Click here to Opt in to a Thread about Opt Outs

[NDame616]

So it seems like many threads *cough James Shields* discussing possible contracts with players turns into a discussion/argument about opt outs, who they help, etc.
 
While I think they usually help the player, there are certainly examples where they help both (eg player A opts out after 4 years, the team pays a lower AAV because it's backloaded, and the player goes on to sign another contract where he gets more money than the balance of the contract)
 
Personally I think that players/agents will start to use opt outs more for their benefit and it'll be very interesting to see the shift in free agency as guys are signing long term deals at 27/28, and then opting out at 30/31.
 
So, hopefully this thread will prevent derailing other discussions. 

 

[Frank Fenway]

This is the worst topic of disagreement since Hitler vs Stalin: Bikini Contest

 

[NDame616]

This is the worst topic of disagreement since Hitler vs Stalin: Bikini Contest

 
Maybe but several threads on the Sox board have turned into a discussion about opt ins, so I thought we'd try to move them all here.\

 

[Eddie Jurak]

Obviously, it is to the player's advantage to have an opt out versus having the exact same contract with no opt out.  That's not even worthy of debate.  (A player could, I suppose, screw it up for himself by opting out into a market that ultimately offers him less than what he opted out of, but that seems like it would be a very rare occurrence that doesn't really have anything to do with the value of the option.)
 
The reason player opt outs could potentially be valuable to the team is because a player might choose to accept a lesser offer if it includes an opt out.  An opt out is not just good for the player in some vague and unmeasurable way - it is actually worth some amount of money to a player; its financial value can be estimated.  So there may be scenarios where contract A + opt out is better value for the team than contract B (at higher money), which does not contain an opt out. It would depend on how the team and player estimates of the value of the opt out differ and on whether the contract is front or backloaded.   
 
Of course the estimated value of the opt out will differ from its actual value assessed after the fact.  

 

[Leather]

The opt out holds value to the player both as a future option and in any post-hoc analysis (by maximizing his earnings, either by staying on an over-priced contract or leaving to earn what the market will bear, if the contract is under-priced).  
 
The opt out only holds value to a team if, in the post-hoc analysis, the player opting out performed at a level below what the remaining years of the contract would have paid him.
 
The threat of an opt out is never beneficial to the team.  Even in a situation where the player takes less because the contract has an opt out, that is only done with the idea that, if at the time of the opt out the player is being underpaid, he will leave the team.  An opt out effectively guarantees that the team will not pay less than market value for the player, but offers no relief if the team is paying more than market rate.

 

[Eddie Jurak]

The threat of an opt out is never beneficial to the team.  Even in a situation where the player takes less because the contract has an opt out, that is only done with the idea that, if at the time of the opt out the player is being underpaid, he will leave the team.  An opt out effectively guarantees that the team will not pay less than market value for the player, but offers no relief if the team is paying more than market rate.

 
Before his opt out, Giancarlo Stanton will earn $107 milllion over 6 years.  That is not just below Stanton's market value it, is ridiculously so.  Even his arb years are underpriced. There's no guarantee here that the Marlins will not pay less than market value for Stanton - if he walks after 6 years, that's exactly what they will have done.  
 
It's true, of course, that if his market value falls below $30 million per year for the final 7 years of the deal, the Marlins are on the hook for the difference - which could be as much as the full value of the contract.  But that one-sided commitment from the Marlins is better thought of as the price they had to pay to get him signed ultra-cheap for the first 6 years.

 

[crystalline]

Obviously, it is to the player's advantage to have an opt out versus having the exact same contract with no opt out.  That's not even worthy of debate.  (A player could, I suppose, screw it up for himself by opting out into a market that ultimately offers him less than what he opted out of, but that seems like it would be a very rare occurrence that doesn't really have anything to do with the value of the option.)
 
The reason player opt outs could potentially be valuable to the team is because a player might choose to accept a lesser offer if it includes an opt out.  An opt out is not just good for the player in some vague and unmeasurable way - it is actually worth some amount of money to a player; its financial value can be estimated.  So there may be scenarios where contract A + opt out is better value for the team than contract B (at higher money), which does not contain an opt out. It would depend on how the team and player estimates of the value of the opt out differ and on whether the contract is front or backloaded.   
 
Of course the estimated value of the opt out will differ from its actual value assessed after the fact.  

That is the definition of "value to the player".

When a contract with an opt out has lower dollar value as the same contract without an opt out, that means the player places a positive valuation on the option.

When you say the option comes with a smaller contract, you are defining the dollar value of the option: positive for the player, negative for the team. Period.

Yes the team gets a smaller contract, which is why they offer the option. If the team and the player both place the same dollar price on the option, it doesn't matter whether the option or equivalent dollars are included in the contract. But that is just setting a price on the option, which we all agree is positive for the player and negative for the team.

 

[glennhoffmania]

 
 
The reason player opt outs could potentially be valuable to the team is because a player might choose to accept a lesser offer if it includes an opt out.  An opt out is not just good for the player in some vague and unmeasurable way - it is actually worth some amount of money to a player; its financial value can be estimated.  So there may be scenarios where contract A + opt out is better value for the team than contract B (at higher money), which does not contain an opt out. It would depend on how the team and player estimates of the value of the opt out differ and on whether the contract is front or backloaded.   
 from its actual value assessed after the fact.  

 
Yes, this is completely true.  Upon signing a contract that includes an option, there's an implied benefit to the team since they're giving something of value and they'd presumably expect to receive consideration in return.  It's the same thing as any other option scenario.  If an employer grants options to an employee, it's in consideration for the employee's service.  I worked on a deal where a landlord gave a tenant an option to purchase the building to incentivize the tenant to sign the lease.  So clearly at that moment in any of these situations the option isn't being given away for free.
 
But that isn't what's been endlessly debated in various threads over the last couple of years or so.  The debate has been about whether a team can benefit from the vesting and exercising of an opt out.  If we assume that a player isn't going to make a really stupid decision, the answer is no.  The team received value when the contract was signed, either in the form of reducing the annual salaries or simply incentivizing a player to sign with them.  Upon vesting is when the player realizes the value of that part of the deal, either by choosing to continue playing under a contract that over-values him or opting out where he'll get paid more in the open market.
 
This isn't complicated but some people are over-analyzing it and using hindsight to argue that it really benefits the team.  That's nonsense.  Being at the mercy of your counterparty is never advantageous.  If a player opts out and signs a more lucrative deal with another team, by definition his initial deal was below market.  That means that the initial team held a valuable asset at a reduced cost and another team would've given up something of value to acquire it.  So the initial team is losing out on that potential value if a player simply walks away and signs elsewhere.  And pointing to draft pick compensation doesn't change the answer.  This assumes that sophisticated front offices of MLB teams don't consider the value of a potential comp pick when making decisions, which is obviously not true.
 
So again, all of the value lies with the option holder once the contract is executed, period. The fact that Sabathia ended up sucking after the fact or that Stanton signed a below-market deal in 2014 has absolutely nothing to do with the valuation of the option of the time of vesting.  And the debates have only been about who gains or loses at the time of vesting and exercise.  Maybe we can get a valuation expert to chime in so we can end this argument once and for all, although I doubt even that would do the trick. 

 

[Leather]

I don't want to get too granular, but the lesser salary is a negotiated benefit of the opt out.  The Opt out itself isn't beneficial to the team; it was a player's benefit that the team negotiated around.
 
That option, once it materializes in the form of an actual contract, is beneficial only to Stanton.  It's the price that the Marlins pay to get him cheaply in the early part of his contract.  
 
Similarly, if I negotiate a higher salary to go work for a new employer, that higher salary is not a benefit of the contract to my new employer; it's the consideration (price) that they have to pay to earn the benefit of my decision to work there.  If I say "Well, I'll take stock options to take less in upfront salary", they may like that deal better, but it's still consideration that they have to pay.  All other things being equal, they would never give those stock options gratis.

EDIT: or, what the others have said.

 

[aron7awol]

Soriano is a great example to analyze because he is the best example of an opt-out that arguably benefited the team...but did it actually?  The draft pick compensation is hardly relevant because the Yankees would have received a pick the following year, leaving the time value of having that pick a year earlier as the only net value there.  To those arguing that Soriano had no trade value at that point, doesn't the fact that the Nationals gave up a first-rounder AND gave Soriano 2/$28 (with deferred money that certainly also has time value to them) suggest that they would have given the Yankees at least an equivalent value in a trade to the first-rounder they eventually gave up just for the opportunity to sign Soriano?  Even if it is arguable that the time value of the deferred money makes the 2/$28 preferable to 1/$14, it is difficult to reach a conclusion that Soriano's theoretical trade value if he were without an opt-out is very much less than a first-rounder, if at all.
 
In every other example we have of players opting out, they have gone on to receive significantly more on the open market, which means that those teams absolutely missed out on significant excess value remaining in those contracts, whether they would decide to trade those players or keep them.  So while including an opt-out in a deal can be a factor in signing a player, including an opt-out is costly in potential future value and thus in expected value.  The waters are further muddied by the question of whether certain types of values in this comparison are overvalued or undervalued.  For example, is it cheaper to just give the player more money or years or lose the EV by adding the opt-out?  That's a difficult question to answer, and may make including an opt-out preferable to adding money, but everything else being equal, including an opt-out certainly carries a very significant cost in expected value.

 

[kieckeredinthehead]

 
Yes, this is completely true.  Upon signing a contract that includes an option, there's an implied benefit to the team since they're giving something of value and they'd presumably expect to receive consideration in return.  It's the same thing as any other option scenario.  If an employer grants options to an employee, it's in consideration for the employee's service.  I worked on a deal where a landlord gave a tenant an option to purchase the building to incentivize the tenant to sign the lease.  So clearly at that moment in any of these situations the option isn't being given away for free.
 
But that isn't what's been endlessly debated in various threads over the last couple of years or so.  The debate has been about whether a team can benefit from the vesting and exercising of an opt out.  If we assume that a player isn't going to make a really stupid decision, the answer is no.  The team received value when the contract was signed, either in the form of reducing the annual salaries or simply incentivizing a player to sign with them.  Upon vesting is when the player realizes the value of that part of the deal, either by choosing to continue playing under a contract that over-values him or opting out where he'll get paid more in the open market.
 
This isn't complicated but some people are over-analyzing it and using hindsight to argue that it really benefits the team.  That's nonsense.  Being at the mercy of your counterparty is never advantageous.  If a player opts out and signs a more lucrative deal with another team, by definition his initial deal was below market.  That means that the initial team held a valuable asset at a reduced cost and another team would've given up something of value to acquire it.  So the initial team is losing out on that potential value if a player simply walks away and signs elsewhere.  And pointing to draft pick compensation doesn't change the answer.  This assumes that sophisticated front offices of MLB teams don't consider the value of a potential comp pick when making decisions, which is obviously not true.
 
So again, all of the value lies with the option holder once the contract is executed, period. The fact that Sabathia ended up sucking after the fact or that Stanton signed a below-market deal in 2014 has absolutely nothing to do with the valuation of the option of the time of vesting.  And the debates have only been about who gains or loses at the time of vesting and exercise.  Maybe we can get a valuation expert to chime in so we can end this argument once and for all, although I doubt even that would do the trick. 

Isn't it weird how real estate markets function differently from the market for aging free agent baseball players, some of whom have no trade clauses in their contract or vested as 10-5 rights?

 

[Hagios]

There are some contrived scenarios when opt-outs could benefit the team. Take a hypothetical young player - "Bob" - on a small market team. Bob is a good player who will make $60 million going through arbitration for the next few years. But Bob doesn't want the risk of going through arbitration year by year. The team would like to have Bob for longer and/or less money
 
Scenario A: go year by year with Bob and trade him a year or two before free agency
Scenario B: Extend Bob a year or two into free agency
Scenario C: Extend Bob well into free agency but give Bob an opt-out. The contract is such that Bob is expected to be paid below his market value in his free agent years, and both parties expect Bob to opt out.
 
Scenarios A through C involve the team taking on progressively more of the risk of Bob suffering a career-ending injury, but with the tradeoff of paying Bob less money while he is with the team.

 

[Leather]

But, again, in Scenario C, the Opt Out does not benefit the team.  
 
You're conflating the mutually beneficial contract that includes an opt out with the opt out itself.   

 

[Hagios]

But, again, in Scenario C, the Opt Out does not benefit the team.  
 
You're conflating the mutually beneficial contract that includes an opt out with the opt out itself.   

 
Yeah, you're right. So I can't think of any situations then.

 

[BroodsSexton]

The dollars a team pays to a player actually have value to the team, because if you don't pay them the dollars, they won't sign the contract.

 

[Leather]

The value to the team of the contract is, roughly, (production)-(salary+other consideration).

An opt out is "other consideration". Ergo, it has negative value to the team, regardless of whether the contract as a whole has a net positive value.

 

[HowBoutDemSox]

If a player opts out and signs a more lucrative deal with another team, by definition his initial deal was below market.  That means that the initial team held a valuable asset at a reduced cost and another team would've given up something of value to acquire it.  So the initial team is losing out on that potential value if a player simply walks away and signs elsewhere.  And pointing to draft pick compensation doesn't change the answer.  This assumes that sophisticated front offices of MLB teams don't consider the value of a potential comp pick when making decisions, which is obviously not true.

Could you explain the bolded a little more? Hypothetically, couldn't there be a scenario where another team values the player by some non-zero amount more than the current team does, but that non-zero amount isn't enough to justify trading away players that have greater value to the current team than comp pick has to the current team? Wouldn't the team then benefit from the opt out by realizing greater value through the comp pick than the trade?

 

[glennhoffmania]

Could you explain the bolded a little more? Hypothetically, couldn't there be a scenario where another team values the player by some non-zero amount more than the current team does, but that non-zero amount isn't enough to justify trading away players that have greater value to the current team than comp pick has to the current team? Wouldn't the team then benefit from the opt out by realizing greater value through the comp pick than the trade?

 
Take a situation like Soriano's as the example.  If he opts out, gets a QO and turns it down, NY gets a comp pick.  If he doesn't opt out and is traded to Washington, they could make a QO, he turns it down, and they get a comp pick the next year.  So ignoring the potential marginal benefit of getting that comp pick a year early just to simplify it, Washington would have to give up something that's more valuable to NY than the sum of the comp pick and Soriano's value for one year.  And they should be willing to give up the value of the comp pick to them plus whatever excess value they ascribe to Soriano's one year contract.  If no team is willing to give NY more value than the comp pick, then logic would suggest that Soriano shouldn't opt out because no one would sign him to a better contract while forfeiting a pick to do so.  

 

[Eddie Jurak]

One thing that opt-outs do that hasn't been mentioned here is shift risk to different parties.  Consider two "standard" deals with no opt outs:
 
 
A: 6 years, $120 million
B: 3 years, $60 million
 
These are the kind of contracts that we are used to.  Under contact A, the team bears the risk (of injuries and/or underperformance) for the duration of the contract. Under contract B, with much the shorter term, the team and player share the risk.  The team is bears any losses that occur during years 1-3 and then the risk shifts to the player (who bears the long-term cost of any injuries that occur during years 1-3) and his next team (who will bear the cost of any injuries during years 4-6).
 
The opt out shifts those risks around a bit.  Consider this contract:
 
C:  6 years, $110 million, opt out after 3
 
The signing team bears the full cost of any early injuries - if this is a pitcher who blows out a shoulder in year 2, he doesn't opt out and the signing team pays him his full 6 years, just as would be the case for a typical 6 year deal (contract A).
 
On the other hand, the signing team is off the hook for any injury/underperformance risk that occurs during years 4-6.  At this point, the player will have opted out, and signed elsewhere, with that team bearing the risk - unless the signing team was foolish enough to re-sign him after the opt out. 
 
Of course, this is reversed when considering upside.  If a player has an opt out, the upside of overperformance in the early part of the contract accrues to him (and his next team) rather than to the team, which will just see the player opt out. 
 
For the signing team, an opt out is a way to give up upside in exchange for reducing risk.  If a team sees a player as equally likely to overperform or underperform, an opt out would seem to be a net negative for the team.  However, if a team sees a long-term underperformance as a major concern (as may be the case for, say, an aging pitcher), the risk/reward of an opt out may be more favorable.  

 

[benhogan]

 
Take a situation like Soriano's as the example.  If he opts out, gets a QO and turns it down, NY gets a comp pick.  If he doesn't opt out and is traded to Washington, they could make a QO, he turns it down, and they get a comp pick the next year.  So ignoring the potential marginal benefit of getting that comp pick a year early just to simplify it, Washington would have to give up something that's more valuable to NY than the sum of the comp pick and Soriano's value for one year.  And they should be willing to give up the value of the comp pick to them plus whatever excess value they ascribe to Soriano's one year contract.  If no team is willing to give NY more value than the comp pick, then logic would suggest that Soriano shouldn't opt out because no one would sign him to a better contract while forfeiting a pick to do so.  

Jon Abbey had trouble with this concept?
 
 

 

 

One thing that opt-outs do that hasn't been mentioned here is shift risk to different parties.  Consider two "standard" deals with no opt outs:
 
 
A: 6 years, $120 million
B: 3 years, $60 million
 
These are the kind of contracts that we are used to.  Under contact A, the team bears the risk (of injuries and/or underperformance) for the duration of the contract. Under contract B, with much the shorter term, the team and player share the risk.  The team is bears any losses that occur during years 1-3 and then the risk shifts to the player (who bears the long-term cost of any injuries that occur during years 1-3) and his next team (who will bear the cost of any injuries during years 4-6).
 
The opt out shifts those risks around a bit.  Consider this contract:
 
C:  6 years, $110 million, opt out after 3
 
The signing team bears the full cost of any early injuries - if this is a pitcher who blows out a shoulder in year 2, he doesn't opt out and the signing team pays him his full 6 years, just as would be the case for a typical 6 year deal (contract A).
 
On the other hand, the signing team is off the hook for any injury/underperformance risk that occurs during years 4-6.  At this point, the player will have opted out, and signed elsewhere, with that team bearing the risk - unless the signing team was foolish enough to re-sign him after the opt out. 
 
Of course, this is reversed when considering upside.  If a player has an opt out, the upside of overperformance in the early part of the contract accrues to him (and his next team) rather than to the team, which will just see the player opt out. 
 
For the signing team, an opt out is a way to give up upside in exchange for reducing risk.  If a team sees a player as equally likely to overperform or underperform, an opt out would seem to be a net negative for the team.  However, if a team sees a long-term underperformance as a major concern (as may be the case for, say, an aging pitcher), the risk/reward of an opt out may be more favorable.  

Teams really need a pristine crystal ball to make an opt-out option work for them on big contracts.  I think those teams would be better off using that crystal ball on low cost signings, trades or prospects.
 
 
I guess the inverse to a 'player opt-out' contract is a 'team opt-out' contract.  Take Clay Buchholz contract right now, he is basically signed to a 3yr contract for $38.5MM, where the Sox can 'opt-out' after each year for a small buy-out.  Question: how does this benefit Clay after each year?

 

[phrenile]

Click this button if you want to opt in:

Spoiler

I'm seeing three year opt out which I love!

I assume that means he can opt out.

The opt out is potentially huge .. Love it

Why? It just means that the only way we'll keep him beyond 2018 is if it's a clear four-year overpay.

No player is going to agree to a team opt-out on a deal like that, so of course it's his choice.

Yeah but we all know this is going to restart the opt out debate even though you're 110% correct.

I'm sure they will if it looks like he's going to be a good value the last four years of the contract, but those are the exact circumstances under which he'll opt out.

Not saying the opt-out ruins the deal, but it's clearly in his favor, not ours.

The only way they will keep him is if they want to lose him. The only way they will lose him is if they want to keep him. That's how optouts work.

Well, I guess we're going to have to find something new to argue about.

The harm is that it takes away all of the upside potential for the team. If he's worth more he'll opt out and they'll lose a valuable below-market asset. Price has all of the upside in this deal.

Sure it's good for Price, but for the Sox it's no worse than no opt-out. Either we are stuck with the 7/217 we agreed to in the first place, or we get 4/7ths of it back because someone is willing to even more grossly overpay a 34-year-old pitcher. The only potential downside for the Sox IMHO is if he's a 34-y.o. Cliff Lee and we wish we could just keep him at the original price. But even there, it would mean we got three excellent years from him.

He only opts out if he's pitched well enough to increase his value. I'm good with that.

I don't care if they lose a below-market asset in 2019 if he is healthy and pitches like a true ace from 2016 through 2018. I'm not debating the merits of the opt-out. I just don't care right now if he ends up using it or not.

I hope he's terrific for three years, opts out and they replace him with someone younger.
Win/Win

Edit- of course it's unlikely he could be good enough to get a better offer at age 33/4 than 4 years at $31M per, so likely we'll be paying for his decline.

We have no idea what the starting pitching market will look like in four years and what $31m will get you. The only question at that time will be whether Price is worth more than 4/124. If the answer is yes, the Sox lose out. If the answer is no, they're still stuck with him and his salary. It's not a positive for the team in any way.

Though I doubt he uses the opt out given what the AAV is for this deal.. Unless he puts up amazing stats in all 3 years and feels he can get more than 31MM

Big fan of the opt out; BIG fan!

Giving an opt-out to the player is a lose-lose for the club. Either he's not worth it and they're stuck with him or he's worth it and they lose him (or have to pay him more money). The situation where the player thinks he's worth more but the club thinks he's worth less so he opts out and everyone is happy is a fantasy.

A player can have a career-ending injury and stick the team with the contract with or without an optout. The downside is in the other direction--that a team might wish they could continue to employ the guy at his contract price, because he's doing as well as possible, but they have to go looking for other solutions. And that's not really such a horrible downside--but such as it is, it's the only impact of the optout, so in that sense, the optout is bad for the team.

I don't think a single team has regretted the opt-out itself. They may have regretted re-signing the player after he opted out, but the opt-out itself is only half of the equation.

I think with the number of young pitchers the Red Sox have, there's a good chance that in three years, they can feel comfortable letting Price walk away if he opts out. It might not be ideal or perfect value or whatever, but they shouldn't be in a position where they're over a barrel needing to re-sign the guy because the rotation will fall apart or be horrible without him.

Another scenario could be that another team loses a couple of LCS or World Series in the first 3 years of Price's contract. Perhaps he's willing to opt out, take somewhere close to what he's getting in Boston (maybe even a little less) for the chance to be the difference maker for that team and have a shot at multiple championships.

So basically your argument is that the upside is hopefully he's awesome and the Red Sox change their mind about wanting an awesome David Price who has proven he can pitch in Boston signed for 4/$124M when pitchers of that age and caliber are signing for 4/$160M (edit: or worse, 6/$240M) because of inflation?

The player opt out is pure downside for the team.

I will say that, although I obviously agree with @amarshal2 that the opt out is pure downside, it's at least well-timed downside.


Chris Hatfield ‏@SPChrisHatfield 6m6 minutes ago
Kershaw, Price opt-outs are both after 2018. Harvey, Fernandez would be FAs too if not extended. Hitters: Harper, McCutchen, Donaldson. Wow.

I'd rather him pitch great, opt out, then the Sox move on and sign the next 29 year old stud and give him crazier money and the same opt out. I'll take the first three years of a bunch of crazy contracts in a row rather than be stuck with one Manny length deal.

Honestly, I think that makes it LESS likely that he opts out.. Too crowded in the FA pool

Translation: the Red Sox will be trading more prospects for another reliever.

I look at the opt-out this way--yes it's not to the team's benefit but is that worth missing out on the player entirely? Because somebody else would give it to him in a heartbeat. Same with Greinke.

Sorry if it's been posted, but if Price opts out and becomes a free agent again, the Sox offer him a qualifying offer and then get a compensation pick, assuming he signs elsewhere?

Also, assuming current CBA rules, of course.
Grienke this year would be the better example I guess.

The worst case scenario regarding the opt out is that Price is still lights out in year 4 and the Sox are left without an ace if they can't re-sign him at that time or find another ace in the free agent market or through a trade. It's not that he doesn't opt out if he sucks because having him for the full 7 years is the default position; there are no opt outs for teams.

But it's quite possible that either the Sox couldn't get Price without the opt out in the deal or DD became convinced of that...it was just part of the cost of doing business. Or that DD is glad it's there for some of the reasons mentioned above.

Either way, it's hard for me to me upset about something that might help and in the most negative light is just something that they had to swallow to get the deal done.

He could also underperform and come to detest Boston and the media. I can think of a few guys around MLB (Carl Crawford) who would have gotten the hell off their team if given the choice, even if they were leaving money on the table. Stanton may not be too keen in Miami if they are mismanaged into the ground. Obviously most players wouldn't give up those millions, but a precedent could be set.

I love the flexibility regardless and think he will earn his contract.

I do believe he would have left money on the table if he opted out, so no.

I hate the opt out if only for starting this discussion again.

Oh thank goodness for this.

The opt-out makes this probably the best of all worlds. 3/$93 is a really steep price to pay, but...that's less guaranteed money than Panda got.

Keep in mind that opt outs usually involve the potential for more total dollars rather than AAV. So while he'd be walking away from 4/127 and its unlikely anyone will bite at 4/131, he'll opt out if he thinks he can get 5/138. So at that point it would be about total dollars and additional years for the player.

If he pitches like David Price for three years, he's gone and I like the deal even more.

The Yankees. Without the opt-out the CC Sabathia contract would be off the books right now. I

If they hadn't re-signed him after he opted out, he'd have been off the books four years ago. It's not the opt-out that was regrettable, it was re-signing him to a longer deal.

If Price opts out in 2018 they will be shedding about 60 million in payroll with a FA class that includes Harper, Machado, Harvey, and Fernandez

Edit- Donaldson, Cutch, and Kershaw has an opt out too.

Regardless of what you think of the opt out, the value they got was David Price agreeing to come here.

Its very debatable because everyone sets value differently. Maybe the value calculation was that if Boston didnt give him the opt-out he wouldnt sign with them. So the option then is opt-out or someone else at which point I think Boston got good value

Re: opt outs... It's true that the player gets the upside and no downside and the team loses control of a potentially valuable asset while still being on the hook for the downside. But... We mostly fear these contracts because of their duration. Age catches up with everyone eventually. So while Price could be pitching fabulously and an opt out could represent a lost asset, he could also "save" us from his declining years on the back end of the initial deal. In that sense, the opt out could at least work out well for the Sox.

Moreover, people talk about the decision to opt out as though it's black-and-white. It isn't necessarily. Say Price puts up 2.75/225 IP, 3.25/220 IP, and 3.75/205 IP. All good though slightly declining numbers. (Assume peripherals all follow in this slight decline.) Does he opt out? Do we sorta hope he opts out? Maybe. Gray area.

Looking ahead, maybe Edro is coming off his first CYA in 2019 and Espinoza is ready to go all Jose Fernandez on the league. Price opts out but hey, that's ok, cuz what we really want to do is use that money for some in house extensions, or to sign Harper, etc.

If the opt out is what it took to get him to sign, it's worth it. But yeah, the money overall? Mind-numbing.

This is totally logical. I'm not actually arguing that it's a bad contract (although I do think that, I haven't argued it). It may have made sense to them to give him the opt out vs. whatever their alternatives were (e.g., someone else).

What I am saying is that it's illogical to celebrate that they gave him a player option. It's not a good thing in a vacuum.

Moreover, the value in the opt out has already been mentioned in that there will be a number of very high profile players with similar opt out clauses having the ability to opt out at the same time.

David Price, a top 5 pitcher in baseball, signed with the Red Sox with an opt out clause. The Red Sox are now contenders the next 3 years. That is much more valuable than signing three #3 starters.

The opt out benefits both sides. The sox should be pleased if he does so. Older and longer without injury increases the chances of him hitting trouble imo not less.

Love it. I understand that the team carries all the risk when giving a player an opt out but if this front office can learn the lessons that previous opt outs have provided (I.e. - if they opt out, don't sign them again) then this contract might be truly awesome.

You've got that right. The opt out gets you three years of David Price in his prime .. And you trade that for the liability of a seven year deal.

I don't think anyone would ever consider trading a pitcher of this caliber on a below market deal to reduce risk. That is what the opt out clause is for.

So basically your argument is the opt-out clause is to save the team from themselves? Not sure if serious....

If you are...how do we save them from using the exact same line of thinking about how much they need that player on their roster as the justification for giving the player more money in free agency?

Is the argument that it's better PR for teams to not re-sign a player than it is to trade one? Therefore they include it as a super secret way of maybe parting with their star before he's too old but not having as much pressure from the fanbase? I guess that's interesting, but it's not actually a point anyone here has articulated.

Unless Price is injured, the team has no reason to believe he won't opt out. Price has no injury history, no declining tendencies and no reason to think he won't be worth the $93M in his first 3 years. I see no reason to think he won't opt out for one last big contract. If you want to see it as the team saving itself from itself, go ahead. I see it as natural player tendency to secure one last big deal.

I also see no logic in thinking 2/217 with no opt-out is a better team deal than the current contract.

Quit being reasonable. Think of what DD had to give up during negotiations to get that clause included.

I'm not drunk. But you might be. Either that or you can't/don't read.

It's been made abundantly clear (by me and maufman) that we're talking the value of player option and not the value of getting David Price.

But thanks for your contribution.

It seems like some of this discussion is boiling down to arguing whether the opt-out is good for the team or bad. I don't think I was arguing for either of those, but rather it's not likely to be terrible. Is it that hard to reinvest $32m in another pitcher? Particularly in that year when Kershaw, Harvey, Fernandez might all be on the market?

Here is a thought exercise about the opt-out. What would you pay in AAV to have Price for only 3 years (i.e. automatic opt-out)? What do you think Price would accept?

This is largely what I think the team feels today. Again, I see no reason the team doesn't think Price will think he is worth the 4/$127 after this first three years and opt-out. At that time, the team needs may very well be much different than where the team currently stands and use of that cash, either on another big name player who opted out or whatever, is a better use of the cash.

Seems to me that evolution of rosters and quickly changing market needs are driving the uptick in use of opt-outs. I still feel it's player driven in that players will naturally feel their worth on the open market to other teams. We have been given no reason to feel otherwise with players who have opted out.

There's also the scenario where the pitcher exercises the opt out and the Red Sox give him a big raise, as the MFY did with Sabathia. This makes the most sense if the Sox are planning to let him walk in 3 years.

The opt out, once the contract is signed, only has value to the player.

I think the supposed upside to the team is when the player wants to walk away, the team does not want him to, but he does, and then starts sucking. The team side-steps the decline while having gotten his best three years, and has money to spend on someone else, who is more likely to perform well than a 34 year-old pitcher.

I think the opt-out is fine. Because if he does opt out, it means he's pitched well, and everyone will be happy(ish), and hopefully the team had developed a plan to replace him. It's only truly awful if he's sucked, but if he sucks and there were no opt-out, they'd be screwed anyway.

Yes, I am in this camp as well. Price doesn't opt out in 3 years because he necessarily thinks he can beat the $31 million AAV, he opts out in 3 years because he thinks he can get another 6-7 year deal. If he can get 6 years $165m, that would be better than the 4/$124 more than likely being that year 5 and 6 would be his age 39/40 years. If he declines in years 5-7 of the initial deal, it would work out for the Red Sox not to have been tied up with all that money. There is no value TODAY for the Red Sox with the opt-out, but that doesn't mean it can't work out in their favor over the course of the initial 7 years of this contract. I think that is all people are trying to say.

Either way, LOVE the signing. Price, Kimbrel . . . . . . Castillo/Bradley/Betts. . . . . love it when a plan comes together.

If you believe at all in the value of a future contract motivating a player to push himself, then the opt-out has some value: it focuses Price on a 3-year horizon, rather than him feeling "Hey, this is it, I've gotten the biggest payday I can and that's that." Not sure I believe that, but whatever.

It isn't lose-lose if you look at it from a risk perspective. You can't predict catastrophic risk, but the opt-out helps reduce that scenario from occurring. As it's difficult to evaluate a deal at signing, the effect of an opt-out exists in multiple scenarios, not just the two mentioned above.

1)If Price performs below expectations, the opt-out has no effect on the deal, and therefore including it didn't make things worse.
2)If Price performs at or above expectations through the seven years, the opt out is bad for the team. If I were betting, I wouldn't bet on this scenario.
3-1000?) If Price performs at or above expectations through the first few years, but declines through the remaining four, then the opt-out may be good/neutral/bad depending on the severity of the decline.
1001-2001) If Price somehow suffers a catastrophic injury in the first few years, but recovers to perform at or above expectations over the remaining four. Price doesn't take the opt-out (see #1). Again, whether the opt-out is present has no real effect on the outcome

Assuming the current CBA rules are basically the same in three years, the fact that Price is a commodity doesn't mean he'd be available for most markets. I'm not sure many teams would be willing to spend 30 million of payroll on a single pitcher; I'm sure the teams that are willing would be concerned about paying 124 million/year for a 33-37 year old pitcher.

EDIT: I wouldn't say an opt-out is win-win, more win-neutral.

Doesn't this logic make it a "save us from our future selves!" clause?

The opt-out is not *as awful* as it might seem because it likely reduces the amount of $ you have to give him up front, because it's valuable to the player. It has some paradoxical benefit of providing some other mechanism for getting out of the possible bad years of a contract with this possibility that you get to sign a player to an at- or below-market deal for 3 years only to have him become overvalued in the last few years. But if he really were overvalued, you could trade him and get actual value rather than him walking away.

It's also possible that the opt-out was useful in selling the deal to ownership, with the theory that if he performs as expected (or even slightly worse) you're likely to be on the hook for 3 years and not 7, even if you are leaving some value on the table in year 4.

But the opt out isn't good. You'd always want this deal to have no opt out at the same cost.

Isn't the possibility of his walking away while getting "nothing" in return mitigated to a degree by the opportunity to give him a QO and recoup a draft pick if he leaves? Granted, the CBA and thus the QO system might be vastly different in three years, but if it isn't, there isn't a scenario in which they get absolutely nothing if he leaves.

The persistent disconnect over opt-outs seems to be around the distinction between how much additional potential value it adds at the time of signing for the player (which is substantial), vs. the probability that it results in an optimal outcome for the team (which is certainly non-zero). Everyone seems to agree on the possible different outcomes, but we aren't laying them out:

1.) player does well, opts out, signs with other team does well [winner: player] (JD Drew)
2.) player does well, opts out, signs with other team, does poorly [winner: team] (AJ Burnett)
3.) player does well, opts out, signs with original team, does well [winner: player]
4.) player does well, opts out, signs with original team, does poorly [winner: player] (CC Sabathia)
5.) player does poorly-as expected, doesn't opt out, stays with original team, does well [winner: draw/team]
6.) player does poorly-as expected, doesn't opt out, stays with original team, does poorly-as expected [winner: draw/player]

Now, I am going to assume that we don't need to list every combination, unless someone can justify inclusions of the situations where a player does poorly and opts out (never happened, shouldn't happen if he has an agent), or where a player does well and doesn't opt out. We don't have a huge number of examples to draw on here (but I used some examples above, because only a handful of players had received this contract clause as of 2014, and while in the past year they have become a little more common, we haven't gotten to see the results of those yet.

So basically, out of the six most likely scenarios, the team wins 1.5 of them, the player wins 3.5, and 1 is a draw. Now, we can argue the probabilities of those outcomes, and if we knew that we could create an expected value matrix, but that seems to be the situation we are facing as of today. The opt out provides a likely additional benefit to the player at the time of signing, but the game theory side of things creates possibilities (even if slim) for the team to end up benefiting more in the long run, or at least transferring the downside risk to another team.

Why is 1 only in the player's favor? There's a pretty good chance the team takes the money saved from the opt-out and invests in another player, who could be better or worse. Also, does the team get a draft pick in this situation? What if that draft pick turns into an impact player? I think we're starting to repeat ourselves; IMHO the answer to all this is, there are a lot of possibilities and we won't be able to judge the wisdom of the opt-out for quite a while.

The point is that it takes a sure thing with value out of the team's hands (an undervalued player) in return for the possibility of something else that might cost even more or be non existent.

It's why teams seldom trade good players on good contracts for prospects unless they absolutely have to.

The opt out, right now (as opposed to six hours ago) is a negative for the Red Sox. It will certainly work to Price's financial advantage, and almost certainly work to the Red Sox' detriment.

How about player opts out / misreads the market and signs for a less lucrative contract? Can you say Jody Reed?

This exactly. Opt-outs are never good for the team...

We're discussing who benefits from the opt out. So stating where the player benefits when the team does not is, well, kind of relevant.

If Price pitches well for three years and opts out, that's great. But in that scenario, the opt out works to the Red Sox disadvantage.

This isn't a subjective judgment of the contract, just a statement of fact.

Well, the only sure thing taken from the team will be his past value. We're talking his age 34 and up seasons, which even right beforehand we won't be able to predict with great assurance.

Excellent points.

The opt out acts as a type of potential bonus the player can earn, the threshold for that bonus being set by the "market" in three years time, not any specific stat or award category. And the kicker is it might not even be the team that pays out that defacto bonus.

But right now, the Red Sox are on the hook for his 34+ years. The only way he doesn't opt out is if he is performing at or under his contract value in 3 years.

The Red Sox have already made a bet on those and 34+ seasons, and your argument is "it would be great if Price does really well for three years, opts out, and then sucks." But that seems like a tight needle to thread.

Look, I hope it works out. I'm glad they signed him, opt out or no. But the opt out is a bit of a bummer.

I'm sorry for joining those making you crazy, but it is not a lose lose situation. Certainly a player focused concession, but of the recent opt-outs taken, the players have NOT outperformed either the opted out, or the new larger contract. Just because someone else might give a 33 year old pitcher more than 4/127 doesn't mean that losing out on paying 4/127 for a 33 year old pitcher is a bad thing.

So it can be to Price's advantage (the primary benefit) and ALSO be a positive to the Red Sox. The negative isn't when he is has performed well enough at 33 to think he can get more years or dollars and take it. The negative for the Red Sox is only if he takes another team's contract after a great three years and then ALSO performs above 4/127 over the first years of the contract.

*The obvious comp is Sabathia who opted out leaving 4/92 on the table to get 5/122 instead. Sabathia had a good season followed by three bad, for an average of 1.1 WAR over those four years. The Yankees getting out of the 4/92 was nothing but a positive for them in hindsight. Their mistake was signing him to a 5/122 after they had gotten.

*With A-Rod, he benefitted clearly like Sabathia, and he opted out of 3/72 for seasons in which he produced 15 WAR, so the Yankees would have preferred to keep him, but he wasn't any crazy bargain at 5M/WAR at the 2008-2010 rates. The Yankees mistake was again, not losing the opt out years, but giving him a 10 year deal once he was a free agent.

*AJ Burnett opted out of 2/24 in 2008, much to his advantage, but ALSO to the team that lost him's advantage as he produced zero net WAR in those two seasons he would have earned 24M.

*JD Drew opted out of 3/33 for 2007-2009. He then had 9 WAR over those seasons so falsely assuming equivalency, the Dodgers lost out on the right to pay 3.6M/WAR over those years.

So in those four examples, all four clearly benefitted the player, but the two pitchers ALSO benefitted the team losing the end of the contract, and the two hitters within the range of being a wash.

No matter how great a 3/90 player Price is from 2016-2018, chances are that he won't be a 4/127 player from 2019 to 2022 and certainly unlikely to exceed that, EVEN IF Price and another team think he is.

So while Price definitely prefers the contract with an opt out, I don't know that I actually like it less with the opt out than without. If he is amazing for three years as I expect, we might all be pulling out our hair momentarily in 2019 when he is starting his brand new 5/170 with the Angels, but when we look back on that opt out after 2022 we are likely to be happy he chose to opt out. I would rather have a 6/185 deal if that were possible (It wasn't), but I think there are very reasonable options why him opting out will prove to benefit both him AND the Red Sox at the expense of a team willing to over pay for the decline of an amazing 33 year old.

Because it's unheard of that age 34-37 pitchers can lose it? I don't think it's quite the tight needle many here believe it is.

Think about it this way: what would the general opinions on opt-outs be if the Yankees hadn't outbid themselves for CC and A-Rod? They let both of those guys walk, and I bet the views are a wee bit different around these parts.

While I'm generally opposed to opt outs because they shift almost all the downside from the later part of the contract to the team while shifting almost all of the upside to the player, I can't find it in myself to hate this one in this very specific circumstance.

The downside risk is still there. Price could get injured and suck for the whole seven years. If he pitches brilliantly for the whole seven years, four of them will probably be elsewhere. It's essentially a 3/90 deal with a 4/127 option that kicks in if he sucks.

But he's probably not going to suck for those first three years. The risk is there, sure, but there's a very good chance--it's probably the most likely outcome in fact--that Price pitches really well here, opts out of the contract, signs somewhere else, and we as fans, are pretty much okay with that.

It's a huge 127 million dollar risk, but it aint my money and if things go as they could, Eduardo Rodriguez could be the ace in 2019, with Anderson Espinoza and/or Michael Kopech knocking on the door. Or, you know, knocking it down.

Hey, I love him having the opt-out. If he exercises it, it means he's outperformed his first three years and we won't have to worry so much about him declining for the last four years -and- we get an extra first round pick. With the scouting department still intact... great!

The value of the player option to the organisation is that it meant David Price signed on the dotted line where he may well not have otherwise.


But before it is signed there is definite value to the organisation if it tips the player over too signing with them over somewhere else.



Is it? There have not been that many, which opt outs harmed the clubs? The contracts then signed after the optout is a different beast. It can be argued that the team may be somewhat forced into resigning the player as its hard to plan if you don't know if they will opt out, but in most cases (all? ) it was pretty obvious.
http://www.mlbtraderumors.com/2014/02/opt-out-clauses-mlb.html

Re the 3 year opt-out.
Don't know if this was mentioned but

Kershaw can opt out of his contract at the same time, (after 2018) if he does he will leave a 2/70 contract. So assuming both pitchers have performed well and remain healthy, kershaw's decision and ability to reset the high-end of the market may have a big influence on what Price does. If Kershaw thinks he can get a 5/200 in 2018 then price's 4/127 looks inadequate, and he triggers his option to walk.

For those bitching about the opt-out.

He's not 25. He's not opting-out when he's hitting his prime. He will be 33 if he chooses to opt out. Great. I'll drive him to the goddamn airport. Give me your 3 best years left and let some other owner pay for your new 6 year deal when you'll be trending downward quickly at some point..

If SoSH had a like button, I'd be using it here. I'm not a fan of the opt out, but it's a necessary evil in today's market, especially if you want to get someone like this signed early. Best case scenario, considering it's there and not going anywhere, is that he dominates for 3 seasons, opts out and someone else pays him 30 million a year for another 5 or 6 seasons. I will never argue that an opt out benefits a team, but if it's there, might as well hope for the best in the limited years of control you have and deal with him walking.

Yes.



All of them.



I don't get why this is so hard for people to understand. When a player exercises his opt-out, it's because he's performing well which means the result of the opt-out is that a player otherwhise under contract is now a free agent. You can't simply say that the contracts signed after the player opts out are a different beast entirely because IF THE PLAYER HADN'T HAD THE OPT OUT CLAUSE HE WOULD HAVE BEEN UNDER CONTRACT ALREADY so the team wouldn't have had to negotiate with either the player or their replacement. They'd have had a position filled with a quality player.

Seriously, people this is not hard to understand. The opt out shifts the burden of the worst cas scenario to the team while reserving the benefits of the best case scenario to the player. It's a huge benefit for the player. That's not something that can be debated by anyone who has any thoughts of being a reasonable person. If you disagree, you should stop because you're very clearly very wrong.

Now there may well be some times where the opt-out clause is worth it to the team, especially in a situation where it means the difference between signing a player and not, but pretending that it is anything but a huge benefit to the player is absurd.

I mean, seriously, do you not think the Dodgers would much rather have Grienke under contract than have to either give him more money or give someone else a lot of mony and hope they get a similar performance?

I think this is exactly the perspective behind the opt-out. If he wants to leave, let him go. I know this is not relevant to the Price situation, but how many times did Theo try to get out from under Manny's contract? If Manny had an opt-out and used it, Theo would have donned the gorilla suit and scattered rose petals in front of Manny on his way out of town.

Anyway, I think Dombrowski signed Price just to give us all a break from obsessing about NFL officials.

Every player option does not come with a team getting David Price. For example, when the Yankees gave CC a player option, they did not also get David Price. For the 4th (?) time, I was taking about the value of player options, not the value of getting David Price.

There's a separate discussion many have assumed is the same. It was pointed out earlier that player options might have more value to the player than they do cost to the team. Hypothetically, it might be worth $3m/year to Price to have the opt out but the Red Sox might only estimate this at the equivalent of adding $1M per year. So the Sox and Price should agree to discount the contract somewhere between $1M and $3M per year - everyone is better off. (This isn't the only scenario that could make sense. A player might refuse to sign with a certain team without one.)

Anytime this unequal valuing of the player option exists between a player and a team they player option should be included in the negotiation. Money is typically worth about the same to the team and the player ($1 is $1) but any time you have a negotiable chip worth a lot more to one party than the other, you should try and work it into the equation. Negotiations 101.

Tldr: even though player options are net negative to the team, they have a place in baseball if the team can extract discounts from the player to make it worth while. Hopefully this was the case with Price.

Regarding the value of player options in a vacuum, I have seen only two arguments on this board I buy as being logical arguments for them being a benefit to the team (meaning a team would offer a bigger contract to a player to include a player option or at least be indifferent):
1) For some reason teams can't trade a player mid contract (eg fan pressure/optics) so they include the option hoping that it will save them from themselves or from their fanbase. I find it dubious but it's definitely plausible
2) as motivation to perform well in the year(s) before the option treating it as a contract year. There's some truth to contract year improvement so I buy this but I think the value is probably mote as a function to create the unequal valuing between player and team I described above and not enough to turn player options into an actual positive for the team.

I think that player options are not in every contract is proof that teams don't view them as a net positive. They are inarguably a net positive for the player so if everyone thought they were awesome they would be standard.

To the bolded: no. The worst-case scenario is completely, absolutely, positively, 100% unaffected by the opt-out. The only impact of the opt-out is to transfer control from the team to the player for the final years of the contract in the best-case scenario. Even in the very best case, that probably amounts to robbing the team of a pretty modest bargain. A fully healthy David Price, showing no signs of decline, may well be worth more than 4/$124M in the 2018-19 offseason market--but it's pretty unlikely that his performance in his age 33-36 years is going to provide a huge value surplus over that $124M figure. The opt-out is bad for the team in a relative sense--it gives something to the player while not giving the team anything in return, at least not in itself--but it's really a fairly trivial problem for the team. It's right to say that the opt-out benefits only the player. It's wrong to talk as if it subjects the team to some new and serious downside risk. All the downside risk is baked in either way.

If only this opt out had been offered behind door number three, on a plane on a treadmill.

Logically, the opt out is better for the player. I doubt the Red Sox said, "Hey, we want to put an opt out in the contract." Price's agent demanded it.

But honestly, I don't care. The Red Sox got better and did not lose any players. Price is a better pitcher than Lester IMO, but I don't care about that either. Dombrowski has decisions to make now, and Lester was not an option for him. Should be debate the Frank Viola signing too. Let's focus on 2016.

I look at it this way. Barring a catastrophic injury, there is a zero to very slim chance that he is not worth every penny, probably even more, for the first 3 years. If he is, that increases the odds for his opt out substantially, But even if he doesn't, at that point it's a 4 year, $124 mill. deal. I think he will still be good enough to earn that contract also. I love this signing. It is simply fantastic. The odds he wont be worth it are minimal, IMO.
By the way, does anyone know what number he wants or gets?? 14 is retired.

I really don't understand the anger/unsettling feeling over the opt out. For the last month posters have said they didn't want to give this guy 7 years. People wanted an opt out. The Sox get Price with an opt out after 3 years and it's still an issue. Put it in these terms. If Price opts out after 3 years then this was a tremendous signing. 30 million is 20 million in MLB a few years ago. Times change. I'm sure the luxury tax is going to be drastically bumped during the next CBA negotiations as well.

Like the Crawford theoretical, I don't think a player would opt out of a deal if he wasn't sure he was going to get more money elsewhere. He would just try to force a trade. That way, the team would eat the lost value, not him. They'd either have to chip in cash or take back lesser talent. And the player gets to keep his payout the same.

The anger about the opt out is that if things go poorly, it's still a seven year contract and if things go well, it isn't. The downside risk is all on the Sox and the upside benefit is all on Price. It's really pretty much that simple.

THE SOX DO NOT GET AN OPT OUT ONLY PRICE GETS AN OPT OUT HOW HARD IS THIS TO UNDERSTAND

Building on this, it's obvious that teams view player options as a net negative. That's why they're not ubiquitous and we only see them in super star contracts. The reasons for this are probably wishing to avoid uncertainty of who is on the roster and hoping to get a bargain that fights inflation. Perhaps there are more.

In short, it's not wrong to like the deal regardless of the player option. It's not illogical for the Red Sox to have included one and may have been a smart move. It's almost certainly wrong to be excited at the inclusion of a player option as though it were a win for the team.

Except that's ignoring the scenario that the first three years could be good with a swift decline phase in the last four, which given his age I believe may be more likely than some here think.

Put this way: if he was 25, I'd hate the opt-out. At 30, nope, don't mind.

What about a team that doesn't really want to sign 30yo pitchers to contracts longer than 5yrs? There is no way Price was giving the team an opt out nor was he going to accept less than 7yrs on the open market but I wouldn't be at all surprised if Boston was fully supportive of the opt out given that perhaps their analysis justifies paying Price 3/95 but that the back end 4yrs bring considerable risk. They could have decided that other teams may be less risk averse to signing older pitchers to long term contracts and see this as a way to minimize the risk on a long-term deal. For all we know they assume this is a 3/95 deal. If Price had signed for 3/95 today I don't think anyone would be complaining.

I think we only see them in superstar contracts because those are the only ones that are 6+ years.

It's actually not, but you'd have to ignore every other page of this thread and type in all caps to think otherwise.

Oh I understand that. I didn't think my post came off as otherwise. But there's an opt out in the deal which most of the board wanted.

What is so hard to understand about the back end of big contracts being a huge risk of injury and/or accelerated decline. You generally get the value in the first few years, then pay for it later. If the injury/decline comes after the opt out has happened and some other sucker is paying the contract, then guess what? The team that let him go dodges a bullet and already received the ealry years value.



Noone is debating who wins in those scenarios at both extremes. What you can't seem to grasp is there is plenty of middle ground between them.





Nope.

Sabathia. Let him walk after 2011 and you have had three great years at a value cost, and avoid paying big bucks for 1 good year and three shitty ones. Team wins.

year IP ERA
7 years - 161
2009 230 3.37
2010 237.2 3.18
2011 237.1 3.00
opt out - could have let him walk.
signed 25 mill extension with 5 mill buyout making the original contract 8/186.
2012 200 3.38
2013 211 4.78
2014 46 5.28
2015 167 4.73
2016 ??


Arod. 2001 to 2007 for ~180 mill is a bargain. 2008 onwards for ~275 (minus the paycut for cheating) not so much. Let him walk and the club wins.

2001 Tex 162 1.021
2002 Tex 162 1.015
2003 Tex 161 .995
2004 NYY 155 .888
2005 NYY 162 1.031
2006 NYY 154 .914
2007 NYY 158 1.067
opt out - could have let him walk.
signed 10y 275 million.
2008 NYY 138 .965
2009 NYY 124 .933
2010 NYY 137 .847
2011 NYY 99 .823
2012 NYY 122 .783
2013 NYY 44 .771
2014 NYY 0 games 0 cost
2015 NYY 151 .842
2016 NYY ??
2017 NYY ??

It is still a net negative to the team vs not having one because they could just not include the opt out and trade him after three years. I covered this in my post.

I agree but if you look at a scenario in which both opt out in 3 years....

He will take the opt out, and that's great news for us. This isn't a $217 million contract; it's a $93 million contract. If he pitches great for the next three years, the Red Sox will get more than $93 million of value from him, and they don't have to pay for his likely decline years. The Yankees can pay $35 million per year for those.

I guess it boils down to this: if Price has 3 years like he just had (in other words, really good but not historically so) and opts out, how likely is it that the Sox will have a better way to spend 124/4 than a 33 year old Price who still seems to have it?

They both opt out in 3 years then the deal was a success. The first Sabathia deal where the Yankees gave him an opt out was a huge success. The resigning...not so much. If he opts out that free agent class is filled with young aces if of course no one is extended.

As you mentioned there is also the media and clubhouse pressure you have to consider if you opt to trade a highly productive 33YO pitcher on a playoff caliber team. The Sox probably want him for 3-5 years and would rather lose him a year early than a year late. A lot easier to have him walk instead of trying to trade him a year early.
People are reacting like he got a full NTC for 7yrs. The downside to the opt out is you get at worst market value performance for 3yrs. This is hardly the negative people are making it out to be.

You're not thinking this through. Price only opts out if he's getting more elsewhere.

Excellent post, with the bolded the heart of the matter. This is really tempest-in-a-teacup stuff.

You're the one not thinking it through. If that's the case, how is that a negative for the Sox? Perhaps he's still the same pitcher 34+ that he was from 30-33, but that's not a bet I'd be confident making.

Please read the thread.

I like A-Rod as an example, because opt-out defenders misread it. Yes, the Yankees would have been better off if they had let A-Rod walk. But know how they would have been even better off than that? If his contract didn't include an opt-out in the first place! (and yes, I know they're not the ones who gave it to him). If his contract was a straight 10 years, 2001-2010, then he would have been worth it the entire time, and the Yankees could have kept A-Rod from 2008-2010 (while he was still good) without having to tack on the additional 7 years after that. THAT is the problem with opt-outs that too many people ignore. It's not that the team is better off letting the player walk, it's that a lot of the time the team would be better off if the opt-out didn't exist in the first place.

There is nothing I don't grasp. You seem to think that because there is a middle ground, the risk isn't there and that's just stupid. The Sox are signing this contract now. They have to account for the possibility of this contract going to shit and they have to do it now. They do not have the luxury of knowing what's going to happen in the next three years. They are accepting the risk of a seven year contract while letting Price have the benefit of a three year contract.



You don't get to advise me of misunderstanding you then massively misunderstand me in the next paragraph.

When a player opts out, the team is harmed because they have an extra hole in their roster. In the best case scenario, the team has a cost controlled player ready to take over that position and they don't have to negotiate with anyone for anything, but even then, they have a resource they could have used as trade bait which they can't do now.

Helpful and insightful commentary.

The downside risk is the same either way, though. If Price's shoulder blows up in spring training and he never pitches an inning, the Red Sox and Price are exactly where they would be if there was no opt out.

If he pitches great for the next 3 years, he can walk and go to the highest bidder. But 33 year old pitcher is a strong bet to be worth 4/$127, even in 2018. They are giving Price a huge insurance policy on his career - those last 4 years are unmistakably a huge value. But he was getting those anyway, opt out or no. This gives the Sox at least a change to get out of the back end years.

The way the opt out becomes unambiguously a loss for the Red Sox is if Price opts out and they give him a big raise.

Clearly that contract would have been better for the team if the optout wasn't there. But if it wasn't then maybe some other club is enjoying paying for those prime years for a few mill more per year or for a year extra.

Except it's not the same circumstances, as Price signed at 30 years old and A-Rod at 25.

Yes but that's not relevant. If he opts out it means he'll make more money. The Sox will have to decide if they want to pay him more money. They now have a second decision to make that's independent of the opt out. Whether they suffer through a swift decline, get four more good years, watch another team get stuck with his swift decline, or watch another team enjoy four more good years- completely unrelated to the contract that was signed today. They could make the wrong or right decision four years from now. If they choose wisely, great. If they choose poorly it'll sucks. But the fact that letting him go and him declining swiftly is one possible scenario four years from now does not benefit the team today in any way. For the Sox to benefit, Price has to either choose the wrong option in year four (very unlikely), or the Sox need to choose the right option (to resign or let him go) if he opts out. That second decision is what will make it a good or bad situation for the Sox, not the granting of the option.

There is risk in signing any player to any contract. I didn't say there was no risk in an optout. You ARE saying though that there is no scenario where an opt out benefits the club. That is incorrect and there are real life examples of it.



A team has a hole in their roster whether a player opts out or whether a "normal" contract ends. What sort of argument is this?
If Robinson Cano had an opt out this year and exercise it the Mariners would have a hole at 2b. I don't think they would be too upset about it though.
The dodgers have a hole because Greinke opted out, Toronto have a hole because Prices contract ended. Whats the difference?

The gamble in this contract is about whether Price's age-related decline becomes significant before or after his option year. He's 30. I'd bet after.

If Price is still an ace in 2019, he opts out, gets more money somewhere else and the Sox are off the hook for his age 33-34-35-36 years when he's most likely to fall off a cliff.

If Price declines to #2-#3 starter level by 2019, he stays put and the Sox have a slightly overpriced (by then) middle-of-rotation starter. Or he opts out and it's not our problem.

This contract only sucks if Price gets injured before 2019, but that's always a risk and expect the Sox will buy contract insurance for that possibility.

The Opt Out Debate is getting pretty stale; so I skimmed it. That said, I don't believe anyone has pointed out that the opt-out is an additional motivation for Price to stay healthy and deliver on the first 3 years of his contract. I'm sure he's an otherwise well motivated guy (in terms of him just being competitive). But the additional inducement can't hurt.

Plus, I like the fact that he's got something to prove re: his post season performances.

It's extremely relevant, and I find it highly unlikely the Sox would even entertain the idea of signing him if he opts out. If that were the case, they wouldn't have given it to him in the first place. It goes back to what I said earlier, the consensus opinion on opt-outs is almost entirely based on the Yankees bidding against themselves to give CC and A-Rod more years and money.

Giving a 25 year old an opt-out after three years is unwise, as the chance of decline at 28 is unlikely. A 30 year old does not have those same odds, and to suggest otherwise and label it as irrelevant, is, well...shortsighted.

I'm offering a wager. If you post something about an opt out in this thread and I can find a post saying essentially the same thing already, you give me a dollar. If I can't, I give you a dollar. Please use the words "logic" "market" "decline" or "Johan Santana" in your response if you accept.

Disagree. There's a reasonable likelihood that in 2019, the team and Price disagree about his value going forward.

If, in 2019, Price thinks he's worth more than $127 million for four-years going forward and the Sox think he's worth less than that, his opting out to seek more money elsewhere is in both party's best interests.

For luxury tax purposes, which is all we should care about, it doesn't matter. If he opts out the tax gets recalculated and they will get a rebate.

You still don't understand and this fact is frustrating me. I think I've already been rude and will probably be so more and I apologize, but it bugs the shit out of me when people can't or won't understand things that are very simple.

There are some situations where a team can offer an opt out, the player can take it, and the team come out of it just fine. In those situations and all the others, the benefit of including the upside in the contract is all on the player's side when compared to the same contract without the opt out clause. Including the opt out clause might be worth it to the team if it means getting the player they want or getting the player for fewer dollars.



A normal contract doesn't put risk on the team beyond the end of the contract. What we're looking at here is a 3/90 contract with a player option for 4/127 that is activated if the player performs poorly.



If Robinson Cano had an opt out this year, he wouldn't exercise it.



The difference is that if Greinke's arm had blown up in June, his contract wouldn't have ended and Price's still would have. Oh, and if he didn't have the opt out clause, he's still under contract and they aren't looking to sign a big free agent pitcher.

Let me reframe this a bit.

Player A is signed for a seven year deal with an opt out after three years. Player B is signed for a seven year deal with no opt out.

Both players perform very well for their first three years.

Player B dies. Car crash, plane crash, whatever, he dies. The team has insurance to cover the remaining salary so they aren't out of pocket any of that money. This is a bad thing for the team, right? They have to scramble around to replace that player.

When Player A opts out, it's the same thing. It's a bit more forseeable, and it means the supply of players to replace the player with is precisely one player deeper than if he'd died, but the effect is the same.

When you sign anyone to a contract, there's a range of things that can happen. They can perform poorly and be massively overpaid for a long time. They can perform excellently and be massively underpaid for a long time. When you sign someone to a contract with an opt out, you're accepting the risk of potentially massively overpaying them for a long time and giving away any possibility of massively underpaying them for a long time. When it's a free agent contract like this where the guy is being paid top dollar, you're also giving away any possibility of paying them about what they're worth for a long time.

It's seven years worth of risk for three years worth of upside. It's a massive risk to take on. Sometimes those risks are worth taking. Often, they are not.

Sure, but if they understood my position, they wouldn't be replying with answers that indicate they don't.

Also, given the possibility of me being wrong and some random person on the internet being wrong, well, I know where the good bet is.


I'm not really sure I buy the notion that the Sox are the best team in baseball, but we're gonna be pretty good.

 

[Devizier]

We are into Pascal's Wager territory with the opt-out.

Based on his career to date, Price belongs to a pretty elite group of pitchers. Setting aside the all time greats (Maddux, Pedro, Clemens, Johnson), there's a pretty good pool of pitchers that Price compares to, a number of whom (but not all) signed contracts around his age. The outcome of those contracts has been pretty mixed -- I'm not sure if those outcomes have been significantly more divergent than those for smaller contracts, but the risk is obviously larger.

Here are some examples of guys who probably would have exercised their David Price opt-out (with their fWAR listed from ages 30-36):

Kevin Brown: 6.5, 9.6, 7.3, 6.8, 3.0, 0.5, 6.1
Roy Halladay: 5.8, 6.1, 7.0, 6.1, 8.3, 2.7, -0.7
Cliff Lee: 6.7, 6.3, 7.0, 6.8, 5.0, 5.5, 1.9
Mike Mussina: 5.1, 6.0, 6.4, 6.9, 4.6, 6.1, 2.9
Tom Glavine: 5.3, 3.6, 4.8, 4.2, 4.7, 1.7, 2.8
John Smoltz: 6.7, 5.2, 5.4, 1.3, 2.5, 2.9, 2.1

Each of these guys were pretty awesome from ages 30-32, but there's no clear-cut argument about the cost/value of an opt-out. Despite missing 1 1/2 seasons, Kevin Brown was ridiculously good in his mid-late thirties. He would probably be worth the back end of an equivalent contract. This is definitely true for Mussina and Lee, and I think most would accept two truly elite seasons from Roy Halladay before his sudden decline. But even with that said, they weren't as good as they were in their early thirties. In fact, the only recent example that I can come up with is Andy Pettitte (who was mediocre/injured in his early thirties before being very good again).

Smoltz is a weird case, considering that he converted to relief (before converting back!). Glavine, who showed the most "classic" decline, was still pretty damn good from 34-37.

Now there are plenty of cases (some ongoing) of pitchers declining rapidly in their thirties (Appier, Santana, Verlander, for starters) but they don't really make the case for the opt-out since they definitely wouldn't exercise it.

Generally speaking, I think the opt-out is a pretty minor concession for the Red Sox -- obviously it's not in their favor to assume the risk while losing some of the upside -- but in every case you'd still be getting the player's best seasons.

 

[grimshaw]

Thank you for doing that. I was working on something similar, but for all players. I think Kevin Brown is tougher to evaluate because of his PED ties.
I would kill for Mussina level consistency - a bulldog who doesn't break - and he (hopefully) seems to be on that track.

I don't think we have explored the area enough of whether a player would be willing to take less to move elsewhere.
It has mostly boiled down to pricing themselves out, or burying their head in the sand and getting paid to underperform.
And you can't underestimate any team ownership's willingness to make life tougher for a guy who isn't living up to his contract.

I believe there is a non-zero chance that he sucks, wears out his welcome and becomes a free agent because Boston makes him so miserable.
I know the players union is all about guys making as much money as they possibly can over the course of his career, but there has to be a breaking point.

New fangraphs article discussing this issue.
http://www.fangraphs.com/blogs/the-value-of-the-opt-out-clause-in-the-david-price-contract/

 

[GRPhilipp]

While I admit I haven't read all forty bazillion posts on this topic in various threads, there is one point I don't recall seeing anyone mention that could affect how teams view the opt-out: professional athletes are highly likely to bet on themselves if given the chance. I haven't seen data on this, but my strong suspicion is that the vast majority of players who have ever had the right to opt out of their contracts have exercised that option. I doubt those were all rational decisions, but we humans aren't great at being consistently rational and the conventional wisdom is that pro athletes have more confidence in their abilities (and, perhaps by logical extension, their chances of landing a bigger contract if they can get to free agency) than the average person.

It's basically another manifestation of the overconfidence phenomenon we see with qualifying offers. Until this year, no player had accepted a QO because they apparently all believed they could do better in free agency. It wasn't until after this backfired badly for Drew and Morales that a few guys have now accepted the QO.

I guess what I'm saying is that we fans generally seem to assume that the question of whether a player should exercise his opt-out right is a simple math problem with an objectively right answer that the player will see, accept, and follow. In reality, I think there's an ego element at play that greatly increases the probability that the player will, in fact, opt out. Has anyone seen data that would support or refute this hunch?

 

[Eddie Jurak]

Well, the qualifying offer data would tend to support your argument to some extent - there we have seen players bet on themselves and lose.

I don't know that anyone with an opt out has ever Jody Reeded himself, though.

 

[DavidTai01]

While I admit I haven't read all forty bazillion posts on this topic in various threads, there is one point I don't recall seeing anyone mention that could affect how teams view the opt-out: professional athletes are highly likely to bet on themselves if given the chance. I haven't seen data on this, but my strong suspicion is that the vast majority of players who have ever had the right to opt out of their contracts have exercised that option. I doubt those were all rational decisions, but we humans aren't great at being consistently rational and the conventional wisdom is that pro athletes have more confidence in their abilities (and, perhaps by logical extension, their chances of landing a bigger contract if they can get to free agency) than the average person.

It's basically another manifestation of the overconfidence phenomenon we see with qualifying offers. Until this year, no player had accepted a QO because they apparently all believed they could do better in free agency. It wasn't until after this backfired badly for Drew and Morales that a few guys have now accepted the QO.

I guess what I'm saying is that we fans generally seem to assume that the question of whether a player should exercise his opt-out right is a simple math problem with an objectively right answer that the player will see, accept, and follow. In reality, I think there's an ego element at play that greatly increases the probability that the player will, in fact, opt out. Has anyone seen data that would support or refute this hunch?

Not the exact situation, but haven't we seen drafted players choose not to sign in order to get picked higher next time and fall? They bet on themselves and failed.

 

[keninten]

How many people think a team option is beneficial to the player? Isn`t that more of a comparison?

 

[kieckeredinthehead]

How many people think a team option is beneficial to the player? Isn`t that more of a comparison?

Only if teams have a clear record of collectively overestimating the value of players.

 

[dhappy42]

How many people think a team option is beneficial to the player? Isn`t that more of a comparison?

If a player asks for a 6/60 contract and a team offers him 4/44 with a team option in year 5 for 2/26, which is more beneficial to the player?

 

[terrisus]

How many people think a team option is beneficial to the player? Isn`t that more of a comparison?

If a player asks for a 6/60 contract and a team offers him 4/44 with a team option in year 5 for 2/26, which is more beneficial to the player?

"Which is more valuable? A contract that the player isn't being offered, or a contract that a player is being offered?"
I think you have your wording wrong there.

Anyway, you answered a question with a question.
Why don't you try explaining your answer first.

 

[dhappy42]

"Which is more valuable? A contract that the player isn't being offered, or a contract that a player is being offered?"
I think you have your wording wrong there.

Okay. I'll rephrase. Which is more valuable to the player?

a) 6/60
b) 4/44 with a team option for 2/26

Why don't you try explaining your answer first.

I didn't answer the question "How many people think a team option is beneficial to the player?" Thought it was a rhetorical question. No?

 

[terrisus]

I didn't answer the question "How many people think a team option is beneficial to the player?" Thought it was a rhetorical question. No?

Obviously not.
Enlighten us with whether a team option can be beneficial to a player, and why or why not.

 

[dhappy42]

Obviously not.
Enlighten us with whether a team option can be beneficial to a player, and why or why not.

I was hoping you'd tell us by answering the question:

Which contract is more valuable to the player?

a) 6/60
b) 4/44 with a team option for 2/26

 

[terrisus]

I was hoping you'd tell us by answering the question:

You were the one who responded to a question by asking another question.
And then said the reason you didn't answer that question was that you assumed it was rhetorical - which should mean the answer is obvious, and should be extremely easy to state.

So why would you respond to that question, but not actually answer it?

Here it is again:

How many people think a team option is beneficial to the player? Isn`t that more of a comparison?

 

[dhappy42]

You were the one who responded to a question by asking another question. And then said the reason you didn't answer that question was that you assumed it was rhetorical... Here it is again:
↑
How many people think a team option is beneficial to the player?

None.

Now answer my question. Which contract is more valuable to the player?

a) 6/60
b) 4/44 with a team option for 2/26


I think I understand the confusion now. We're talking about two slightly different things. An team option, by itself, doesn't have any value to the player. But a contract that includes a team option can be more beneficial to a player than a similar contract without one. It depends on other factors. For example, I think the Price 3/90 contract with the 4/127 player option is better for the Red Sox than a straight 7/217 contract because there's a low probability that Price underperforms in years 1-2-3, but a relatively higher risk of underperformance in years 4-5-6-7 when he'll likely be playing somewhere else.

If Price is worth 15+ WAR in years 1-2-3, he'll almost certainly opt-out. 15 WAR for $90M is a bargain and the Sox won't be on the hook for "decline" years. Isn't that the most likely way this plays out?

 

[Tokyo Sox]

Just to reply to your original post on the main board, which countered smas' assertion that the player option gives value to the player not the team...

Beyond that, it is clear to literally anyone who can think through basic math or negotiating that the opt-out gives value to the player, not the team. If someone is arguing that a 7/217 with opt-out is a better contract for the Boston Red Sox than a 7/217 without one, then I don't know what to say, because it is obviously wrong.

That is fundamentally false. A player-option can have value to both the player and the team. Not necessarily the same value, obviously, but option clauses are not a zero-sum game. How much value to the player and team, positive or negative, depends on performance and financial assumptions. This is easy to illustrate with (lots of well-meaning but totally irrelevant #'s)

His assertion is fundamentally true, and your counter is logically flawed. Or, at best, using the word "value" wrong. When discussing the value of an option, the holder of the option is the only party who has the potential to receive value. It is literally impossible for someone else to receive value from an option which they have no right to exercise. That's really all there is to it.

Of course - OF COURSE - there could occur a set of circumstances whereby Price is awesome for 3 years, opts out, signs elsewhere for big money and then figuratively and/or literally falls off a cliff and the Sox dodge a bullet. I don't think anyone on this board will argue against that possibility. But if that happens it would not represent "option value" for the Red Sox; it would represent luck.

Now answer my question. Which contract is more valuable to the player?

a) 6/60
b) 4/44 with a team option for 2/26

I think I understand the confusion now. We're talking about two slightly different things. An team option, by itself, doesn't have any value to the player. But a contract that includes a team option can be more beneficial to a player than a similar contract without one. It depends on other factors.

Two things:
- You're aware that 44+26 =/= 60, correct? You've typed this a bunch of times; I really have no idea what you're after. If these are the #'s you meant it's totally apples and oranges, isn't at all answerable with a firm # answer, and can't possibly be instructive. If you meant for B to also add to 60 total, then obviously the answer is A.
- On the bolded, I don't think anyone will argue with "can be more beneficial" because of "other factors"...but again, please be careful not to conflate that with "option value."

 

[kieckeredinthehead]

If you are coming at this question from a finance/micro background then I would ask you to first state the assumptions in that model and then address which assumptions are or are not violated by the MLB free agent market.

 

[Average Reds]

Rob Manfred weighs in with his (negative) view of the value of opt-outs from the club perspective, and IMO comes perilously close to the line of collusion while doing so:

http://mlb.nbcsports.com/2015/12/18/rob-manfred-fires-a-warning-shot-to-owners-regarding-opt-outs/?ocid=Yahoo&partner=ya5nbcs&ref=yfp

 

[crystalline]

Thanks for posting that.

You'd think that Manfred could just talk to the owners if he wanted to drive collusion.

And I'm not sure collusion would be that effective with options, as they're easily substitutable with contract dollars. Maybe if they're not efficiently priced, owners colluding to eliminate optouts might reduce contract values a bit. But if the reports are true that Price's opt-out was priced at 30M or more, I'm not sure they're hugely mispriced.

And personally I'd rather have opt outs. Seems likely that John Henry has a competitive advantage in negotiations over other owners when it comes to correctly valuing options.

 

[wade boggs chicken dinner]

Rob Manfred weighs in with his (negative) view of the value of opt-outs from the club perspective, and IMO comes perilously close to the line of collusion while doing so:

http://mlb.nbcsports.com/2015/12/18/rob-manfred-fires-a-warning-shot-to-owners-regarding-opt-outs/?ocid=Yahoo&partner=ya5nbcs&ref=yfp

Not sure what Manfred would hope to accomplish if he seriously tried to ban opt-outs. Any half-way intelligent person on the players' side would immediately request the same ban for club options, which would probably impact the clubs a lot more than getting rid of the few instances where teams agree to player options to top-end FAs.

 

[Average Reds]

I can't figure it out either.

He has no chance of negotiating this away from the MLBPA and to the extent the clubs follow his suggestion, he creates a case for collusion.

I just don't understand the thinking behind this sort of public statement.

 

[dhappy42]

"'If the player performs so well that he opts out, the team doesn't have to pay for the back end of the contract, where most of the risk is.

This is a good thing. [My bold.] The Giants didn't sign Cueto to a six-year deal because they're expecting him to be an ace in 2021. They signed him to that deal because he could get it on the open market, and the Giants valued his short-term value enough to accept the risks of an expensive 35-year-old pitcher.'"

http://bleacherreport.com/articles/2601297-will-the-rise-of-the-opt-out-in-mlb-be-a-win-win-scheme-or-future-regret?utm_source=newsletter&utm_medium=newsletter&utm_campaign=boston-red-sox

If (big if) it "is a good thing" for the team, isn't that the same thing as saying a player-option can have (but not necessarily have) value for the team?

 

[EvilEmpire]

I can't figure it out either.

He has no chance of negotiating this away from the MLBPA and to the extent the clubs follow his suggestion, he creates a case for collusion.

I just don't understand the thinking behind this sort of public statement.

Since options have value to the player, could Manfred disincentivize them by getting a majority of owners to agree to a monetary value for them and counting that amount against the luxury tax?

I don't know f the MLBPA would get a vote on that or not.

 

[nvalvo]

Since options have value to the player, could Manfred disincentivize them by getting a majority of owners to agree to a monetary value for them and counting that amount against the luxury tax?

I don't know f the MLBPA would get a vote on that or not.

The CBT tax dodge angle is, I think, a new one in these conversations. Impressive. Have any teams far from the tax threshold given a contract with an opt out?

 

[glennhoffmania]

Since options have value to the player, could Manfred disincentivize them by getting a majority of owners to agree to a monetary value for them and counting that amount against the luxury tax?

I don't know f the MLBPA would get a vote on that or not.

There's no way they could assign a uniform monetary value to all options. Several factors make the value of each one unique. If MLB wants to independently value every option whenever one is given I guess they could do that but I see no reason why big market owners would ever agree to that.

 

[glennhoffmania]

The CBT tax dodge angle is, I think, a new one in these conversations. Impressive. Have any teams far from the tax threshold given a contract with an opt out?

Miami.