The myth of the Hometown Discount
It's a situation we've all seen before- a popular player is up for free agency, in high demand and coming off of a great season. Teams all over are clamoring for them to join, offering probably more money than they can possibly be worth to the team, but in the end they end up re-signing with the team they've had success with for less money and/or years than they would have been able to get on the market.
It seems to happen particularly a lot to the Sox (see Mike Lowell, see David Ortiz, see Josh Beckett, see Tim Wakefield).
Then fast forward to a few years later (let's look at Lowell, because we've been hearing all about his contract status lately), and they just aren't the same player. They are aging, not playing as well, and the team starts thinking that there are better options to start every day. Fans all over who are used to seeing them on the field start complaining about how it is unfair to the player, who took a discount to stay, to not be putting them out there.
What do you think? Is there any validity to this?
Personally, I say no. When a player signs a contract, they are not signing as a favor to the GM of the team. When Lowell was a free agent after 2007, he had several other offers, including a 4 year deal from Philadelphia. He ended up signing for just three years for the Sox, but not because he liked Theo and wanted to do him a favor. At that point in their career, players take stock of their options and decide what they're comfortable with based on a few different things:
- How much money and how many years are being offered?
- How comfortable are they with where they are now and do they feel like uprooting and having to deal with a whole new set of coworkers? and of course
- Who is going to give them the best shot at a brand shiny new World Series ring?
There are some other factors that play into this. Lowell, for example, has said that he's always thought about retiring after these three years are up (though one questions how recently those thoughts became serious). He also thought Boston offered him a better chance at another championship than Philadelphia (oops). Wakefield agreed to a reduction in his already bargain-basement price because he was comfortable with Boston and wanted his shot at making the Boston record books (again, oops, looking more and more unlikely). The Red Sox even see this happen with players who haven't even been in Boston before, taking less money to play here than they are offered by other teams, just because they think they'll have their best shot at a ring (Marco Scutaro, Adrian Beltre).
So, these hometown discount players, do the Red Sox owe them anything?
Sure they do. It's spelled out in their contracts. They have the responsibility to pay Lowell, for example, $12 million dollars a year, no matter what they do with him. This is the players guarantee. It should be the Red Sox perogative to decide whether they'd rather pay their players to play everyday for the Red Sox, to play golf, or to play for the Orioles. The team obviously wants the players they sign to work out for the length of the contract and to play great baseball, but signing a contract agreeing to pay out $37.5 million dollars shouldn't mean that the front office should be handcuffed to starting a particular player every day if they think there are better options out there.
Now don't misunderstand me. I fully see how and why Lowell is upset with the way things are. It's gotta be tough to go from being a key piece of a team to a leftover who spends his days sitting on the bench wanting to play. I fully sympathize with Lowell for this. This post is not intended for him, but for the fans who shout "he took a discount to play in Boston! Not having him start is a disservice to him!" He still makes his money at the end of the day whether he plays or not, and Boston is holding up their end of the deal.
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Let me insert this post here
because the one About Beckett is too old. It does fit quite well here as well!
I posted what I thought was a serious post about contract requirements and incentives, and I got one legitimate answer and another crap answer from Ben Buchanan who wanted to dismiss this question because of an Ad Hominem attack on me. Here goes.
Where else in life can you or must you LEGALLY pre-pay for something, and then when you don’t get what you contracted for, you still lose your money. To put it another way, when you give a baseball player a huge multi-year, multi-million dollar contract with no performance requirements, what exactly are the incentives for that player to perform over smashing his hand into a wall and taking the contract years off to sit on the beach?? Just why are not all baseball contracts not filled with performance requirements. Even go so far as putting the re-insurance or disability insurance requirement for non-contract performance on the player instead of the team. Let the player have to prove to the re-insurance company that he is indeed hurt by natural wear and tear or true accidental incidences?
I think if performance contracts such as above were the norm, the game would be more balanced and more fan friendly toward good team performance, which is what one should be paying to see, IMO!
Well...
I would say that, largely, your playing time is dictated by you, but rather by your manager. So you can be benched, pinch-hit for, moved up and down the line-up, etc…and all that would potentially effect you achieving these “performance requirements”.
Let’s take Ortiz for example. Let’s say he’s got a home run minimum (since he’s a power hitter). Tito feels the team has a better shot at winning if Lowell bats against lefties and Ortiz against righties. All of a sudden, it becomes a lot more difficult for Ortiz to achieve this minimum, doesn’t it? Making it unfair to the player.
I think one of the things GMs do (or leastways should) take into consideration is things like “competitive drive” when making these contract decisions. All these contracts are risks, m’man, because the future is unforeseeable. Sometimes it works better than you would expect (Ortiz’s first contract), sometimes less (Lowell’s extension).
Galactus does as he pleases. Because Galactus is drunk.
@#$%ing Twit: @blogtard
How contract incentives are written
could evolve so as to minimize the lack of player control that you cite. For example, the use of percentages would relieve problems caused by absolutes. Also, requiring simple attendance at practices, games, whatever would be a requirement that all players should have to meet to get their multi-millions! You know what I mean.
I understand that performance incentives may seem unfair in some respects, but look at the JD Drews and Becketts out there making millions, but where is the incentive for there to be a commitment to perform?
by NG on May 20, 2010 8:59 AM EDT up reply actions
well generally they're people who are very competitive, and are dedicated to perform anyways
but yeah, I think you do have a point that it’s not really the absolutely ideal way to go about things. Precedent, however, is very strong, and if the Sox approached their lead pitcher and said they wanted to structure a deal in a way that would only be able to hurt him and had never been done before, no deal would ever get done (whether that would be a good thing or not is a different debate, the point is the Sox thought it would be a good thing to lock him up).
But, it works both ways. We end up having Lester, Pedroia, and Youk all signed to very under-value extensions because they signed early before they had completely reached their potential. They all over-perform what they are all paid, so with a decent GM, the bad and the good tend to balance out somewhat.
I think the agreement is that they will be in attendance at practices and games. Obviously, if the management tells the player to go rehab in a different city, they can’t be at the game, but they also can’t really be penalized because management tells them not to be there. Notice that until he started his rehab stint, Cameron was with the team for every single game.
Standard, almost boilerplate logic
instituted on a league-wide scale for common sense performance requirements would be a good thing. It may lower some of these outrageous costs, and would give management leverage to make more of a difference!
How many of you guys out there are paid for 4 years guaranteed at super high levels even if you do nothing?? Get real here!
well
I know that if my boss decides I don’t need to be there and sends me home, I still get paid for it, because part of our agreement is I get a certain amount of hours. I also know that if I take a sick day, I still get paid for it. No I don’t have money guaranteed for four years, but if I am outperforming my salary, I have the freedom to go to my boss and say that I should be making more, or to go to other employers and see what they’ll offer me.
Their commitment to perform comes in the form of their NEXT contract. Who is going to sign a guy who sat back and did nothing in their last contract? If you want to make your money you will play hard to insure that there is always a next contract.
"We are not normal, We are Legends. People will tell their kids about us." - Deon Butler before Ohio State Game 2008.
But really, except for the Milton Bradley situation, I’m not seeing many cases of players just not performing and it really isn’t that big of a problem. This is how contracts are done, there are a lot of assumptions of goodwill on both sides and it gets done. Players want to win championships because there is a lot of ego in this game, they want a legacy. I’d like to think that if there was a better way to do it, it would have been figured out since free agency started. I mean, we could start paying people based on performance alone, take a walk, that’s $35000 in your pocket, HR? Just made yourself 50k, but some stats just don’t exist or just aren’t good enough to cover every aspect of the game. I think the biggest advancement in recent years is the injury clauses like the one we sneaked into Lackey’s deal that says if he has a certain medical issue than he plays his last year at league minimum.
"We are not normal, We are Legends. People will tell their kids about us." - Deon Butler before Ohio State Game 2008.
Check out corporate world.
Most top executives are under some form of a no-cut contract. Sure, they can’t commit a felony like embezzling funds, and the like, and they get big bonuses for better performance, but this almost the same thing.
Why do the teams do it? Simple, “It is the business we have CHOSEN!” (Hyman Roth, Godfather II). It is simply the market that has been established through collective bargaining.
@#$%....EDIT:
I would say that, largely, your playing time is NOTdictated by you, but rather by your manager.
Galactus does as he pleases. Because Galactus is drunk.
@#$%ing Twit: @blogtard
For the record...
I didn’t realize that there were that many people saying we should be playing Lowell because we owe it to him. I mean, that’s likely because my Sox Blogging is restricted to OTM, Joy of Sox, and Cursed to First, but still.
Galactus does as he pleases. Because Galactus is drunk.
@#$%ing Twit: @blogtard
this isn't something I've seen all over blogs
this is something I’ve heard talking to a lot of people at bars and hearing people at games. I haven’t so much lately, but all over the place when they first signed Beltre.
For the record...
if fans think we owe something to a guy making $12m a year, i think they need to be drug tested.
doesn’t anyone think the player getting paid to do a job, owes something to the owner and the paying customers (fans)?
just once in my life i’d like to tell my employer that he owes me something and not have to dig his boot outta my butt.
Hah!!!
The “don’t care” option! And yet, despite my lobbying, I can’t bring myself to select it. More fool I.
Wait 'til next year...
by nuthinboutnuthin on May 20, 2010 11:29 AM EDT reply actions
Here are three examples
of why guys want to play and might complain if they don’t get a fair shake.
Adrian Beltre 3b
1 year/$10M (2010), plus 2011 player option
1 year/$10M (2010)
signed by Boston as a free agent 1/5/10
10:$9M, 11:$5M player option
$1M buyout for 2011 option if Beltre has 575 PAs in 2010
2011 option increases to $10M with 640 PAs in 2010
Tim Wakefield rhp
2 years/$5M (2010-11)
2 years/$5M (2010-11)
signed extension with Boston 11/9/09
10:$3.5M, 11:$1.5M
2011 base salary increases based on innings in 2010:
$2M salary with 130 IP in 2010
$3.5M salary with 160 IP in 2010
performance bonuses based on starts:
2010: $50,000 each for 11-15 GS; $75,000 each for 16-25 GS; $100,000 each for 26-30 GS
2011 bonuses vary, depending on 2011 base salary:
$1.5M base: $0.1M each for 11-15 GS; $0.2M each for 16-25 GS; $0.25M each for 26-30 GS
$2M base: $75,000 each for 11-15 GS; $0.15M each for 16-20 GS; $0.2M each for 21-30 GS
$3.5M base: same bonuses as 2010
Jason Varitek c
1 year/$5M (2009), plus 2010 options
1 year/$5M (2009), plus 2010 options
re-signed by Boston as a free agent 1/31/09
09:$5M, 10:$5M club option or $3M player option
if Varitek exercises $3M player option, he may earn $2M in 2010 performance bonuses ($0.4M each for 80, 90, 100, 110, 120 games started)
Now, if Mike Lowell is playing once a week for Beltre, then Beltre will lose $5 mil on his 2011 option to come back to Boston.
Look what Wakefield gets if he is a starter and not a reliever.
And Varitek gets an extra $400,000 if he starts half of the Sox games this year. That is not chicken scratch.
Point is, this is why the clubhouse atmosphere can get complicated.
Thank you Cot’s for the numbers.
http://mlbcontracts.blogspot.com/2004/12/boston-red-sox.html
" Play Ball "
That's interesting stuff.
I’d be a tad upset if I was Wake.
Galactus does as he pleases. Because Galactus is drunk.
@#$%ing Twit: @blogtard
Yeh, many players take a bit less to stay
in a certain city. A lot has to do with moving their families and taking their kids out of school and moving them across the country. It’s really hard on the wifes and kids even with Dad bringing home some serious bacon. Jermaine Dye said he would not up-root his family to move to Washington for the reported $3 mil he was being offered. After talking it over with his family, he thought it would be better to let his kids finish the school year. We forget the human element involved in the move.
Beltre, Wake, and Tek each took deals to be in Boston but the incentives in the contracts sometimes conflict with another players incentives.
Could you imagine at the end of the year if Beltre only had 639 PA because they pinch hit for him a few times late in games? That’s a $5 mil difference.
And yes, Wake’s contract is really set up to be a starter and not good to be a reliever.
" Play Ball "
Well if Dice-K
keeps pitching like his last start, Wakefield will be the 5th starter soon enough.
Or if Matsuzaka pitches like the start before last,
he could be in the Cy Young voting. ;)
" Play Ball "

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