Feb
25

Pondering Sabathia’s opt-out clause

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When the Yankees and CC Sabathia came to terms on a contract last winter, the deal was generally reported to be for seven years and worth $161 million. In one sense, that’s true because it’s the total amount the deal could be worth, but in another sense, we should consider the deal Sabathia signed to be for three years at $69 million with a four-year, $92-million player option. That opt-out clause must loom large.

As the Yankees and CC discussed the deal last winter, the opt-out clause was seemingly marginalized. The Yanks put in the deal, in the words of Buster Olney, “just in case” the Sabathia family didn’t like living in the New York area. That phrase seemingly indicates that, if Sabathia is happy, he won’t exercise that opt-out option. I don’t think we should believe that.

Over the last few years, opt-out clauses have come into vogue in baseball. A-Rod earned himself one in 2000 that he triggered in 2007. He walked away with a better deal that guaranteed him a contract until he turns 42. A.J. Burnett had the chance to opt out of his five-year, $55-million deal following the 2008 season. He did so and signed another five-year deal worth $82 million with the Yanks. Similarly, J.D. Drew opted out of his five-year, $55-million deal following the 2006 season and landed another five-year deal worth $70 million. Aramis Ramirez did the same in 2006 and can do so again following the 2010 season.

In a way, the Ramirez opt-out is an important one for the Yankees. He’ll be playing his age 32 season this year, and the market isn’t nearly as robust as it was when he signed his current five-year, $75-million deal. If he doesn’t opt out, he’ll become the first high-profile player not to exercise that option. Yet, on the other hand, his deal isn’t comparable to Sabathia’s. He’ll be leaving only one guaranteed year on the table and a club option. CC will be just 30 and will have four guaranteed years on the table when the 2011 season wraps up.

The Yankees have to be moving ahead with the idea that Sabathia will opt out. They are basically three scenarios. In one, he gets injured or unpredictably declines such that four years and $92 million are his earnings ceiling for those four years. In another, he uses the threat of an opt out to secure more money from the Yanks. In a third, the economy will be so bad that a lefty ace coming off his 30-year-old season can’t find more than $23 million and four years. The last is a possible but unlikely scenario.

So the Bombers will pay careful attention next year to the free agent pitchers. Josh Beckett will hit the market, and Cliff Lee will be available. Brandon Webb too will be out there for the taking, and the Yanks will have to move on a pitcher with an eye toward this opt out and beyond.

I hope Sabathia stays in New York. I hope he continues to lead the team deep into October, and I hope the winning is an antidote to the option to leave. But I know that money will play a big role in his decision, and the Yanks knew that last year. It might be a little too early to know what Sabathia is thinking, but Brian Cashman and the Yanks will have to plan for that worst-case scenario as much as we don’t want to consider it.

Photo Credit: AP Photo/Kathy Willens

Categories : Pitching

124 Comments»

  1. Say we win another ring or two before the opt out, either this year or next year (or both). Sabathia would then be a 31 year old lefty who had just won two (or three) rings as the frontman of a budding Yankee dynasty. He’d be looking at either a guaranteed 4/92M from the Yankees or the hitting open market, where he could probably command at least 5/125 or so (provided that hasn’t become an injury risk, of course).

    I say there’s a 95% certainty he opts out and 90% certainty that he does so with the express intention of resigning with us for that 5/125ish figure. He’ll want to build his legacy here; win rings here, make this the team he’s associated with.

    (I know this is sort of reminiscent to the flawed “Johnny Damon should leave money on the table to return to the Yankees because it’s good for his legacy” argument, but I think there’s some subtle but important differences, mainly that CC has less of a non-Yankee legacy to muddy the waters, that CC will still be much younger and more productive than Johnny at the respective winters, and that CC won’t need to take a pay cut.)

    • Steve H says:

      I agree with most of this, but I don’t think it will get to the opt out porition. I think the Yankees will, instead of letting a market get set, just break the market before they let him see it. Similar to when they signed him. They threw a number out there that no one else would touch, and the only thing that would keep CC from signing would be not wanting to play in NY. That clearly wasn’t the case, and is no longer even an issue for his next contract. I bet they work out an extension before he ops out.

    • Chris says:

      I’m not sure that CC would get 5/$125 on the open market.

      Here’s the list of pitchers that are paid more than $17M per season:
      1. CC Sabathia, $23,000,000 (2009-15)
      2. Johan Santana, $22,916,667 (2008-13)
      3. Roy Halladay, $20,000,000 (2011-13)
      4. Carlos Zambrano, $18,300,000 (2008-12)
      5. Barry Zito, $18,000,000 (2007-13)
      6. Jake Peavy, $17,333,333 (2010-12)

      I think the best comp here is Halladay. We’ll get a better sense of the market after this season, but I’m not convinced that he would do any better than 5/$115 – if he could even command that much.

      • Steve H says:

        Halladay admittedly settled for less than market value, and was also 34 years old. Also, assuming the economy recovers, and people start throwing Zito dollars around aimlessly, I’m sure CC will command $25 mil/year. Maybe he’d take $23 mil for an extra 2 years on the deal, but I see zero reason he would take less money per year than Johan, considering he’d be opting out of $23 million.

        • Hey ZZ says:

          I think Halladay settled for less years, but not necessarily less AAV. Santana was also 29 when he signed that contract while ZZ will be 31. Those 2 years in baseball life are huge.

        • And even if he doesn’t get a slight raise on the AAV, the primary point of the opt-out is to move from 4 more guaranteed years post-2011 to 5, 6, 7, or 8.

          CC’s not concerned with making more than 23M, he’s concerned with locking up guaranteed money for as long as possible post-age 35.

    • Lanny says:

      What player has ever left money on the table? If hes healthy he’ll def opt out. Its in his best interest.

  2. Steve H says:

    I’m going with option two, they’ll work something out longer term. There is simply no replacement out there that makes sense. Not saying someone might not be on the market by then, but Cliff Lee will be 34 by then (IIRC), and Beckett and Webb simply aren’t in CC’s class. Give him an extra 2 or 3 years on top, never even let him get to opting out, unless he is hurt/ineffecitve over the course of the next 2 years.

  3. Ellipses S. Grant (Formerly Rose) says:

    If you look around…the market seems to be mostly affecting aging and constantly-injured players. Younger dominant players still seem to be getting their annual 8 figure contracts just fine.

    Therefore, the way I look at it is, Sabathia will most certainly opt out to get the most money possible. Anybody in their right mind would want as much money as possible during these times.

    So, as opposed to not opting out because of the economy…I believe he does opt out due to the economy and recent history regarding players of his caliber.

    And this increases due to the fact that all of the younger dominant pitchers have signed extensions making them seemingly unavailable through (at least most of) Sabathia’s opt out years.

  4. Ams223 says:

    Is there any chance or way that the Yankees can “buy-out” the opt out? For instance offer him a 6-8 million dollar “re-signing” bonus?

    • Ellipses S. Grant (Formerly Rose) says:

      Is there a chance? Not really. Is that possible? I guess if Sabathia accepted something like that, it would be possible.

      But again. EXTREMELY unlikely.

    • Is there any chance or way that the Yankees can “buy-out” the opt out?

      Possibly.

      For instance offer him a 6-8 million dollar “re-signing” bonus?

      That wouldn’t remotely be enough. The opt out alone is probably worth 30-50 million in total increased MLB salary over the lifetime of Sabathia’s career… maybe more.

      • Ams223 says:

        I meant more 8 million. That’s an additional two per year which gives him essentially 25 a year for his last 4 years. Then it still gives him an opportunity to have another contract year.

        • Still not remotely enough.

          You can’t technically “buy out” a contract option, all you can do is rip up an old contract and sign the player to a new one. And the only new contracts that CC would agree to would

          A) add way more than 8M total to his 2009-2015 seasons he’s currently under contract for
          B) add at least a year or two (or three) to the end of his current deal, which (at a bare minimum 23M AAV) would mean somewhere around 25-75M total on top of the 4/92 currently guaranteed on the other side of that opt-out.

    • Klemy says:

      If you multiply it by 5x, then maybe that works as others just said.

      This situation scares me, yet if he’s healthy I believe they’ll make sure he stays put, but that he’ll opt out first. He seems happy here and if he lives up to getting us another ring or two by then, he’ll be getting that raise from someone, if not us.

    • Mike Axisa says:

      They can do, it’s just a matter of whether or not CC’s up for it. The Phillies gave Abreu $1.5M to get him to waive his NTC back in 2006.

  5. rbizzler says:

    Option 4: CC opts out, says that he enjoyed his time in NYC, polishes his ring(s) and heads back to the Left Coast.

    I know that it is not a popular assertion, but I certainly don’t think that it is out of the realm of possibilities.

    • Yeah. Sorry. I left that one out. You’re right though. It’s quite possible. The Giants won’t be paying Barry Zito beyond 2013. But if it comes down to pure dollars, the Yankees can always offer more than the Giants. That’s sort of why I left it out.

    • Not The Rays says:

      My counter argument is that would mean relocating their kids away from their friends at a tender age. In order to take a pay cut. And increase the odds of not adding to his 3 ring collection. I don’t see it.

      I firmly believe he will not exercise the opt out, and will trade it for 2 extra years @ the same $23.

  6. Chris says:

    Two thoughts:

    1. Has any other player had as much as $92M left when they have the choice to opt out? A-Rod had $81M left when he opted out in 2007, but most of the others are down to their last 1 or 2 years when they have the right to opt out.

    2. No pitcher earns more than the $23M per season that he would be giving up. It’s safe to assume that he would get more than 4 years in a FA deal after the 2011 season, but I don’t think he’d beat that AAV.

    I tend to believe that he won’t opt out and leave that much money on the table. Maybe I’m too optimistic, but I just don’t see him giving up the guaranteed money for the chance to make some (not a ton) more.

  7. ADam says:

    I think this years free agent class will dictate what CC does. If the biggest deal is around 20 Mill and that’s what Halladay is Making and CC is still the highest paid in the game why would he opt out. (there is always the possibility that CC wins another Cy or WS title and then decides he wants to end his career in SF or out west to be home)

    The other possibility here is if someone signs beckett or lee to a 4yr 100 Million dollar deal and then he might go after that… but i doubt anyone gets a higher yearly salary than C, or a bigger deal. My guess is the former is more likely if he does opt out however you never do know when it comes to these athletes…

    I hope he stays.. one way or another hes a special ball ball player.

  8. JobaWockeeZ says:

    With Beckett and Cliff Lee being the main options I’d rather give CC a larger contract.

    • Tom Zig says:

      Why not have CC and Cliff Lee?

      Unless Cliff Lee will ask for a CC-like contract, which he probably will. In that case, pass.

      • JobaWockeeZ says:

        That would be nice if he isn’t going to be really expensive. Which I personally believe he will be.

      • chriso says:

        CC and Cliff Lee are good buddies.
        If Lee has a spectacular year with the Mariners, they could re-sign him. They certainly have the money to do whatever they want.
        But signing Lee to replace Pettitte would be a brilliant move by the Yanks.
        They won’t need to be spending money on a hitter–the inexpensive Jesus Montero will be better than anyone they’d be able to sign as a free agent–so they’ll have plenty of money to spend on pitching.
        And Lee will be the best pitcher available.

  9. Hey ZZ says:

    31 year old ZZ or 27 year old Matt Cain taking into account contract demands?

  10. Sweet Lou says:

    All the more reason to develop inexpensive, top-of-the-line starting pitching such as Joba and Hughes. This is something that the B-Jobbers (Fatcesca, Lupica, Davidoff, et al) fail to realize.

    • All the more reason to develop inexpensive, top-of-the-line starting pitching such as Joba and Hughes. This is something that the B-Jobbers (Fatcesca, Lupica, Davidoff, et al) fail to realize.

      I have nothing to add, I just wanted to repeat that louder to be sure everyone heard it.

    • Lanny says:

      You know the pitchers you want to be starters may be better in the bullpen. You cant force being a starter on some guys. Thats why you have to develop 10-15 starters. Not just 2.

      • WIlliam says:

        You act like being a releiver and a starter are totally different. jobs. Almost any average starter can be an elite releiver in a season or 2. Hughes and chamberlain, even if they become middle of the rotation starters will be more valuable as cheap, average, starters then cheap elite set up men. On your second point, the yankees have many good pitching prospects. They got alot of trade value out of IPK and Vizcaino, and Nova and Brackman are coveted minor leaguers. 2 elite pitching prospects is 1-2 more then most teams have.

  11. Chip says:

    I’m really not worried about it to tell you the truth. If they NEED him in the rotation, they’ll simply offer him the most money. However, if Hughes, Joba, Brackman, Man Ban, Bleich, ect really establish themselves as top of the rotation guys and say we have Cliff Lee holding down the number two spot then perhaps they call his bluff.

    My ideal situation, he opts out and the Yankees end up resigning him at something like 5/100 because the market just doesn’t materialize for him.

  12. JobaWockeeZ says:

    Oh and plus there is some chance CC stays since he moved his family to NJ.

  13. Al says:

    Ideally – he does opt out and the Yanks don’t resign him. Before you jump all over me.

    Think about this – long term deals for pitchers rarely work out. I know CC has been a horse and an innings eater. But let’s say Joba and Phil are front line pitchers by then. Burnett will still be under contract and assume a Webb or Lee is signed next winter… you will have essentially paid for CC’s best years. He’s in his prime now. I’d rather him leave after three years then signing him to another long term deal for his decline years.

    The opt out is a win-win. CC will get some team to throw a truck load of money at a 31 yr LHP. The Yanks will have gotten an ace pitcher on a THREE YEAR DEAL!

    There are some IFs involved… but CC opting out and leaving… not the worst thing… think about how many long-term pitching contracts work out… just saying…

    • Chip says:

      It would have been a lot nicer if the opt-out weren’t until he was 33 or 34. The problem is, CC will probably have 2 or 3 Cy Young quality years left at this point which may cause the Yankees to overpay him on the back end of his contract.

    • Agreed. If:

      A) Burnett is still dealing and is a solid #2
      B) Joba and Hughes, by then both 26/25, have continued their progression and are young aces
      C) Vazquez and Andy have been replaced by some sort of upgrade on a multi-year deal (Webb/Lee/Beckett/etc.) and said upgrade is still healthy and pitching well

      Given those entirely likely scenarios, I agree, I could see us not giving CC a contract that will pay for his age 36/37 seasons and letting him walk. We’d have 4 frontline starters without him, we could afford it.

    • Jimmie Foxx says:

      I wouldn’t say its “Ideal” for him to opt-out but I definitely agree that it wouldn’t be a big deal and I agree with all your points. Plus there’s always that VERY remote chance that we sign him back for cheaper than what he would have earned had he not opted-out in the first place.

  14. Carl says:

    I don’t think CC will opt out. I think at the end of this contract he will retire.

  15. mustang says:

    I think the Felix Hernandez signing threw a bit of a monkey wrench into the Yankees plan here. I remember many people pointing out how CC’s opt-out clause and Hernandez’s free agency lined up nicely. The best made plans of mice and men often….

  16. Snakes on the mother effin plane says:

    I agree with those above who feel that Lee and Becket’s coming experiences will have a large bearing on CC’s approach, as will the economy, as will winning more rings, or a Cy Young or two, though I’m of the opinion that winning is addictive (see: Jeter, Derek), and that in the grand scheme of things he’ll want to stay more as we win more. I don’t buy the “I’ve won 3 rings so now I can go out West and pitch for a less competitive team and potentially for less money” thing.

    Which is why I believe the conversation will go something like this:

    CC: Hey guys I just won a ring (or two or 3) for you guys, pitched like the stud I am, and I love it here. So let’s work it out.

    Cash: Sure, how’s an additional 2 years, same AAV?

    CC: Done.

    Cash: See ya in ST.

    And it’ll happen somewhat before the eve of his opt out date.

    My $.02.

  17. MP says:

    Maybe I’m too much of an optimist, but is it really that unrealistic to think that CC will appreciate the money, rings, and attitude that’s here and decide not to quibble over an extra $2/year (assuming he can make that much, which is not at all a definite)? I mean he seems to have already really embraced the whole NYY experience (I know, like Johnny Damon, right?), and perhaps he’ll realize that he would not be guaranteed $25 mil on the open market. Unreasonable?

  18. Cliff says:

    Ben, What would you put that chances at of CC being a Yankee in 2012?

  19. Lanny says:

    I guess the CC opt out will take the place of “Melky stinks” in the Kabak list of weekly posts.

  20. mike c says:

    CC, AJ, Lee, Joba, Hughes sounds like a pretty sweet 2011 to me

  21. jramey says:

    does his family like NY? I think he does.

  22. warren says:

    People do not even know if they will be alive tomorrow, but let’s think about November 2011.

  23. Sean C says:

    Has anyone else pondered that he likes pitching for the Yankees, likes his teammates, likes his contract, and likes being, not only a top flight ace for an annual postseason contender, but also a top flight ace for one of the best teams in baseball? I don’t know about much of you RAB bloggers, but winning championships is addicting. I had it in the late 90′s, and it feels like it’s starting again in 2009 and beyond. CC will hopefully catch that winning bug, as he should’ve after last season’s results, and feel good about the crazy amount of money he’ll be making from the Yankees for years to come. I guarantee you every baseball player is in it for the money, it’s human nature, but there’s that “I want to WIN (aka, postseason/World Series) mode that is in the back of EVERY player’s mind. Why would someone opt out of one of the best contracts with one of the best teams? I guess that question can only be answered by one of the best pitchers making A LOT of money in MLB. That’s why I continue to hope for the best of my favorite team/players in the major leagues; that they WIN.

    • winning championships is addicting.

      And more money is even more addicting. As cynical as that sounds, there’s a reason why every high-priced player with an opt-out clause has exercised it.

  24. RIsto says:

    CC opting out wouldn’t necessarily be undesirable at all for the Yankees. If he did, it would mean the Yankees got CC’s prime years of his career and would not have to worry about paying him as he possibly declines on the back-end of the deal. Most teams would prefer to sign pitchers to shorter term deals.

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