THE BOOK--Playing The Percentages In Baseball

Tim Wakefield’s perpetual 4M option has been eliminated.  In its stead, the Red Sox have signed him to a 2 year, 5M contract (3.5 for 2010, 1.5 for 2011).

Very depressing to me...Wakefield’s knuckler makes him my favorite pitcher who’s not on my team.

That Wakefield deal makes little sense to me, I thought the Sox and Wakefield had a great agreement.  It greatly favored the Sox and Wakefield didn’t even have to think about moving his family.

Yeah, I don’t understand Wake taking that deal.  He’s been worth more than the option every one of the past 8 years, but he takes a 2 year deal at only 2.5 per.  He must have really wanted to stay in Boston, and they must have made him believe he had to sign that to stay there.

Well the deal is for his 44 and 45 years of age seasons, so there are no guarantees he’ll be healthy and effective.

Still, it’s hard to think he’ll fall short of 1 WAR, which is basically what they paid for.

I looked into the deal further, there are some incentives.  30 starts in 2010 will bump the salary up to 5.5 and 160 innings in 2011 will bring it to 4.5. 

This makes more sense, though he is still likely to be underpaid if he hits those bonuses.

I thought the Sox and Wakefield had a great agreement.  It greatly favored the Sox and Wakefield didn’t even have to think about moving his family.

If it GREATLY favored the Sox, how is it a great agreement?

Moving his family? 

Dude, c’mon.  This is the kind of deal that every GM wishes he had with his players, and that no player would ever sign for.  Are you kidding me?  A guaranteed one-year 4MM deal, with a perpetual team option?  Really?  That is insane, and is exactly what the union fought against.

If anyone wants to argue this, I will have to come after you guns blazing.  Be warned.

Pretty sure Wakefield wants to keep playing and DOES NOT WANT TO LEAVE BOSTON.

Meanwhile, Boston is afraid injuries and old age will make Wakefield not worth 4M.

So Boston threatens not to pick up his option and they work out the new contract.

Is it advantageous to Boston?  Of Course.  Sad for the rest of us tho if indeed he’s done after these 2 years.

SOMEONE ELSE LEARN A KNUCKLER!

The Wakefield deal seems horrible for him.  Like, worse than his previous deal, which was probably the worst contract since Flood changed things.  Theoretically, he can make more money with this new deal if either he suffers an injury that prevents him from pitching in 2011, or he pitches near-full seasons in 2010 and 2011.  I don’t think either of these are terribly likely, and they each only provide a very small benefit ($1 million extra for him).  Versus the much more likely scenario of him pitching a couple injury-riddled seasons, throwing 150 IP each year, and being well worth the $4 million per season he would have otherwise been paid.

I guess I never understood the nature of Wakefield’s prior deal, in the sense of what would happen if the Red Sox declined his option.  Would he become a free agent?  If so, he should have known he could get $6 or $8 for a season or two from someone else.  I don’t see how the Red Sox had any leverage here to rip up the $4 million contract.  Except for maybe the family thing… which, it appears, is one of the worst things a ballplayer can do for himself financially (while he is still playing).

A contract where the downside is borne by one side, while there is no upside is, by definition, a one-sided deal.

If it was a mutual option, say the Redsox can resign him at 4MM, and if they decline, Wakefield can resign at 5MM, that would make more sense.  And that once the player picks up his option, the contract terminates after one year.

So, imagine that Wake is worth at least 4MM.  Redsox sign him no matter what.  What if he’s actually worth 3MM (to the Sox).  Well, the Sox either resign him at 4MM (and continue the contract), or decline the option, and then Wake decides whether to sign for 5MM (and terminate the contract) or take his chances in free agency.

If he really sux, the Sox won’t pick up the option, and Wake picks it up for 5MM.  Essentially a buyout.

And maybe 5MM is not fair.  Maybe it should have been a 4/6 or 4/7 deal.  Whatever, something where Wake has SOME upside.

Otherwise, this previous contract was a one-sided deal.  Argue against this at your peril.

The new Wake contract is a fair deal for Wake.

The previous Wake contract was a joke because of the perpetuity clause.  He could have signed a one-year contract without a perpetuity clause for 4MM each time, and he’d be in the same position.  I think Redsox fans might be thinking that the Redsox were OBLIGATED to pick up his option, without realizing that the option was ... optional… to the Redsox.  Wakefield had no say in the matter, other than retiring.

It was a ridiculous deal, and any fan that supported that deal shows his ignorance in such matters.

According to Fangraphs, he earned 32MM since 2002, while his performance would have merited 69MM as a free agent.  He left 37MM on the table.

According to Fangraphs, he earned 32MM since 2002, while his performance would have merited 69MM as a free agent.  He left 37MM on the table.

I agree with your general point, but I don’t think he left that much money on the table.  After the 2002 season (3.3 WAR, 8.6M in FG value on a 3.2M salary) he was free agent and he shopped himself around before agreeing to a 3yr/13.02M contract.

This was before Wake had decided to tie himself to Boston forever.  He had actually been grumbling for a couple years previous about the Sox not sticking with him in one role.  He was legitimately on the market and willing to move.

At least publicly, he did not generate interest as an innings eater who might be expected to be worth 2-3 WAR per year.  There were teams that claimed not to be interested because they didn’t trust or want to deal with a knuckleballer.

I’d be careful about generalizing a market value for such a unique, niche player.  If DIPS theory could not stand up to the power of the knuckler what chance does these market valuations?

I always thought the Wakefield deal was nuts for Wakefield.  I said to myself “damn, he just loves being a Red Sock.” I’ve long wondered if the union has hated Wake for signing that deal.

Now if the Yankees could only manage to get Jeter to agree to something like that…

I think it’s silly to judge Wake’s deal as bad for him. He is under no obligation to try to maximize at this point in his career. He is under no obligation to do what the union would like him to do, for the supposed benefit of other players.

I’m at a point in my own career where I have little desire to give up any lifestyle considerations in order to make a bit more money. And believe me, I don’t have Wakefield’s kind of money in the bank. No need for anyone to get their “guns blazing” about this. It’s simply a guy who doesn’t need more money, but apparently still enjoys playing, And, he apparently realizes that, while he has some value, he is not any sort of Cy Young candidate. So, he lets the Redsox construct a deal that works for them, and finds that he is quite OK with it.

IMO, it is quite unbecoming for analysts to weigh in on these things, with their formulas, in any sort of judgmental way towards Wakefield. Believe me, he doesn’t give a $hit what anyone thinks about his deal, he is quite happy cashing his checks.

His current deal is fine.  He previous deal was not.  He earned nothing, nothing at all, by agreeing to a perpetual reserve clause.  He could have won the Cy Young 2 years in a row, and the Redsox would have resigned him at the team option for 4MM. 

The team option had zero benefit for Wakefield.  I can’t even believe the MLBPA would allow that contract to be signed.  Certainly in their next round of negotiations, such a deal (perpetual reserve clause) will be ensure to no longer happen.

-----"He earned nothing, nothing at all, by agreeing to a perpetual reserve clause.”

Well, I think he might say that he earned a fantastic income of 4 mill., as long as he was wanted by the team (after he was already past his “prime” and very rich), and he earned some freedom from the hassles of being traded to who knows where, or having to negotiate a new contract all the time, plus some stress avoidance that if he had a mediocre or even poor season, he would be less cauterized in the press. How can he be skewered if he agreed to a reasonable or even “humble” deal, given his age, and he finally got old, all of a sudden.

What did his perpetual team option have to do with not being traded?  He had no-trade rights because he was a 10-and-5 player, which he would have had no matter what deal he signed with Boston.  The deal didn’t keep him in Boston either.  It let them keep him as long as they wanted, which they would have done without the perpetual option anyway, except with the provision that if they value him at above $4 million, they only have to pay him $4, but if they value him at less, they can pay him the lesser amount that they value him at.

Is having an agent negotiate with the team such a hassle that he should just say, “the heck with that, if I am better than a certain level, just keep renewing me for the minimum salary you would pay that level, and if not, tear up the contract and then we can worry about negotiating to work out something cheaper for you”?

This isn’t about skewering Wakefield for signing a deal lopsided against him.  The point is that teams should not be allowed to play on a player’s loyalty or some fabricated ideals about nobility or whatever to take adavantage of them in essentially recreating the reserve clause, which was been banished from the game for basically being illegally unfair.  The whole reason there is a union and that they negotiate a CBA is to ensure that the clubs don’t take these kind of advantages over players.  You could argue that Wakefield can do whatever he wants, and if he signs an unfair deal, that’s his prerogative, but then what is the point of having a union or CBA in the first place?  No one is saying he shouldn’t stay in Boston or should shop himself to the highest bidder if he doesn’t want to, but there’s really no need for Boston to write the reserve clause back into his contract for him to stay there.

Question for Tango:

Let’s say I have a ‘true talent’ earning power of $690,000/year. Wherever I work for, I will deserve $690,000.

However, I don’t want to work anywhere. I want to work in a specific city. And I don’t want to work in any company, I want to work in a company I believe in/treats me like I want to be treated.

Am I an idiot for valuing my choice of city and positions at $370,000/year?

Bringing it back to Wakefield, how much is he allowed to give for a ‘home town discount’ before it becomes unreasonable? Is it simply the self-perpetuating clause? If A-Rod was offered a new contract giving him his peak salary perpetually from now on, would that be a problem to you?

We accept it when players sign for slightly less to play with a team they think can make it to the playoffs.

I don’t think any of us think giving a discount for what we want is wrong. I think that it’s the degree of discount that is given that you have the problem with. So where do you draw the line?

Is it simply the self-perpetuating clause?

It is solely that.

If A-Rod was offered a new contract giving him his peak salary perpetually from now on, would that be a problem to you?

You’re being a stickler now. 

The Redsox will exercise their rights as long as they think Wakefield is worth at least 4MM a year.  And that means, that there’s a tremendous potential of money to be left on the table, which Wakefield has every right to leave.  But, seeing that he gains nothing at all by giving the Redsox that option, then it makes no sense to give it to the team a few years ago, when he can simply give it to them on an annual basis.  (Even marriages are not so permanent.)

Now, you are asking what if the team option was for say 12MM every year.  Would I have a problem with it?  Not as much, but only because we don’t expect him to reach those levels, and so, we do not expect the Redsox to exercise this option more than once.

Had his performance been deemed worthy enough that they continually exercise this option, then we know he gained nothing out of it (other than the “benefit” of his agent not talking to the Redsox).

The main point is that Wakefield gave the Redsox something very valuable (the reserve clause), and the Redsox gave him back nothing at all (unless you want to call “not negotiating every year” as some sort of “benefit").

I suppose Wakefield pays 200$ a month for cable TV because this means he doesn’t have to negotiate with the cable company while everyone else is getting a price drop.

How anyone can defend giving the player the right to introduce the reserve clause INTO a contract is beyond me.

And remember, I am going to go all-out here.  I may insult you.  I may give you a bloody nose.  I’ve already prewarned everyone at least once, so if you choose to engage me, be a man and take your pummeling.  I don’t want to hear any complaining about it.  I am going to remain completely unscathed.

And what Kincaid/52 said is perfect.

I’d be surprised if MLBPA didn’t take note of the deal and tell agents and players not to negotiate such a thing in the future.  Does it violate the CBA?

I’m not trying to defend that first contract but I think a player like Wakefield may have a value below his WAR -> Salary conversion due to the fact that a team basically has to deal with having constrained choices on your second catcher.  That eats a second roster spot with someone who may otherwise have a lower WAR then the person he would replace (say you subtract half a WAR from his valuation - it is just a direct replacement because it will just affect the second catcher no chain effects).

The only thing about the deal that may have been in Wakefield’s favor is that I really don’t think he would have gotten $4 mill from anyone on the open market. So MAYBE there was a conversation between Wakefield and the Red Sox that sounded like this:

Red Sox: “We estimate you will be worth $4-$8 mill per year for the next couple of years. We also know that no other team agrees due to age/knuckleball prejudice. We guess you could get at most, a contract worth $2 mill per year on the open market. So...we will split the difference between what the market would pay you and what we know to be your true value @ $4 mill. In return, you give us a perpetual option to renew.”

Wakefield: “Can you throw in a year’s supply of emery boards?”

So I’m guessing that Wakefield agreed to the deal because he thought there was no way he would ever get $4 mill on the open market (and I think that is true). The Red Sox agreed to the deal because, well, duh.

I’m not saying it was a good deal for Wakefield. *ducks a tango-tomato* I’m just trying to rationalize how it might have looked good to Wakefield. To say that Wakefield ‘earned’ more than $4 mill for the Red Sox is factually true, but irrelevant due to the realities of the MLB free agent market (ie. poor decision making abilities of GMs).

You are suggesting that without the reserve clause added in, the Redsox would have only given him 2 or 3MM, and therefore, in order to get him to 4MM, they need the reserve clause. I don’t know that that is plausible, but I’ll give you points for trying. 

As we’ve seen with injured pitchers, it’s very easy to construct incentives based on inning pitched that would give Wakefield his true value.  If he’s making 30 starts and pitching 180 innings, that pretty much means he’s been at least an average starter.  So, on the open market, he could have made 2MM plus incentives that would have pushed him into the 6 to 8MM deal.

If the Redsox played on Wake’s emotional need to be in Boston, and then told him the only way they would agree to a flat 4MM deal was with a reserve clause introduced, that would seem to be highly dubious.

Thanks for giving me something to think about, and introducing something even more unethical than I had considered.

I would also not be surprised that his NEW incentive-based contract was quietly pushed by the MLBPA and MLB Labord Board.

I don’t think they played on his emotional need to be in Boston. I think they told him ‘we will give you more guaranteed money than the market will give you in return for the reserve clause.’ I think that could have been compelling if Wakefield preferred $4 mill guaranteed vs $2 mill guaranteed + another $4 mill in incentives.

Again, if I were Tim Wakefield I would not have signed that contract. I’m just trying to get inside his head.

Also, I think there is an incorrect assumption being made (and its a common mistake) that a player’s market value is determined by the value that he returns to the team in wins. In other words, if a player returns $8 mill in value to his team, a fair market contract for the player is $8 mill. That’s not true because it is ignoring the characteristics of the particular market in which the player has become available. Who and how many teams need this player? How many similar players are available? What are the opportunity costs involved? If 3 teams need a slugging 3rd baseman and the market offers 4 roughly equivalent slugging 3B, those teams are going to pay less for a 3B than if the market offered 2 players. I’m not saying anything that isn’t obvious. I just think people shouldn’t make the assumption that if Wakefield is expected to be worth $6 mill next year that he should get $6 mill in a fair market.

There are 30 3B jobs out there, of which some may be fielding-centric and others are power-centric.

There are 150 starting pitcher jobs out there, all of which require the pitcher to give up as few runs as possible while pitching as much as possible.

So, no, your statement here does not apply to Wakefield.  Wakefield’s value is identical to anyone else expected to pitch as long as give up as few runs as he is.  You can argue that knucklers need to be paid at a discount because of their uncertainty, which is fine.

But, the sole idea that a MLB team can introduce in this day-and-age a clause to insert the reserve clause is preposterous.  And if they can do it to a veteran, imagine what they are doing to kids.  It is unethical and I think the MLBPA was asleep at the switch on this one.  And I imagine the new union head must have pushed the Sox on this.

Just wanted to add that Wakefield’s incentives for games started are $50K per start 11-20, $75K per start 21+.

Since he signed the deal before the 2005 season, he’s made $2.5MM for starts 11-20 (50 starts at $50K per), and $2.78MM for starts 21+ (38 starts at $75K per), plus another $50K for the All Star game in 2009. 

So his compensation for the years 2005-2009 has not been $20MM, but a shade over $25MM.

A few other comments:

- Legacy: Wakefield signed his perpetual option deal shortly after the Red Sox won their first World Series in 86 years.  He has by far the longest tenure of any Boston player, and clearly wanted to play for the Red Sox, and only the Red Sox.  He’s not a one-team player, but nearly so, and obviously values his legacy in a Red Sox uniform very highly.  Being one of the 25, and one who never put on someone else’s uniform thereafter, is a guarantee of perpetual folk-hero adulation in the Boston area.  Would you trade that for a couple indifferent seasons with another team, when the Red Sox are still willing to send you to the mound every 5 days?

- Remaining with the Red Sox is a virtual guarantee that one will be in the playoff hunt every year.  That’s valuable to a player.

- Not having to either disrupt the family by moving, or live away from his family for most of the season: huge.  If I’ve already got tens of millions of dollars in the bank, and if I’m not the type to blow all that money on making it rain for strangers, I’d trade a lot of POTENTIAL salary increase for the certainty of seeing my wife and children every day my team is at home during the season.

- Conflict.  Who here likes buying a new car?  Some people get a euphoric high off that sort of confrontation, but many people dread those situations.  Negotiating a contract is definitely worse, as the team, even if they like you and want you back, have little choice but to argue against your value, magnify every one of your flaws and diminish your virtues.  I have no trouble at all believing that Wakefield would be willing to forego the POTENTIAL of eking out a better deal for the certainty of not having to be raked over the coals every November.

- The Union angle: I’m sure Wakefield wants his fellow players to get what they deserve in salary, but if I were him, any argument that said I had to leave Boston in order to render full brotherly solidarity with my union fellows would fall completely flat.  And he’s been proven right: everyone regards Wakefield’s deal as an anomaly, not representative of the union as a whole, and irrelevant to any and all other contract negotiations.  It’s foolish to think that some mid-level free agent would have gotten a better offer if only Tim Wakefield had taken $4.5MM to play in Houston or Chicago.

Fire when ready, Tom, but I don’t think we really disagree.  I believe Wakefield left money on the table, just like you do.  I just think he’s gotten at least that much value back in other forms: legacy, family bliss, playoff baseball, peace of mind…

@Greg…

I don’t understand why giving the Red Sox a reserve clause guarantees any of those things you list.

The only incentive for giving them the reserve clause would be if Wakefield felt the Red Sox were giving him more money in exchange for the right to perpetually renew the contract.

Brian,

Essentially, Wakefield has painted himself into a corner he likes: either he’s a pitcher for the Red Sox, making fantastic money (reckoned as a typical human being, not an MLB player, mind you), in an ideal workplace arrangement.

Maybe the stumbling point on people comprehending Wakefield’s (former) deal is that some people can’t imagine ever having enough money.  I, for one, can…

I didn’t realize that Wakefield had that kind of deal with the Red Sox. No wonder he’s been there for so long.

Despite being a very valuable pitcher, Charlie Hough never tried free agency with the Rangers. He said publicly that he didn’t have any interest in pitching for another team and would sign with the Rangers as long as they offered him a fair contract.

Hough had a great loyalty to the Rangers because they picked him up after he was released and then made him a starting pitcher. He didn’t feel he would have had much of a career if not for the Rangers.

I guess Wakefield had a similar attitude. The Red Sox brought him back to the majors and stuck with him through thick and thin and he apparently thought he was worth $4 million a year and as long as they gave it to him, he’d pitch for them.

He must have considered the clause a carrot for the Red Sox to stick with him if he had a bad year because he wouldn’t be too expensive to keep around.

Wakefield has chalked up enough ERAs right around 5.00 that he couldn’t feel too secure about getting a real good deal. As a knuckleballer, you can either establish a mutual relationship with a team which you value and they value, or you can pitch for different team every other year and be a journeyman.

After his little run with the Dodgers this year, Charlie Haegar probably should be getting offers to be the No.5 man in the rotation for half the teams in MLB but he’ll probably be pitching at AAA again next year. Teams just aren’t too interested in a knuckleballer.

Oops, left out the rest of a sentence:

either he’s a pitcher for the Red Sox, making fantastic money (reckoned as a typical human being, not an MLB player, mind you), in an ideal workplace arrangement, or he’s a retired perpetual hero in Boston, likely to be able to snap his fingers and get a job in the Sox organization, or on the NESN broadcast team…

So there are two questions here, nicely illustrated in a comment by tangotiger:

“I suppose Wakefield pays 200$ a month for cable TV because this means he doesn’t have to negotiate with the cable company while everyone else is getting a price drop.”

This would be a poor decision, given that the benefits for not having to renegotiate his cable deal are not worth the extra cost he incurs.  Wakefield presumably thinks this tradeoff is worth it, for whatever reason.  He may be wrong about that.

The second question is the ethical one - whether it is right to allow a player to accept such a deal.  Now, it might be wrong via a principle of autonomy, on the grounds that he did not freely consent to the contract (as might be the case if teams were pushing these on new players).  There does not seem to be any evidence that this is the case.

The second line one could push is that it is the consequences which matter here.  Accepting this deal makes it a precedent, allowing teams in the future to pressure younger players into signing these deals.  While this remains in the realm of logical possibility, it does not seem to be a consequence which actually obtains.  What we have here is an empirical question - is there any evidence that this contract has established an operational precedent which affects the contracts of others?

A third possible route is to suggest that he owes a duty to the union to act consistently with its established principles.  In other words, even if the deal were in his own self-interest, he would still be violating his duty to the union.  This could be it, though establishing this duty is non-trivial.  One has the right to not accept the best contract from the union’s perspective if another contract better fits one’s own interests and values.  The question is how far this extends, and that’s an open question.

Finally, a fourth option is that deals which are unbalanced violate a norm of fairness.  I’m not sure what that norm is though.  We do not demand that Oliver Perez renegotiate his contract because he is being massively overpaid.  What a norm of fairness requires is that players are able to negotiate in good faith (no collusion), represented by competent people, and based on the same basic information (for starters).  If so, then this objection reduces to the first - a question of Wakefield’s competency to accept such a contract.  In other words, the generalized norm of fairness, that contracts match value, certainly holds at the macro-level, but I’m not sure how it applies at the micro-level.

The question remains outstanding, however, what moral principles justify the claim that the contract is unethical, above and beyond it being irrational.

Totally agree with Greg! Tango, I think you are obsessed with the monetray part of the deal. Like Greg said, there are lots of other things youb can value higher when you already have tens of millions on your bank account!

The SOLE issue is the reserve clause being introduced into the contract.  There’s really no reason to bring family into this.  If Wake values things differently, fine.  I have no problem with that.

Nothing that Greg says precludes all that from happening if Wake signs year-to-year.  There’s NO reason for the contract to be written with the reserve clause.  None.

Unless the Redsox have decided to value the reserve clause and therefore have given Wakefield more money than he would have gotten as a year-to-year player.  That is, in order for the REDSOX to benefit, they basically turn Wakefield into a perpetual pre-arb player, and for that, they give him more money than the market would have otherwise borne.

And that would be unethical for them to do. 

The issue is introducing the perpetuity clause, and that is it.  Talking about anything else is meaningless frankly.  Those are not issues, since I have no problem with those issues, and no one else does.

Tango, I think you are obsessed with the monetray part of the deal.

I think I am obsessed with people not reading what I write.

I will repeat it once more: the sole issue is the perpetuity clause.  Anything else, I am not arguing.

I will repeat it once more: the sole issue is the perpetuity clause.  Anything else, I am not arguing.

I will repeat it once more: the sole issue is the perpetuity clause.  Anything else, I am not arguing.

I will repeat it once more: the sole issue is the perpetuity clause.  Anything else, I am not arguing.

I will repeat it once more: the sole issue is the perpetuity clause.  Anything else, I am not arguing.

But, go ahead, and say something that I didn’t say.

OK, Tom, I get that.

But can you clarify your objection, then.  What exactly about the perpetuity clause do you object to:

do you object to the Red Sox offering it? (and actually, I don’t know if the Sox offered it or if Wakefield did, but anyway)

do you object to Wakefield accepting it?

do you object to the MLBPA permitting it?

which of those is the objection?

I object to all of it.  It basically keeps the player as a pre-arb player for as long as the team wants it. And in return for that, they pay the player at arb-rates. Even though the player is a free agent.

There is no place for a perpetual clause.

But are they paying him the arb-rate or the arb-rate+?

If they are paying him less than or equal to what he could get on the open market, then the deal is pure evil. If they are paying him more, then I guess it’s up to the player to decide if he wants to give up freedom for cash. We don’t know for sure what Wakefield would get on the open market, and we definitely don’t know what Wakefield THINKS he could get on the open market.

The best discussion on this topic is posts 17/18 between me and Sal.

Sal is basically asking: what is the monetary value of the perpetual clause.

At the most extreme, what if the Cards were given the right to renew Pujols contract on a year-to-year basis, on the condition that Pujols’ compensation was $1 more than the highest contract for that year.

At this point, this tips in favor of Pujols (possibly).  Suppose that the highest contract was 30MM.  And you think that he’s worth 28MM this year, but think that he might be worth 32MM next year (because of injuries or you expect a jump in the free agent market, but the top-end salary will still be 29.999MM$).  In this case, you might sign Pujols to 30MM even if he’s worth 28MM this year.  Maybe because the Cards prefer continuity, and maybe because they really need to win this year, and so they pay the extra.

So, you MIGHT be able to construct a perpetual clause where it might make sense.

But, that is quite a stretch.  The perpetual clause is enacted on those guys who are average-ish and worse.  So, in practical purposes, the perpetual clause should not exist as a rule. 

That you might be able to justify it for the most extreme cases doesn’t make it justifiable therefore for the more mundane cases like Wakefield.

It seems foolish to assume any significant discount for a knuckleball pitcher. 

Steve Sparks made $3.5 and $4 million for the Tigers in 2002 and 2003 without quite the track record that Wakefield has.  Tom Candiotti made $3-4 million salaries throughout the 90s with a similar track record to Wakefield’s but in a lower revenue/salary environment.

I agree...the basic question is “What is the monetary value of the perpetual clause?”

The monetary value of free agency is low for a player like Wakefield who:

1. Doesn’t expect to play many more years
2. Would probably prefer to retire rather than play for another team
3. May not have much market value anyway

All I’m saying is that to Wakefield, the amount of money the Red Sox were paying him for the reserve clause must have been greater than the amount of money free agency was worth to him. The MLBPA should certainly discourage such contracts as it sets a terrible precedent. But in this case, I think you can reasonably make an argument that the deal was fair to both sides. (And certainly fairer than any deal struck out of the amateur draft.)

From #39:

The perpetual clause is enacted on those guys who are average-ish and worse.

Tom, what are you talking about?  It hasn’t been enacted on anyone, is has been freely signed by one sane, competent guy who liked it enough to agree to it.

FWIW, when I joined my current employer I signed a contract that states I cannot work for a competitor for a period of 2 years after voluntarily leaving my employment. In exchange for signing this agreement, I got a much improved benefits package.

I do not plan on leaving my employer (they let me read The Book blog at work!) and even if I did, I have options outside my current industry.

Relevant?

re#43:
I should say that none of my employer’s competitors are in the city I live in and I cannot relocate due to family concerns.

Did I make a sane decision in signing that contract?

The monetary value of free agency is low for a player like Wakefield who:

1. Doesn’t expect to play many more years
2. Would probably prefer to retire rather than play for another team
3. May not have much market value anyway

Your claim #3 is likely completely false.

@Mike #45:

I qualified the statement. It’s not necessary to the argument unless you think #2 is completely false as well.

I probably should have worded it, “May be undervalued by the market relative to performance anyway.”

This whole question revolves around whether the Red Sox compensated Wakefield for giving up any upside value. First, that upside is relatively limited - it was unlikely that Wakefield at 40 or 42 would suddenly start performing better than he had before. Second, it is near impossible to say whether his $4m contract includes compensation for giving up the flexibility to work elsewhere. That depends on Wakefields’s bargaining position, which is relatively weak because he wants to stay in Boston, and because other teams may undervalue his ability.  Maybe he would have signed a $3m/year deal if the “reserve clause” wasn’t included - that $1m/year was worth giving up the potential upside of free agency.

Would it be better if there had been a different deal, in which Wakefield signs a 10year deal at $4m/year, but the club has the right to end the contract at anytime? This would be exactly the same contract, would you have the same problem with that?

Tango: Wakefield negotiated the perpetual option himself. If he is happy, and the team is happy, I don’t see how it can possibly be considered a “bad” deal from a utilitarian standpoint.

Your argument is paternalistic. The bottom line is that you (and I) aren’t Tim Wakefield, so what you (and I) think of his contract means absolutely nothing.

Isn’t that viewpoint essentially the same as saying that as long as both sides negotiate a contract, there can never be any such thing as a “bad” or unfair contract?

If you think that Tango’s view is paternalistic, do you also feel that way about the entire CBA, or even the existence of the Union?  Preventing things like this is essentially their entire point of existence.  If players and teams were just left to themselves to negotiate whatever they wanted and the paternalistic nature of the Union and CBA were removed, would that be more fair to players?  If Wakefield only wants to play in Boston, so that Boston offers him a $10,000 a year deal, should they be allowed to because enforcing a league minimum is paternalistic?  Or if they say they want to sign him for $4 million, but that they want a clause that says they can option him down to the minors without his consent at any point in time as often as they want?

I’m just trying to gauge how far you would take the counter-argument of paternalism and that universally negotiated principles won by the Union infringe on a players’ rights rather than enhance them.  Is it specific to this reserve clause, or does it extend to all paternalistic benefits the Union fights for in the CBA?  One of the first major rights won by the players against the owners was the abolishment of the archaic form of the reserve clause.  That is among the most basic tenets of the CBA.  If you want to say teams can throw that out as long as they can get a player to agree to it, then what good is the rest of it, and should teams be allowed to basically ignore the whole thing if they can get a player to go along?

That depends on Wakefields’s bargaining position, which is relatively weak because he wants to stay in Boston, and because other teams may undervalue his ability.

People keep throwing out this idea that Wakefield might have had a hard time getting suitors in the free agent market, but I don’t see any evidence for it.  On this blog at least, can we quit repeating a baseless claim?

I’ve already addressed the knuckleballing portion of the salary equation, and I don’t see any evidence that knuckleballers get paid less than other pitchers.  Anyone have any evidence to the contrary? 

His age can’t really be considered a salary detriment, either.  Jamie Moyer and Randy Johnson are several years older, and they made $6.5 million and $8 million last year, respectively.  Tom Glavine made $8 million in 2008 at age 42.

You may argue that the contract terms were his personal choice, but I don’t think you can argue that he was forced to take the contract because he didn’t have free agent value or that the Red Sox weren’t getting a real bargain for their money.

Kincaid is going to argue my position better than I am.  So you can pretty much ditto everything he says as my point.

***

If the position is that any contract freely entered is somehow “fair”, then there’s really nothing to discuss is there?

***

This issue rests, solely, on the value of the perpetuity clause.  The union has a standard contract, and they have certain rules, like performance bonuses can only be based on playing time and awards.  I would have thought that the union also had a rule that would prevent the reserve clause from being introduced.  Obviously they don’t, but just as obvious, they will in the next CBA.  I presume they figured no sane player would want to introduce it. 

The only way it makes sense is, as is being discussed here, that the perpetuity clause was sold by Wakefield in order for him to get “up” to 4MM, when he might have only gotten 3 or 3.5 without it.  And, his new deal essentially is showing that, that he’s getting a more normal deal, and that the perpetuity clause was not for him to bargain with to begin with.

***

So, as is being discussed, what is the value of the perpetuity clause, and should the player be allowed to sell it back to the team.

And, once its sold, is there any way the union will let this happen again?

@Kincaid: As long as both sides negotiate a contract in good faith, yes. The point of the union is to protect the rights of the individual members. If, however, an individual freely chooses to give up the rights protected by the union, he should be allowed to do that.

So, in all the scenarios that you propose, it should be allowed as long as Wakefield agrees and the club agrees (and, naturally, neither side has agreed under duress).

@Tango: As with any other commodity, the value of a perpetual option clause is agreed upon by the buyer and the seller. If Wakefield thinks that it’s is worth nothing, and the Red Sox think that it’s is worth nothing, then it’s worth nothing.

Why are performance bonuses (number of HR) specifically excluded as being allowed under the CBA?

At what point do you stop a contract that is clearly lopsided and say that it was not negotiated in good faith?  If Boston (or anyone else) knows a player doesn’t want to play anywhere else, and they say, “We know you’re worth this much, and we would normally pay you that, but we also don’t think you’ll move somewhere else to play, so you can either sign away all your collectively bargained rights and play for $50,000, or you can retire,” that is obviously not in good faith.  But what if they don’t come out and say it like that, and just do it?  Like, say you have someone who signs away a basic right for no apparent reason with the result being a lopsided deal against them, but no one comes out and says he was taken advantage of.  At what point to you step in when you have a contract that is clearly biased against a player and breaks the CBA?  Do you just let them do whatever they want as long as they don’t come out and blatantly say “We’re deliberately taking advantage of this player”?

Every team probably has several players in the low minors who would immediately sign away their collectively bargained rights and play for well below the league minimum.  Does that mean that Pittsburgh (or whomever) can decide that they don’t want to pay for a real team and are going to fill half their bench with low minor guys who willfully entered into Major League contracts that discarded all collectively bargained rights, given that each player negotiated the deal in good faith?  Say that Pittsburgh then goes to Andrew McCutchen and tells him that they are more than happy to let him sit in the minors for a few more years and replace him with a low minors guy who will play for peanuts and no rights.  Say they then tell McCutchen that they would also be happy to leave him in the Majors and let him accumulate service time toward free agency, but only if he is willing to also sign away his rights and play for below the league minimum.  This is clearly not negotiating with McCutchen in good faith, but there is nothing that says that Pittsburgh has to play McCutchen in the Majors at all right now.  They could just leave him down and play the low-minors replacement who did negotiate the bad deal in good faith, and now, by playing within those rules, they have royally ****** McCutchen doing nothing other than negotiating away rights from players in good faith.

In general, if you let teams negotiate collectively bargained rights away from players, what stops them from eschewing players who aren’t willing to negotiate away those rights in favour of players who are willing to do so, or from leveraging PR factors (or whatever they can) against players to coerce them into negotiating away rights without blatantly doing so enough to flag themselves as not negotiating in good faith?  At what point does it become apparent that such an environment precludes anyone from negotiating in good faith?

There are reasons that the CBA is not optional, and they are not to restrict the rights of players.

Tom #53:

Perhaps to avoid collusion, or the appearance of collusion, among opposing players - e.g. last game of the year, “throw me a fastball so I can get HR #30, I’ll split the $100K with you”, or something of that sort.

Tango/#53:  I don’t think it’s specifically the CBA that precludes performance bonuses, but the Major League Rules (the business ones, not the on-field ones), in particular Rule 3(b)(5).  I am not sure how those fit into negotiations between the clubs and the MLBPA, but a lot of them pre-date modern CBA negotiations, and I think they come more-or-less from the Commissioner’s Office.  Supposedly the theory is that they don’t want players chasing personal stats at the end of the season when it doesn’t benefit the team (i.e. Pitcher A dialing up the heat against every batter to try to reach 150 Ks rather than throw his best GB stuff, or Hitter B hacking at every ball 4 to reach 200 hits, or something like that).  So it was more of a “best interest of baseball” thing from the Commissioner’s Office more than something either the clubs and Union decided they needed, I think.

The point where someone needs to step in is when the team starts using the fact that one player negotiated away the right as leverage to force other players to negotiate away the right. This has not happened with the perpetual option clause, so it’s irrelevant to our discussion of utility.

Kincaid,

If your scenario (or the opening moves of it) came to pass, the MLBPA would clearly step in and object.

Your scenario, in my opinion, is not a logical extension of the Wakefield scenario.  Wakefield was pleased with his contract; McCutchen would be outraged by his.

I’d also give some weight to the fact that 5 years have passed since Wakefield signed his contract, and not one of the 30 teams has shown the slightest inclination of even testing the cynical waters you just described.

What’s to stop a team from executing your scenario?  The MLBPA would go berserk, that’s what.  That the MLBPA didn’t go berserk over Wakefield’s contract shows that they have a sense of proportion, and furthermore this whole situation shows that not every slope is slippery…

That was not intended to be the results of Wakefield’s deal itself, but of the general idea that the CBA should be optional if a player agrees to forgo his collectively bargained rights, since Adam W expressed that sentiment.  Perpetual club options are apparently not precluded at this point, possibly due to an oversight in the negotiations because it was assumed such a thing wouldn’t arise (as Tango hypothesized), so this isn’t specifically an issue of overriding the CBA as the above post discussed.  If the MLBPA gets that in the next CBA (which is pretty plausible), though, it’s not an optional thing because of the potential chaos that making the CBA optional creates.  In general, the idea that everything the Union does for its members is strictly optional and that its paternal provisions should not be necessarily binding for any contract is not particularly feasible, at least not in any way that is fair to the players.

Adam/#57, the Union’s job is to stop such situations from happening, not to wait for them to happen and react.  That is why the CBA is already not optional-to prevent scenarios like the above from happening.  They did not just say, “it’s optional, do what you want” until chaos ensued.  They predicted the possibility and made the CBA binding for all player contracts.  Chaos has not ensued because they never let the CBA be optional in the first place.

Fair enough, if they forbid this in the CBA, then MLBPA members should not be permitted to waive that part, or any part, of the CBA, and clubs should be forbidden to offer it.

I think you’re right, this must not be addressed in the CBA currently.  And it probably will be next time around.

@Kincaid: I was very careful to state that we are only considering negotiations that took place in good faith.

Moreover, since this is a discussion of utility, we are only concerned with what did, in fact, happen; any ridiculous hypothetical scenario that you want to propose is irrelevant from a utilitarian standpoint.

How do you determine what was in good faith and what was not?

What do you do when teams are negotiating entirely in good faith, but totally ******* over other players in the process?  Like if the Pirates want to negotiate in good faith with their low minor leaguers, and as a result of negotiating in good faith with those players, better players lose their jobs.  Or if a pitcher wants to sign away his collectively bargained rights, so another better pitcher loses his job because the team signs the one who will give up his rights in good faith?  Is it in good faith when the players who get ****** decide they would rather negotiate away their rights as well if it means keeping a job?  Or do you only say it is in good faith when their are no other players available on the market or in the team’s system who could also fill the role (which is never), because those players are always going to be ****** when someone else negotiates their rights away in good faith.  As long as you let teams sign players to deals that negotiate away their collectively bargained rights at all, you give them the power to **** other players over if they so choose, as well as the leverage to force other players into choosing to bargain away their rights as well.

The ridiculous hypothetical situation is to make any of the provisions of the CBA optional.  You felt that all such paternal provisions should be optional, so I explained a couple of situations to show exactly why that is not the case (not to show what is going to happen; it isn’t, because those provisions are not optional).  Whether you feel forcing teams and players to play by the rules is paternal or not, that’s how the game works.  If you think that someone should be able to sign for $10,000 and give up his rights to not be sent down or anything else as long as he negotiates in good faith, that’s irrelevant, because he can’t.  So if you don’t want to discuss hypotheticals, don’t bring up the point that stopping an unfair deal that a player is willing to negotiate is paternal and thus shouldn’t happen, because that is not the reality of how the game works.  Same thing if the Union takes a stand against this:  paternal or not, it’s not optional, and that’s the only way to be fair to the players.  Unless you are willing to introduce hypotheticals into the discussion, you can’t make the point that the Union shouldn’t step in when a player chooses to sign an unfair contract and should let its members do whatever they want, because the Union does step in and its members are not allowed to do whatever they want.

There was also a good faith arrangement between Rangers’ ARod and the Redsox that would have required that ARod take a pay cut.  The union would have none of it.

There are many good faith arrangement between two sane parties.  That doesn’t mean we have to let it happen.

Contracts between players and teams are regulated by MLBPA and MLB.  Seeing that the uprising of the MLBPA was predicated on the reserve clause to begin with, allowing a player to introduce the reserve clause is not something that the union would have ever allowed.  They just figured no one would bargain away one of the fundamentals they fought for.

I have no doubt that something behind the scenes forced the issue for this year, and just as liekly that this will be part of the next CBA.

@Kincaid: Why do you insist on belaboring this point? What you’re describing is coercion. That arrangement would never be upheld in a court of law… not to mention the level of fan and media backlash that would happen if the Pirates fielded a roster like the one you describe.

I am arguing that Tim Wakefield’s actual contract was, from a utilitarian standpoint, a fair and good contract. It benefited the Red Sox, it presumably benefited Wakefield, and it did nothing to negatively impact the contract negotiations of any other player.

@Tango: Salient comparison. However, you’re still doing nothing to address the utilitarian aspect, which is all that I am discussing. Why shouldn’t a player be allowed to enter into a perpetual option if he wants to (i.e. is not coerced to do so)?

The CBA obviously did allow it, so saying it shouldn’t be allowed is irrelevant.

Yes, coercion is certainly a potential consequence of letting players negotiate away collectively bargained rights in good faith.  That’s precisely why it’s not allowed.  Obviously it would not hold up to legal scrutiny, which is why what you are suggesting does not exist in the reality of player negotiations.  And that is addressing your point that if a player wants to do something, he should be allowed to regardless of what the Union says or whether it is unfair to him or not.  The ripple effects create an unfair negotiating environment for the players in general.  If you take the position that any contract a player and team are both willing to sign is necessarily fair and thus the Union or CBA should have no say in it, that is something that has to be considered.  Why are you asking Tango to address that point while summarily dismissing counterpoints that do address it?

Is discussing what we think about player negotiations ever relevant?  If the only answer is that only what is in the CBA right now is relevant, then there is no discussion.  All there is is to go read the CBA, and that’s the beginning and end of discussion.

If a black person is not noted as being a person, does that mean that he can be considered property?  A sane person would not need to define a person that somehow we need to distinguish between the color of one’s skin.

So, if something is allowed per the CBA, or more accurately, is not specifically prevented, doesn’t mean it’s correct.

The analogy, for those who think I’m reaching, is not that slavery = reserve clause (though you can make the case).  The analogy is how far do you need to document something that otherwise reasonable people would accept.

Seeing that the union just fought to have the reserve clause stripped as no longer meaning perpetual (just one and done), it simply never occurred to the tens of thousands of players and hundreds or thousands of GMs in the last 30 years that a player and GM would negotiate to have the clause brought back in.

This is a loophole that the Redsox broached.  And the player acquiesced.

If there was no minimum salary provision in the CBA, there is no doubt, at all, that the lowest paid MLB player would make under 100K.  Teh intent of the union is to make sure to give their players minimum rights.  And one of them is not to be tied to a team in perpetuity.

For whatever reason, they did not spell that out.  This is an oversight, not a “feature”.

@Kincaid: This has become a semantic argument. I am arguing individual utility and nothing else. There are factors both utilitarian and otherwise why that scenario would not play out.

@Tango: The problem with your slavery example is utility, which is why I continue to include this word in every post. Wakefield’s perpetual option was seen as a positive by both the player and the team. That was not the case with slavery, so it’s not a relevant counter-example.

Let’s say the Red Sox gave Tim Wakefield a perpetual player option at $4M/year.  The only way to escape it would be to fold the team or Wake to die.

The Red Sox could enter into this agreement in good faith.  Does anybody think the contract makes sense for one second?

The converse contract is no less insane.  That’s why it lost in a court of law 35 years ago and no player has ever accepted it again.

A few points for #68:

- I believe the reserve clause as it used to exist did not include any sort of leverage on the player’s part to influence the size of their paycheck (aside from holdouts), so it’s not quite the same as Wakefield painting himself into a comfortable $5MM corner (see my post earlier on his incentive clauses).

- I do believe one player has accepted it, not none.

- I know this is a legalistic society, and few posters in this thread have shown much inclination to take into account a particular player’s circumstances, but Wakefield was (is) nearing the end of his career, and has (obviously) decided that the Red Sox are going to be his last team, one way or another.  His is a different situation than would be the case for a young, up and coming player. 

The MLBPA recognized this, I believe, when they acquiesced to Wakefield’s perpetual option contract.  They probably would not have done so if a team had pressured a young player into such a deal.

- Finally, if Wakefield’s contract opened a can of worms, or started baseball down a slippery slope, or (choose your own cliche), why has there been 5 years of nothing after his signing?  I think the current system has taken care of this, and in the next CBA, this “loophole” will be closed.  No harm done, in my opinion…

"The problem with your slavery example is utility, which is why I continue to include this word in every post. Wakefield’s perpetual option was seen as a positive by both the player and the team. That was not the case with slavery, so it’s not a relevant counter-example. “

But I said:

The analogy, for those who think I’m reaching, is not that slavery = reserve clause (though you can make the case).  The analogy is how far do you need to document something that otherwise reasonable people would accept.

I did not argue the slavery argument you are attributing to me.

***

And, the issue is the introduction of the reserve clause into a contract, its value and its implication.

It is clear that if this caused a slippery slope, then MLBPA would have stepped in immediately.  If only the MLBPA could have been as diligent as the silly NFL is in banned any fun football players have in the end zone.

Apparently, that this has NOT caused a slippery slope is seen as evidence of something.  Wrong is wrong, regardless of how contained it is.

***

That the MLBPA managed to get the reserve clause overturned, and then Wakefield managed to get a value out of it by reintroducing it into his contract doesn’t make it right for him.

As noted, if he somehow managed to get negative bonuses attached to his contract such that he would go below the minimum salary, would that be ok?

Suppose the Redsox tell Wakefield: listen, you better pitch alot, or we won’t pay you.  We’ll give you 10MM and for every start you make that is less than 100, you give us back 100K.  So, he makes 1 start, gets injured, and ends up with a 100K contract.

I’m not going to bother reading the CBA to see if this is plausible.  Let’s say the CBA was written such that the BASE salary is a minimum 400K, and bonuses are unbounded, and it does not even mention that it is bounded to $1 at the low end, simply because what sane person would agree to negative bonuses.

***

Are we really arguing about the validity of loopholes, and how much a player is able to benefit from selling away a right that players fought to ensure would never re-appear?

This will never happen again.

To answer the “paternalism” argument: Certain contracts, out in “the real world,” are not enforceable because they are against public policy. If I pay you a million dollars to go kill my ex-wife, and you pocket the money and do nothing, I can’t sue you in court to enforce the contract. Contracts with negative externalities, and this is one of them, shouldn’t be enforceable from a utility standpoint.

The pertinent question here is: should the perpetual-option contract be against MLB’s version of public policy? (CBAs basically set up a mini-code of laws for a given employer’s workforce.) The answer almost has to be yes. We saw what a system of unchecked employer power did to players’ rights: there were none. (Rights, that is.)

That being said, Wakefield was well within his rights to sign for the deal he did. The “law” simply has to be changed. Castigating a particular player for exploiting the loophole is both pointless and unjustified.

I guess we’re castigating the MLBPA for not rejecting the contract, similar to the way they quickly stopped the ARod/Redsox contract talk.

My version of the negotiation:

WK: I’ll pitch for as long as you want me to.  Tell me when you don’t want me and I’ll retire.

RS: How about $4m a year for as long as we want you?

WK: I’m never going to be worth much more than that, sure. Deal.

Now, perhaps the perpetual option wasn’t the best way of converting that into contract language, but I suspect that the informal version of that deal was where they started.

It could have been converted into contractese in several ways, e.g. a mutual option, e.g. a voidable automatic option depending on the number of starts (eg if Wake gets >20 GS then he gets an automatic renewal for the following season), e.g. a voidable team option, where Wake can void the option on performance criteria (e.g. option voids if Wake gets a Cy Young vote, so he can ask for more money if he improves dramatically).

Tom, I think you’re freaking out over some lawyers drafting their language without thinking about the reserve clause.  It makes far more sense to think there was a handshake deal which was translated over-literally into a contract, and both Wakefield and the Red Sox have chosen to abide by the handshake and not the contract.  I’m sure that if he’d pitched like Phil Niekro in his prime then they would have renegotiated - but you’re right that the contract should have had language covering that sort of eventuality.

Lawyers not thinking about the perpetuity of an agreement?

I don’t know if you’ve ever seen a contract, but every one that I have signed has a header called “Termination”.

It is impossible that the lawyer did not think about the perpetuity of the agreement, especially in baseball.

I think this point by Greg is important:

but Wakefield was (is) nearing the end of his career, and has (obviously) decided that the Red Sox are going to be his last team, one way or another.

This is not a 29-year-old Andy Messersmith at the peak of his abilities that we’re talking about.  Nonetheless, Wakefield might very feasibly play/have played 8-10 years under that contract had the terms not been renegotiated.

I also think is near undeniable that Wakefield left a lot of money on the table when he signed the $4 million perpetual contract.  He could easily have been earning $6-8 million.

I don’t really claim to understand all the union implications, or even claim to know what was right and wrong about it.  The thing I don’t understand is why the Red Sox put that wording in the contract.  I understand how it was in their financial interest to lock him up that way, and I know they are not obligated to pay their players “fairly”, but it seems like it would be in their interest not to take advantage of their players so blatantly.  Even if Wakefield didn’t care if they paid him the minimum salary, the perpetual option was unnecessary. 

Longoria gave up a lot of potential money when he signed his contract with the Rays, but the benefit to him was also clear.  He was trading off the risk of injury or performance decline for a smaller but guaranteed payout.  The benefit to Wakefield of the perpetual option is nonexistent.

"the perpetual option was unnecessary....  The benefit to Wakefield of the perpetual option is nonexistent.  “

The argument being set forth to counter that is that without the perpetual option, the Redsox would have signed him to a one-year deal at 3.5MM.  The Redsox presumably said “We’ll give you 4MM, if you give us a perpetual team option.”

If Wakefield felt that he only had 2 years to go, he might think “yeah, sweet… instead of a 2/7 deal, I’m getting a 2/8 deal… maybe I should put in an out-clause that if I get one Cy Young vote that the team option doesn’t kick in, but, let’s be reasonable here… my best year I went 16-8 and that was 12 years ago and that was the only time I got a Cy Young vote”.

I presume the MLBPA turned the other way if they figured it would only get exercised no more than 2 times.

@Tango: No, you were very clear. But slavery is not a relevant counter-example because the “black people” would object to being defined as property.

@ All: I feel that I am being misunderstood. Perhaps it’s my fault; initially, I was not clear that I was replying specifically to post #9 (in which Tango stated that the Wakefield contract could not possibly be a good one). Here is my stance, put in the form of a very simple syllogism:

1. Tim Wakefield and the Boston Red Sox agreed on a contract that was upheld by the MLB and the MLBPA.
2. This contract made both Tim Wakefield and the Boston Red Sox very happy, and this contract did not effect the contract negotiations of any other player.
Therefore, 3. The contract was fair (ref #1) and good (ref #2).

I am open to other viewpoints. However, I will take my cue from our esteemed blog author and state unequivocally: the sole issue is the utility of the perpetual option. Anything else, I am not arguing.

I will repeat it once more: the sole issue is utility.  Anything else, I am not arguing.

I will repeat it once more: the sole issue is utility.  Anything else, I am not arguing.

I will repeat it once more: the sole issue is utility.  Anything else, I am not arguing.

I will repeat it once more: the sole issue is utility.  Anything else, I am not arguing.

I will repeat it once more: the sole issue is utility.  Anything else, I am not arguing.

I will repeat it once more: the sole issue is utility.  Anything else, I am not arguing.

Greg @69: All I asked was whether the contract (Red Sox get a perpetual option, or Wakefield gets a perpetual option) makes sense.  Neither configuration does.

I think it was pretty clear that I meant that no one other than Wakefield has signed a contract like this since the reserve clause was struck down.  How many free agent contracts is that?  10,000?

What is meant by “utility of the perpetual option”?  Exactly what are we discussing?  That it is a valid negotiating point to which each side will attempt to assess its value?

@Tango: Utility as defined by the utilitarian philosophy of ethics. I answered the question of the value of the perpetual option clause in post #52.

What you described in post #52 is not at all utilitarian, though.  A utilitarian evaluation considers the greatest good for the greatest number of people.  Which means that the Union should have the power to step in and stop a contract they feel is unfair whether the player agrees to it or not, and “If, however, an individual freely chooses to give up the rights protected by the union, he should be allowed to do that,” is not a utilitarian viewpoint.

The argument that because a player and team both agree to a contract, it is necessarily fair from a utilitarian perspective is not true.  If you want to argue that in this specific case, that holds, that’s a different argument, but if you are saying that that is always the case when a player freely chooses to give up his rights as a rule, as you seemed to be earlier, then that’s wrong.  Perhaps you can clarify which you mean:  that in this specific case, with this specific clause for this specific player, but not necessarily for other cases, it holds true, or that it holds true any time a player is willing to negotiate away his rights in good faith (such as a player who wants to sign for below the league minimum or a player who wants to give up his rights to not be optioned to the minors)?

I don’t know anything about it, but if what you are saying is what I just found:

“Under this framework, acting ethically means making decisions and taking actions that benefit people by maximizing ‘good’ and minimizing ‘bad.’”

And we are allowed to look at it from the “common good”, then the perpetual option clause has ALREADY proven to be bad, hence Curt Flood.

If you are suggesting that the perpetual clause does have ethical utility for people aged 40 and older, then I can agree with it.  If, as noted, each side can value the perpetuity option to their satisfaction, then, yes, it could work.

***

You have other cases of (young) players with a 3-yr team option, but that has to be exercised under certain conditions.  So, while we have not seen any perpetuity clauses, we have seen cases that could lead to it.  The market has simply not been able to price it yet for the under-30 crowd.

***

What I will back down from is that the perpetuity clause was a “freebie” from Wakefield’s part.  It could be he valued it properly, but horribly undervalued his own base asset value.

I will maintain that there are some things that should not be commoditized, and the perpetuity clause is one of them.  The question then becomes how many team options can you have?  And how many player options (ARod had a few).

***

It’s also possible that a player could treat the following as equivalent:

10 yr contract at 30MM per

year-to-year contract at 40MM per, with team option to renew in perpetuity

Say this case is presented to Pujols.  He could legitimately go for either one.  It could even be made more palatable for attaching a player option to the second scenario for 10MM per (and decreasing by 1MM per year).

***

I don’t think the MLBPA wants to be in the business of selling off the perpetuity clause.  It will not survive in the next CBA.  The question will be: what’s the closest thing to the perpetuity clause that they can enact?

@Kincaid: My discussion of ethical utility is limited to Tim Wakefield; however, Wakefield’s contract can be viewed as part of a great hypothetical set that fulfills certain criteria. One criterion that I laid out in post #77 that it does not impact the contract negotiations of any other player.

That said, you asked me my opinion on a number of hypothetical scenarios, and I should have stated that my opinion holds so long as the above criteria (i.e. that it takes place in a vacuum) holds.

@Tango: That’s a fair description of the utilitarian thought process. However, I was careful to state in my syllogism that Wakefield’s contract did not effect the contract negotiations of any other player. (I suppose that one could dispute that point.) So, when we talk about “the greatest good for the greatest number”, the “greatest number” is 2: Tim Wakefield and the Boston Red Sox. The “greatest good” is to let the contract stand.

If you create a universe of two people, then of course I can’t find fault with the contract, any more than if I find a universe where child labor laws are non-existant.  If this universe knows nothing else, and this universe impacts nothing else, then the universe is in harmony.  The reason we are outraged at lack of labor laws is because of the unncessary exploitation (even if the family WANT their children to work for Michael Jordan for 2 cents a day).  It goes beyond the universe of Nike hiring children in China.

If that’s the point you are trying to debate, it simply becomes a truism, doesn’t it?

Otherwise, aren’t you really arguing that everything is for sale between two consenting parties (especially if we don’t consider third-party impacts)?

84: That’s what inspired me to comment, because you apparently failed to consider something very, very basic before passing judgement. I’m not going to touch the child labor example.

85: With professional athletes, I think everything already is for sale.

I didn’t “fail” to consider it.  I outright reject it as even being up for discussion.  It’s a truism, and not a universe I want to talk about.

I don’t think the MLBPA wants to be in the business of selling off the perpetuity clause.  It will not survive in the next CBA.

Tango, you (and I think others) have a number of times here said this will be prohibited in the next CBA. Perhaps you’re correct, but everything I’ve read suggests the new union head has much bigger issues in mind — the drafting system, draft-pick compensation, the idea of an international draft, revenue sharing, and a number of other things. On top of all that, Wakefield’s contract with the annually recurring club option pre-dates the current CBA.

Since this wasn’t addressed in the current CBA, since it hasn’t spread beyond this lone instance, and since the MLBPA seems to have bigger fish to fry, I wouldn’t be surprised if this issue is not part of the next CBA negotiations.

That would be a very small addition to the CBA.  If the Union simply said they wouldn’t agree to a new agreement without banning perpetual club renewal of a contract, it would not hang up negotiations.  There is no reason for any of the more major negotiations to prevent them from adding something as simple as this.

Tango,

Thank you for the explanation. I read you loud and clear.

Kincaid,

Excellent arguments for why this is troublesome.

Made it all clear for me.

This is all pretty silly. I can sum this up succinctly:

Tim Wakefield agreed to a contract that by most people would be seen as “one-sided” in terms of a monetary evaluation.

However, we don’t know why Wakefield signed this contract. We should defer to the assumption that he felt he was gaining the most utility out of the contract.

You all botched utility pretty bad. It is not “the greatest good for the greatest number of people.” That’s utilitarianism as a societal/governmental framework.

Utility is better defined as happiness derived. I get utility from eating candy. From watching baseball. Reading XKCD, etc.

People sign contracts to maximize personal utility. Whether that utility is derived from money/work comfortability/"really liking Boston” is irrelevant.

Wakefield has no obligation to the other members of the MLBPA. He has an obligation to himself. The maximization of his utility is not something we should make value judgments about.

Pat: you repeated my post 84:

“If you create a universe of two people, then of course I can’t find fault with the contract...”

The Union does have an obligation to its other members, and as a member of the Union, Wakefield is obligated to follow the actions Union.  The Union also acts under utilitarian principles (though you could argue not always, but in the case of not letting members bargain away rights, it does) of protecting the greater good over the choices of one member, which is why that definition was brought up.  The utility of the greater body of the MLBPA takes precedence over the utility of one member in the actions of the Union.  The utilitarian framework of the MLBPA has to be considered in evaluating a contract based on the merits of utility.

The needs of the many, outweigh the needs of the few.

Or the one.

***

I’ve been dying to say it for a while.  Is it the inner-nerd in me, or was that scene the most touching man/man scene in movie history (non-gay, non-relative division)?

Greed, for lack of a better word, is good.

****

I’ll see your Spock, and raise you a Gekko…

(know of course, Spock’s right!)

Tango:

The difference is that I don’t believe Wake’s acts are any different in a world in which there are just two people and in the current one we live in. Wake shouldn’t have to care about contract negotiations of other players; he should only have to worry about himself.

Also, just because Wake is a member of the MLBPA doesn’t mean he is obligated to worry about others. He’s a member because that’s what you do when you join MLB. Even if he has officially joined a union, that wouldn’t bar him from signing a contract he felt was in his best interest, especially since the MLBPA didn’t stop him from signing it.

Will this screw over others in the future? Maybe, but I don’t think Wakefield need to/ought care about that.

Thank you, Pat, for putting it so succinctly.

The CBA:

ARTICLE II—Recognition
...
provided
that an individual Player shall be entitled to negotiate in accordance
with the provisions set forth in this Agreement (1) an individual salary
over and above the minimum requirements established by this Agreement
and (2) Special Covenants to be included in an individual Uniform
Player’s Contract, which actually or potentially provide
additional benefits to the Player.

ARTICLE III—Uniform Player’s Contract
The form of the Uniform Player’s Contract between a Club and a Player
is attached hereto as Schedule A, which is incorporated herein by
reference and made a part hereof.

During the term of this Agreement, no other form of Uniform Player’s
Contract will be utilized. Should the provisions of any Contract
between any individual Player and any of the Clubs be inconsistent
with the terms of this Agreement, the provisions of this Agreement
shall govern. Subject to the limitations set forth in Article IV below…

The approval of the contract shows it to be only by the commissioner, not even by the union, according to Article IV.

***

Interestingly is this paragraph:

10.(a) Unless the Player has exercised his right to become a free agent
as set forth in the Basic Agreement, the Club may retain reservation
rights over the Player by…

...

10.(b) The Club’s right to renew this contract, as provided in subparagraph
(a) of this paragraph 10, and the promise of the Player not to play
otherwise than with the Club have been taken into consideration in
determining the amount payable under paragraph 2 hereof.

Paragraph 2 is his salary.  Paragraph 10.a expressly gives the club the right to renew a contract, unless the player declares his free agency (if he has such rights). 

This means that the “Special Covenant” that Wakefield signed would have said something like “I give up my rights to free agency, as long as I’m a member of the Redsox”.

Therefore, he would argue that his paragraph 2 (his salary) is higher than it would have been without this special covenant.

And paragraph 10b supports the right therefore, by default, that the team will renew his contract indefinitely.

The argument, and it’s a fair one, is that Wakefield, had he signed year-to-year, might have been pocketing 3MM instead.  By signing that special covenant, he increased his pay.

Regardless though, the part I bolded in Article II stands, and the ONLY thing a player is allowed to put in the special covenant is something that is a BENEFIT.  It CANNOT be something that he wishes to just give away.

As long as Wakefield’s agent can make the case that the special covenant is being compensated within his salary, then there is no issue.

The MLBPA however will likely make it an issue in the next round of negotiations.

It doesn’t matter if Wakefield cares if he is screwing over other people or not, he still is subject to the rules that govern player negotiations.  Being a member of the MLBPA doesn’t mean he has to care about anyone else, but it does mean he is bound by the Union’s negotiations whether he cares or not.

...And the utility argument is that the player sees the perpetual option (i.e. the right to play for whatever team) as beneficial to him.

Adam/100: you are restating what you said, and what I said here, which is also a restatement:

The argument, and it’s a fair one, is that Wakefield, had he signed year-to-year, might have been pocketing 3MM instead.  By signing that special covenant, he increased his pay.

And to be accurate, your statement here “(i.e. the right to play for whatever team) “ is not accurate.  It’s “the right to not declare free agency”, but I’ll accept that’s what you meant.

Anyhoo… let’s not keep restating all the same points.  Makes for a boring thread…

By the way, that special covenant would NOT have been allowed, had the player signed for the league minimum. 

Of course, he can sign for 1$ over, and the player can say that that’s what it’s worth, because otherwise, he’d be out of a job.  Imagine, a replacement-level player, knowing he’s a replacement level player, and he might not make it ever again, will sign for league minimum + 1$ AND sign the special covenant foregoing the right to free agency.  (Say Jacque Jones signs this.) This would make him more appealing to a team, and he’ll make 400K. Without that, he’s just another guy, and he won’t make it back to MLB.

So, to Jacque Jones, that right to forego free agency in perpetuity is worth 1$ a year.  To Albert Pujols, it’s worth $20MM (over and above his base pay) a year.