Opt-outs are the hottest trend in high-priced baseball contracts. Sign a six-year or a seven-year deal with a player opt-out after three and, bam, the player can be a free agent again. Jason Heyward, David Price and Johnny Cueto just got opt-outs that will make them a crap-ton of money if they’re healthy and even moderately effective over the next couple of years. Zack Greinke just exercised one that made him a crap-ton more money than he would’ve gotten had he played out the full term of his deal with the Dodgers. CC Sabathia took advantage of one a couple of years ago too.
Commissioner Rob Manfred spoke with Ken Rosenthal yesterday, however, and said that he doesn’t quite understand them, at least from the club’s perspective:
“The logic of opt-out clauses for the club escapes me. You make an eight-year agreement with a player. He plays well, and he opts out after three. You either pay the player again or you lose him. Conversely, if the player performs poorly, he doesn’t opt out and gets the benefit of the eight-year agreement. That doesn’t strike me as a very good deal. Personally, I don’t see the logic of it. But clubs do what they do.”
Manfred is not dense. He understands perfectly why clubs agree to them: because great players with tons of leverage have demanded them and, if a club wants to sign that player, they’re going to agree to them. That’s how an arm’s-length negotiation between parties with power and agency work. If, instead of an opt-out, you imagine the item as “a case of Founder’s Breakfast Stout in my locker on the first of every month,” maybe it’d be more understandable. It’s a thing asked for and a thing granted. It’s what makes the “free” in “free market” and “free agency” make sense.
To better understand this, maybe Manfred should ask himself why clubs offer club options. A player makes a three year agreement with a club. He plays poorly, the club opts out after one, leaving the player with no real security. If he plays well, the club gets him at a lower price than if he were able to go back out on the market. I can’t recall him sounding puzzled about that.
So, if Manfred does understand what’s going on here — and I am sure he does as he is extraordinarily intelligent — what is he doing?
I suspect he’s firing a warning shot or, at the very least, delivering a message. A message from the owners who employ him and who do not or cannot afford to get into big money free agency game to the owners who have been handing out opt-outs in free agency. Telling them that they should cut it the heck out or signaling to them that their smaller-payroll brethren don’t much care for the practice. And it has to be Manfred doing this — and doing this in a general, non-specific way — because if one owner tells another owner not to do it, that starts to smell like collusion.
All of this makes sense when you remember that, historically, the biggest disputes about money in baseball haven’t really been between owners as a group on the one side and players as a group on the other. They have been between owners of different factions, with those less willing or able to spend going to war with those who are. We don’t see that too often because by the time money disputes make general news the sides have more or less gotten their members in line, but the root of most of these things — including and especially the 1994-95 strike — is a faction of owners not liking where the rich teams were taking them.
I suspect that we’re seeing the same dynamic at play in opt-outs. Manfred giving voice to some grumbling on the ownership side and, perhaps, trying to prep people that opt-outs could be an agenda item when the CBA negotiations begin.