Creatively Structuring Contracts: Yoenis Cespedes Edition

One rumor about the Mets' pursuit of Yoenis Cespedes is that he doesn't just want an opt-out after the first season of a potential three-year deal, but after the second season as well. That's pretty extreme: the ability to opt out is a very useful one, essentially shifting an awful lot of risk onto the other side. If the player performs, he can seek a new, even bigger deal on the open market; if he doesn't, the team is stuck with what now probably looks like a not-so-fantastic contract. In no case does the team get to enjoy the normal fantastic bargain that comes when you sign a player and then they're even better than you anticipated. This year has seen an awful lot of opt-outs in star players' contracts, but mostly only one of them. (I think there's one deal that gives someone, perhaps Heyward, two opt-outs after consecutive seasons in the middle of a long-term deal.) The idea of giving the player an opt-out after every season is not super appealing for a team. It's a lot like turning every season into a player option, and player options are great. For players.

But I have an idea about how something like this design could be made to work in a way that might benefit both parties. Typically, contract years have one of four statues: guaranteed, team option, player option, or mutual option. Typically the salary of a team option year will be very high, and of a player option year very low; in both cases the side with more control is giving back some money in return. In that last category, the contract is extended only if both the team and the player want it to be; the size of the buy-out typically depends on which side declined the option. But what about combining team and player options in a different way? What if you had, basically, sequential options? So, at Step One, the team gets to exercise an option to just plain keep the player under contract, no questions asked--but, with a very high salary. Maybe even higher than a regular team option would be. If they decline that option, then the player has an option to extend his current contract at a significantly lower salary, or to become a free agent.

For the player, they get most of the benefits of an opt-out/player option, except that some of those benefits are realized not in the form of control over their own destiny but in the form of cash. For the team, it's better than an opt-out, because they have a lot more control if they decide the cash is worth it. And they get the benefit of giving the player something to play for every single year. That could be particularly relevant with someone like Cespedes, where it's rumored that teams don't want to just give him a large guaranteed contract for fear he'll get all Manny/Hanley-esque. This is a way to do that on a truly perpetual basis without giving up the insane amount of control that an opt-out after each year would give up. In principle I could see a contract structured like this over a basically indefinite period, if the dollars were balanced the right way on each side. (This would probably mean that the player option's value would decline substantially after a few years.) It's designed to make each side okay with whatever the other side does at any time. That way, a player and a team who aren't quite comfortable just signing on with each other for a term of six or eight or ten years might nonetheless be willing to sign on to a framework of perpetual tolerable uncertainty covering just such a term.

I feel like this is the logical next step after this off-season's opt-out craze.