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Sunday, October 20, 2019

Why did Jeff Bridich give Nolan Arenado an opt-out clause?:The Athletic (paywall):Groke

It was assumed that the opt-out clause was the price of doing business, a stipulation that Arenado demanded in order to make him comfortable, an extra bait to lure him into signing before free agency.

Turns out, the idea was Bridich’s — not Arenado’s.

“In those negotiations, I was the one who actually pushed for that opt-out,” Bridich said this month. “To Nolan’s credit, he didn’t have a ton of interest in that initially being in there. It wasn’t a priority of his for it to be in there. I was the one who thought it might be a good idea.”

“...Just trying to learn lessons from years and years and years, and contracts over contracts over contracts, not just in this organization, but in the industry,” Bridich said. “Let’s just put in a time where we come together and say, ‘OK, is this right to stay together?’ Seems pretty reasonable and realistic when there’s one career on the line and a lot of money on the line. And really behind all that commitment, can we share a vision going forward?”

Sorry to post a link to the subscription-only Athletic, but I found it flabbergasting that the opt out was the GM’s idea.  Long contracts are tough, yeah sure. So why put *all* the risk on the team when the player is not insisting on it?

The years on the deal after the opt-out cover Arenado’s age 31-35 seasons, and are worth $35M, $35M, $35M, $32M and $27M.

Am I missing something?  Please tell me the brain surgeon isn’t the stupidest GM in baseball.

puck Posted: October 20, 2019 at 06:01 PM | 29 comment(s) Login to Bookmark
  Tags: brain surgery, nolan arenado, rockies, wtf

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   1. Walt Davis Posted: October 20, 2019 at 09:55 PM (#5892393)
As described, it sounds bad. But maybe it was part of the negotiation when they were still a few million apart and Bridich suggested this as a compromise. Or I suppose if he feels it's unlikely to be exercised (I'd agree), it might just be a "here's how much we love you" offer no more consequential than giving him use of a stadium suite for 10 games a year or whatever.
   2. Nasty Nate Posted: October 21, 2019 at 12:18 AM (#5892416)
“Let’s just put in a time where we come together and say, ‘OK, is this right to stay together?’
I don't understand how exactly this is accomplished by the opt-out, but i haven't read the whole article.
   3. Dr. Vaux Posted: October 21, 2019 at 01:05 AM (#5892418)
I guess the idea is that it gives them the year before the opt out to negotiate an extension (assuming the contract isn't just a ride-it-out albatross by then).
   4. Nasty Nate Posted: October 21, 2019 at 08:01 AM (#5892429)
There are 5 years after the opt out. It would be an unusual time to negotiate an extension.
   5. PreservedFish Posted: October 21, 2019 at 08:13 AM (#5892431)
The idea that opt-outs might be a benefit to the team is predicated on the assumption that there is another, stupider team out there. Historically this has probably been a safe assumption, but with pursestrings getting pulled shut across the league I don't know if it's a good one anymore. And anyway in practice we've seen at least a few times (ARod, Sabathia) that the stupider team was just the original team, and that made everything worse.
   6. Ziggy is done with Dominican discotheques Posted: October 21, 2019 at 08:59 AM (#5892436)
The idea that opt-outs might be a benefit to the team is predicated on the assumption that there is another, stupider team out there.


If there's another, stupider, team out there, you just trade him to them. Player opt outs are always bad for the team.
   7. Nasty Nate Posted: October 21, 2019 at 09:05 AM (#5892438)
The idea that opt-outs might be a benefit to the team is predicated on the assumption that there is another, stupider team out there. Historically this has probably been a safe assumption
Have there been instances of an opt-out where the team spent the money better on different players afterwards? I can only think of the opposite, e.g. ARod, or the Dodgers spending more money for worse pitchers after Greinke left.
   8. snapper (history's 42nd greatest monster) Posted: October 21, 2019 at 09:07 AM (#5892439)

If there's another, stupider, team out there, you just trade him to them. Player opt outs are always bad for the team.


Yes. An option always has positive value, therefore it's always a cost for the party writing the option.
   9. Nasty Nate Posted: October 21, 2019 at 09:10 AM (#5892441)
In other opt-out news, Elvis Andrus will not use his. Last year Heyward and Price also did not opt out.
   10. Greg Pope Posted: October 21, 2019 at 09:10 AM (#5892442)
If there's another, stupider, team out there, you just trade him to them.

It’s really not that simple. First of all, you may not be able to identify the team. Secondly, it’s not really that there’s a stupider team out there, it’s that the player thinks there is. Third, we see all the time that trading a large contract doesn’t go the way we think it does. We think there may be excess value but the team ends up dumping it. However we also see that with opt outs the player does get more money. So while it doesn’t make sense from an economic theory perspective, we know it happens.

What’s foolish is to stick to the theory when the practice is clearly different. In practice, the opt out can help the team.
   11. Nasty Nate Posted: October 21, 2019 at 09:16 AM (#5892446)
What’s foolish is to stick to the theory when the practice is clearly different. In practice, the opt out can help the team.
But what are the examples in practice? When has an opt out helped a team lose a contract they didn't want and were unable to trade for full value for whatever reason?
   12. asinwreck Posted: October 21, 2019 at 09:23 AM (#5892448)
The thin air in Denver puts the Rockies at a competitive disadvantage. If I owned the team, I would keep the front office somewhere at sea level so they'd have enough oxygen to dismiss ideas like this.
   13. snapper (history's 42nd greatest monster) Posted: October 21, 2019 at 09:24 AM (#5892449)
What’s foolish is to stick to the theory when the practice is clearly different. In practice, the opt out can help the team.

If your plan for success is that the people you're doing business with are going to make irrational decisions, you're going to have a bad time.
   14. puck Posted: October 21, 2019 at 10:49 AM (#5892473)
I don't understand how exactly this is accomplished by the opt-out, but i haven't read the whole article.


There's not a lot more in there. In between Bridich quotes were recountings of the Helton and Tulo contracts, and the quotes were made to appear that that was part of the context of the conversation. But yes, both those were deals where the team would be likely to want out of the deal. (Though I guess not in Helton's case, I think they had a chance to trade him and declined.)
   15. puck Posted: October 21, 2019 at 10:51 AM (#5892477)
In the end, I suppose the most likely case for Arenado opting out is he's willing to walk way from a lot of money for a chance to go somewhere else. Players entering their age 31 seasons haven't been getting $30M+ AAV's, right?
   16. Never Give an Inge (Dave) Posted: October 21, 2019 at 11:01 AM (#5892478)

It’s really not that simple. First of all, you may not be able to identify the team.

If you think player opt-outs are good for the team because you might not be able to find the other team that wants your player when you want to trade him, you probably shouldn't be a major league GM. Just sayin'...
   17. What did Billy Ripken have against ElRoy Face? Posted: October 21, 2019 at 11:03 AM (#5892479)
In other opt-out news, Elvis Andrus will not use his.
Elvis has not left the building.
   18. PreservedFish Posted: October 21, 2019 at 11:16 AM (#5892484)
Andrus still has 3 years, $45M left on his contract. I remember the discussion was very interesting when he first signed it, because it was so long and so speculative, for a very young player with unknown potential. And they had Profar knocking on the door, too.

Looks like he's 5 years into the deal, and returned about 15 WAR so far. He's paid $15M per year. So far, so good. But he has not played well recently.
   19. filihok Posted: October 21, 2019 at 02:07 PM (#5892576)
Player opt outs are always bad for the team.

I don't know

Getting a player for 5/$80 with an opt out seems better than getting him for, say, 5/$100 without one. As long as the opt out is valued properly.

Yes, getting an injured or underperforming player for 5/$80 isn't great, but, it is better than getting him for 5/$100

The opt-out mitigates the risk (both good and bad) for the team (and the player).
   20. Nasty Nate Posted: October 21, 2019 at 02:17 PM (#5892579)
Player opt outs are always bad for the team.

I don't know

Getting a player for 5/$80 with an opt out seems better than getting him for, say, 5/$100 without one. As long as the opt out is valued properly.
I don't think that conflicts with what you quoted. In your hypothetical, the team getting a huge discount to compensate for the opt-out is evidence that the opt-out is, indeed, bad for the team.
   21. Howie Menckel Posted: October 21, 2019 at 02:18 PM (#5892580)
Elvis has not left the building.

I believe the building left him.
   22. snapper (history's 42nd greatest monster) Posted: October 21, 2019 at 02:27 PM (#5892584)
I don't know

Getting a player for 5/$80 with an opt out seems better than getting him for, say, 5/$100 without one. As long as the opt out is valued properly.


It's not "bad" it's a cost. It depends what they're getting to off-set the cost of the option. In your example, they're getting a lot.
   23. filihok Posted: October 21, 2019 at 02:29 PM (#5892585)
I don't think that conflicts with what you quoted. In your hypothetical, the team getting a huge discount to compensate for the opt-out is evidence that the opt-out is, indeed, bad for the team.

Getting the discount is good

An opt-out with no discount, yes, is bad for the team. You're giving the player something of value and getting no value in return.

I suppose, being very literal, one could say that "opt out clauses are always bad for the team but *giving* opt out clauses can be beneficial for the team".

   24. The Ghost of Sox Fans Past Posted: October 21, 2019 at 10:30 PM (#5892686)
It's become assumed that most of these megadeals will eventually turn bad. It would be interesting to see an analysis of all them that have run several years to see the proportion that have become burdens but the time they're, say, halfway done.
   25. filihok Posted: October 22, 2019 at 12:11 AM (#5892701)
24

That's why the option is good for the team, no?

Players are expected to be more productive at the beginning and less productive at the end.

It turns a $200 million contract into a $180 million (or whatever contact) and there's chance the player decides to leave before the back half.
   26. DJS Thinks Apples and Oranges are Similar Posted: October 22, 2019 at 06:32 AM (#5892708)
The problem is that players and their agents generally have an idea what the value of their client is in the open market. It always depends just what and when the opt-out is, but generally speaking, the chance that a player miscalculates on a contract isn't worth even a fraction to a team of the cost of the contract being longest when it hurts the team and shortest when it's most beneficial. And people in baseball, both in front offices and among agents, that I've talked to in the last month about this think it's the funniest thing ever; literally *nobody* treats opt-outs like it's a team benefit.

I use a model in which the odds of a player opting out is scaled from 20% to 80% based on the ZiPS projections (since it's probably not 0% to 100%) and I've never seen an opt-out that gives a better valuation than the identical sum without an opt-out. I wish we had more opt-outs in history! With an 80% chance that Hosmer wouldn't be worth the final 3/39 (based on projections, ZiPS only gave Hosmer a 7% chance of being worth a 3/39 contract after the first five years), the 5/105 + 3/39 player option has the same average return as a guaranteed 8 year, $169 million contract. Unless Hosmer/Boras are extremely incompetent, the contract will usually be 5/105 if the Padres want it to be 8/144 and 8/144 when the Padres want it to be 5/105. That eliminates a *lot* of the team's upside scenarios while preserving all the downside ones in which Boras/Hosmer aren't competent.

ZiPS uses a Monte Carlo method already, so it's something that it spits out fairly easily. It's not that complex an exercise given that baseball is a relatively closed system and there is an extra timeframe for Hosmer to exercise his opt-out. It's pretty much a European option.

I think it's easier to get your head around a contract like this if you consider it as a contract with multiple player options that have to be exercised simultaneously.
   27. PreservedFish Posted: October 22, 2019 at 08:39 AM (#5892710)
It turns a $200 million contract into a $180 million (or whatever contact) and there's chance the player decides to leave before the back half.


The player only leaves if he's doing awesome already, and the remaining half of the contract looks like it'll be a bargain. So there's nothing good about that for the team. It's only kinda good if the team thinks he'll fall apart ASAP and that his market value is hugely inflated above his true worth. This doesn't seem like a common situation, far less one that can be predicted years previous, when the option is negotiated.

It would be nice if there were an example of a team pulling this off even once. I would have thought that the Greinke-to-Arizona deal would have become an example of it, but so far Greinke has been terrific and the Dodgers would've loved to have him, so nope.

There are probably some examples that kind of show this happening. The Marlins signed Carlos Delgado for a top-of-market contract, got one great year out of him at a tiny cost, and then traded him for a real package of prospects to a team that could've just had Delgado in the first place if it had paid more money the year previous. They got their cake and ate it too (whatever that means) because another team was hella stupid.
   28. Never Give an Inge (Dave) Posted: October 22, 2019 at 10:02 AM (#5892733)

I always think about the Delgado trade as an example of a team not realizing that you trade for a contract, not just a player. That being said teams (even the Mets) are smarter about that today.

The deal ended up not working out that well for the Marlins -- they got Mike Jacobs who gave them 3 below replacement years at 1B, plus Yusmeiro Petit, who gave them 26 innings of a 9.57 ERA before they traded him for Jorge Julio, who gave them a 9 innings of a 12.54 ERA before they traded him for Byung-Hyun Kim, who gave them 75 innings of 4.16 ERA but was still somehow below replacement level.

I do love the fact that Yusmeiro Petit is still around and pretty good, though.
   29. Nasty Nate Posted: October 22, 2019 at 10:29 AM (#5892745)
And people in baseball, both in front offices and among agents, that I've talked to in the last month about this think it's the funniest thing ever;
They think what is funny? Bridich?

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