A prominent feature of both of the massive contracts given to pitchers this month is an opt-out clause.
Left-handed Dodgers ace Clayton Kershaw accepted the richest contract ever given to a pitcher, but can choose to become a free agent after five years. Japanese righty Masahiro Tanaka was guaranteeed $155 million by the Yankees, but can similarly tear up the rest of his deal after four seasons to hit the market again.
At first blush, this might seem like an awful deal for teams willing to climb on the hook for millions of dollars six or seven years down the road. If either player suffers a career-ending injury this year, their teams will still have to pay them millions of dollars for years after. If they pitch well and the free agent market keeps yielding huge contracts, either guy could opt out for a richer deal than what they have in hand, denying the Dodgers or Yankees the opportunity to collect value on the back end of these risky contracts.
That's the wrong way to look at the opt-out.
To the first fear I'll just say that if you're not offering a player like Kershaw or Tanaka six or seven guaranteed years, you're not really in the game as far as bidding for their services. Opt-out or no, they'll get those years guaranteed when they reach the open market. And opt-out or no, if a player gets hurt in Year 1 of a long contract, the team that signed the player is left holding the bag.
As for getting value on the back end of a huge contract, I have a hard time believing any team that signed a player to deal longer than five years expects to be getting a good value beyond that point. Perhaps Tanaka is an exception, because he's hitting the market as a 25-year-old, but these days teams enter into these massive contracts expecting to be overpaying for what the player is by the end of the deal.
Teams do that because they get a good value on the front end. If Tanaka pitches like an ace for the Yankees, they will be very happy to have paid him just under $90 million for four years, plus a posting fee that doesn't count against the luxury tax.
They might be unhappy to have to negotiate a new deal in four years, one that might be in excess of $200 million if Tanaka lives up to some expectations. But if there's that much money still rolling into baseball to spur that kind of salary growth for players, the Yankees are surely a team that can afford to retain Tanaka if they desire. Or if at that point the Yankees decide to spread their financial risk out a different way than on the right arm of a pitcher entering his 30s, they can do that, too.
In other words, if everything goes as planned, the Yankees have the opportunity to say goodbye to Tanaka when, theoretically, his best days will be behind him.
Where teams have been burned by opt-out clauses hasn't been by including them in the original contract. It's been by signing the player once the clause has been exercised.
White Sox fans around in the 90s can probably remember Albert Belle receiving a clause that allowed him to opt out if he wasn't among baseball's highest-paid players. When salaries escalated quickly in the late 90s, Belle took advantage of that clause to leave the Sox two years into a five-year, $55 million deal that once made him baseball's top-earning player.
Did the Sox regret losing Belle's services? Not after seeing him sign a new five-year, $65 million deal with the Orioles. Belle gave Baltimore one good year, then one poor year before degenerative osteoarthritis in his hip ended his career, though not his steady stream of paychecks.
If the Yankees need a reminder of what second-time buyer's remorse looks like, they just have to look at their payroll right now. After giving CC Sabathia seven-year, $161 million contract with an opt-out after three years, they saw the left-hander exercise that clause. Instead of being satisfied with three years and 705 innings of a 3.18 ERA and a 59-23 record, they chose to give Sabathia a five-year, $122 contract that has yielded a 29-19 record with a pedestrian 4.09 ERA through the first two years.
And of course there's the defamed Alex Rodriguez. The Yankees inherited the opt-out Rodriguez had built into his then-richest-ever-for-baseball $252 million contract he signed with the Rangers. After trading for Rodriguez -- with the Rangers picking up part of the tab -- the Yankees got a .303/.403/.573 batting line with 173 home runs from the shortstop-turned-third baseman over four seasons.
When Rodriguez opted out, the Yankees weren't happy with the house money they could have left the casino with in their pockets. So instead they signed him to a new record-setting deal, 10 years and $275 million. For that money they've gotten an often-injured player with a diminished .279/.369/.498 line who instead of collecting career milestones on the way to the Hall of Fame is instead sitting out this upcoming season as part of a cloud of steroid scandal that's rendered his once-incredible career meaningless to most fans.
For me, the moral of the story isn't that including the opt-out automatically makes things peachy for teams. It didn't make it that way with Vernon Wells' contract.
To state the obvious, signing any player to a massive contract involves risk for the team agreeing to the pact. No matter the player, no matter the team.
Something just as obvious is that signing the same player three or four years later to a massive contract is just that much riskier. So is crossing your fingers and hoping the next three or four years of a massive megadeal go as well as the first three or four.
Short of simply offering free agents higher annual salaries for fewer years, the willingness to include an opt-out clause might be the best chance for teams to avoid the years of these free agent contracts when they become an albatross.