The Miami Marlins are on the precipice of finalizing a rumored mammoth $325 million contract to star outfielder Giancarlo Stanton. That would make him the highest paid man in baseball, and indeed in all of sports. The Fish are offering the right amount of money, as Stanton is deserving of this kind of contract. Stanton would be foolish to pass up that kind of deal, especially with the large leverage he would hold under the proposed offer. Not only are the Marlins rumored to be including the long-forsaken first no-trade clause in the team's history, but the club might also offer an opt-out clause, expected to come after the fifth year of the deal, that would let Stanton become a free agent again.
The most obvious thing about this is how beneficial it is to Stanton. Miami is offering Stanton an easy way to correct the course of his career and his opportunity to win by opting out five years into the deal, while he is still young and more than able to earn another huge ten-year contract if he is as good as that. And even if he is happy with his situation in Miami, he can still opt out just to earn the extra money and correct his status as among the highest-paid players in the game; by the time 2020 rolls around, you would suspect that the price of a win would be even more expensive.
The downside for Stanton's career, with the option in hand, is meaningless. If he struggles or breaks his leg badly three days into the signing, he can bank the rest of that money for the remainder of the 13 years, without worrying about losing those guarantees. How can he lose?
There is no way Stanton does benefit; he only opts out if he thinks he can earn more money, and if he does not think that, well, he would already be earning a lot of money in the first place.
But the Marlins are not without their own benefits. A team that constantly purports itself to be cash-strapped would certainly not mind having a superstar in a record-breaking contract opt out halfway into the deal if things go well.
Building Around Stanton
The Marlins will have to build around Stanton in the next five years to make a contender. The window of competition is shorter, and Miami has to turn the team into a quality club around Stanton's guaranteed wins. The downside to this is if and when the Fish fail to do this. There are many concerns as to whether the Marlins can build a contender while keeping lower payrolls and at the same time carrying Stanton's expected $26.8 million salary from 2017 to 2019. If the Marlins do not increase the payroll, they could run the risk of failing to build a competitive franchise even with a five-win head start.
On a lot of other teams, this may not be as much of a concern, but for the cheapskate Marlins and owner Jeffrey Loria, it is a real risk. This is especially true given Loria's tenuous grasp on the concept of patience. Loria once broke down an expensive 2012 core roster within three and a half months of it debuting because it had underperformed expectations at an expensive price. You have to figure that Loria is at risk to do the same sort of continuity-breaking and rebuilding with a heftier Stanton price sitting in the background.
Eventually, Miami may determine that Stanton's price is too large for them too. And if that happens, it might be difficult for them to find a taker for Stanton with such a mammoth contract, especially as the years close in to the opt-out clause. The alternative for the Fish may be present in the form of the opt-out. As long as Stanton is matching his expectations, he would almost certainly opt out of his contract; all but one player (Vernon Wells) who has received an opt-out clause in their long-term contract has exercised the right to re-enter free agency. Miami might be hesitant to pay the large sums owed to Stanton in future years if it finds it has had a hard time building a contender with his salary on board, so it would happily some other team to sign a long-term deal with Stanton, this time covering more years of his decline than the original contract.
The Bargain Rate
Unless Stanton collapses completely, this rumored contract is in essence a five-year deal with an eight-year player option. But because of the structure, the Marlins can pawn it off as a 13-year deal and construct the salaries to match up. Believe it or not, one might expect Stanton to make more money per year if his contract were shorter. Mike Trout, who is in another league compared to Stanton, is making $33.25 million per year in his first three free agent seasons after his earlier extension. Stanton is much closer to free agency and much more likely to get market prices. It would not be unreasonable for him to demand $30 million or $31 million a free agent year if his contract only guaranteed five seasons.
At $31 million, the Marlins would be paying $123 million for five years and having Stanton re-enter the free agent market. By framing the contract in this fashion, Miami will get Stanton at $110.4 million for five years instead. It may not sound like much of a difference, but every dollar counts when you are on the cheaper end for a franchise. The Marlins could use those $13 million over three years to help secure another player signing or contract extension or other type of addition.
The only risk is if Stanton collapses and opts into his deal while he is no longer worth the money. At this point, it seems highly unlikely that this would happen by that fifth year, so the Marlins are making a good bet to save some money and still retain a chance to re-sign Stanton off of his opt-out.
The clause is ultimately something that hurts the team's long-term chances of retaining Stanton through age 37, as the contract initially points out. But that may be at least something that has a silver lining in the end.