Jan
17

The Opt-Out Clause

By

You're gonna have to shave that thing. (AP Photo/Rob Carr)

Late last week the Yankees agreed to a contract with a Rafael Soriano, and it’s not just a normal contract. It’s an absurdly player-friendly contract that’s almost too good to be true from the player’s perspective. The guy gets a guaranteed $11.5M in 2011, and then depending on how things play out over the next eleven or so months, he can either go seek a bigger contract elsewhere or take another $10M from the Yankees. If he does the latter, then twelve months after that he gets to decide if he wants to test the market or take another $13.5M of the Yankees money. It’s a fantastic contract for Soriano and I’m certain there are quite a few players around the league envious of him.

Therein lies the problem, the structure of the contract is just ridiculously unfavorable to the Yankees. Forget the money, that’s a drop in the bucket to them, it’s the structure of the contract and they way Soriano is now allowed to determine his role with the team for the next three years. Within minutes of the news breaking about the contract and the inclusion of these opt-outs, the general sense was that people were hoping that Soriano would pitch well in 2011 then opt out and go somewhere else. Hoping he opts out! If you have to hope a guy opts within a weekend of the deal being announced, that’s a pretty definitive sign that something is wrong.

There’s basically one way this deal will end up being a positive for the Yankees, if Soriano is fantastic in 2011 and he opts out to sign elsewhere. That’s it. Anything else happens, it’s a loss because everything is out of the team’s hands. They have zero say about whether Soriano will be a part of their club in either 2012 or 2013 (unless they can magically trade a reliever making eight figures at some point), and the only way they know for certain that he’ll still be around is if he gets hurt or just starts sucking like relievers can do for no apparent reason. But the other side of the coin is that if Soriano is dominant, he’s going to take off and look for a bigger contract elsewhere, maybe even just a bigger one from the Yankees. The team has no leverage, the risk on their end exists in the form of two years and $23.5M while the risk to Soriano is … what? Where’s the trade-off?

I’m just using Soriano as an example here, the same logic applies to CC Sabathia and his opt-out next offseason. Trust me, I’m a thousand percent aware that CC has said he won’t opt out (not necessarily using those words, mind you) pretty much since the day he signed his contract, but I don’t believe him. He’s not stupid, CC and his agent know that next winter’s free agent pitching crop is weak, so if he opts out he’ll have the Yankees by the balls. They can’t afford to lose him so the four years and $92M left on his contract will turn into a brand new five year, $120M contract like the Phillies gave Cliff Lee. Hell, when Sabathia hits the free agent market next winter, he’ll still be a full year younger than Lee was this winter. Five years and $120M is probably just a starting point.

The thing I hate most about these opt-outs is that they’re being passed off as “creative.” That was the word used for the Soriano deal, just like it was for Derek Jeter. Taking on all of the risk is not creative, it’s a horrible management of resources and will come back to bite the Yankees rather hard if they continue handing out contracts structured like this. It’s likely to happen with Sabathia in a year, and it’s likely to happen when a 39-year-old Jeter gets to decide if 40-year-old Jeter should earn no less than $8M regardless of how well he’s actually playing.

Look, there’s no denying that Soriano makes the 2011 Yankees considerably better. He’s a world-class pitcher and the bullpen is considerably stronger with him, I’m not going to argue that aspect of this contract because there is no argument. On the field, the dude is a beast and I look forward to watching him pitch and rooting for him to succeed. But the contract, good grief the contract. The Yankees took on all the risk with a microscopically small chance that it ends up working in there favor. It reeks of desperation and the opt-outs strike me as saying “we really don’t want to do this and we’re hoping that we can get out from under this deal as soon as possible, please please please don’t get hurt in 2011.” If you’re that concerned about a contract, just don’t do it.

Oh well, there’s nothing that can be done about it now, but giving out opt-out clauses like this just isn’t a smart way to build a team. The risk is too great and the reward is far too small, there’s no other way around it.

Categories : Rants

147 Comments»

  1. Dave Mancuso says:

    “He’s a world-class pitcher”

    Eesh. Really?

  2. billy barty says:

    Mike, don’t you think there is something that you may be missing something in your analysis? After all, these deals are almost always structured by Randy Levine, widely viewed to be an extremely shrewd and knowledgeable negotiator. There must be some benefit to the team to included them. It can’t just be a deal sweetener, ie just a way to lure the player to sign on to play for such a bad team in such a bad city…

    • bob says:

      Mike and BB,
      First, good article Mike, but I am also leaning toward agreeing with BB, seems there may be more to it that we don’t know about. If not, I would like to think that maybe, just maybe, they are looking to build some recognition from future FA’s since they have been scorned lately.

      • Mike HC says:

        I might be reading too much into this one line, but I think Mike acknowledges there could be something else going on here when he wrote, “almost too good to be true.”

  3. coolerking says:

    He was arguable one of the top 3 closers in the game last year…that’s world class. Great article Mike. Right on the money.

    What I don’t understand is, given the lack of teams looking to sign Soriano so late in the free agency period, why in the world did the Yanks have to give him this sort of option? What possible leverage did Soriano have to get this sort of deal? I wonder if it’s a situation where Cashman was told to sign him and make it quick…whatever it takes.

  4. Jeff says:

    How about this…Soriano has a great season on 2011, and, wait for it, stays in New York. It’s a possibility no one seams to mention. Let’s wait until CC and Soriano opt out to criticize these deals.

    • I don’t think anyone mentions it because it’s not all that likely. If he has a great year, he’s going to look to parlay that into a closing job. Granted, the money probably won’t be as good, but it could be equal and he could be closing.

      • Section 203 says:

        That’s nonsense considering he will be 1 year away from closing at that point. The two-year contract Mo signed is his last contract. Soriano would clearly be the obvious favorite to close after Mo.

  5. Jerome S. says:

    Meanwhile in Tampa, Evan Longoria produces 7 bWAR and makes pennies. Ok, that is the opposite extreme, but is it just me or have contracts gotten increasingly player-friendly?

    • Ed says:

      Also remember that Longoria had spent about 6 days in the majors when he signed that contract. It’s team friendly because things worked out and he become a star.

      If Alex Gordon got the same deal, everyone would’ve started off calling it great, but would have ended up hating it.

  6. Ultimate Yankee Warrior (James) says:

    “Look, there’s no denying that Soriano makes the 2011 Yankees considerably better. ”

    I’m not so sure of that. He’s a 2 win pitcher. D-Rob was a 1 win pitcher last year.

    One win.

    • Ed says:

      bWAR has them at 2.6 and 1.0.

      Remember that Soriano isn’t replacing D-Rob, he’s replacing Gaudin or similar.

      Guadin was -0.1 bWAR last year. You’re looking at an improvement of almost 3 wins.

      Of course, that’s assuming everyone repeats their performance, which isn’t at all a given with relievers.

      • In what world was Gaudin the set up man? He is replacing Joba which makes the difference in WAR negligible…

        • king of fruitless hypotheticals says:

          Chaining.

          If you do it well enough, essentially Soriano replaced me in the bullpen.

          Although technically, my bWar was 0, so I guess I helped the Yanks more than he did. Plus, there’s my salary to throw in there (about -$650)…

        • Ed says:

          It doesn’t matter who the setup man is. At the end of the day, the worst reliever in the bullpen lost his roster spot and got replaced by Soriano.

          This isn’t Torre managing the bullpen, so everyone’s going to get used.

    • Aaron says:

      Is it possible that too much stock is put into that statistic? If they were truly representative of contribution to the team’s Win column, then why hasn’t every team in the league cut all of their pitchers, and promoted their AA and AAA pitchers. Because honestly, if the difference is only ONE win, why spend a gazillion dollars (and virtually every team does it)?

      I think if we let them play the games, you will see a major difference in Wins vs Losses. The Yankees have basically made the game a 7 inning game, and in the meantime, they still have 6 more outs to score runs.

  7. TopChuckie says:

    Would a 3-year guaranteed deal be better? I don’t think so. So if it was that or this with the opt-outs, this makes more sense for the Yankees.

    I think the Yanks obviously preferred a 1-year/$12M deal during which Soriano gave them all they hoped and then he left next year when they could refocus their resources on starting pitching, but Soriano/Boras wouldn’t agree to that. Whether or not the Yanks had enough leverage to say “take it or leave it” is something none of us know. This offer at least creates the possibility, barring an injury or sucking, that they will end up with the best case scenario. If they gave him 3 years guaranteed and he got hurt or sucked, they were on the hook anyway.

    Now if he opts out they can choose to offer arbitration or not, if he opts out I don’t really see why he would accept, but even if he does the Yanks are only on the hook for that additional year. After which they get to decide how interested they are in him again.

    And each of the opt outs represents a chance, however small, to recoup the draft pick, plus one, assuming no changes to the CBA.

    • Tom Swift says:

      It is a 3 year guaranteed deal. In which the player has additional rights. So I think that, as a matter of logic, this deal is worse than a simple 3 yr deal.

      • Tank the Frank says:

        +1

      • TopChuckie says:

        -1

        Best Case: 1/$11.5 with good performance, recoup draft pick +1
        Good case: 1/$11.5 with good performance, no arb. offer
        Neutral Case: 2/$21.5M, recoup draft pick +1
        Bad Case: 2/$21.5M, no arb offer
        >>>>>>>>>>>
        Worse case: 3/$35M with good performance each year
        Worst Case: 3/$35M with poor or no performance

        The current deal offers a chance at the four best case scenarios. A 3-year guaranteed offers no upside with a best case scenario of overpaying a middle reliever for three years.

        The only way the opt out isn’t the best deal the yanks could have gotten is if they could have signed him for less years or with team options, and none of us know if that was possible, but apparently not.

        • AndrewYF says:

          3 years with good performance is a worst case? Um.

          • TopChuckie says:

            That’s not what I said, I said it’s a WORSE case scenario. 3 years of sucking or being injured is WORST case. I didn’t get into the infinite possibilities of a year of decent, a year of mediocre, etc. because it’s not relevant, all that would fall between my worse and worst. The point is, I don’t really think any of us think a 3/$35 guaranteed contract for a middle reliever is a good contract, even a good middle reliever, even the best middle reliever. If you do, then we’ll have to agree to disagree.

          • TopChuckie says:

            I’m saying it’s “worse” than the four possibilities above it. I’m also saying it’s the best case scenario of a 3-year guaranteed contract. Which is exactly my original point that the opt outs at least present a CHANCE at a better outcome.

      • Mike M says:

        Eh…not exactly. Lets say he has a great 2011, opts out, and gets hurt in 2012. Yanks are free of paying him for his 2 crap years. It only bites them as a 3 year deal if he breaks down BEFORE opting out.

      • AndrewYF says:

        It’s actually mostly like a one-year deal with player options. With an outright 3-year deal, the Yankees will always pay him for the three years. With the opt-outs, there exists the possibility they only pay him 1. Of course, the possibility only exists if Soriano does well, and it doesn’t exist if he does poorly, but it’s a possibility none-the-less.

        Frankly, I prefer this to an outright 3-year deal, and I suspect ownership does as well.

        • toad says:

          Frankly, I prefer this to an outright 3-year deal, and I suspect ownership does as well.

          I don’t understand why.

          You’re right. It’s a one-year deal with player options. So if he pitches well he goes and if not he stays. Oversimplifying just a little, if he’s worth more than $23.5 million for two years after the season he goes, if less he stays.

          Options have value. While things could work out in the team’s favor on some series of events, looked at from today’s point of view this has to be worse than a straight three-year contract for the same amount.

  8. Chris says:

    What really bothered me about the deal is the opt out after the 2nd year. If he’s healthy and effective for the first 2 seasons, going into the 3rd year with Rivera likely retiring, the Yankees are going to want him to stick around to be closer on a 1 year deal. He’s gonna have leverage to extend the deal at that point because of the opt out. In addition, if he only had the opt out after the 1st year, I think there would be a much better chance he’d use it which I think everyone would agree is what the Yankees would want at this point.

  9. Twains Yankee says:

    Mike, I appreciate your Agita here. My biggest concern is that it raises the specter of “who is running this show, anyway?”. My second concern is that it does not address a need (Unless they get religion with Joba). That said, it makes the yankees better and if he opts out great and if he doesn’t thats fine too. The Yankees are in a very enviable financial position and I am hard pressed to believe this contract even has the potential to be as bad as say, Kyle Farnsworth.

  10. Jonathan says:

    Couldn’t have said it better. The only people I’ve seen defend this deal are the same ones who are quoting save totals as the main reason why in the first paragraph. Why even hire a GM if you truly believe you know what’s best for the team? I bet that ugly fuck Levine didn’t even play tball. I can only imagine what Cash really thinks.

    • Chris says:

      I think you need to see how this plays out before condemning Levine. If the most likely scenario plays out which is Soriano pitching lights out as setup man for a year, opting out and the Yanks get 2 high draft picks next year, then he did Cashman a huge favor. This deal has no chance of becoming as big an albatross as Cashman’s deal currently is with Burnett($17 million for 1.3 WAR last year and 3 year to go).

      • Mike Axisa says:

        This deal has no chance of becoming as big an albatross as Cashman’s deal currently is with Burnett($17 million for 1.3 WAR last year and 3 year to go).

        Oh yeah?

        • Chris says:

          Well the Yankees already flushed $16.5 million down the toilet last year with Burnett and have the potential of flushing another $49.5 million if Rothchild can work miracles. Even if Soriano gets hurt tomorrow, most it can cost is $35 million. Igawa was a far bigger screw up than Soriano could ever be also.

          • Jonathan says:

            he was worth $5.2MM last year. By the way, we get it. You don’t like Cash. Every single GM has made a mistake. How on earth does that make this signing any better? At least Cash has great moves in his history. What baseball move worked out well that Levine made? Here is a better question….Are you Levine?

          • Avi says:

            I agree. In general it’s a bad idea to have anyone go around the baseball personnel people. But if it’s going around Cashman I have no problem with it. He spent $20M just last off season on 2010 contracts and made the team WORSE (Vazquez, Nick Johnson, Chan Ho, and Winn). Though if they don’t trust him what’s the point of having him occupy the GM position. Just let him go.

            • Jonathan says:

              I didn’t like any of those moves at the time. But nobody could forsee Vazquez losing that much stuff. Nick Johnson was just stupid and the others were no risk all reward type guys and if they don’t cut it, you just get rid of them. Just like we did. What blows me away is people act like it’s easy to be a GM and that every move should work out well. Cashman has successfully raised our farm system from one of the worsts in baseball to a top 5 system all while keeping us at or near the top of the AL. He’s done all this while continuing to get younger. Let’s not all forget that it was Cashman who had the idea to bring Cano/Wang up in 2005. That was a great idea. The Burnett deal doesn’t look good after last year but the guy was dominant when healthy. There was zero way to tell that he’d fall off like he did but remain healthy.

              I don’t think Cash is an elite GM but if the front office would stay the fuck out of his way, I doubt Jeter/Arod would have near the deals they do now and Igawa wouldn’t have been with us at all.

              • Chris says:

                There is absolutely no reason why the Yankees shouldn’t have a top farm system. They can sign the best international players, they can pay over slot in the draft, they can hire the top talent evaluators. coaches and build the best training facilities. It would take gross negligence for them to not have at least a top 10 farm system consistently. Cashman doesn’t deserve a pat on the back for not being stupid.

                • Mike Axisa says:

                  Oh is that all it takes? Wow.

                  You see to extremely unrealistic expectations about pretty much everything you’ve posted in this thread.

                  • Matt says:

                    I think Cashman has a built in edge compared to GMs of other MLB teams as well as GMs in other sports like basketball and football with their salary caps and draft structures. I don’t think anyone could argue otherwise.

                  • Chris says:

                    I’ll agree I may have exaggerated the ease in building a good farm system but I think Cashman has a significant build in advantage to suceed compared to other MLB GMs as well as GMs in just about any other major professional sport with the way baseball is structured. I don’t think anyone would argue otherwise.

                • Aaron says:

                  Hmm, I have to disagree with you on one point: You have to put your foot down and say I am not going to trade away all of our youth for 34 yr old free agents.. and Cash did just that.

                  He told the Brass that he wanted to do things his way, and have control. Cash was the one who didn’t want to give up the draft pick in this instance as well. I think he does deserve a pat on the back for rebuilding the farm, becasue if not for him, the Yanks wouldn’t still have 3 bad ass catchers and 6 ML ready pitchers in the farm system.

              • Matt says:

                Are we now trying to say Levine went around Cashman’s back to sign Jeter too. Cashman has the ideal job. He gets credit for the good moves and the bad ones gets blamed on the “front office.”
                You are 100% right about ARod. Steinbrenner had him by the balls after he came crawling back and somehow he still came away with a 10 year deal when it should have been for much less.

            • Ted Nelson says:

              I like Cashman. However, if you’re going to overrule your GM the time to do it is money time. Just as a cheap org would veto a decision that increased payroll, the Yankees brass can decide to spend a bit more if they want.

              If they forced Cashman into a trade he and the baseball people found to be a bad move, then I’d have a problem.

          • Kiersten says:

            There was also that thing how the Yankees only had 3 starters in the 2009 postseason and Burnett was one of them. Not sure if you’ve heard, but they won the World Series that year.

      • Jonathan says:

        obviously you aren’t a big cashman fan. Regardless of that, even if the best case scenario works out, the risk involved and the very small chance that the best case scenario works out is the real issue at hand. By the way, even in Soriano’s great year last year his WAR was only 1.6 and barely above Burnett’s. Levine underminded the guy who righted the ship after Levine and George did their best to ruin it. He received nothing while took on all the risk. Results won’t change the fact that it was a dumb move. Sorry your dislike of Cash has blinded you to that.

        What if he blows his arm out?
        What if he’s too much to deal with the locker room?
        What if he just sucks?

        You could say that about any player, but taking that much risk in a contract with the most volatile type of player with a history of major arm injury and that’s a huge flyball guy is lunacy. The truth is, with our money no contract, even AJ’s or Arod’s, is an albatross. This isn’t about money.

        • Jonathan says:

          undermined*

        • Chris says:

          I don’t hate Cashman, I just don’t think he’s any great shakes, maybe a little above average as a GM especially considering he’s operating in a system where the deck is stacked in his favor. He’s made some nice trades and signings and some terrible ones like all GMs. The farm system is in better shape than it has been though the lack of potential starting position players in the upper levels other than catcher is somewhat alarming. Too bad there wasn’t statistics to objectively rate GMs and managers like we have with players.

          • Sweet Dick Willie says:

            the lack of potential starting position players in the upper levels other than catcher is somewhat alarming.

            Not really. If Adams didn’t get injured last year, he would probably be starting 2011 in Scranton.

            Also, don’t forget that it produced Cano in 2005, Melky in 2006, Gardner in 2009, and Granderson (via Ajax) in 2010.

            No farm system produces bonafide major leaguers every year.

            • Aaron says:

              3B Laird is ML ready, and could see him this year; he worked out in the OF during winter ball. SS Nunez is supposed to be 5 tool player that projects to ML level as well, doesn’t he? In addition, the Yanks have 3 good catching prospects, and a half dozen pitching.

              Do you draft for position? or does one draft the best available player at the time of signing?

      • JAG says:

        No chance? Really? What if Soriano blows out this shoulder in Spring Training and never pitches an inning for the Yankees, but gets paid by them for 3 years? The fact that Burnett is providing positive WAR means at least he’s doing something positive. Is he getting paid way too much for it? Sure, maybe. But at least he’s contributing. There’s a non-zero chance that Soriano pulls a Pavano and spends 3 years rehabbing with the Yankees footing the bill.

        I have a hard time saying that the most likely scenario is the 1 year and opt out. He could just as easily be mediocre to Gaudin-level and get paid for 3 years to be replacement level. Granted, when healthy he’s excellent, but he has yet to prove that he can do that for 3 years in a row.

        • Chris says:

          First of all, you can’t really judge relievers by WAR. Mike and his crew will be the first to tell you that so don’t tell me Burnett was just as valueable to his team as Soriano was last year. 2nd. There’s no evidence of Soriano pitching like Gaudin unless he gets injured. 3rd. Injuries can happen to anyone. What if CC blows out his arm or back or knee tomorrow. Now that would cripple the franchise. If Soriano never pitches an inning, the $35 million over 3 years isn’t gonna change the way the Yankees do business anymore than the Igawa fiasco did.

          • Jonathan says:

            I just said it wouldn’t change anything and we can’t have a true albatross. secondly, comparing a guy with a long history of major arm problems to a guy who has been largely healthy his entire career is just stupid. Mike Hampton and Cal Ripken Jr could both get hurt in their careers but which one is more likely? you continue to not comprehend the entire thing is about unnecessary risk.

        • TomG says:

          If he blows out his shoulder the team will recoup the cost of the contract, or at least a portion of it, through insurance. I don’t know the intricacies of player injury insurance, but I’m sure the front office does. The worst case scenario is he just inexplicably starts sucking.

  11. TomG says:

    This may sound absurd, and I’m kind of pulling it out the air, but maybe this is the Yankees thinking big picture. The Yankees aren’t victims of the whims of the market, their spending shapes the market. If these types of deals became the norm across all of baseball it would benefit the teams and hurt the players. Free agents are expensive because there’s only a trickle of them per year. The more players that have these deals, the more would opt-out, which would flood the market with available players, lowering salaries uniformly. It’s like the prisoner’s dilemma. If next year’s crop of free agent relievers all use Soriano’s deal as their starting point, the following year would have many more available. Or maybe my team just got badly hosed.

    • Tank the Frank says:

      “Or maybe my team just got badly hosed.”

      Boom.

    • billy barty says:

      I agree 1000%

    • Ted Nelson says:

      More so than altruistically helping out other teams, more opt outs helps the Yankees because it means more free agents. The Yankees can’t bid on most big ticket players solely because they rarely reach free agency. When they do reach it, they’re old.

      I don’t know that this has much to do with their reasoning behind the deal, but long-term is could help the Yankees get a shot at more top free agents. Since they have more money than other teams, this is to their advantage.

    • Mike HC says:

      This is absurd and makes little to no sense. The Yankees are the team that are giving out these long term deals and will be the team that has the most to lose if opt outs all over the place becomes the norm. These player out opts are solely in favor of players and to the detriment of all teams, especially the big market teams.

      • Ted Nelson says:

        “The Yankees are the team that are giving out these long term deals and will be the team that has the most to lose if opt outs all over the place becomes the norm.”

        Couldn’t disagree more. Imagine if instead of getting locked into long term deals all veteran stars were eligible to hit free agency every season. That would be great for the Yankees. If young guys got bought out of their arb years and then had opt outs every season after they were no longer arb eligible. The Yankees could make a killing in free agency. Free agency would be flooded with talent and the Yankees could pick a lot of the ripest fruit.

        • Mike HC says:

          Players under team control would be the most valuable commodity in a world where players can opt out every year. Free agents would become less valuable because of the volatility. The Yanks thrive on free agents, not on young players under team control.

          Your logic is just flawed logic and I can’t even begin to debate this at this hour, let alone any hour. I guess we can just agree to disagree if that sounds better.

          • Ted Nelson says:

            “Your logic is just flawed logic”

            More players will be able to test the market. The reason to sign a long-term deal is security. The players would get that security of the long-term deal with the upside of being able to cash in when they’re coming off a good season. There would be more very good players hitting free agency, and the Yankees could acquire more of them.

            Productive players under team control are already really valuable. Maybe they would become more valuable, but that has absolutely nothing to do with the Yankees getting their hat into the ring for more top-end free agents (sure some would pull Cliff Lee’s, but there would be more Cliff Lee’s out there). Teams as a whole would lose and players as a whole would gain, but the Yankees could be a winner because of their financial competitive advantage.

            Try to understand what people are saying before calling them illogical.

            • Mike HC says:

              I get what you guys are saying and it does not make sense to me. ARod, Jeter, Cano, Tex, Posada, Granderson, Swisher, CC, AJ, Mo … these guys are basically our entire team and are already all stars (not AJ, but if he could opt out, he wouldn’t and we would be stuck with him anyway) and there are not that many guys that are better than them, period, at any age. The Yanks can sign all these all stars for basically every spot on the team, and don’t have to worry about losing one, or all of them in any given year, and then at best, signing another teams player who is most likely at best equal to the players we lose. And then do it all again next year. It is not like the Yanks have a dearth of talent to sign out there.

              • Ted Nelson says:

                A. Pitching is where it would really help. The Yankees haven’t been getting shots at too many elite pitchers in their late 20s and very early 30s because not many are hitting free agency. They are locking themselves in with their teams because pitching is volatile and induces injuries at a higher rate than hitting/fielding. Now those guys would get the long-term security, but once their arb years are over the Yankees could offer more long-term security. No need to overpay AJ Burnett in the first place.

                “It is not like the Yanks have a dearth of talent to sign out there.”

                There absolutely is a dearth of pitching talent to sign. After Cliff Lee spurned them who were the Yankees choices? Under this new arrangement they’d have a bunch of choices.

                B. All teams would theoretically be dealing with this if it became the norm and not just the Yankees. Since the Yankees have more money to spend than other teams, if they’re smart with how they spend it (and a little lucky) they have an comparative advantage the freer free agency becomes. The Yankees would not be losing many of their free agents. Who is going to pay these guys more than the Yankees? If they’re smart they’ll let the right guys leave and hold onto the right guys while more than making up for the departed with acquisitions.

  12. David says:

    How about this, Sori has an excellent year in ’11, and gets the World Series winning save in game 5, (Mo getting the saves in games 1,3 and 4). He stays with the team and in early ’12, while his value is high, we trade him back to Seattle, along with Mitre and Nova or Noesi for Felix.

    It Could happen… IT COULD HAPPEN…!!!eleventy!!!

    /alarm clock goes off

    • TopChuckie says:

      No, THAT couldn’t happen, not with that offer, but it could happen that other teams will have interest in a 2-year/$23.5M contract for the best available closer in the game with no draft pick cost.

    • Kiersten says:

      If the Yankees win the World Series, Mariano Rivera will throw the last pitch of the 2011 season.* Book it.

      *Unless the Yankees win on a walk-off

  13. Dale Mohorcic says:

    In principle I agree with your analysis, but in this scenario I see the options as a good thing-they obtain the value of Soriano for a year an give themselves more time to find someone to start games, i.e. A simple purchase of time. By the time he opts out hopefully the yanks have no need for him anymore. That being said, I’d rather they put joba in the rotation and toss $2.5M at Jeff Francis.

    • Gonzo says:

      I am not sure Francis was the answer. That soft tosser would have been mauled.

    • Ted Nelson says:

      What does Soriano have to do with the rotation? I don’t think it was the Soriano deal that kept the Yankees from matching the Royals deal of $2 mill guaranteed and another $2 mill in incentives. And if anything Soriano helps the chances of Joba moving to the rotation.

  14. Mark says:

    the etire premise of this article is RE-DICK-YOU-RUS

  15. Gonzo says:

    The one variable that doesn’t get counted (which may or may not have been calculated by the Yanks) is the farm system. When 2012 rolls around, they will have a much better assesment of who of Stoneburner, Warren, Brackman, Noesi, Nova, etc…, will contribute to the team in the pen or rotation. Not that this is a big consolation, just an observation.

    • Ted Nelson says:

      You’d think that since he covers the farm system Mike might look at these kind of things, but he’s too busy bashing every aspect of the signing to even consider positives.

      • Mike Axisa says:

        What does Rafael Soriano have to do with Graham Stoneburner, etc.? Nothing.

        • Ted Nelson says:

          The flexibility of him opting out and the Yankees being able to decide if they want to say so long or hold onto him by re-signing him.

          Again, you have covered nothing but the negatives. Your only mention of the positives have been “he’s a good pitcher” and “there’s a microscopic chance this works out.” Yet every negative has received its own article.

          It is possible to analyze the move thoroughly and draw a conclusion that it was a bad move without creating a strawman out of the positives. You have not chosen that route. On a site that’s supposed to be about thorough analysis, that pisses me off.

          • Mike Axisa says:

            The flexibility of him opting out and the Yankees being able to decide if they want to say so long or hold onto him by re-signing him.

            Haha, they don’t get to decide, Soriano gets to decide. He’s in control, the team has no leverage whatsoever.

            • Ted Nelson says:

              How many teams are looking to pay a closer more than $11.7 mill per? The Yankees absolutely do have leverage. They set the market. Again, you are being ridiculously pessimistic. Looking at everything as a negative without seeing the corresponding positives.

              If he does decide to opt out, he has to actually believe he’s getting more money on his new deal (or just really want to leave). At that point the Yankees have the flexibility to bid for his services if they think he’s worth it, or to let him walk because they don’t want to pay him. Maybe it’s a messy divorce and he just wants out, but most likely if he’s looking for more than 2 years 24 mill or 1 year 14 mill there’s going to be a very limited market.

  16. Teh Comp Pick says:

    This was my first reaction. The first one I get, but the second one?????

  17. TopChuckie says:

    I think the Yanks would have loved to sign a 3 year/$36M contract for a free agent starting pitcher they felt was worthy of a $12M per contract. Unfortunately this year’s crop of free agents didn’t present that player, so the Yanks should have gotten creative and made one.

    (This is just an example, they could have done this with any team and another one of the true free agents.) Even though I think the White Sox are fine with Matt Thornton, I believe they were one of the teams rumored to be interested in Soriano, but they probably weren’t willing to commit to the 3/$35M contract and/or the draft pick sacrifice. The Yanks should have called up the White Sox and said, “We’ll sign Soriano to a 3/$35M contract and give up our draft pick. Then we’ll trade him to you for Gavin Floyd and his remaining 3/$21.5M (if the club option for ’13 is exercised). We’ll also give you the $13.5M to offset the contracts.” That way the White Sox get an elite closer for 3/$21.5M with no draft pick cost, while the Yanks get a quality starting pitcher for 3/$35M and sacrifice a draft pick, which I think the Yanks would have gladly done to sign Gavin Floyd as a free agent this off-season.

  18. Monteroisdinero says:

    We’ve got other crappy contracts for 2011. Posada and Jeter come to mind. OMG-we couldn’t win without those two next year!

    Spare me the stats from the past.

    • Chris says:

      Dont forget Arod’s contract. It will take an act of god or a 50 gallon drum of Vitamin B-12 for Arod to produce up to his salary in the last 2-3 years of that deal.

    • First of all, Posada’s contract had a chance to be crappy but considering what he’s given the Yankees it wasn’t bad at all. Who knows what he’ll be this year, but it’s the last year of his contract so the Yankees will be getting out at about the right time.

      Not that any of this matters, because you’re basically arguing that two wrongs make a right. Just because the Yankees have won with bad contracts on the roster doesn’t mean they’ll be perfectly fine if they just keep wasting money.

  19. Avi says:

    Absolutely, you’re right on Mike. There’s no way the opt out clause can benefit the Yankees. If he’s great this year the Yanks won’t want him to opt out. And the idea that the Yanks signed him to be the closer in 2013 (when Mariano’s contract is up) is a joke. Either he’ll suck or be hurt and under contract for 2013 or be awesome and opt out and be a free agent heading into that season. This contract does zero for the Yankees’ closer situation after 2011. I have to chalk up the opt-out clauses to Boras negotiating like an SOB as it’s hard to imagine Soriano doesn’t take the deal without them.

    • Mike M says:

      What about if Soriano opts out and then proceeds to get hurt? What if the team truly is on a budget, and him opting out allows us to sign a better free agent? I get that it PROBABALY won’t help the Yanks but to say it CAN’T is just as dumb.

  20. J Scott says:

    Has Boras ever had a client with an opt-out who didn’t opt-out if he was coming off a good, or reasonably good season? I mean, like, ever?

    • TopChuckie says:

      That’s a good thing for the Yankees. Though I think a better question is, “has Boras ever had a relief pitcher, who saw little market for his services two years in row, opt out of a contract offering two more years at $23.5M?” i.e. has Boras ever had a player with an opt out with less chance of getting more money if he opts out?

  21. Jerome S. says:

    Question, where would Soriano be able to go where he could find better than 2/24? Just wondering.

  22. R Web says:

    I may be one of few, but I actually like the opt out clauses. In recent years, the Yankees haven’t gotten many compensation picks when their Type A and B free agents leave, such as Damon, Abreu, or Wood, because if they offered them arbitration, they’d likely accept, and we’d have another overpriced player taking up space on the roster. In Soriano’s case, the only way he opts out, either year, is if Boras is sure there’s another, better, multiyear offer out there. It basically insures the Yankees of two picks whenever Soriano leaves, and I think that part was a smart move. Now, don’t get me wrong, the money side of it I don’t love, but as Mike said, as long as it doesn’t keep them from making other moves in the future it doesn’t bother me.

  23. Slugger27 says:

    you would really call the chances of soriano having a good year and opting out to test the market “microscopically small”? that’s laughable.

    also, (correct me if im wrong) but i think the media is calling the contract “creative”… to my knowledge, nobody of the yankees brass has referred to it as this

    • you would really call the chances of soriano having a good year and opting out to test the market “microscopically small”? that’s laughable.

      Why is it “laughable”? Regardless of Soriano’s ability there are a number of factors working against him. Mainly, the volatility of relievers, the fact that he’s never pitched 3 years in a row without getting injured, and the possibility of a market flooded with quality relievers next year. Not to mention this assumes he duplicates last year and doesn’t suffer some BABIP regression or is the victim of some Yankee Stadium home runs.

      • mike c says:

        His career whip is 1.000. ‘Microscopically small’ is absurd statement, but don’t let stats get in the way of your opinion

        • Mike Axisa says:

          If only WHIP was useful in anything other than fantasy baseball.

          • Slugger27 says:

            whip is useful, and ironically, its cited numerous times by the authors on this very site (it goes against your argument here, which is why i think u had such a sarcastic answer)

            the guys been lights out statistically for the past 2 seasons.his chances of having a similar year in 2011 and using the opt out are not “microscopically small”… thats really all im trying to say… that was crazy hyberbolic

            • Mike Axisa says:

              I never use WHIP, we have much better measures of effectiveness. There’s essentially one scenario in which the opt outs work in favor of the Yankees and about a million in which they won’t.

              • Slugger27 says:

                we do have better measures of effectiveness, and he excels at all of those, too.

                it wont work out if he gets injured or is ineffective the first year. this is true. those are 2 ways that i count. i would say the odds of him being ineffective or getting injured the first year as opposed to having a similar year to the past 2 is roughly 50/50

                you exaggerated a lot in your post, thats all.

              • TopChuckie says:

                If you were right that would be one scenario more than a 3-year guaranteed contract, and a 3-year guaranteed contract carries the same million that won’t.

                The one scenario where a 3-year guaranteed works out better for the Yanks is if, Mo forbid, Mo has a career ending season this season, in which case the Yanks would have their replacement locked in for three years.

                And I’m sure you would agree a 1/$12 contract for Soriano would have been the best case scenario, but had they signed that and Mo went down, they’d be just as desperate to re-sign Soriano next season as if he opts out.

                All you’re really arguing is that a 3-year contract carries a lot of risk, and no one here is arguing against that. Your position that it forces the Yanks to assume all the risk is off base, they are assuming no more risk than a 3-year guaranteed.

        • So if Soriano pitches to a WHIP of 1.000 it means he had an amazing year and he’ll definitely without a doubt opt out to test the market? There’s no way he could get injured, or give up a lot of home runs, or a dozen other things… right?

          Try coming up with facts that actually back up your statement next time.

    • mike c says:

      It’s creative if it meant avoiding a 4 year deal. ‘Microscopically small ‘ is an absurd prediction, but it seems like the authors here have decided to be negative on soriano. I’m rooting for the guy

  24. LarryM.,Fl. says:

    I have no issue with the contract. The Yankees (fans) pay better than 29 other clubs in the MLB. Sure he can opt. out but my thoughts are he’ll make more money than with any other team, he’ll be an integral part of a big season with the Yanks going all the way. He’ll like the atmosphere and stick around taking over for MO.

    No team except Boston will pay close to this number of 11.66 million a year, practically MO territory.

    If he wants to leave, opt. out let him go. We need him now to compete in the AL East.

    We need him this year the rotation is weak with no improvement possibilities known. The Yanks got to do what they got to do.

  25. J Scott says:

    I had to go back and check, to refresh my memory. J.D. Drew left 3 years and $33 million guarenteed on the table when he opted out of the last 3 years of his contract with the Dodgers. He was coming off a year where he’d hit .283 with 20 homeruns. And Drew, I think, had a more troubling medical history at that point than Soriano does now.

    Going back and looking at the quotes, the Dodgers were…astonished.

  26. king of fruitless hypotheticals says:

    this is a great deal, and you guys need to learn to respect the ninja:

    A) This was all Cash’s idea, he just made the FO THINK it was coming from them.
    B) He knows how good Soriano will be.
    C) He, Joe and Teh Binder are going to game the system to make Soriano’s stats frickin’ amazing.
    D) Soriano is going to walk, allowing us to get the most absolutist fantastic first round picks, keeping our farm in the top ten.

    …all the while winning the WS and robbing some poor schmuck of their #3 starter halfway through the year.

    Book it.

  27. Wil Nieves #1 Fan says:

    Slightly off topic: I don’t think CC will opt out. Shame on you, Axisa, for making me saddened by your words. Poop head.

  28. Hughesus Christo says:

    I’m generally supportive of signing Jones to be a 4th OF, but I have some concern about the inevitable steroids sweep he’s sure to get swept up in

  29. Jerome S. says:

    I truthfully think that, while a bad deal, the fuss is really much ado about nothing. This isn’t the Rays, I highly doubt that the negative repercussions from this deal will be widely felt. On a small market team, they’d want the GM’s head.

    • Mike HC says:

      When you are rich, you can buy a $30 hamburger from an overpriced restaurant that is only twice as good as a $3.00 Wendy’s hamburger. Yea you got ripped off, but that is how the world works.

      $30 hamburger = Soriano
      Overprice restaurant = Boras clients
      $3.00 Wendy’s burger = guys like Robertson and other “build a bullpen” type of guys.

      And yes, I am hungry right now, ha.

  30. Will says:

    This contract is like “Avatar” a year ago. The backlash on the internet is way disproportionate to its actual negatives.

    • Mr. Sparkle says:

      I agree with the backlash on the Soriano contract…way out of proportion with the reality of the situation. I still think many people are sore over losing the draft pick, which is ridiculous.

      I have to personally disagree on “Avatar,” which I found to be a colossal bore.

  31. stu phillips says:

    levine should be fired for that sorino contraci!!!!

  32. MattG says:

    When compared to a guaranteed 3yr/$35m contract, the opt outs have no downside. Think about it–the Yankees already have a significant financial advantage. Once Soriano opts out, the Yankees will offer arbitration, and now they have a tactical advantage as well. Who is going to be able to offer more money than the Yankees plus their first unprotected pick? We’ve seen two years running that no one wants to part with a draft pick for a reliever. A draft pick and more than $24m? I don’t think so.

    I am sure the opt-outs seem valuable to the player, but in reality, the have no value at all (again, if the alternative is a straight 3 year deal).

  33. camilo Gerardo says:

    2014 will ave a lot of salary relief without w/out Jeter, Mo, Po, AJ, Rafael

    Curtis
    Alex
    Robi
    Tex
    Jesus
    Swisha
    DH
    Nunez/SS
    Gardner/LF

    CC
    Phil
    Banuelos
    FArm
    FArm

  34. Ted Nelson says:

    This is getting pathetic. Where’s the article on his $35 mill maybe going to the axis of evil and narco-terrorists?

    “There’s basically one way this deal will end up being a positive for the Yankees, if Soriano is fantastic in 2011 and he opts out to sign elsewhere.”
    “The Yankees took on all the risk with a microscopically small chance that it ends up working in there favor.”

    It could work out any number of ways for the Yankees. One good year and opt out. Two good years and opt out. Three good years and leave. Three good years and stay. Two of three years are good. In any of those cases it could work out and help the Yankees.

    “The risk is too great and the reward is far too small, there’s no other way around it.”

    What risk are you talking about? He leaves? If no one is going to trade for his salary, who is going to sign him to a better deal? You contradict yourself by saying he can’t be traded and also that he can leave and get a better deal. You don’t want to pay a guy the money, but you also don’t want him to leave? And if it’s a drop in the bucket as you say, who cares about the downside of wasting $?
    The potential reward is one of the best relievers in baseball and the potential risk is that he leaves. His sucking or getting hurt is not a risk that is unique to this deal because if they gave him a straight 3 year deal the same risk exists. The only unique risk is that he leaves, which would mean success and doubling the draft picks.

    Is it ideal for a team to give players these opt outs? No. Do guys like CC and Soriano have the leverage to negotiate that in because they’re among the best at what they do? Yes. It’s a player friendly development, but clearly the Yankees felt comfortable taking the risk and that Soriano had the leverage to force their hand.

    Even in this article you don’t bother to elaborate on the positives such as 2 draft picks for 1 if he leaves as a Type A. The bias is just ridiculous.

    • Mike Axisa says:

      Even in this article you don’t bother to elaborate on the positives such as 2 draft picks for 1 if he leaves as a Type A.

      I’m still waiting for those two Javy Vazquez picks to come through.

      • Ted Nelson says:

        “if he leaves as a Type A.”

        2 picks is a best case if he leaves. 1 pick a medium case. Zero a worst. Losing a draft pick gets mentioned as a negative, but there’s no mention of the probability being that they at least get that pick back. There’s no analysis of what the pick is actually worth. Just a list of negatives and a strawman for opposition.

        I’m not waiting to see the 1 pick come through. The Yankees did get a pick for Javy. The probability of them getting one for Soriano if he leaves in the next 3 years is pretty high.

      • Ted Nelson says:

        And this article is all about how horrible it is that Soriano can opt out. This horrifically risky downside of him opting out is pretty likely to be accompanied by the upside of the Yankees doubling their pick. If he opts out we can pretty much assume it’s because he’s coming off a successful season (or at least not a disaster) and maintains Type A or at least Type B status. The deal is structured in such a way that he’s also unlikely to opt out and then accept arb: leave a season on the table after year 1 or likely leave $ on the table after year 2.

        Again, you are focused on the negatives to the point where you’re not being impartial. I’m not saying this was a great signing. I’m saying that you don’t have to ignore the positives and potential positives to talk about the negatives.

        • Mike Axisa says:

          I said it write in the post, the positives are that he’s a great pitcher and that he might opt out after year one.

          Draft picks that the Yankees may or may not get aren’t all that exciting. That draft is 18 months away and will be covered by a new CBA, if they install some kind of rigid slotting system, the value of those picks declines significantly. We can’t bank on them being a certain value because so much can change between now and then.

          • Mike HC says:

            I don’t get how him opting out after the first year works out as a positive. If he pitches well enough to want to opt out, wouldn’t the Yanks prefer to keep him on the two year deal with the player option for the second year? Why would they want him to opt out at that point and lose our great set up man (again, assuming he pitches well enough to want to opt out)?

            • Ted Nelson says:

              Because they got a great season and now have flexibility. They can still re-sign him if they want, and he’s probably not looking at a higher average annual salary than he’s already got. They can watch him walk and pick up 2 draft picks.

              One way of looking at it is that his being healthy in 2009, 2010, and 2011 actually makes it pretty likely he’s going to get hurt in 2012. So, you get the healthy 2011, the picks, and don’t deal with the unhealthy 2012 and the $14 mill in 2013. Instead of not signing him and using your #31 pick, you get a great reliever for a season and get 2 picks in return.

              • Mike HC says:

                I can’t get on board with this idea that Soriano would be likely to get hurt in 2012 after pitching great in 2011 and because he pitched well for us last year, we no longer want him the year after. Isn’t a two year deal for a dominant reliever pretty damn good?

                I guess I’m checking out at this point. This Soriano signing has made people’s head spin apparently. I’m looking forward to non Soriano related conversations around here.

                • Ted Nelson says:

                  The point is just that if he does have a dominant 2011 and then walks away you got all the upside of signing him without the downside. You had a great ride and are no worse off than where you were.

                  • Ted Nelson says:

                    And I don’t really know if he’s opting out, because who is paying him more than the Yankees? Maybe after two years for more years.

          • Ted Nelson says:

            Again, it’s like every negative is sure to happen but every positive is some intangible thing that you explain away. Your pessimism is killing me.

            Even a slotting system is not going to change the value of the picks all that significantly to me. No one can say before a draft exactly who the best prospects are in order. Plenty of guys are still going to fall through the cracks and bloom late. The NBA does have a slotting system and that doesn’t stop teams from wasting top 5 picks and finding gems late 1st, 2nd, and undrafted. Again, it’s like you just have some personal vendetta against this signing to the point where you ignore reason and reality to bash it.

  35. Mike HC says:

    I personally think the most likely scenario is two years, then the opt out after the second year. Also, I don’t get people who claim the options are actually a positive for the team. Clearly, as you mentioned, the player options are solely in the favor of the player. No point in even explaining why if some people can’t get that.

    I don’t agree with the line, “we really don’t want to do this and we’re hoping that we can get out from under this deal as soon as possible, please please please don’t get hurt in 2011.” To me, the opt outs say one of two things. Either it was the only way to get Soriano to sign the deal, or, there is something else going on behind closed doors, handshake agreements or something. “Too good to be true,” certainly rings true here.

    • Ted Nelson says:

      I would not at all say they’re a positive for the team, but with all the opposition to giving relievers 3 year deals there is a reasonable case that the opt out **COULD** work out in the Yankees favor. If he leaves and would have gotten hurt in the next season or two… works out. I’m not saying that you make the deal with that in mind, but I am saying it’s a point that has to be brought up when people say there’s nothing but downside for the Yankees to the opt outs.

      • Mike HC says:

        That is missing the point. Under that logic, signing Cliff Lee to a ten year, one million dollar deal total could also work out to be a bad deal if he gets a career ending injury on the first pitch he throws. Or Pettitte retiring could work out to be great because Mitre might have a great year.

        I see you get that the opt outs are in the players favor and you are just looking for a possible positive. Yes, your scenario is possible.

        • Ted Nelson says:

          The logic is that if 3 year relief contracts are risky–and that seems to be the overwhelming consensus on the subject–the opt outs mitigate the risk. If he does leave after one or two seasons then the Yankees have not taken the 3 year risk and have probably gotten at least good production for him to think he’ll cash in on the open market.

          I don’t really understand your examples and think you are twisting my logic way out of whack.

          • Mike HC says:

            Except after he pitches great next year and opts out, it is no longer a three year deal. It is a two year deal with a player option for the second year. So Soriano pitches great next year and opts out to sign with another team and this is a good thing?

            • Ted Nelson says:

              It’s not a bad thing and, yes, some would argue it’s a good thing.

              Before signing Soriano the Yankees had the #31 pick and they had probably an unknown like Romulo Sanchez or a retread like Mark Prior or whoever taking Soriano’s spot in the bullpen. They are better on paper in 2011 and now they have basically 2 similar picks in the 2012 draft to the #31 they lost. They’re no worse off than they were.

              The good thing part comes in term of years. Some people don’t want to sign relievers to 3 year deals–for understandable reasons–and would prefer a one or two year deal. They get their wish and Soriano was only on a one or two year deal if he opts out and leaves after one or two years…

              • Mike HC says:

                I guess I just can’t stop.

                You don’t see how that does not make sense. If people prefer a one or two year deal for relievers, then they would prefer Soriano to not opt out after next year because that is exactly what his deal would be at that point, a one or two year deal. There would no longer be a 3 year risk, it would be a one or two year risk, like all these people wanted to begin with.

                Under your logic, people are pissed about the three year deal and prefer a one or two year deal, and then when the deal turns into a one or two year deal, they prefer him to opt out. How does that make sense on any level? If you hate Soriano on any type of deal for 11 mil per, fine, I get that. You want him to opt out no matter what.

                • Mike HC says:

                  With the player opt outs, the Yanks have the risk of the full three year deal right now and lose all the advantage of having him on the team friendly deal of only one or two years after the first year is completed. Nothing about the opt outs are a good thing for the Yanks except as you said earlier, if he opts out and then gets hurt that next year. But as I tried to inartfully explain earlier, you can say that about any deal. Maybe he gets hurt and it works out that we didn’t sign him/opts out.

                • Ted Nelson says:

                  The risk is that he gets hurt sometime in the next 3 years. If he’s already been here one or two year and hasn’t been hurt much… you’ve avoided that risk. However, the risk is greater going forward if you believe random chance plays a part in relievers getting injured. If you believe that one of the next 3 years he is very likely to be hurt, it’s been two years and he hasn’t been hurt… then he’s due for an injury.

                  Do you not see how if he opts out it WAS a one or two year deal and how if he opts in it WAS a 3 year deal? By your logic you can sign guys to as many years as they want because eventually it will dwindle down to the number of years you originally wanted: sign Cliff Lee for 11 years because in 4 years it’ll be that 7 year deal you thought he deserved… it doesn’t work that way.

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