"Contract Repeater" Options...

[Alex]

Why aren't contracts written to give baseball teams the best chance to keep their own ballplayers that they develop?

Years ago, we knew that BOTH Manny Ramirez AND Jim Thome would have great careers. Signing them both to 3 and 4 year deals that vest and are over was silly.

I would have put in a "repeater" option in both of their contracts. After the 2nd year of a 4 year contract, the team has an option to "renew" or repeat a new four year deal at a pre-approved amount. (or, we can repeat a new contract after the first contract is finished)

I'm pretty sure that both Manny and Thome would have gone for a repeater clause in their contract IF IT HAD BEEN DONE EARLY ENOUGH IN THEIR CAREER because the repeater option would have been for significantly more money than they were making earlier in their career.

A classic example about to happen could be Karim Garcia. What if Garcia has a monster year this year? We may have him for one more year after that, maybe two, but then we will lose him also.

Why not put a repeater clause in Garcia's contract THIS YEAR! If the ballplayer balks at a repeater clause, then you probably know that he is going to some other team in couple of years anyway, and we can plan accordingly.

If Garcia has a great year, and then in next years contract we offer a repeater option, the option will be at an inflated price. The key is to do it now. It's smalltime thinking to worry about Garcia later rather than now.

You almost have to hope he does just well enough to keep, but not too well to the point where he have to let him go. A repeater clause is Big Time thinking, because we can control the destiny of the ballplayers we want to keep without risking a long-term contract if they tank, yet the ballplayer realizes that if his contract is "repeated", he will be set for life from a financial point of view.

The only one who doesn't benefit as much is the agent! The agent has less negotiating power because their player has not had a great year yet.

Anyone thing that benefits the home team, the ballplayer, and the fans, while neutralizing the agent, is a good thing!

<font color="#a62a2a" size="1">[ December 26, 2002 08:56 PM: Message edited by: Super8 Filmmaking in the DigitalAge ]</font>

[Alex]

Here is an example of a "repeating contract" that I would have offered Karim Garcia...

1 year at 1 million, with a Repeater clause that increases annually by 2 million. At the end of every year, the Indians can choose to automatically renew (or repeat) Karim's contract every year by raising his salary two million dollars. The idea is because Karim's first year is so low (1 million is low) you can tack on two million dollar raises every year and still get a good deal.

So we could hold onto Karim for the next five years by paying him...

1 million this year, 3 million next year, 5 million the following year, then 7 million in the fourth year, then 9 million in the fifth year.

BUT only if Karim "earns" the pay raise do we repeat our offer and increase it by two million, that is why it is a repeating contract "OPTION" .

We would also have the right to NOT repeat Karim's contract after any year. If Karim has a great two years, then tanks, we don't repeat the offer after the year Karim tanks. Karim would miss out on the last two years of the repeating contract.

If Karim has a great year this year and next year, he will want a 4 year 30 million dollar deal, or a 6 year 40 million dollar deal. Yech!

With the repeater clause, there is no threat of a player signing a long term deal and tanking because the team can choose not to repeat/renew the contract. But the team can hold onto players that the fans really like and who do produce.

The grand total of the repeating contract offer to Karim would pay Karim 25 million over five years, an average of 5 million a year. This could prove to be a steal if Karim produces. If Karim tanks in a year or two, we can walk away whenever we want. Right now, Karim would love to know he could be "bought" for a total of 25 million over 5 years, because if the Indians choose to repeat his contract, it means he is a bonafide hitter, and he and his family are set for life.

By being content to ONLY offer Karim a one year deal, two years from now the agent can turn his ballplayer against the team by reminding Karim how the Indians ripped him off by only giving him a one year deal.

The agent simply reminds Karim that if he had been injured, he might not have been able to provide for his family long-term, that the Indians were willing to exploit Karim for that one year, so now it's "our turn" to exploit the owners and get Karim as big a contract as possible.

In Karim's case, after the final year of the 5 year repeater, I'd put an additional repeater clause at 10 million a year for 3 more years.

I bet Karim would have gone for that repeater also. Yet once again, we risk nothing! A repeater clause is an excellent incentive for the ballplayer who is still finding his way, but still has a chance to have a good to great career.

John Hart made one key miscalculaton when he signed many of our young kids to long term deals. Ballplayers like Belle, Ramirez, Lofton, etc... were bonafide stars perhaps a bit earlier because we committed to them long-term when they were young.

So when their contracts expired, all we had done was create a situation where the money we saved in the early years would be wiped out a couple of times over when we attempted to re-sign the ballplayers that were now in their prime.

Imagine if we had signed Manny Ramirez to a progressively increasing contract, a repeating contract, that increased Manny's contract by one million dollars a year every year Manny played for the Indians.

Right now, Manny would be an Indian making about 8-9 million a year!
But early on in Manny's career, Manny would have been making significantly more than what the Indians "had" to pay Manny based on the pay scale for non-veteran ballplayers.

Manny should have had a repeater clause put in his contract from the beginning. Instead, the owners get sucked in to saving as much money as they can early on in Manny's career, and the result is Manny gets 20 million a year now, elsewhere. Manny would still be here if the owners weren't so cheap earlier in Manny's career.

Imagine both Jim Thome and Manny Ramirez still with the Indians, each making 9 million dollars this up coming year! Wow!

The Repeating contract option would have made that a possibility.

Am i missing something? This seems so logical and easy to do, it's a no-brainer.

<font color="#a62a2a" size="1">[ December 19, 2002 09:54 AM: Message edited by: Super8 Filmmaking in the DigitalAge ]</font>

[Alex]

the following sounds suspiciously like a repeating contract...


The delay poses a dilemma for the Indians, whose 10-year spring-training contract with Winter Haven expires this year. The Indians have four five-year options to continue training in Winter Haven, but club officials have said they'd rather be in Fort Myers.