The Latest Victory for MLB Teams Over Free Agents? Introducing the 'Swellopt'
The stasis in baseball’s free-agent market momentarily broke on Saturday, when news leaked that the Yankees would be bringing back reliever Zach Britton, whom they had acquired in a trade with Baltimore in July, on a three-year deal. Or was it two? Or four? One site had it this way: “Zach Britton re-joins Yankees with 2-4 year contract.”
It's not that information about the contract was hard to come by. No, it's that baseball—once the province of the most straightforward compensation system in sports, yes, a low bar—has recently seen the adoption of a number of wrinkles in free-agent deals.
The most recent of these wrinkles, which is present not only in Britton's contract but in those signed by Japanese pitcher Yusei Kikuchi and Phillies starter Jake Arrieta, grants the team an option to extend the deal in advance of what could be the contract's final season. If the team declines the option, the player is free to opt out of what's left in the deal, but he doesn't have to.
For instance, Britton's deal reportedly calls for salaries of $13 million in 2019, 2020, and 2021. After the 2020 season, the Yankees can pick up a $14 million option for 2022; if they decline it, Britton can become a free agent immediately, or he can play out the final year of his deal. (Britton will be paid a $1 million bonus if traded.) If Britton remains healthy and effective for the first two years of his deal, and the Yankees remain in a financial and competitive position that leaves them comfortable paying Britton—who will probably never be their closer—eight figures annually, the fourth-year option seems a safe bet to be exercised. (Britton will be 32 going on 33.) If Britton is healthy and effective but the Yankees have no interest in paying him, he'll likely hit the market again. If Britton struggles or gets hurt, he'll play out that third year and figure things out afterward.
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Arrieta signed a three-year, $75 million contract before the 2018 season, with the Phillies retaining the option, after 2019, to add 2020 and 2021 to the deal. Kikuchi signed a four-year, $56 million deal earlier this month that allows the Mariners, after 2021, to tack on 2023, 2024, and 2025 for an extra $53 million total.
Scott Boras, the agent who negotiated all three deals, calls it a "swellopt." He unpacked the etymology for Ken Rosenthal: “For the club, if the player performs well, the club can opt in (contract swells). For the player, if the club doesn’t opt in, the player has the choice to continue with contract (swell) or opt out. It’s a swell option for both.” A contractual provision by any other name would swell as… well, you get it.
The swellopt looks, in the abstract, like what Boras said it was: a swell option for both. But viewed in the context of broader developments in baseball free agency—due to tanking (which shrinks the pool of teams interested in free agents) and the luxury tax (which dissuades high-payroll teams from adding pricey free agents), players face a decidedly softer market for their services than they did a decade ago—the swellopt looks like another small concession to ownership. It's not hard to imagine, in a stronger market, Britton getting a four-year deal with a straightforward opt-out after year two, or perhaps a three-year deal with an opt-out after the second year and a fourth year that would automatically trigger if Britton pitched in a certain number of games over the life of the deal. J.D. Martinez, another Boras client, signed a five-year deal with the Red Sox before the 2018 season that included opt-outs after 2019, 2020, and 2021. If Martinez has another year like the one he had in 2018 in any of the next three seasons, he could have Boston over a barrel; the swellopt never creates such a situation.
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Then again, $39 million is a hefty guarantee for a player who hasn't in recent years sniffed the game-shortening dominance of his 2014, 2015, and 2016 seasons. Over those three seasons, Britton held opposing hitters to a .185/.244/.249 line; in two injury-shortened years since, opposing hitters have hit .239/.334/.312 against him. Barring the development of a new approach or the rediscovery of his old stuff, Britton would most likely be locked into a setup role on any contender, save perhaps the Rockies, who overspent on free-agent relievers one offseason ago. (My colleague Joe Sheehan argued Monday (subscription required) that the Yankees paid Britton based not on his statistical-level performance in 2018 but on underlying metrics that provide some hope for further recovery in 2019; I see mostly bad trends for Britton in even the underlying numbers, but the Yankees have dozens of analysts and I have only Baseball Savant.)
And when Britton's guarantee is stacked up against that of his ex-mate in the Yankee bullpen—David Robertson, who signed with the Phillies on Thursday for two years and $21 million, with a club option for a third year at $12 million—it looks even more like a triumph for Boras. Though Robertson is nearly three years older than Britton and never had a three-year stretch as good as Britton's 2014-16, he has simply been the better reliever over the course of his career. He strikes out more hitters than Britton does (in 2018, 32% of hitters versus 20% for Britton) while walking fewer (9% versus 12%). He has not demonstrated any signs of slowing down; he threw his go-to cutter harder, on average, in 2018 than he did in 2017.
We will not know for sure how any reliever did, contract-wise, until Craig Kimbrel and Adam Ottavino sign. But one crucial difference in determining the relative contractual positions in which Robertson and Britton now find themselves is that Britton was represented by Boras while Robertson was represented by himself. Robertson had said before the offseason that he "no longer [felt] as though I need a middle man"; after signing the deal, and saving more than $1 million in agent fees, he said he likely wouldn't represent himself again. The swellopt might not be a win for players, but compared to self-representation, it doesn't look so bad at all.
