Options For Everyone

The business of Baseball transcends the game in many ways. Oftentimes purist fans want to forget about the business side of Baseball as it takes away from the joy of watching America's Pastime the way it was meant to be watched. On the other hand, like in medicine, philanthropy, and other parts of life, Baseball is a business, no matter how much we wish it weren't. While many heads in the clouds hope that one day Baseball will return to just a bunch of boys playing game after game in the summer sun, the business side of Baseball isn't going anywhere. In fact, embracing the money side of the game can enrich one's fandom. Determining the length, dollar amount, and other parts of contracts makes up such a large part of analyzing the game, that some focus solely on such topics. If your looking for a good website for all things business oriented concerning Baseball check out Maury Brown's website http://www.bizofbaseball.com/. For now, I want to discuss the idea of an option. 

Adam LaRoche

Every player's contract has an average annual value, a yearly dollar amount that when combined equals the total value of said player's contract. So, for example, this offseason Adam LaRoche of the Washington Nationals signed a 2-year contract worth $22 million. He will earn $10 million in 2013 and $12 million in 2014. That $22 million counts as his base salary. Options are one-year additions that teams and players' representatives negotiate on when discussing a contract that have a dollar amount associated with them, but are not guaranteed unless the option is "picked up" or the option vests. Options give teams and players flexibility. Sometimes tacking on an option to a contract can make negotiations run more smoothly, other times they can be deal breakers, causing the two sides to forgo a contract and move on. More often than not, options are useful tools for both a player and the team; giving both sides a bit more wiggle room when discussing contracts involving tens of millions of dollars.

A few different types of options exist, including team options, player options, mutual options, and vesting options. I'll give a quick synopsis of each type, using examples to illustrate the positive and negative affects of each. First, let's discuss the team option. Team options, or club options, are the most commonly utilized form of the option. In his book, "The Extra 2%", Jonah Keri mentions club options when discussing ways in which the lowly Tampa Bay Devil Rays, now known only as the Rays, got the most out of the contracts they offered to top tier players. Keri describes it best when he says, "But with a club option, the team wields all the power. Got a 40-home run hitter? Keep him. Did he turn into Mario Mendoza? Happy trails." Team options give a club's front office complete latitude as to whether to keep or release a player. If an option has a dollar amount that a player would not find on the open market due to attrition in productivity then the team will choose to not pick up said option because no team wants to waste money on a player who isn't worth the money he will receive.

James Shields

On the other hand, using the example of the Rays, tacking on multiple team options onto a contract given to a young player could allow a team to keep said player for relatively less money than that player would make on the open market, making such an option very valuable. For example, when the Rays offered James Shields a contract early in his career, they added three player options on to the end of the deal, anticipating that Shields would only get better with time, and thus giving them complete autonomy when making the decision to keep him or not. Veterans who sign contracts during their prime years rarely allow teams to add club options onto their deals, preferring the other types of options instead, but young players who haven't proven their worth yet, or older players who are on the wrong part of the aging curve accept team options because it leaves some possibility that they could continue playing without becoming a free agent. Oftentimes, if a team refuses to give a player a contract without a club option attached, the player's agent will demand that a buyout clause be attached. A buyout clause is a dollar amount that a team must pay the player if said team decides not to pick up the club option, thereby securing the player some money no matter which way the club decides to go.

Derek Jeter

Now that you understand what a team option entails, let's move on to a player option. Player options are simple; they constitute the exact opposite of a club option. If teams place club options on younger or older players' contracts, player options are more often seen on contracts of players in their prime, or franchise players' contracts. Since the team has the money, front offices rarely want to allow a player to decide whether he will play another year after the base years of his contract have expired. It leaves teams with fewer alternatives, making it more difficult for General Managers and their staffs to plan for the future. On the other hand, some players are just worth it. For example, Derek Jeter, the face of the Yankees franchise, a future first-ballot hall of famer, and a consistently productive player even in his late thirties, had a player option attached to the contract he signed with the Yankees in 2010. The foundation of the contract runs through 2013, with a player option worth $8 million for 2014. Jeter's AAV for the base of the contract is about $17.6 million, significantly more than the dollar amount associated with the 2014 player option. Like club options, player options commonly have buyout clauses linked to them. In Jeter's case, the team has a $3 million buyout option they must pay if Jeter declines the player option for 2014. Player options are rarer than club options, but for a player as important to a one club as Jeter is to the Yankees, teams will do whatever is necessary to ensure that player signs a deal with them.

Conceptually, player and club options have little complexity to them. But wait, there's more. Another type of option seen in Baseball is the mutual option. This type of option combines the aspects of a team option and a player option. Essentially, a mutual option is an option that both the player and team must agree to. Wendy Thurm, a former lawyer, and writer for www.fangraphs.com describes the positive and negative aspects of a mutual option best:

"A mutual option is a hedge against volatility in the market for that player in that particular option year. If the player’s value plummets, the team can decline the option and pay the buyout. If the player’s value rises, he can decline the option and seek a better deal as a free agent. If the player’s value is stable, however, then it might be in both parties’ interest to exercise the mutual option."

So, mutual options give both the team and the player the ability to come together and make a decision. This may seem like the most mature option available because it very well may be. Player and club options give control to one side, shutting out the other, but mutual options, like the negotiation of any contract, allow both sides to have a say. For a good example, let's take Adam LaRoche's contract, mentioned above. In LaRoche's deal, the two sides negotiated a mutual option for 2015 worth $15 million, substantially more than the $11 million AAV of the years preceding 2015. This option, like so many others, comes with a buyout clause. If the two sides don't agree to the mutual option, the Nationals must pay LaRoche $2 million in his departure.

Bobby Abreu

So, we've gone through club options, player options, and mutual options. All that's left is the vesting option. Recently the diligent writers at www.mlbtraderumors.com published a piece about vesting options, publishing with it a list of examples in which vesting options were and were not triggered. A vesting option is the same as the other types of options, except that in order to trigger the option, the player must attain some predetermined level of productivity. For example, the Angels gave Bobby Abreu a vesting option for 2012 that would be triggered if Abreu reached at least 433 plate appearances in the 2011 season. If he did not come to the plate 433 times or more the option would be moot, but if he achieved that minimum number of plate appearances he would be an Angel for another season. We see vesting options pop up most often on the contracts of older players or oft-injured players. These conditions cause instability, and a team doesn't want to be "on the hook" for money if a player cannot prove to the team they can perform on the field. For relief pitchers vesting options often involve appearances or games finished, for hitters we see plate appearances used, and for starting pitchers, innings pitched are most commonly used as a barometer. Sometimes vesting options come with clauses that allow a player to decline said option even if the option has vested, but not all incorporate such provisions. 

So, now you know everything and more about contract options in Major League Baseball. Maybe for some fans these topics detract from the fun and childlike innocence attached to the game, but for most, it offers another fascinating aspect to the non-playing side of sports. So much of the analytical revolution in Baseball combines on-field play with off-the-field decisions made by MLB front offices. No matter your preference, I hope you've learned something, so that maybe, the next time you hear he details of a contract, you might understand them a little better. 

Morse Code

Adam LaRoche

Yesterday, the Washington Nationals re-signed free agent first baseman Adam LaRoche to a 2-year $24 million contract with $22 million slated to be salary for the first two years and the other $2 million as a buyout in the third year if LaRoche's mutual option doesn't vest. Immediately, this move secures the Nationals a veteran first baseman who has performed well lately in D.C. and showed images of brilliance at pitcher friendly Turner Field in Atlanta. LaRoche, who recently turned 33 years old, brings a multi-faceted game to the Nationals, as well as a left-handed bat in the middle of the order to complement righties Jayson Werth, Ryan Zimmerman, and Ian Desmond. Some may poo poo LaRoche's age, but this contract is short term, 2 years, and LaRoche plays a relatively effortless defensive position that has allowed older players with power to continue to produce impressive stats.

Here's a look at LaRoche's 2012 season, which is essentially the sole reason for getting ~ $12 million AAV, more than the qualifying offer the Nationals offered LaRoche a few months ago.

	AVG	OBP	SLG	wOBA	wRC+	HR
2012	0.271	0.343	0.510	0.361	127	33

LaRoche's overall hitting production derived from his power numbers. The 33 home runs, a spike, led to a slugging percentage over .500, placing him 11th in the Major Leagues. No one denies that LaRoche has always been able to hit, but what has contributed to his inconsistent production? LaRoche's approach to the plate may have been altered slightly during the 2012 season in comparison to those that came before. LaRoche continued to swing more often than the average hitter, make contact less often than the average hitter, but increased his swing percentage on pitches in the strike zone while laying off pitches out of the zone. This alteration shows a better eye at the plate. This was a hitter looking to swing more at strikes, but more importantly crushing the ball when getting pitches in the strike zone.

While LaRoche's offensive game has been up and down throughout his career, Adam's defensive prowess has not wavered. While it took a year or so for his defensive abilities to become apparent, since then, LaRoche has proven he will flash the leather and corral every semi-arrant thrown at the far right side of the infield. Here are his numbers using more advanced metrics:

Year	UZR	DRS	FRAA
2004	-0.6	2	-7.4
2005	-18.2	-13	-2.5
2006	-4.6	-11	5.5
2007	7.6	2	10.3
2008	-6.5	-5	0.4
2009	0.2	-2	6.3
2010	4.8	6	9.7
2011	13.4	5	3
2012	5.7	8	10.8

Range at 1st base can often show itself more once a player has gained more experience, since speed is less necessary at 1st base than proper form and instinct. Without a doubt, LaRoche's defense ranks far higher than the Nationals other possibility at the position, Michael Morse. Morse's career -2.7 UZR and -5 DRS in a little over 800 career innings at 1st base pales in comparison to LaRoches consistent success at the position. LaRoche provides leadership both in the young infield as well as on a young team sporting Stephen Strasburg, Bryce Harper, Danny Espinosa, and Ian Desmond. In addition, the Nats third baseman Ryan Zimmerman has had issue throwing from third base, which puts a premium on having a skilled defensive first baseman. To cap off the reasons why the Nationals will most likely enjoy the services of LaRoche for the next two seasons without remorse is his projections for 2013. PECOTA projects him to put up about 1.3 WARP next season with 19 home runs and a .321 OBP. Bill James' projections have LaRoche putting up a slash line of .256/.334/.471. While this production doesn't stack up to Adam's 2012, LaRoche is a candidate for some regression, but the damage doesn't seem to be that bad.

Michael Morse

So, since, LaRoche will occupy 1st base for the Nats for at least the next 2 seasons, the club is heavy by one player, Michael Morse. Immediately after the news came down concerning the LaRoche's new deal with Washington, the rumors began to fly concerning a possible trade involving Michael Morse. Morse is a righty with experience in the outfield and at 1st base, who has recently figured it out at the plate. Morse has become more than a big guy crushing pitches, hitting for a solid batting average, above-average on base percentage, and doing it against both righties and southpaws. Over the last three seasons, Morse has figured it out at the plate, dealing with some injury problems in 2012, while LaRoche had a big year. 

Year	Games Played	fWAR	rWAR	WARP
2010	98	1.1	1.2	1.5
2011	146	3.3	3.1	3.4
2012	102	0.3	0.6	0.1

Morse doesn't have the resume of consistency that LaRoche brings to the tabel. In addition, Morse is under control for only one season, and bats from the right side of the plate as opposed to the left. Morse provides less defense prowess despite the position he plays. Despite the appeal of LaRoche, Morse provides solid plate discipline, constant doubles power to both gaps, and a hitter with very few deficiencies at the plate. He isn't abysmal in the field, making him a trade candidate to both AL and NL teames. The main issue with Morse is his contract. A team that trades for him might decide to invest in the slugger by signing him to an extension, while some may offer less to the Nats knowing full well they will only have Morse in the lineup for 1 season. Teams that have been linked to the Morse and the Nats include the Yankees, Orioles, Mariners, Rangers, Phillies, and Rays. 

Yankees: According to an article in the New York Daily News, the Yankees will send rookie catcher Austin Romine, who missed most of last season due to injury, back to triple A, and that the team is focused on finding a right-handed hitting outfielder. Given that the Yankees have already resigned Ichiro, and have both Brett Gardner and Curtis Granderson returning, the team isn't looking to trade for a player like Michael Morse who is better suited for first base and hits well against both righty and lefty pitchers. The Yankees may see how little they can trade in exchange for Morse, but Brian Cashman would rather sign Scott Hairston but remain in on the Morse talks to drive the price up in case the Orioles/Rays remain serious contenders for Morse's services.

Orioles: The Orioles farm system is currently top heavy, and I doubt Dan Duquette is willing to trade any of his top prospects for one year of Michael Morse. If the Orioles forgo a trade for Morse, their most likely option at either DH or 1st base will be lefty Chris Davis. Davis came on strong following the trade deadline in 2012, ending the season with more than 30 home runs, while playing in the outfield and at 1st base.

	True Avg	HR	wOBA	wRC+
Morse	0.294	9	0.363	127
Davis	0.267	13	0.322	100

Take a look at this comparison between Morse and Davis. All numbers are either their career percentage or in the case of home runs, home runs per season. Morse has less power but may be the better overall hitter, while Davis is a known commodity that is under team control for fairly cheap until 2016. The Orioles plan to use Nolan Reimold in left field, allowing Chris Davis to occupy 1st base and fill in at DH along with Matt Weiters. While Morse might help the Orioles, he isn't a huge upgrade, the Orioles are a regional rival of the Nats, and the few players they would be willing to trade could be used elsewhere. If the O's were to deal for Morse the trade might look like this:
Orioles trade Brian Matusz and minor leaguer Branden Kline for Michael Morse. It is more likely the Orioles continue to shop J.J. Hardy for a 3rd baseman in an effort to move Many Machado to shortstop.

Mariners: The Mariners recently made a move to acquire Kendrys Morales, bolstering their abundance of prospective designated hitters. Morse originally played in the Seattle organization, and would most likely take over at 1st base for the awful Justin Smoak. The Mariners would rather find a long-term option at 1st base instead of a one-year rental, but if they could work out an extension with Morse, Jack Zduriencik could be persuaded to deal for Morse. If the Mariners make this move, you might see more pieces than just Morse moving as the Mariners might also try to clear space a position in which they have a prospect ready to make the leap to the big show. For example, the Mariners could look to trade shortstop Brendan Ryan and pitcher James Paxton to the Nationals in return for Michael Morse and Ian Desmond. The Nationals would replace the hole left when they treaded prospect Alex Meyer to the Twins with an almost MLB ready player in Paxton while upgrading defensively at shortstop. The Mariners would have a shortstop 3 years of arbitration with Desmond, which consequently makes prospect Nick Franklin expendable. Since the market for young MLB ready shortstops has been high (see the Didi Gregorius deal). More likely, the Mariners refrain from a trade altogether.

Rangers: The Rangers just signed a designated hitter in Lance Berkman, but would love to add a right-handed first baseman to platoon with Mitch Moreland. Moreland has been decent, but as a lefty, he performs much better against righties than versus lefties. His career true average against southpaws is a low .232, but that number goes up to .274 against righties. In addition, Moreland has thus far been inconsistent in his defense at 1st with 2 subpar seasons and a rebound year in 2012. Platooning Moreland and Morse could be valuable for a team probably not looking to resign Morse, but hoping to get the most out of him in 2013. If the Rangers make a deal for Morse, don't look for them to send back a well-known prospect. Two names that could be apart of negotiations could be pitchers Miguel De Los Santos, and Codie Buckle.

Phillies: Recently we've heard some competing reports coming from Philadelphia. Ken Rosenthal has noted that the Phillies are still looking for outfield help, especially of the right-handed persuasion, while others have noted that Ruben Amaro is done dealing. My guess is that Amaro will look to upgrade only if the right deal falls into his lap. Otherwise he'll go with platoons in the corner outfield spots including Domonic Brown, John Mayberry Jr., Darrin Ruf, and Laynce Nix. I would say that there is a popsicles chance in hell that these two teams consummate a deal. The Nationals are the reigning NL East champs with the Phillies claiming the top spot in the division the 5 seasons prior to 2012. Due to these teams' status as divisional rivals, there is no way Michael Morse ends up in a Phillies uniform.

Rays: If the Rays trade for Morse it'll for sure only for the 2013 season. 2014 marks Morses' first chance in the free agent pool, and the Rays definitely don't have the money to sign Morse. Given that his potential service time in Tampa would be for only 1 season, don't look for the Rays to give up anything special in return. My guess is the Nationals will ask for a possibly oft-injured and young high ceiling prospect in an attempt to replenish their system with a less likely to make it Alex Meyer. The Rays still don't have a DH, so if Tampa trades for Morse, he'll most likely spend his time hitting but not fielding. So, what could the Rays move in exchange for Morse? Maybe a pitcher like Jeff Ames. Ames was drafted a few times, and eventually fell from junior college to the Rays in a supplemental first round. He's got a mid-90's fastball making him a possible late-innings reliever in the majors or possible a back of the rotation starter if he develops some secondary pitches. He'll be 22 in 2013, but if his role becomes cemented to the bullpen, he could move through the minors quickly.

Mets: I didn't mention the Mets before, but they could be a sleeper team for Morse's services. The Mets need outfield help, both for now and the future. Morse looks to only help the Mets out now given his contract, but if he performs well in NYC in 2013, the Mets could look to either extend him or trade him at the deadline. While the Mets have the same issue as the Phillies, this potential intra-divisional trade is more likely than one between the Nats and the Phillies. The Mets are not likely to be in contention next season, so a trade remains a possibility. The Mets could look to deal a pitching prospect like Jacob DeGrom who throws hard and is coming off of an injury-plagued season along with a position player like Lukas Duda. Duda is a power-hitting lefty who could be the Nats new left-handed option off the bench for Davey Johnson. The Mets would only go in on this type of deal if they were sure they could either find value for Morse at the trade deadline, or could extend Morse on a deal in the neighborhood of 3 years and $33 million. Either way I don't see this deal happening, but don't count the Mets out of it.

Adam LaRoche was the last part to the Nationals puzzle. he solidifies a position that was up in the air, and does so for a finite amount of time. Although the Nationals loved Michael Morse, he becomes expendable. Morse wants to play in order to improve his dollar value heading into 2014 free agency, so sticking it out on the National's bench would definitely make him unhappy. My guess is that he will take the first ticket out of town, with no particular penchant for one city over another. Due to Morse's recent renaissance, recent injury, defensive liabilities, and the brevity with which his free agency comes, he probably won't fetch that much in a trade. If the Nationals aren't looking for much, a deal could be made soon, but if the Nats want something more significant, it either implies a multi-player trade possibility to the chance that Morse remains for the start of 2013. If I had to guess, I'd say Morse gets traded, possibly in a three-way deal involving the Padres or a simple 2-team deal involving either the Yankees or Rangers. With LaRoche gone, Michael Bourn headlines the remaining position players on the free agent market, but look for Scott Boras to hold off until he finds what he wants, similar to Prince Fielder's situation last offseason.