Detroit Tigers: Justin Upton's opt-out clause not good for team

Even with expanded payroll, Justin Upton’s opt-out clause benefits him, not the Detroit Tigers.

The Detroit Tigers officially announced the signing of outfielder Justin Upton on Wednesday afternoon with an introductory press conference held at Comerica Park.

That new jersey! 👌 pic.twitter.com/YKVtjh180r
— Detroit Tigers (@tigers) January 20, 2016

Terms of the contract were first reported on Monday night when word leaked out on Twitter. The summary, though, is this: six years, $132 million, and a player opt-out after the second year.

Opt-out clauses are becoming very fashionable in baseball contracts. Just this offseason we have seen big names like Zack Greinke, Jason Heyward, David Price, and Johnny Cueto sign contracts that give the players the right to opt out after two or three seasons.

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Players like these clauses because they retain the right to hit free agency again while still in (or near) their primes if they continue to perform at a high level. And they get this while passing nearly all of the long-term risk on to the teams.

Teams are willing to give up the opt-out years as part of the negotiation process. They’re saving some number of millions of dollars on the full value of the contract (somewhat limiting their downside risk) to allow the player the opportunity to opt out. But in that process they’re giving up most of their potential upside benefit.

Many writers and fans have noted the Detroit Tigers’ long-term payroll commitments that are already on the books. In 2018 — the year after Upton’s opt-out clause kicks in — the team owes a combined $100 million to the quartet of Justin Verlander, Miguel Cabrera, Jordan Zimmermann, and Victor Martinez.

Some have taken that fact and used it to opine that Upton’s opt-out clause is actually good for the Tigers because they would be reducing the potential money owed to 30+ year old players if he elects to hit free agency again. Here’s Jason Beck of MLB.com:

"Depending on how Upton performs, it might create a unique situation in which a player opt-out clause could prove useful for both sides."

This is a nice idea, but it is not correct. It might be true that the Tigers would rather not pay Upton into his 30s, but the opt-out is not benefiting them. They would rather not give him the ability to opt out, all things equal.

Dave Cameron recently wrote about this idea on FanGraphs.

"players will only opt-out if they have below-market contracts… and are positive-value assets for the club at that point."

This is the thing. If Upton opts out, it is because he could get more money on the open market than he would be getting from the Tigers. Team love contracts with surplus value. It’s easy to have those guys on your roster. It’s easy to trade those players (even if they have rather extensive no-trade protection).

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Even if a trade return would be low given a limited market of eligible teams, they could expect to unload his contract for a positive return. No Upton and a pack of gum is better than no Upton.

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Detroit Tigers: Justin Upton’s Opt-out Clause is Not Beneficial for Team

By Matt Snyder | Jan 21, 2016

Even with expanded payroll, Justin Upton’s opt-out clause benefits him, not the Detroit Tigers.

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