in exchange for taking on less risk of downside. I imagine the rationale from teams perspective is they would rather lose a stud on a team friendly contract if they can lessen the impact of a crippling albatross contract.
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This is assuming the contracts with an opt-out are lower in total value than they would be without the opt-out, and there is no clear evidence this is actually true.

The opt-out is not something teams are just throwing in as a means to lessen the total dollar value; they are being necessitated by the market. So there's nothing that suggests they are keeping total dollar values down. In fact, I'd imagine if you calculated all FA contracts for the last few years, you would see the dollar values continue to climb at the same rate even though opt-outs are now being included in many of them.
 
Most free agents are coming in around age 28-30. Team are smart to offer the opt out clause after 2 or 3 years. They basically pay for the prime years and the player then becomes someone else's problem when he starts to break down. Much better to be a year early than a year late
 
smootness said:
This is assuming the contracts with an opt-out are lower in total value than they would be without the opt-out, and there is no clear evidence this is actually true.

The opt-out is not something teams are just throwing in as a means to lessen the total dollar value; they are being necessitated by the market. So there's nothing that suggests they are keeping total dollar values down. In fact, I'd imagine if you calculated all FA contracts for the last few years, you would see the dollar values continue to climb at the same rate even though opt-outs are now being included in many of them.
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I believe Heyward excepting less money to sign with the Cubs because there was an Opt out, might say that offers with Opt outs have a total value less than ones that don't. And it is not rocket science that a majority of these opt out are being set when a player reaches 31 or 32 +... It is also not rocket surgery that a majority of players start a decline when they reach said years.. So teams throwing in opt outs are risking that a player accepts the opt out. They received value from that player for the years they had him signed.

I think a good case study will be Zack G. The dodgers lost him to Zona. While he was with the Dodgers, they had great Value with him..(he was worth every penny of his contract).. now it will be interesting if Zona will receive the same value. I think it is clear that zona is assuming far greater risk now that Zack is older. The Opt out worked just as it should have.. The Player got a bigger payday and the team that lost the player received full value for that player.
 
smootness said:
This is assuming the contracts with an opt-out are lower in total value than they would be without the opt-out, and there is no clear evidence this is actually true.

The opt-out is not something teams are just throwing in as a means to lessen the total dollar value; they are being necessitated by the market. So there's nothing that suggests they are keeping total dollar values down. In fact, I'd imagine if you calculated all FA contracts for the last few years, you would see the dollar values continue to climb at the same rate even though opt-outs are now being included in many of them.
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I think it's safe to assume MLB front offices outside of Arizona are smart enough to realize an opt out is beneficial to a player, and therefore should come with a smaller guarantee.

Teams take on less downside risk, and players get the chance to earn even more money while still having a safety net. That's how it works...that's the trade off.

The "clear evidence" is articles written by guys with connections inside the industry like Dave Cameron discussing opt outs and their value.
 
This is less than I thought Bastardo would get. Still several LHRP options out their that would be an upgrade for us.

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The big problem with opt-outs is that most teams aren't prepared to be as hard-nosed and clear-headed about them as they could be. Opt-outs CAN work for the team, if they're willing to be completely rational about a player choosing to leave. However, a lot of teams react to a player opting out (or potentially opting out) by panicking at the prospect of losing him and throwing more money at him to keep him around. The Yankees are a perfect example- if they had let Sabathia opt out after 2011, they would have walked away with three great prime years from Sabathia, a World Series ring and no further commitment to him. But they didn't want to lose him, so they gave him an additional year on his contract that took him through his age-35 season and, sure enough, got stuck with a bad, oft-injured, over-paid pitcher for about four years.

If you could get David Price for 3/90, you'd do it every day. But if Price kicks ass for three years in Boston and wins a World Series, are the Red Sox going to let him opt out and invite someone else to pay him through his age-37 season? Or will they panic and throw more money and years at him to ensure he stays?
 
Enscheff said:
I think it's safe to assume MLB front offices outside of Arizona are smart enough to realize an opt out is beneficial to a player, and therefore should come with a smaller guarantee.

Teams take on less downside risk, and players get the chance to earn even more money while still having a safety net. That's how it works...that's the trade off.

The "clear evidence" is articles written by guys with connections inside the industry like Dave Cameron discussing opt outs and their value.
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But this is not how things work in a market. The opt-out itself doesn't cost the team any more in actual money than a deal without the opt-out, so in a competitive market, if multiple teams offer opt-outs, logic would tell you that those teams will still end up offering the highest dollar value they can.

I get that an opt-out has value, but a team that is willing to offer a 6-year/$120 million deal without an opt-out would logically be willing to eventually offer a 6-year/$120 million deal with an opt-out if forced to do so. And in a competitive market, you would assume that team would eventually be forced to offer the same deal with the opt-out if other teams are also offering opt-outs.
 
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