North Shore Tavern Mound Visit: Risks, rewards of opt-out for Reynolds taken in Boston (Weekly Features)

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Bryan Reynolds.

BOSTON -- After months of speculation, drama and that ever looming offseason trade request, the Bryan Reynolds contract saga is seemingly at its final chapter. The two sides have agreed to the monetary portion of a new deal. There's just one final issue lingering.

Reynolds wants an opt-out on his deal.

As previously reported, the Pirates and Reynolds both moved off of their original offers by the tens of millions and found a figure that works for them: Seven more years after the 2023 season for $100 million in new money. Except that isn't a guaranteed seven years, $100 million. Reynolds and his camp feel that since he's moved so far off of his original asking price of eight years and over $130 million, they should be given the option to end the contract after 2026 if he so chose. The Pirates pushed back on that proposal, and for all intents and purposes, one side is going to have to yield for this deal to get done. If it doesn't get done, it very likely could be one of the biggest "what-ifs" in recent Pittsburgh sports history.

There's reason why the Pirates are justifiably hesitant about including an opt-out in the deal, especially one so early. Reynolds is under team control through 2025, so if the deal was completed in the way Reynolds' camp offered, the Pirates only have him for one additional guaranteed season. 

If completed this way, this would be an unprecedented deal for both the franchise and the sport. One that has serious risks on both sides, but also high potential rewards.

On the Pirates' end, a 7-year, $100 million deal tends to be team-friendly when looking at projections. Going by the ZiPS projection tool by FanGraphs' Dan Szymborski, the suggested extension is six years, $95 million. Another year of that deal at $5 million would probably be in the Pirates' favor, even if it would be Reynolds' age 35 season. 

Going by WARP, Baseball Prospectus' version of WAR, Reynolds is projected to be a 3.3 win player this season. Following a rough, basic projection formula, he still is an above average player for at least the next four or five years:

2024: 3.3 WARP
2025: 3.3 WARP
2026: 2.8 WARP
2027: 2.3 WARP
2028: 1.8 WARP
2029: 1.3 WARP
2030: 0.8 WARP

That totals 15.6 WAR over the next seven years. Matt Swartz, of MLB Trade Rumors arbitration fame, has done deep dives into inflation calculations, summarized here (sorry for the math):

WAR*(Dollar Per Win*(inflation rate^(year-2023)))/(discount ^(year-2023))

The simplified way to look at that is contract extensions factor in about 5% for inflation with a 10% discount for the player security.

If you follow that formula verbatim, that puts a Reynolds deal at around $144 million for the next seven years, valuing one WAR at about $9 million. Simplifying it about and measuring the years and arbitration as exponents instead, it's about $122 million. The Pirates can only do these deals if they feel it benefits the club in the long run, and from a dollars sense, it looks like Reynolds will outperform even a nine-figure salary.

That is, assuming, Reynolds remains a Pirate for all seven years.

We do not know how the money is distributed of this seven-year contract other than it's more backloaded. Reynolds was due to go through arbitration anyway, so it makes sense that it would be cheaper up front because he was not going to get his full market value the next two years. The next four years are likely going to be the most productive over the rest of his career. If he plays well and opts out, the Pirates at least held onto him for another year while knowing what he would make. They would have bought another year of his prime for less than the market value.

The risk is what happens if Reynolds doesn't play well. Then all of a sudden the Pirates are on the hook for a large (for them) four-year contract.

It's why opt outs are starting to become more popular across the league. It's a way for a team to get a player for cheaper on the short term, risking that they aren't on the hook for an albatross contract if they struggle or get hurt. Excluding players who used their opt out as leverage to sign a new contract before making a decision and Trevor Bauer (who was suspended at the time of his two opt outs), there have been 51 times these last five offseasons when a player held either an opt-out, a player option or a mutual option for their major-league contract. For simplification, we'll group all three categories together as an opt out. Here is how they played out each of the last five years:

2018: Four players decline, three opt out
2019: Six players decline, one opts out
2020: Seven players decline, one opts out
2021: Five players decline, five opt out
2022: Seven players decline, 12 opt out

Notice a trend? Maybe it's the new money of the new collective bargaining agreement, maybe it was players not wanting to test the market after the COVID-19 shutdown. But last year, we saw a spike in opt outs, and it resulted in a lot of new money for the players. Look at what Xander Bogarts and Carlos Correa got by forgoing the last couple years of their dal this winter.

Now Reynolds would have just finished his age 31 season after that proposed opt out after 2026. Looking at the last three free agent classes, there have been just five outfielders who have signed a contract of at least three years after playing their age 31 season. They are:

Aaron Judge, nine years, $360 million
Starling Marte, four years, $78 million
Chris Taylor, four years, $60 million
Avisaíl Garcia, four years, $53 million
Mitch Haniger, 3 years, $43.5 million if player option is exercised

Again, we don't know how much money is in the back four years of that contract, but Reynolds is not in Judge's elite tier of player. Looking at the other recent examples, it stands to reason that he would make more sticking with his contract rather than opting out and testing the market.

Opt outs are risky. It's why plenty of teams have yet to dip their toe in those waters, especially for players who are not yet eligible for free agency. Going based off of the research of Ethan Hullihen of Pirates Prospects, there have only been six examples of a player getting an opt out, and Reynolds would be the first to reach free agency guaranteed if the Pirates accept his proposal as is:

But this is also a way to keep Reynolds' cost down the next couple years while the Pirates try to make the jump to being competitors. There's no guarantee he would exercise the opt out anyway, even if he was playing well. Depending on how much money is backloaded, it may be advantageous for Reynolds to stay even if he plays at his roughly All-Star pace he has throughout most of his career.

There's no easy way out of this, but an opt out isn't a guaranteed lose-lose for the Pirates. They inherit a lot of risk, but there was always going to be plenty of risk on both sides for a potential nine-figure contract. The question becomes is can this be the right deal for both sides.

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