Last week, Ben Clemens broke down the trade that sent Tyler Glasnow to the Dodgers, as well as the extension that Glasnow signed soon afterward. In this article, our focus is the conditional option at the very end of the contract. Before the 2028 season, the Dodgers have a $30 million team option. If they decline to exercise it, Glasnow has his own $21.5 million player option. When I read about the structure of the options, my first thought was to wonder why this doesn’t happen all the time. Here’s how Ben interpreted the situation:

“It seems likely to me that one of those two will be exercised; in my mind, it’s a five-year, $135 million deal with a $10 million kicker if he’s pitching well in year four. The circumstances where neither side exercises their option just feel much less likely than one side or the other being an obvious yes.”

I was inclined to agree. It is sort of like a performance bonus: Pitch well and we’ll bring you back for $30 million, but if you don’t, then you’ll be back for $21.5 million. The $8.5 million difference is a lot of money, but it’s also small enough that, depending on the market and their own particular health and performance, a player might not be certain that they’d make it up in free agency. It might just be easier and safer to stick around. The more I thought about it, though, the more wrinkles I saw.

First of all, there are some very real practical concerns. If Glasnow gets hurt, which is not exactly out of the realm of possibility, he will take his option. It’s a safety net, and that’s got to be part of the reason for the structure of the deal. But that’s about it for that side of the ledger. Every other factor I could think of made it more likely for him to leave in free agency. If he’s healthy and pitching well, but not well enough for the Dodgers to spend $30 million, the fact that the option is only for one year could affect his decision. He will be entering his age-34 season in 2028, and he might be more inclined to seek a multi-year deal while he still can, even if it means less money in the first season.

There’s also the poker game to think about. If the Dodgers think Glasnow wants to stay, they might be more inclined to decline their option. Sure, they’d risk losing him altogether, but they’d have to factor the possibility of saving $8.5 million into their calculations. If there’s one thing baseball teams love, it’s saving money.

That risk goes both ways, though. There’s something odd about the idea of having the team make the decision before the player. The team is a business, operated dispassionately to serve the dual masters of dollars and wins. The player is a human being who comes with the attendant hands, organs, dimensions, senses, affections, and passions. If you prick him, he’ll bleed, and if you tell him he’s not worth the money, he may well feel hurt and therefore a little less likely to come back and play for you. Say you’re Glasnow, and the Dodgers decline their option. Even if you think that one year and $21.5 million is the absolute best you can do in free agency, wouldn’t you rather get those terms from a team that wants you than from the team that just said it doesn’t?

Still, it might be just as weird if it worked the other way. At the end of his fourth year, Glasnow would get to decide whether he wanted to stay for $21.5 million. If he declined the option, the Dodgers would get to decide whether they wanted to pony up $30 million to keep him. Maybe the players, coaches, and front office wouldn’t take it personally, accustomed as they are to looking at things through the prism of dollars and cents, but what about the fans? Might they be upset that their star pitcher wanted out?

That’s not to mention the courtship aspect of these kinds of contracts. There’s no way to know how serious a team is about its side of the option when it signs a player, or what changes might occur between the beginning and end of a contract. They’re trying to land a free agent, and adding at least the possibility of an extra year and big money would seem like a low-risk way to improve their offer. There are so many wrinkles; this is the shar pei of contract extensions.

I asked a couple of smart people whether they knew of any contracts with similar option structures, and they brought three recent ones to my attention. None of the situations are directly analogous to Glasnow’s, but all three involved their own extenuating circumstances that gave both team and player reason to hedge their bets.

Michael Wacha

From 2019 to ’21, Michael Wacha went 10–16 with a 5.11 ERA and a 5.07 FIP, accruing 0.8 WAR over 54 starts and 12 relief appearances. He bounced back with the Red Sox in 2022, running a 3.32 ERA and 4.14 FIP. After a very long wait that winter, he signed with the Padres in February. It was, in theory, a four-year deal worth $26 million; he made $7.5 million in 2023. After the season, the Padres had to decide whether to pick up two $16 million options, one for 2024 and one for ’25. If they declined both, then he would have a $6.5 million option for 2024, followed by $6 million options in both ’25 and ’26.

Wacha put up another strong season in 2023, running a 3.22 ERA and 3.89 FIP over 24 starts and 134.1 innings. Amazingly, he now has a 25–6 record over the last two seasons. But his underlying stats indicate a league-average arm. Over the last two seasons, he has posted the two highest strand rates of his entire career. In 2023, he got a boost by posting his lowest HR/FB rate since 2014; his expected ERA and FIP numbers were much worse. He also missed time due to shoulder inflammation, and his fastball dropped a full tick to 92 mph, though it did bounce back up to 92.9 after he returned from the IL.

The other extenuating circumstance likely had just as much to do with San Diego’s decision than Wacha’s performance: The Padres are cutting costs. Had Peter Seidler still been in charge, it would have been reasonable to expect an all-in team to bring Wacha back for at least one season. The current [amount-as-yet-to-be-determined]-in Padres balked, though, and Wacha walked, signing with the Royals for two years and $32 million — the same terms San Diego declined, though he has the added value of an opt-out after next season.

Nick Martinez

After spending four years improving and proving himself in Japan, Nick Martinez signed with the Padres, returning to MLB on a four-year, $25.5 million contract with opt-outs after each season. In 2022, he put up a 3.47 ERA and 4.43 FIP over 106.1 innings. Splitting his time between the rotation and the bullpen, he struck out 21.2% of the batters he faced; in the four years before he went to Japan, his best strikeout rate was 14%.

Martinez exercised his first opt-out and re-signed with San Diego in 2023. His escalator-laden contract was structured so that he made $10 million in the first year, and then the Padres had a two-year, $32 million option (essentially the same option that they had for Wacha). If they declined, Martinez had his own two-year option for $16 million. He put up an even better season in 2023, throwing 110.1 innings and bettering his walk and strikeout rates; his 3.43 ERA was nearly identical to 2023, but he dropped his FIP to 3.92 and his HR/9 to 0.98. On the other hand, it was the second season in a row that began with him as a member of the starting rotation but saw him relegated to the bullpen. Below are his starter and reliever splits over the last two years.

While his results have been a hair better, the numbers are clearly better when he’s pitching in relief, though even in relief, the Padres didn’t rely on him in high-leverage situations. A good reliever who can make the occasional solid start is a useful player, but the Padres clearly didn’t feel comfortable shelling out starter money for Martinez to fill that role for two years. So he opted out and signed with the Reds for a two-year, $26 million deal with an opt-out after the first season. The Reds expect him to start coming into spring training, and while he might end up in the bullpen at some point, that would require Cincinnati to have someone who could conceivably be capable of doing a better job starting, which, well, facts not in evidence.

Chad Green

Of these three players, Chad Green had the least similar contract to Glasnow’s but the most similar situation. Last winter, he was 31 and rehabbing from Tommy John surgery that cost him most of the 2022 season. But over seven prior seasons with the Yankees, he owned a career 3.17 ERA and 3.29 FIP and had been worth 7.8 WAR. Over that timeframe, his 7.5 WAR as a reliever ranked 12th in all of baseball. If you set a minimum of 200 innings pitched, his 2.79 ERA as a reliever ranked 11th, and his 2.93 FIP ranked 13th. He had been one of the best relievers in the game, but whoever acquired him would be getting a 2023 season that would be mostly rehab.

We often see players in that situation sign two- or three-year deals at a discounted rate, both because of the year lost to rehab and because of the uncertainty about their performance once they recovered. Green took another path. His deal with the Blue Jays involved three options, each triggered only if the previous option had been declined. Here’s how Kyle Kishimoto broke down the terms of the contract back in February:

Green will earn $2.25 million in 2023. At the conclusion of the season, the Blue Jays can pick up a three-year option that will keep him in Toronto through the end of 2026, paying out $9 million per season. Should they decline this team option, he has the option to tack on one more year to the deal worth $6.25 million, but if he’s not interested, the Jays get the chance to exercise yet another team option, this one for just two years and $21 million with some escalators based on playing time. In short, if the Blue Jays are satisfied with Green’s arm health, he could be wearing blue for four years, but if they’re not, he could test free agency again as soon as this November. He can guarantee himself $8.5 million over the next two seasons, provided he accepts the player option for 2024.

Green’s recovery went about as well as could be hoped. He started his minor league rehab in July, running a 1.46 ERA and a 31.9% strikeout rate and walking just one batter over 12.1 innings. He made his first appearance with the Blue Jays on September 1, and although he had a 5.25 ERA over his 12 appearances, his 2.87 xERA told a different story, and his 2.67 FIP was the second-best of his career. More importantly, his fastball velocity ticked back up after a drop in 2022, and his strikeout and walk rates weren’t far behind his career norms. Stuff+ wasn’t completely convinced, as his overall figure was 113, closer to the 111 he ran in his truncated 2022 than the 130 and 119 he ran in ’21 and ’20, respectively. Still, over such a short sample size under the shadow of the recent surgery, it certainly looked like he was back.

In November, the Blue Jays declined their three-year option, and Green declined his one-year option, at which point the Jays exercised their two-year option. It’s fair to wonder what more he could have done to convince Toronto to pick up the three-year option, though we have no idea what the training staff saw throughout the year. Maybe the three-year option was only ever intended as a carrot to induce Green to sign. Maybe the hope was that his stuff or velocity would look better than it did in 2023. Or maybe, having constructed such an intricate machine, the Blue Jays simply wanted to watch it dance.

In all three cases, the first two options were declined. Wacha found a contract that, factoring in the value of an opt-out, exceeded the value of the option the Padres declined. Martinez found a contract that fell a few million dollars short but had the benefit giving him another shot at starting. Green stayed on because the Jays dug into the third layer of his decadent option parfait.

Glasnow’s situation is obviously quite different. He’s a legitimate ace with legitimate health risks, he’ll be older than any of these players, and both of the options in his contract are for just one year. Still, looking at how these three contracts played out makes it clear that there’s a wide variety of factors that can conspire to make sure neither option gets picked up.

Thanks to Jon Becker and Mike Petriello for pointing me toward the contracts of Martinez, Wacha, and Green.

Source