When the White Sox decide to spend, there will be different ways to do it

This past winter, the Philadelphia Phillies were in a position a lot of fans wish the White Sox occupied. They might not be a player or three away from making the postseason, but they signed Carlos Santana and Jake Arrieta to three-year deals because they could.

Santana cost them the Phillies their second-round pick, and Arrieta just took away their third-rounder. But hey, they didn’t need another year of high draft picks, not after losing 89 games or more in five straight seasons. They also had nothing on the books before this splurge. Even after Santana and Arrieta, their payroll for 2018 still only gets to $93 million.

The Phillies needed power and patience to improve their league-worst .685 OPS last year, and they needed another starter besides Aaron Nola. They’ve helped themselves in both areas, and considering they’ve spent as much as $178 million on payroll in previous seasons, they can absorb an imperfect contract for a shot at a needed short-term boost.

Should the White Sox find themselves in the same position next winter, the structure of Arrieta’s contract is something worth noting. Just like the Eric Hosmer deal, a Scott Boras client signed another front-loaded deal for a team that will have arbitration-eligible salaries to handle in a few years.

Hosmer’s opt-out after the fifth year doesn’t do all that much to help the Padres, but it provides a little relief. The Arrieta contract’s chief wrinkle is more novel. On its face, Arrieta’s deal is for three years and $75 million. He’ll make $30 million in 2018, $25 million in 2019 and $20 million in 2020. Arrieta can opt out of the final year of his contract, making it a two-year, $55 million deal if all goes well …

… except the Phillies can void the opt-out by exercising a two-year, $40 million option for 2021 and 2022 (with escalators for innings pitched and Cy Young finishes). That’s a new wrinkle, because now this contract has three potential outcomes, rather than the usual two for an opt-out clause.

  1. Arrieta ages poorly: Three years, $75 million.
  2. Arrieta pitches well; Phillies want to explore other options: Two years, $55 million.
  3. Arrieta pitches well; the Phillies want in: Five years, $105 million to $125 million.

The opt-out clause still favors the player, but it restores a fair amount of power to the Phillies, because the worst-case scenario only keeps him around for one year past the opt-out. Also, should Arrieta try to escape, Philadelphia will get to decide whether it wants to sign him to what is effectively a three-year extension worth either $60 million, $70 million or $80 million.

Jeff Sullivan expects this to be a natural evolution of the opt-out clause:

At first, contracts included one opt-out clause. Then we saw contracts with multiple opt-out clauses, like [J.D.] Martinez’s, or Jason Heyward‘s. Now we have our first opt-out offset. And, when I asked around, I got the impression we’ll see more of this. More teams are going to talk about voiding opt-outs with contract extensions. Teams might think about including club options, following player opt-outs. A standard opt-out clause has a value to the player, which some people estimate to be around $20 million or so. Teams are going to look to drive that value down, by asking for their own protective clauses. There’s nothing nefarious here — all contracts are negotiated, and agreed upon. This is just something to get used to. If a regular opt-out tripped you up before, things are only going to get more complex. I can’t even imagine how they’re going to structure Bryce Harper‘s free-agent deal next winter. That’s going to necessitate untold levels of creativity.

And it makes sense, because the Angels and Justin Upton did something similar in their negotiations. Upton could have opted out of the remaining four years and $88.5 million of his deal, but he instead returned to the Angels because they tacked on an extra year and $17.5 million. The Angels kinda acted as if they had a mechanism to void an opt-out, except Upton was able to extract a full no-trade clause from Los Angeles in this round of negotiations (he could block trades to only 20 teams in his previous deal with Detroit).

The Arrieta deal takes it a step or two further on the team’s side, practically codifying an extension years before a player decides whether to opt out. Here, the player still ultimately decides his fate, but now the calculus is different.

In fact, I lied above. If Arrieta rolls back his odometer and posts peak seasons, he might want to opt in to the last year of his deal in order to reach free agency faster. That seems like the least likely option since he’ll be 35 years old at that point, but Arrieta can’t get a second qualifying offer, so he wouldn’t have artificial restrictions on his value this time around.

The fact that such an outcome is theoretically in play — a player at peak value opting in and returning to his club at a bargain rate — shows that the teams can regain some control at the end of the deal, especially if they can offer more cash up front. Creative structuring will have its limits for top-tier free agents like Harper, Manny Machado and Clayton Kershaw, but it could make the non-elite free agents a little more attractive.

If this offseason foreshadows winters to come, the White Sox could end up shopping from that second shelf just because the value-to-risk ratio tilts in their favor. Based on the White Sox’ track record in such deals, they could use all the help they can get lowering the denominator.

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tommytwonines

So if Arrieta opts out of the third year of his contract, he’s not a free agent?

tommytwonines

Oh right I see it now. 

ParisSox

Took me a minute too.

mikeyb

I didn’t realize that Upton now has a full no-trade clause. Man, the Angels have the potentially to be very bad and incredibly expensive in a few years.

Greg Nix

The no-trade clause doesn’t really change that probability much. They need Upton while they have Trout’s prime. If Trout leaves or declines, they’re going to be very bad whether or not Upton is worth his salary. 

PauliePaulie

2020

Josh Nelson

Great stuff, Jim.

After reading this, I’m going to beat the crowd and order my Josh Donaldson shirsey now.

katiesphil

I prefer the Arenado model.

Josh Nelson
Otter

Fixed it for you. “After reading this, I’m going to beat the crowd and order my

Spoiler
Mike Moustakas
shirsey now.”

karkovice squad

Shouldn’t that be

Spoiler
Mark Moustakas
or
Spoiler
Mike Mousteahen
?

Jason.Wade17

That’d be a big mike mistake’as

L2R

So I have seen fans expecting everything from losing 100 games to guaranteeing that they make the playoffs. If (and its a big if) they start out well while other teams tank, would they consider plugging holes mid season to avoid some of the competitive spending of many teams next Winter? Will the frenzy of next year’s free agency will leave us wishing they had done more sooner?

katiesphil

For the answer to these, and many other questions, tune in at the same time tomorrow for As the Sox Turn.

L2R

I love these websites. If you ask a question, it is largely ignored. If you take an unpopular position or make a wrong statement, everyone jumps in and you get answers fast. I should have rephrased it to say we should go get 2 pitchers, a 3rd baseman and a center fielder in June 🙂

Patrick Nolan

I’ve failed to say this succinctly in so many different ways.

The aim is to have the shortest distance between time of signing and time of impact.

Otter

I highly doubt a) they’ll be good and thus 1) they’ll trade away prospects to chase the 2nd wild card.

The Sox are further away than most everyone thinks (imo), I got a little caught up in all this a year ago. They might be aiming for FA after 2019 because they’ll be closing to competing and instead of losing, say, the 45th pick, they’ll be losing the 52nd.

The Sox are only one year into a rebuild. The Astros, Cubs, Royals, etc all took at least three years. Spending after year two, unless it’s Harper or Machado, isn’t the best way to allocate resources.

karkovice squad

The Sox are only one year into a rebuild. The Astros, Cubs, Royals, etc all took at least three years

I think this doesn’t address some of the differences between the Sox and those teams.

The 1st is that usually a big chunk of the delay in a rebuild is clearing payroll. The Sox already accomplished most of that and they’ll cut the rope on Shields’ anchor after this year. The 2nd is that they’ve already drafted 3rd, 8th, 10th, 11th, and now 4th since 2014. The 3rd is who the Sox had available to trade and who they got in return.

That all should accelerate the timeline.

Which isn’t to say that they should be making mid-season acquisitions to capitalize on a hot start, especially if they aren’t of the 1.5+ year variety. But it makes for a good case to start spending by next offseason.

Lurker Laura

Yes, the significant difference between the Sox and the other teams are that the Sox’s trade pieces allowed them to get quantifiable assets in return (i.e., guys who had shown something in the minors already), rather than just being terrible in order to draft guys who have no professional experience yet.

Otter

Cubs picked up Arrieta, Hendricks, and Russell through trades and it still took them three years to really come together.

karkovice squad

They traded for Arrieta in July 2013. In December 2014 they signed Lester.

zerobs

Epstein started the Cubs rebuild in 2012. Took 3 bad seasons (2012-2014) and then the prospects were ready to come up and Lester was signed. The Sox bad seasons for their rebuild are expected to be 2017-2019.
I understand the optimism about some of the pitching and Eloy Jimenez, but we’ve already got expected prospects like Robert and Burger missing significant time so hopes for contending in 2019 are misplaced. As much as I would love to see Machado here, I’d temper my big-time free agent acquisitions until the off-season after 2019 when Sale, Bumgarner, Altuve, Arenado, and Goldschmidt are free agents.

Trooper Galactus

I get the feeling Sale wouldn’t even consider coming back to the White Sox given the way he clashed with Kenny.

karkovice squad

First, neither Burger nor Robert figured prominently in decisions about 2019. Even with a clean slate this season it would’ve been an exceptionally optimistic projection for them to get a call-up by Sept. ’19.

Second, you’re making an incomplete argument about the Cubs without acknowledging the different circumstances. The key being how long it took them to tear down. Garza wasn’t moved until 2013. Samardzija wasn’t moved until 2014. Their payroll didn’t bottom out until 2014. They’d been acquiring 25-man talent all along but as soon as they cleared the decks, they spent. More importantly, that spending began ahead of having all their prospects proven.

zerobs

I’m saying the White Sox haven’t cleared the decks yet. Samardzija wasn’t moved until 2014, but you can bet he was shopped around as soon as Epstein got there; he waited until he got a better return. Hahn was patient in moving Quintana in order to get a greater return; there is no reason to think he won’t do the same with Avi and Abreu who can stick around through most of 2019.

karkovice squad

The Cubs still had holdovers like Castro into 2015 after they’d started signing veterans. Which still fits with a timeline of being active in the 2019 free agent market without having resolved Abreu and Garcia’s futures.

Otter

True.

But… looking at the major league roster, they’ve only got 2nd, short, and maybe/probably first nailed down for 2020. And even short might be debatable depending on this season goes. They might have a solution for left in Delmonico, but we’re dealing with SSS and the glove might limit him to first. Presumably they have a solution for right in 2019.

Things are much brighter on the pitching side, but we’re talking about young pitchers so I’m not holding my breath at the same time.

As for the draft picks, the guy they took 8th looks like a reliever/10th might have contact issues and might not be a catchers/11th just blew out his achillies. Somehow the guy they took 3rd and has shoulder issues is the one I’m the most bullish on.

Even if things go pretty well from a player development stand point, it seems like Collins and Robert won’t be a regulars until 2020.

Right now, best case for the Sox is that they have a young and pretty good/excellent rotation starting to come together in 2019 but struggle to score runs with the hope that it all starts to come together as a team in 2020 as Collins, Robert, and hopefully one or two of Sheets, Adolfo, Rutherford, Basabe, whoever is picked at 4 (if he’s a hitter) are called up/play a whole year.

I have no clue what to do with Avi but I’m guessing he’s not apart of the 2020 team.

zerobs

Of guys on the 25-man roster, I’m guessing only Moncada, Giolito, Anderson, Lopez, and Rodon will be here at the end of 2020. (and I think Anderson is still in an undecided area, much like Starlin Castro was with the Cubs).

Otter

I’d guess one or two of Engel, Delmoncio, Gillaspie, or Cordell will be on it and there’s a decent chance they resign Abreu. [Ignores today’s outing] Fulmer has an excellent chance too.

zerobs

I don’t consider the Rodon and Fulmer picks as part of the rebuild strategy. The Astros and Cubs had high first round picks before they started their rebuilds too – because they were bad but trying to win (a la the 2014 and 2015 White Sox).

You can’t accelerate the timeline – the players need a certain amount of time to develop and rushing them when they aren’t ready doesn’t get you to the playoffs sooner. Hahn has addressed this multiple times – and without saying their names he is specifying the fast-tracking that Rodon and Fulmer were given (and even Tim Anderson, IMO).

karkovice squad

Sure, I’ll concede the Astros and Cubs had early high draft picks, too. The Astros also managed to drive their payroll into the ground but didn’t have the trade options available. The Cubs traded for major league ready players but they still had payroll anchors.

You’re still missing the big picture. The Sox uniquely positioned themselves by ticking all the boxes not just some of them.

At this point, the Sox have already acquired a core that’s either arrived or getting mid-season or September call-ups this year then starting 2019 on the 25-man. The players who need to develop are the reinforcing wave and some of those should be arriving mid-season 2019.

PauliePaulie

I think some want to see more from this young core you speak of. Cautious optimism over guaranteed contributions. I also think the contract status of our 2 highest fWAR players beyond ’19 needs to be considered.

zerobs

Other than Jimenez and Kopech, I’m not seeing locks for 2019. Cordell and Gillapsie are OK, but they aren’t A-grade prospects; the A-graders the Sox do have already have injury histories pushing their arrival dates back to 2020. Burger, Cease, Collins, Hansen, Robert, Rutherford, Adolfo, Dunning – I doubt any of them see MLB action until August 2019 at the soonest.

Otter

I mostly agree. If Collins goes off this year, there’s an outside shot they move him off catcher and bring him up in September. But that’s somewhat doubtful at this point in time. If Hansen’s healthy, he could force them to bring him up before then too.

If I squint, I could see Dunning, but it’s not all that likely.

It’d be really nice to have those draft picks from 2015 back…

Trooper Galactus

Brian Dozier was never an A-grade prospect, and I’d say he turned out pretty darn well. Cordell and Gillaspie both have traits which could make them pretty good players, there’s just few who believe they will be able to maximize their talents. Thing is the team finally has a lot of reasonable possibilities past Option A for once, so the chances of finding diamonds in the rough are only increased.

PauliePaulie

A hot start by this group would mean they have some guys who could be valuable trade pieces to acquire young talent, not a promising long term outlook. IF the youngsters are promoted, and look good in the second half, there will be plenty of FA’s and available trade pieces for everyone next offseason.

mikeyb

There aren’t a ton of flip candidates among the position players that would drive a hot start: Abreu they clearly don’t want to move, Avi they could have tried to move in the offseason, and everybody else in the field is young enough to play a role on contending teams for years to come.

sausalito pale hose

Avi also is someone that can play in the years to come.

PauliePaulie

As it stands, he can play here for 2 years. Then he’s gone.

Otter

Either Avi hits well and the Sox trade him this summer for a B prospect, or he goes back to being the Avi we know and don’t like and they let him walk/trade him for an org guy after/during 2019. I honestly don’t see how he stays here outside of becoming Nelson Cruz.

PauliePaulie

I think they could/should flip several of their position players if they perform well out of the gate. Also, keying solely on the position side is to ignore over half of a 25 man roster.

mikeyb

I certainly would have tried to move Abreu in the offseason. Avi is really the only position player (other than Abreu) I could see having flip value.

As far as pitchers go, I sincerely doubt anybody would ever have any interest in Shields, and we already saw Miguel Gonzalez gets you nothing. I don’t see anybody in the bullpen that can get you the return that Kahnle or Swarzak did. But I also didn’t see either of those guys breaking through. I’d love for the bullpen to be lights out to start the year, flip some dudes, and call up the young borderline arms in AAA (Viera, Danish, etc. I just don’t see anybody that looks likely to be flipped for a great return, outside of Avi.

zerobs

Abreu they would absolutely move if the offer is right. They’d even throw in 8 million or take a bad contract to get an A- prospect.

mikeyb

Based on everything Hahn has said in the past, I’m not so sure this is true. Abreu is my favorite player on the team, but I’d love for them to be able to flip him for a high-end prospect. But Hahn has made it sound like there’s just no chance any other team could value him nearly as highly as the Sox do.

zerobs

Of course he says that. He’s trying to increase the return for him.

karkovice squad

The market for players like Abreu is down, he offers meaningful intangibles to the team, and he isn’t really blocking anyone. An extension seems incredibly likely compared to the alternatives.

lil jimmy

He says that because it happpens to be true.

Blow my Gload

Crazy to think that these ‘discount’ contracts would still represent the largest and third largest in Sox history.

Trooper Galactus

If 2020 arrives and the White Sox still haven’t inked a top free agent to a nine-figure contract, then Hahn’s line about the final stage of the rebuild is bullshit.

PauliePaulie

Unless Blackmon and Donaldson are be a bridge to Robert and Gorman. And they fill other needs through trades.

Trooper Galactus

If they gut their minor league depth to plug the gaps, they’re just going back to the strategies that got them to the rebuild in the first place. They can’t cheap out this time around, and they’d better be ready to spend bigly.

zerobs

I can’t see them signing bridge guys over 30 and punting top 100 draft picks to do it. The farm system has some outfield depth now, but there’s still not much infield-wise. I could see them breaking the bank for Machado because he wouldn’t be a bridge and the loss of draft pick wouldn’t be as important.

Patrick Nolan

Yessir.

PauliePaulie

Jacob May replaced Avi after the 1st. Anybody know why? Also, Carson Fulmer walking the tightrope again.

PauliePaulie

Carson just fell off.

lil jimmy

Avi half assed it to first. Got yanked

PauliePaulie

Ouch. Well, better than losing another guy to injury, I suppose. BTW- Nolan Gorman’s early season line is: .500/.667/.1.110

zerobs

That is unusual for Avi.

tommytwonines

This Carson fuller guy he don’t look so good. 

Trooper Galactus

…whoever he is.

He parlayed a successful stint as the host of MTV’s TRL into a job as starting cornerback for the Bears.

Two sport star? We got Bo Jackson v2.0!!!

tommytwonines

He’s gotta earn the correct spelling. 

Trooper Galactus

So if you wanted something to feel good about:

https://www.fangraphs.com/blogs/lets-watch-lucas-giolito-look-very-good/