February 15th, 2015 at 6:00 am 
by Ron Cervenka Nobody saw it coming. In fact, there’s a good chance that most Dodger fans didn’t even know it existed until it happened. On November 9, 2006, Dodgers right fielder J.D. Drew opted out of his five-year/$55 million contract with the Dodgers after only two seasons in L.A., thus leaving $33 million on the table.
What made this decision even more controversial is that Drew, a Scott Boras client, reportedly told the Dodgers that he would not do so, leaving Dodgers general manager Ned Colletti both “surprised” and “disappointed” when it happened.
“In light of what J.D. said at the end of the year, about making a commitment and how much he loved playing here, I was surprised,” Colletti told reports upon hearing the news. “J.D.’s a man of his word. I guess he changed his word. I think you expect things to be handled in a certain way. Based on what was written at the end of the season, you have to ask yourself, ‘How did this happen?'”
What little affection Dodger fans had for J.D. Drew vanished completely when he opted out of his five-year contract after only two seasons.
(Photo credit – Jed Jacobsohn)
The decision forced Colletti to find a replacement outfielder – and fast; a move that he hadn’t planned on and one that he would eventually come to regret. Colletti signed free agent outfielder Juan Pierre to a ridiculous five-year / $44 million contract. Even though Pierre had 170 or more hits in each of his five previous seasons, he had hit only 12 home runs in his then seven-year MLB career – a far cry from the 35 that Drew had hit in his two seasons with the Dodgers. But even more damaging for the Dodgers was the fact that Pierre had no arm. Base runners frequently challenged his weak throwing arm and often scored on balls hit to him. Pierre would eventually be traded after only three seasons with the Dodgers.
Fast forward to December 12, 2012.
Free agent and former AL Cy Young award winner Zack Greinke signed a then record-setting six-year/$147 million contract with the Dodgers. The deal included an opt-out clause after three seasons, which is this season. Should Greinke exercise his opt-out clause – and he would be foolish not to – he will be walking away from a guaranteed $71 million over the final three years of the deal.
How is walking away from $71 million not foolish, you ask? Because as a 31-year-old top-of-the-rotation starting pitcher, Greinke will be in a position to make a lot more than that and for a longer period of time if he chooses to opt-out at the end of the season. And with several top Dodgers pitching prospects on the cusp of being MLB-ready, it is highly unlikely that the Dodgers would be willing to offer Greinke a lengthy and expensive contract extension. The caveat, of course, is that should the Orlando, Florida native have an uncharacteristic bad season, he would be foolish if he did exercise his opt-out clause.
Fast forward again to January 14, 2014.
Two-time Cy Young award winner Clayton Kershaw (who would go on to win his third Cy Young and the NL MVP award in 2014) signed a record-setting seven-year/$215 million contract extension with the Dodgers. It was (and still is) the largest contract in MLB history for a pitcher and, quite frankly, was a bargain at the price for the Dodgers. However; like Greinke, Kershaw has an opt-out clause after the 2018 season. And even though Kershaw would be walking away from $65 million for the final two years of the contract, he, too, would undoubtedly be in a position to make a lot more than that for an even longer period of time. Keep in mind that Kershaw will be 29 years old at the conclusion of the 2018 season. Interestingly, both Zack Greinke and Clayton Kershaw have Casey Close as their agent.
Even though Kershaw’s opt-out clause is still four years away, it is undoubtedly in the back of the mind of every Dodger fan. (Photo credit – Ron Cervenka)
But the Dodgers aren’t the only team to have players with opt-out clauses. Without question, the mother of all opt-out clauses occurred on November 19, 2014 when Miami Marlins slugger Giancarlo Stanton signed an unprecedented 13-year/$325 million contract extension. Once you get past the sticker shock of this deal you’ll find an opt-out clause after the 2020 season. And even though that is still six years away, should Stanton exercise that clause, he will be leaving a guaranteed $208 million on the table with a $25 million club option for 2028 or a $10 million buyout.
Stanton will be 30 years old at the end of the 2020 season (he’ll turn 31 on November 8, 2020) and unless salaries for top-tier outfielders go through the roof over the next six years – which is certainly possible – fans can expect to see the Southern California native in a Marlins uniform for a very long time. Then again, we once thought the same thing about Alex Rodriguez, who had a “may void in 10-day window after 2007 World Series” (aka: an opt-out clause) in his Scott Boras-drafted ten-year/$252 million contract with the Texas Rangers in 2000.
And just this past Wednesday 33-year-old Santa Clarita native James Shields signed a four-year/$75 million contract with the San Diego Padres that has an opt-out clause after the 2016 season. But unlike Greinke and Kershaw, it is highly unlikely that Shields will exercise his opt-out clause because the deal is so heavily back-loaded. Shield is set to receive $10 million this season and $21 million in 2016. He will the receive $21 million in 2017 and 2018 with a $16 million club option for 2019 or a $2 million buyout. Even though Shields has an incredible history of throwing more than 200 innings per season over the last eight years, it will be tough for him to walk away from a guaranteed $44 million (and possible $61 million) as a 35-year-old.
Without question opt-out clauses definitely favor younger guys like Kershaw, Stanton and even Greinke because it allows them to sign even bigger and loner contracts while they are still relatively young. But for older guys like Shields an opt-out clause is more of a throw-in perk because of the unlikelihood that they would walk away from biggest part of their contract at age 35. That being said, if Shields remains healthy and continues to put up 200 innings per season, even he could benefit from his opt-out clause.
One thing is for certain – you can pretty much count on more free agents including an opt-out clause in their contracts as MLB salaries continue to rise.
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I think most players would be foolish not to include the opt-out clause, especially the young ones. From now on whenever I see an opt-out clause I will consider the contract ending the year of the contract clause, becouse it actually ends the present contract.
Actually it does not, Joe. An opt-out clause means exactly what its name implies – that a player has the option of getting out from under the current contract or seeing it through to fruition.
In many cases opting out is a wise move – especially for younger players with a number of years left in their playing careers who are successful and have the potential to re-sign for more money and a term longer than their existing contract and/or the market value is likely to goes up for their position, such as Greinke and Kershaw. But for other players under a very heavy back-loaded contract or a position where there are a lot of soon-to-be free agents – such as Giancarlo Stanton – they probably will not opt out of their contracts.
Opting out is entirely market-driven – again, except in cases of those heavy back-loaded contracts.
I was bringing out the fact that at the point of the opt-out clause, changes could take place. The player may not opt-out but we’ll all be watching to see what he does. There will be a momentary pause, even if the player has already made up his mind, we won’t be sure, until we know.
If he does opt-out, I’d say that the original contract ends. In fact I feel it does in both cases. At least we pass that point.
I know players were taken advantage of for years but it seems the pendulum has swung too far in their direction now.
The opt-out clause simply makes it more difficult to build team stability and keeps uncertainty alive on a team. How often will the opt- out question arise this year for Zack Greinke in lieu of game related questions?
The opt-out clause does nothing to help build parity in MLB as again it favors the wealthy teams. With contracts already bordering on insane, how much money do players need? I wonder if it is even about getting more money or just feeding an ego when a contract tops that of another player. Self worth it seems now comes in dollar signs in MLB.
I would like to think Zack Greinke will not opt out but I am not sure he is a hard core Dodger. I think he is as professional as any major league athlete but he is just that – a professional athlete.
I will be totally devastated if Clayton opts out. I think he too is a professional athlete with incredible class but is also a hard core Dodger. If Clayton opts out I will stop collecting his cards. That is not much of a threat as I stop collecting cards when Dodgers go to other teams anyway. For me it’s all about the name on the front of the uniform.
Do either Zach or Clayton opt out after a down year which can happen if they have a slight but chronic injury or just a tired arm for a year?
The pendulum has swung too far. When do the teams get an opt-out clause without having to pay a player playing for another team? Back loading a contract is not all that great of a solution as the player is then making his biggest financial gains in his declining years when a team needs to be replenishing and he becomes a less than desirable trade candidate.
The only way you will ever see things like opt-out clauses go away would be with a salary cap – which will absolutely positively never happen.
I believe that a World Series title between now and 2018 might keep Kershaw from opting out of his contract. He has said repeatedly that anything less ring is unacceptable.
Any idea what Friedman and Zaidi’s history with opt-out clauses might be? I expect that since they worked with low budget teams that opt-out clauses weren’t in play. I also expect they won’t include them in future contracts since I think they are looking for stability and depth rather than star power.
Opt-outs allow for the JD Drew thing to happen and forfeits the possibility of a trade to get something in return for that player. I don’t think they will buy into that scenario.
I do not know specifically what Friedman and Zaidi’s positions are on opt-out clauses but I’d be willing to bet that they don’t particularly care for of them – just as Kasten didn’t care for (or ever agree to) no-trade clauses. That being said, it doesn’t really matter whether they like them or not, they are going to have to accept them because (as the title suggests) opt-out clauses are going to become the rule rather than the exception.
Even if the Dodgers grow their own players, the good ones (i.e Kershaw, Puig, Pederson, Seager, Schebler, etc.) are going to want opt-out clauses when they are up for lengthy contract extensions.
I think it does matter. I think they will opt-out of opt-out clauses and find another way around them. I don’t think they will be held hostage by an opt-out clause especially if they see it limiting the team down the road. I think they are seeking stability, consistency and there is more than one way to get there. I think they sign extensions with young players before free agency years which do not include opt-outs or make trades. A robust farm system is definitely part of the equation to keep filling spots as players want to seek free agency.
If they do submit to opt-outs then they are not as savvy as we are led to believe.