The Brackman Contract

(Check out which former Yanks’ son is having his shot blocked by Brackman in the photo)

As you’ve certainly heard by now, the Yanks signed first round pick Andrew Brackman to a monster contract. A Major League contract in fact. It’s nuts, I know. But hey, Damon Oppenheimer & Co. trust their people and believe the risk is worth the reward, and I can’t help but agree. I’ve noticed quite a few people around the interweb trying to figure out how the hell this deal works, and that’s what I’m here to explain.

Before we start dissecting the deal, let’s first understand the terms of the contract:

• Four years, $4.55M guaranteed Major League deal
• $3.35M signing bonus included
• Roster and performance bonuses can push the value of the contract to upwards of $13M.

The contract would be simple enough to understand if say, Brackman was a 10-year big league vet just looking to change teams. Then it’s simple; it’d be like every other free agent contract given out in the history of man. But he’s not, so the deal gets a bit more complicated.

Let’s start this off with the easy part: the signing bonus (I’m assuming you get the gist of how roster and performance bonuses work). MLB rules allow the Yankees to spread the $3.35M out over a 5-year period because Brackman is a two-sport guy. Justin Upton had his $6.1M signing bonus distributed in a similar fashion because he was also a basketball prospect or some shit. Jeff Samardzija didn’t have his bonus spread out in this manner because he agreed to pay back a substantial portion of his $10M deal if went back to the gridiron. Basically, this gives the Yanks some security in case Brackman up and decides to give hoops a try. But don’t count on it; dude averaged 7.5 ppg; 3.5 rpg in college.

Okay, that was the easy stuff.

Next, let’s tackle the only part of the contract that’s guaranteed: the four-year, $4.55M part. Being a Major League deal, Brackman had to be added to the 40-man roster immediately, which as you can see has happened already (Chris Basak was DFA’ed to make room). Being added to the 40-man triggers a minor chain of events. After Spring Training next year, the Yankees will have to option Brackman to the minors. That’s where the four-year portion of the deal comes in.

By signing the deal, Brackman agreed to let the Yanks hold four options on him (Whenever a player is sent to the minors, it uses up an option, although a player is charged a maximum of one option per year). When guys sign minor league deals out of the draft, they get 3 options by default. David Price agreed to a six-year Major League deal, so he agreed to 6 options (though if he has to use more than two, I’d be shocked). Based on this, the Yankees can send Brackman to the minors during the 2008, 2009, 2010 and 2011 seasons without incident. After those four options are used up though, they have to pass him through irrevocable waivers before sending him down. Follow? Good.

Basically, the deal just covers his career up to 2011, after that it gets kinda tricky. His status with regards to arbitration and free agency eligibility depends on the amount of service time he accumulates. A player accumulates service time only for the days he spends on the 25-man Major League roster or the 15-day DL (there are also some funny little intricacies that are explained here). As a general rule of thumb, a player needs to rack up 6.0 years of service time to be eligible for free agency, and 3.0 years to be eligible for arbitration (these numbers aren’t set in stone though, Robbie Cano and Chien-Ming Wang will be arb-eligible this offseason with about only 2.75 years of service time).

So what does that all mean for Brackman? Well depending how the next few years play out, the Yanks could conceivably control Brackman’s rights (and somewhat his salary) for another 6 seasons beyond the original 4 yrs of the deal. That’s unlikely though, and it all depends how much time he spends in The Show before 2011. But there’s a catch though: By rule, the Yanks can’t reduce Brackman’s salary by more than 20% from one year to the next. But it’s the Yanks, and money isn’t much of an issue for them, as this deal more than adequately showed.

Okay, so was that so hard? Not really once it’s all laid out in plain ol’ English. Let’s quickly recap:

1. Brackman goes right on the 40-man roster.
2. He has four options, and after those four options are gone, he must clear irrevocable waivers – if a team claims him, he’s theirs, no chance to pull him back – to be sent to the minors.
3. His arbitration and free agency eligibility is dependent on how much service time he accrues (roughly 3 & 6 years worth, respectively). Service time is only accrued while he is on the 25-man ML roster or 15-day DL.
4. If the Yanks are able to control his salary for any year (say he spends 2008-2011 in the minors before sticking with the big league club in 2012), he can not have his salary reduced by more than 20 percent, injury/ineffectiveness or not.

Hopefully this cleared things up. Major League deals aren’t the convoluted beasts they’re made out to be, they’re just a pain in the ass because MLB keeps its rules such a secret.

FAQ

What happens if Brackman needs Tommy John surgery? If Brackman does go down with TJ, he’ll be placed on the 60-day DL. He’ll still have an option eaten up in 2008 (or whatever year he misses, if the surgery goes down in the future), but the Yanks can add a player to the 40-man roster in his place. He won’t accumulate service time or anything like that while he’s out. For all intents and purposes, its just like he is pitching down in Tampa, except that the Yanks may be able to recover some money through insurance. And well, you know, he won’t actually be pitching either.

When can we expect to see him in action? Even if he doesn’t need TJ surgery (if he does, you won’t see him on the mound until 2009), Brackman won’t set a foot on a mound in an affiliated game until next year. Major League deals typically don’t begin until the year after they are signed; this avoids burning up an option for (in Brackman’s case) a month worth of time in the minors.

If his deal is worth $4.55M, and his signing bonus is only $3.35M, what happens to the other $1.2M? The remaining $1.2M is paid to Brackman during the course of the 4-yr deal in intervals specified by the deal. It could be spread out evenly, or it could be front/backloaded. Brackman will also earn a regular salary appropriate for the level in which he is pitching (from about $850 a month in A-ball to about $2,000 a month in AAA, with raises if he repeats a level). Essentially, that $1.2M is a supplement to his regular income for playing (or sitting on the couch if he flames out quickly).

So what’s the big deal about this “not able to reduce his salary by more than 20%” thing? Well, more than likely it won’t even come into play, so don’t get to worked up over it. This rule will really start to rear it’s ugly head if Brackman starts earning those roster and performance bonuses. Say, for example, that Brackman earns a $500k bonus for making 20 Major League starts in any given year. That’s a bonus, paid out at once, and not tacked onto his salary. However, if the incentive says that Brackman’s salary increases by $500k the following year if he makes 20 starts, then all of a sudden he’s making a pretty good chunk of money, and the Yanks won’t be able to cut it by much if they want to. Look at it this way though, if he’s earning those bonuses, chances are the Yanks won’t be looking to cut his salary anyway.

Can they really control him for another 6 years after the 4 options are used up? Yup, although that scenario is unlikely. For that to happen, Brackman would have to spend every day of those four option years in the minors, then hit the bigs (and stay there) the season immediately following the last option year. Delmon Young signed a five-year ML deal when he was drafted, and the D-Rays did their darndest to keep him in the minors as long as possible so that they could keep pushing his free agency back. He got his first call-up last September, and has earned himself a little less than a year of service time (meaning he’s still two years from arbitration and five from free agency) despite using up three of those five available options.