It’s been several weeks since Albert Pujols signed a mega-$250 million deal with the Anaheim Angels, but Prince Fielder seems no closer to finding a home. Even for a Scott Boras client, the slow developing market for the All Star slugger has been somewhat of a surprise, but that can probably be chalked up to the fact that most big market teams either already have a high-priced first baseman, or, in the case of the Dodgers and Mets, are facing a financial crisis.
Even though the big market teams may be tapped out, the rest of baseball is awash with cash, so all Boras needs to do is find the right owner, just like he did for Alex Rodriguez in 2001. At the time, no one expected Arod to come close to the $250 million deal he eventually signed, but Boras found an aggressive owner in Tom Hicks who was hoping to leverage Rodriguez’ stardom into a media empire. Things didn’t exactly go according to plan for Hicks, who was eventually forced to sell the Texas Rangers, but that doesn’t mean there isn’t another ambitious owner who might view Fielder in much the same way.
All the signs currently point to the Nationals as the likely landing spot for Fielder. Team owner Ted Lerner is worth approximately $3.3 billion, according to Forbes, and at age 85, may want to see a winner sooner than later. With last year’s signing of Jayson Werth and the offseason acquisition of Gio Gonzalez, not to mention the record breaking bonuses paid to recent draftees Stephen Strasburg and Bryce Harper, Werner has shown a willingness to spend, so adding Fielder could be the latest step in the team’s attempt to quickly build a winner. What’s more, if the Nationals sign Fielder, it doesn’t necessarily have to come out of Lerner’s pocket. Like many other big spenders, the Nationals are set to receive a big bump in television revenue when its contract with MASN is renewed, so like the Arte Moreno with Pujols, Lerner could decide to immediately invest that expected windfall into a player who would not only greatly improve the team on the field, but possibly generate enough fan interest to impact the bottom line (especially if that MASN contract is not yet signed).
Of course, just because the Nationals want Prince Fielder doesn’t mean the first baseman wants to play in Washington. Even though the team has the feel of a burgeoning contender, the franchise still carries a stigma of losing. As a result, Fielder may view the Nationals as more of a last resort, which could be one reason Boras is reportedly seeking an opt-out for his client.
The opt-out strategy makes sense for a number of reasons. Not only would the ability to “escape” from the contract mitigate Fielder’s concerns about playing for a non-contender, it would also give him the opportunity to re-enter the market if/when the conditions are more favorable. CC Sabathia and Alex Rodriguez were both able to leverage the strategy into lucrative contract extensions, and if Fielder isn’t happy in Washington, he could use it to find greener pastures, in more ways than one.
On the surface, the inclusion of an opt-out seems like a one-sided option in favor of the player. After all, if the player meets expectations, he’s likely to opt-out, but if he fails miserably, the team gets stuck with him. That latter point is mostly irrelevant because even without the opt-out, the team would get stuck with a lemon if the player’s performance declines. The only time the opt-out becomes germane is if it is actually exercised, and, it is at that point when the risk burden shifts to either the player or another team.
Consider the following example in which Prince Fielder receives an opt-out clause after his third season. If Fielder performs well and opts out, the team is a winner. Why? Because it likely underpaid him for his performance (otherwise, Fielder would not exercise the option) during that span. Now, the team would be free to offer an extension based on expectations for the future instead of consideration of the past. Returning to the example, Fielder’s GM could either decide that the now 30-year old first baseman is worthy of an extension or too much of a long-term risk. If the latter, the club would have had the advantage of signing an elite player for three prime years without having to pay a premium for his decline phase, something that would exist under a normal long-term contract. Granted, there is the potential replacement risk of losing out on the remaining years of what could still be a favorable contract, but what team wouldn’t prefer to sign a short-term deal in the first place?
So, if the opt-out works well for the club, should teams also include inducements that ensure the player will exercise it? For example, let’s say Fielder signs a 10-year, $220 million deal with a third-year opt-out. One way his team could induce the opt-out would be to give him a $15 million “buy out” if he exercises the option and signs with another team. Although this approach seems counter-intuitive, it would effectively be like signing Fielder to a three-year, $81 million deal, which, presumably, would be more palatable because less risk would be involved.
Prince Fielder is going to get paid, but it might take some creativity to hammer out a deal. Scott Boras has never lacked cunning when it comes to getting his price, but that doesn’t mean a smart general manager can’t do the same. If Boras wants an opt out, give it to him (or, even better, trade it for a concession on total contract value)…and then hope Fielder uses it.