THE BOOK--Playing The Percentages In Baseball

Interesting idea.

The presence of a buy out option could lead to inflated salaries. If you know you can get out of a contract by buying it out at a 25% level (say) then there is more incentive to overpay, especially in earlier years. I don’t know—maybe not. Maybe the 25% mark is a big enough number to stop people exercising the buy out that often.

Also why should clubs have get out clauses and not players—by the same token players players should be able to buy themselves out of their contract too. Take Pujols for instance—I am not sure what his contract is worth but if he stumped up say 25% of its value (including arb years - how would they work that out I am not sure), then he could be rich rich rich.

I was thinking about player buyouts as well.  I think you can certainly put that into the equation.  I’m not sure it has to necessarily match the 25% (or whatever) figure on the team’s side. 

You could make the buyout 50% of whatever has already been paid.  So, in the Pujols case, since his deal was back-loaded, he could make out pretty well.

Not sure how much it would do for competitive balance though. For player buyouts rich teams could “persuade” players to buy themselves out.

Many soccer contracts have buyout clauses, but they tend to be monsterous—we are talking 100+ million Euros for the best players. Although the soccer trade market works much differently to the baseball market

I like the idea, but I’m wondering how it would be negotiated.  Would there really be enough power behind a move in the next CBA to draw up unilateral rules and punishments for buyouts?
Any move toward making contracts anything less than 100% guaranteed would raise the hackles of the Players’ Union, even if it might actually serve their long-term interests by raising salaries (as “buyout insurance").  And wouldn’t Scott Boras start demanding a “no-buyout clause” for his star players?
Even if they went for the idea, I can envision lengthy haggling over the exact numbers at the negotiation table.  Just like everything else, the players and owners would start on opposite ends (75% and 25%) and only inch forward.
I just don’t think the players be willing to accept the idea that their $50 million might evaporate with a lump-sum buyout.  And judging from the reaction to the steroids issue, the players association these days isn’t giving up anything they don’t absolutely have to.

I think it’s a bridge and a half too far to not only theorize a salary cap, but then go on to theorize contract buyouts as well.  Given my utter and absolute loathing for baseball’s owners, I hardly think much of a salary cap on its own, let alone coupled with a second mechanism to even further insulate owners and GMs from their own monumental idiocy.  You signed a contract with Denny Neagle, you get to suffer.

I wouldn’t care to see baseball turn into the NFL, with even more roster turnover and more rooting for the uniforms as well as the players that make the game what it is getting shafted, playing in pain and quite possibly living the rest of their lives with their injuries to pad the wallets of the already stupidly rich owners.

Another buyout in the NHL, with Alexei Yashin:
http://slam.canoe.ca/Slam/Hockey/NHL/NYIslanders/2007/06/07/4241591-sun.html

He had signed a 10-yr contract, and was now down to a 4/26.4 deal to go.  The Islanders buy him out at 17.6MM, which they also get to pay him over a span of 8 years (so that they take a 2.2MM a year salary cap hit, over 8 years).

Paying someone 17.6MM over 8 years is the same as paying him 16MM over 4 years.  So, that’s what the Isles had to choose from:
16MM: no play
26.4MM: play for 4 years

The difference is whether they wanted to pay him an extra 10.4MM over 4 years (2.6MM).

Yashin will turn 34 years old at the start of the next season, and you can consider him to be an average to a bit average player.  He was the #1 forward selected, in a fairly weak draft year.  Lots of promise with him.

The average NHL will make a bit over 2MM this year.  It seems to me that he *might* find a team willing to give him a 4/10 deal, or maybe a 3/9 deal if he’s lucky.

So, it seems that the Isles figured out that they’d be in the same boat with or without him, in terms of cost for the asset value.  They get additional flexibility in the salary cap room, since instead of using up 6.6MM each year for 4 years, they use up 2.2MM each year for 8 years.  Considering that a team doesn’t need to spend right to the cap, it’s a great deal by the Islanders.

The Islanders were blasted in the off-season for turning then-backup goalie Garth Snow into its GM.  (Snow the player is still taking cap room!).  But, if you’ve got a smart guy, who knows hockey, and who has made his bones in college, what’s not to like?  Getting free-agent-to-be Ryan Smyth was a fantastic deal, among others.

Sportswriters should be ashamed of themselves for giving such a glib immediate analysis of the hiring of Garth Snow.  We can judge a book by its cover on our own.  Sportswriters need to read the book for us.  Or, as in this case, we can read it ourselves after 8 months of moves by Snow.