Opt-out clauses a win-win for players
When Brian Cashman was hustling to sign CC Sabathia after the 2008 season, he bolted from baseball’s winter meetings that December, flying from Las Vegas to San Francisco to visit with the pitcher on his Bay Area home turf.
[/DROPCAP]The Yankees’ general manager wanted to show Sabathia, the sport’s most coveted free-agent arm at the time, just how important he was to Cashman’s reloading effort in the Bronx. But it would take more than a secret recruiting trip to secure Sabathia, and Cashman went the extra step at the negotiating table.
He told Sabathia — without being asked — that he would add an opt-out clause.
It was a drastic measure back then and remains so now despite being a popular request among the game’s elite free agents. The Yankees might suffer from the one granted to Masahiro Tanaka, whose clause will kick in at the end of this season, and the Red Sox could face the scenario with the growing volatility around David Price (free to leave after 2018) that boiled over this past week in the Bronx.
With Sabathia, however, Cashman believed the Yankees had to separate themselves from the pack trying to woo the free-agent ace. The Yankees, awash in winter cash, were willing to give the 2007 Cy Young winner nearly every card in the deck.
The original deal was for seven years and $161 million, but Sabathia — coming from his home on the West Coast to try New York — had to spend only three seasons in the Bronx at an annual salary of $23 million. Of course, the contract’s framework was catered to more than simply his comfort level in a new city. If so inclined, Sabathia would hit free agency again at age 31, with a chance to reset his earning rate.
And what did the Yankees get? Either the opportunity to have Sabathia dump them for another team after only three years or to write him an even bigger check to persuade him to stay. In other words, it was a no-win situation for a GM, other than landing the free agent in the first place for what could turn out to be a short-term lease.
So why enter into such a one-sided arrangement? Cashman shrugged. “The player has the competitive advantage,” he said Thursday. It’s the cost of doing business nowadays.
When these contracts are first put together, it’s assumed that the player will opt out, barring major injury or a spiraling dive in performance. Sabathia now says he didn’t even think about an escape clause in the Yankees’ deal until his agent mentioned it, at Cashman’s urging. The chance to win a World Series was at the forefront of his mind, but there also was his family to consider.
“My agent wanted it in there just to make sure this was the right spot,” Sabathia recalled Thursday. “For me, the emphasis always was on winning.”
Sabathia didn’t opt out. He never tested free agency again. But he did wield the threat to pressure the Yankees to rip up the last four seasons and pen him a new five-year, $122-million extension, with a $25-million vesting option for 2017.
Before this season’s revival, that opt-out looked like a big loss for Cashman, as Sabathia went 32-39 with a 4.54 ERA from 2013-16. But overall, his deal is bookended by a World Series ring in ’09 and a remarkable turnaround this season — 7-2 with a 3.66 ERA through 12 starts.
That somewhat softens the blow of Sabathia’s mid-contract dip. But the Yankees could be headed into some gloomy financial territory with Tanaka, and we’re also intrigued by Price’s opt-out situation in Boston.
Tanaka’s outlook, two months in, doesn’t seem all that complicated. Before he took the mound Opening Day, the opt-out clause was very much on the table, especially with Tanaka cruising through spring training in preparation for a monster walk year. But now any talk of his choosing free agency — rather than staying put for the $67 million he’s due through 2020 — seems silly with Tanaka off to the worst start (5-6, 6.55 ERA) of his career, on either continent. He also has the sketchy medical history involving the small UCL tear inside his right elbow, which is enough to scare off potential suitors from giving him more than the $22-million salary Tanaka currently is earning.
For Price, however, the opt-out conundrum might wind up having more to do with a change of scenery at a cost of leaving money on the table — something that happens very rarely, if ever, in professional sports.
Seven years after Sabathia’s landmark deal, Price signed on with the Red Sox at the same contract length, but for $217 million, the record for a pitcher.
Yet he already might be glancing ahead anxiously to the end of next season, when he can choose free agency, based on the very bumpy ride he’s had in the employ of the Red Sox.
This past week, Price’s simmering feud with the Boston media bubbled over in the Bronx, with the lefthander getting into an expletive-filled argument with a reporter over a Twitter post. While this was the first visible sign of open hostility between Price and the media, it seems to have been building for a while. Ripping Price already has become a favorite pastime of the city’s two sports-talk radio stations, the soundtrack for the typical New England fan.
Price has bristled at the constant recital of his poor playoff record (in nine starts, he’s 0-8 with a 5.74 ERA), and his Game 2 flop in last October’s ALDS sweep by the Indians certainly hasn’t endeared himself to the locals. The criticism escalated Thursday after the Yankees again tormented Price by smacking him around for six runs — including two homers by Gary Sanchez — in only five innings, dropping him to 0-4 with a 8.72 ERA in his past four Bronx starts while wearing a Red Sox uniform.
By Friday afternoon, one of the market’s sport-radio channels had gone beyond mocking Price to make fun of his dogs.
Can Price rewrite his dismal Boston narrative during the next 15 months or so? It’s possible. But if not, here’s the problem he faces at the conclusion of the 2018 season: Forego the remaining $127 million he’s owed through 2022 to test the free-agent market as a 33-year-old pitcher with a potentially fragile left elbow, or remain in Boston, a city he apparently is not happy with, for the greater financial gain.
If nothing else, Price could use that pending escape clause as additional motivation to pitch like a Cy Young winner again and upgrade his earning power for after the 2018 season. Still, it’s highly unlikely that he will find a team willing to match the $32-million salary he’s scheduled to make from the Red Sox through 2020-22.
Here’s something to keep in mind as the Tanaka and Price situations move forward. During the past decade, there has been only one notable player to opt in rather than out: the Blue Jays’ Vernon Wells, who signed a seven-year, $126-million deal after the 2006 season.
In the previous four seasons, Wells batted a combined .288 with an .835 OPS, averaging 28 home runs, 97 RBIs and 153 games played. The January before his 2011 opt-out year, however, Wells was traded to the Angels and hit .218 with a .660 OPS during the most lucrative ($26 million) season of the contract. He chose to stick with the remaining three years with $63 million left on his deal, then retired after finishing out that contract with the Yankees in 2013.
There’s plenty more of these decisions to be made in the coming years. In addition to Tanaka and Price, Clayton Kershaw, Johnny Cueto, Jason Heyward and Justin Upton can opt out of their current megadeals. And for most stars, the opt-out is a no-lose situation, because they already have tons of money with their current deals and make even more money by exercising the clause.