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Will Jose Abreu opt out of his contract?

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White Sox first baseman can choose arbitration instead of guaranteed money over his last three years, so let's take a look at the arbitration process

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As you may recall, when Jose Abreu signed his six-year, $68 million contract in October 2013, included in the contract was the ability for Abreu to opt out of the remaining three guaranteed years of his deal and, instead, go year-to-year in arbitration.

If he opts out, Abreu would be giving up $34 million ($10.5 million in 2017, $11.5 million in 2018 and $12 million in 2019). That's a lot of guaranteed money, but after Abreu's storied Cuban career seamlessly transferred to the United States in the form of a Rookie of the Year season, Behind the Box Score and Dave Cameron treated Abreu opting out as the likely scenario.

Two years later, Abreu has shifted more toward ordinary than otherworldly. Even with a terrific August, he's still behind his 2015 numbers, which represented a step down from his rookie year. Assuming he finishes with a second straight year of decline, what does the decision look like now?

The criteria for determining arbitration salaries per the collective bargaining agreement:

  1. Quality of the player's contribution to the team in the most recent season
  2. Length and consistency of the player's career contribution
  3. The player's past compensation
  4. Comparative baseball salaries
  5. The existence of any physical or mental defects
  6. Recent performance record of the player's club
The arbitrators can give whatever weight they want to these except that they're to "give particular attention, for comparative salary purposes, to the contracts of Players with Major League service not exceeding one annual service group above the Player’s annual service group."

It's also important to note what can't be considered:
  1. Financial position of the player and the club
  2. Press comments, testimonials or similar regarding the performance of either the player or club, except that awards like MVP, ROY, Gold Glove, etc. aren't excluded
  3. Offers made by either side prior to arbitration
  4. Cost to the parties of their representatives, attorneys, etc.
  5. Salaries in other sports or occupations.
The player's past compensation
I'm going to address No. 3 first because what Abreu got paid in 2016 is very important in this analysis, as it sets an important baseline. Abreu is being paid $10 million this season, but base salary is not the end of the inquiry for purposes of arbitration. Abreu's contract also included a $10 million signing bonus. He's already been paid that full amount. However, in this calculation, that signing bonus must be prorated over the entire contract. So $1.67 million is added for a total of $11.67 million.

The CBA also stipulates that a player under team control cannot be tendered a contract that reduces his prior year's salary by more than 20 percent. In Abreu's case, that would be a $2.33 million reduction. So the worst-case scenario for Abreu in arbitration is approximately $9.33 million.

Quality of the player's contribution to the team in most recent season

As you can probably guess, this is a comparative negative for Abreu. Arbitrators are going to rely on "traditional" stats for measuring on-field performance, so discussing WAR or wOBA or UZR here isn't useful. What will be most interesting to the arbitrators are his triple slash, extra-base hits (home runs most important) and RBIs. While those are good this season -- currently .291/.346/.469, 29 doubles, one triple, 20 home runs and 76 RBIs -- they are not spectacular numbers.

"Contribution" does include things other than on-field performance. Also specifically mentioned are "special qualities of leadership and public appeal." Abreu can argue that he's a team leader, particularly among the Spanish-speaking players, but the team can argue back that he's not the team leader. Abreu certainly has public appeal, as evidenced by the products and promotions centered around him.

Length and consistency of the player's career contribution

This is one that hurts Abreu significantly. Barring a scorching final five weeks, Abreu will see his production decline for the second straight season. He's unlikely to get anywhere near the 30 homers and 101 RBIs he collected in 2015. While he can point to his 2014 Rookie of the Year, All-Star and Silver Slugger nods, as well as being voted fourth place in AL MVP, those are contributions from his first season.

The existence of any physical or mental defects

This could change, of course, but Abreu doesn't have any announced injuries at this time. While some have speculated about some injury potentially being a cause of his lukewarm performance much of  this season, speculation is all it is. Abreu has a pretty clean injury history with just the one disabled list appearance (for the 15-day minimum) in May 2014.

Recent performance record of the player's club

This isn't helpful to Abreu, either. There are no playoff appearances to point to. They haven't even been close to the playoffs. And, in addition to the standings, specifically mentioned is " attendance as an indication of public acceptance." The White Sox were 13th in the AL in attendance the past two seasons and are currently 12th. While club finances are not permitted, this is certainly one way for a club to get that idea into the heads of the arbitrators.

Comparative baseball salaries

The salaries need not be arbitration awards or settlements. The salary of players with similar service time, however agreed to, is admissible. Teams, of course, like to use comparables of players who signed multi-year deals that bought out arbitration and/or free agent years since those will see lower salaries, particularly among those in their fourth year of service time.

For a few reasons, the number of players who have gone to arbitration and had their salary determined by the panel has declined significantly in recent years. So the $10 million record for first-year arbitration award still dates back to Ryan Howard in 2008. Abreu could point out that, adjusted for inflation (remember, can't mention how much more money MLB is making now), that's about $11.2 million. And, unlike Abreu, Howard was a Super Two.

We can point out other similar players, but I'm not doing this to determine exactly what Abreu would get in arbitration. I'm just looking for whether he'd be put on a path to make not just more, but significantly more than his guaranteed dollars. And Howard is really who he has to look better than to do so.

Like Abreu, Howard had a ROY award. But he also had something a whole lot better: an MVP award. Like Abreu, Howard saw a decline in performance in his last pre-arbitration season. But, for Howard, that was a decline to .268/.392/.584 with 47 dingers and 136 RBI. On top of that, he played quite well in the playoffs, significantly helping his team win the World Series.

As a sanity check, let's look at Josh Donaldson, who was second-year arbitration eligible this past offseason after qualifying for Super Two status. Coming off a MVP, Silver Slugger, All-Star season for a playoff team with a superb triple-slash and Triple Crown numbers (41 homers and a league-leading 123 RBIs), he filed at $11.8 million. The Blue Jays countered with $11.35 million, and settled with him on a two-year deal that paid him $11.65 million in 2016 and $17  million in 2017. No one is going to seriously argue that Abreu has been a better player than Donaldson.

I can go on, but things don't get any better comparatively for Abreu. Bottom line, even with a scintillating month to close 2016, his realistic best case scenario is something close to his current 2017 salary of $10.5 million. So there's no gain in the first year from what he's already guaranteed.

The future

That salary, though, would put him on a path to exceed his total guarantee. But that would mean placing a big bet on himself, which is a rather risky proposition. Abreu's production has declined. He's going to be on the wrong side of 30. If he produced along the lines of his 2015 campaign over the next two seasons going year to year, he would likely earn $40-45 million, aka potentially $10 million more than his current guarantee.

Abreu's play, of course, would not be to go year-to-year, but rather finagle a new multi-year deal; something that likely would cover at least one free agency year and raise his guaranteed take to something more than the $34 million currently owed.

The question really is, why the White Sox would do that? They'd only do that if they were protecting themselves from some significant risk, such as ridiculous arbitration awards or "losing out" on Abreu's production in his free agent year(s). As I've demonstrated, the former is not much of a risk. And the latter isn't looking like one, either.

Realistically, what would the White Sox offer? A four-year deal? If the negotiations were to happen prior to the opt-out deadline, I couldn't see the White Sox offering anything more than his current salaries (or thereabouts) over the next three years, plus a fourth that's marginally higher than his 2019 salary of $12 million. Frankly, that would be much more of a courtesy than an offer that makes baseball sense. It'd avoid the nastiness that can result from trying arbitration cases (a team is essentially criticizing the performance of a player that, regardless, will end up on their team). But it's a pretty bad deal for the White Sox monetarily. All they really get out of it is Abreu's 2020 season, which, as of now, doesn't look like it's a great bet for much. It'd be a great deal for Abreu, though, as he gets guaranteed as much or (more likely) more money than he would get going year to year.

If the White Sox call Abreu's bluff (which they should), the hypothetical offer above begins to make a bit more sense, but I wouldn't say it should be made then, either. There isn't money to be saved for 2017. Maybe you save a couple million in 2018. Maybe you save $5 million in 2019. But you're effectively shifting that not-particularly-significant money to 2020 and paying $5 million more for the privilege.

And what risk are you minimizing? That Abreu has a best-case-scenario year, is extremely productive and would get $15 million or so in arbitration. If that happens, you're looking at $34 million or so over his remaining arbitration, and now you've got more comfort that a deal buying out a free agent year makes baseball sense. All for the price of a few million dollars.

More likely, Abreu has a season that looks a lot more like 2016 than 2014. He's looking at $13.5 million tops in arbitration with potentially another $17 million the next year. If you want to do a three-year deal now, it's not going to look drastically different in overall money than what the last three years of that four year offer would have: $12M/$14M/$17M. If his season looks like 2016 (or worse), you've gotten yourself out of a bad situation.

Probably won't opt out

This was a simplified gaming out of the decisions and perspectives. Maybe you think my numbers are off by a few million one way or the other. But this isn't a "normal" arbitration situation because Abreu debuted in MLB at 27 and his third-year salary was above the record for a first-year arbitration award. His later arbitration years are in his likely decline phase (if he isn't already there). His free agent years certainly are. Abreu is not a case where a team is almost certainly going to save millions upon millions and reap multiple surplus wins. Nor is it a case where Abreu will get tens of millions guaranteed that he doesn't already have.

It would take an aggressive agent to counsel that he should opt out, because the upside is rather minimal with a big downside. Abreu would be shifting significant risk back onto himself from the White Sox. In the likeliest scenario, he would be reaping no more than $7 million above his current guarantee or, in the best case scenario, $10 million. And those gains wouldn't start arriving until 2018. A lot can happen between now and then. And a lot can happen in 2018, too. Privately, the White Sox would probably say that they're neutral on him opting out, if not welcoming it, as their view of the upside and downside is pretty much the exact opposite of Abreu's. Whether Abreu opts out is certainly a whole lot closer of a question than we thought it would be after his rookie season.