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Two More Years?
2005-04-04 13:06
by Alex Ciepley

Alex: I share Derek's enthusiasm for both the length and amount of Aramis' new contract with the Cubs. But as the details filter in, I'm a lot less sure this is a good deal.

The AP release lists the deal as being worth $2M less than the initial estimate of $44M, but the news isn't all good for the Cubs. There's also this nugget:

[Ramirez] can terminate his new deal after 2006.
Rich Lederer, a true Web Gem, wrote the following in his criticism of a similar deal that the Dodgers gave J.D. Drew this offseason:
[I]t is the Dodgers -- and not their new star -- who are taking all the risk here. The only reason why Drew would opt out is if his market value has grown to where he can get an even more lucrative deal elsewhere. If he plays poorly or gets hurts, then the Dodgers will be stuck with him for the duration of the five years.

The same logic holds true for the Aramis deal. If Ramirez plays well the next two years... well, great for the Cubs, but even better for Aramis. He can drop the rest of his now-undervalued contract and sign for bigger bucks elsewhere.

But if Ramirez doesn't perform up to expectations--or his ankle cracks or back swells--the Cubs are stuck with him for two more years at a price above market value. In order for the deal to work for the Cubs, Ramirez has to perform at a good-but-not-great level for the first two years of the deal. Good enough to justify the dollars, but not so great that he opts out of his contract. Where's the benefit in this setup for the Cubs?

The Cubs have assumed all the risk in this deal. I like the number of years: 4. I like the average dollar amount: $10.5M. I just don't like no stinkin' termination clauses.

Derek: Agreed. When I first posted on the deal there was no word on the termination clause, and that changes everything. As Alex said, the risk is all on the Cubs, because if Aramis is really good it's a two year deal and he can either walk or request the keys to the mint, and if he stinks the joint up, it's four seasons of overpaying for unrealized potential. True, he could perform just well enough to deserve the agreed upon cash and no more, but what's the fun in rooting for that?

Earlier I was happy, but this clause leaves me with a sour taste. I'll still cheer for Aramis to blow the lid off the league, but now every home run, every All-Star appearance, every MVP vote gets him another step closer to leaving the Cubs or breaking the bank, and I'd just as soon have Aramis at the hot corner and my little piggy intact.

Comments
2005-04-04 14:01:58
1.   The Boar
So if Ramirez performs like everyone knows (or at least thinks) he can, then is he definitely gone? Is there any scenario you guys can envision in which he 1) does well and 2) actually stays with the Cubbies?
2005-04-04 14:06:06
2.   Alex Ciepley
Boar, sure. But at a price: if Ramirez performs extraordinarily well, he can demand a huge raise. It isn't that I'd begrudge him that raise, it's just that the benefit of signing a player to a long-term commitment is cost certainty, and when you allow a player to leave that price on the table at a certain time, you've lost the benefit of the 4-year deal for your ballclub.

I'm still a huge fan of Aramis, and I'm glad the Cubs signed him; I just don't think the deal is a good one for the Cubs.

2005-04-04 14:09:09
3.   Stevens
Just not that big of a deal, guys.

The Cubs can afford to pay whatever Aramis Ramirez deserves. If he plays well enough to be worth more money, then let him enjoy it. Not having this clause is not worth risking him playing somewhere else next year.

2005-04-04 14:26:35
4.   Derek Smart
Stevens,

I agree it's not necessarily worth letting him walk over, but it still shorts out my logic circuits.

My issue isn't so much with the team having to pay more for him in two years - if it was a two year contract there would be the same possibility, and it wouldn't bother me then - it's the uneven distribution of risk that bugs me.

It's probably less of a thing than my reaction makes it out to be, but it's just one of those things that stick in my craw.

Oh, and Cubs now lead 2-0 after the top of the first. Hooray baseball!

2005-04-04 14:32:03
5.   Rich Lederer
One of the reasons why it's a mistake to allow a player the right to opt out is because if he so exercises that right, it means the team will have to either pay more money to keep him or pay up for another player of comparable value.

To make it a more equitable deal, the team should require that the player pay a buyout just like in reverse when the team has the option of terminating or extending a contract.

What's good for the goose is good for the gander, right?

2005-04-04 15:02:03
6.   Stevens
"What's good for the goose is good for the gander, right?"

Not if the goose has better representation. : )

2005-04-04 15:03:26
7.   Stevens
During the in-game interview, it seemed that Hendry suggested that Ramirez could opt-out of his deal if he met certain performance incentives. Did anyone else hear anything that suggested this?
2005-04-04 15:12:05
8.   Alex Ciepley
Hmmm, haven't heard that: just that a fifth mutual option year automaticlly vests if Aramis plays a certain amount of games in '07 and '08.
2005-04-04 21:02:56
9.   Stevens
"just that a fifth mutual option year automaticlly vests..."

Yeah, that was likely it. Thanks.

2005-04-04 22:08:25
10.   jackiet
Look, this player option isn't so bad.

Aramis will have to do very well to make it relevant. Sure, he might be in a position to bolt and earn an extra mil or two per year in 2006, but is he going to move for that amount? No. If's he's gotten to the point where he's worth $15-16 mil, will he enter into free agency? Sure. But is that likely?

Absent him using this option, this is your standard 4-year contract, and at a good price. And to those who feel like we have a two-year contract while Aramis has a 4-year contract, or that the contract here is just like a 2-year contract, we'd be paying a good deal more if the deal were only two years. So they're not equal. This is no different than announcers complaining that too many players have no-trade clauses. Unless they're mandated per 10-5 rules, no trade clasues cost money for the player.

2005-04-04 23:15:20
11.   10man
If Aramis plays at MVP caliber for the next 2 years, how can that be anything but GOOD for the Cubs? More than anything, I can see that the opt out is a concession to signing for less money than they actually wanted.

What it means is that Aramis actually has 2 years to prove on the field that he is worth what he and Katz were originally asking. If he doesn't perform at that level, then Hendry was right in his value assessment and Aramis does NOT activate the opt out clause.

2005-04-05 07:10:47
12.   Alex Ciepley
I can understand that point of view, but what if Hendry was wrong in his value assessment the other way? What if Aramis plays below par his first two years, or gets injured, and the Cubs are stuck with him at the high salary in '07 and '08?

You can argue that a 4-year guaranteed contract would have the same effect as this, but I'd argue that while Aramis now has an out from his contract that benefits him, there is no corresponding benefit for the Cubs.

I like Rich's idea of making the players have to pay a buyout of the remainder of their contract.

I'm still thinking about this contract, and may post some more thoughts a bit later.

2005-04-05 09:40:12
13.   10man
Just like you, Alex, I also think Rich's suggestion is a very good idea. Not very likely to happen under baseball's current CBA, but a fair solution nontheless. However, since Hendry still has to play it by the current "rules", I think he made out pretty well.

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