Economics of Baseball: A problematic vesting option

After seeing his bullpen falter and the team collapse down the stretch in two straight seasons, Omar Minaya made a big splash in December of 2008 by signing Francisco Rodriguez to a 3-year, $37 million contract and acquiring J.J. Putz in a 3-team, 12-player trade on the same day. These moves were supposed to address what had been the Mets' most visible systematic weakness over the past two seasons, a weakness that had probably cost them a pair of playoff appearances. At the time, one Francisco Rodriguez and one J.J. Putz seemed like the perfect solution to an obvious problem.

Things haven't worked out like Minaya drew them up. Injuries and the inability to surround their core talent with competent role players have led to a .460 winning percentage for the Mets since their pre-2009 bullpen overhaul. Committing $37 million to a closer when you're on the playoff bubble and your bullpen is weak and you have money to spend is, though not the most efficient allocation of resources, entirely defensible. Having a closer making $11.5 million when you're not contending and financial resources aren't as abundant as they used to be is a problem. Even more problematic than Rodriguez's 2011 salary is his 2012 vesting option, one that calls for a $17.5 million salary if he finishes 54 games this year*.

*The option vests with 55 games finished in 2011 or 100 games finished in 2010-2011. He finished 46 games in 2010, so the option triggers at 54 games finished in 2011.

Rodriguez is pitching pretty well in 2011. He's walking more batters than you'd like, but the results have been fine: a 0.87 RA and 12 saves in 13 opportunities. So far he's finished 15 games, which puts him on pace to shatter the 54 GF option triggering threshold. But regardless of how well he's pitching it would be in the best interest of the Mets to ensure that the option doesn't trigger. Having an established closer isn't at the top of the priority list for the 2012 Mets and spending $17.5 million on one isn't something they need to be doing.

There are two ways they can ensure the option doesn't trigger. One of them is to remove Rodriguez from a game-finishing role. That sounds good on paper, but the reality is if they quit giving Rodriguez save opportunities without a performance reason they're in grievance territory and may end up having to pay him anyway. Option two is to trade Rodriguez to a team that would use him as a set-up man.

Say Rodriguez is dealt halfway through the season. He'll be owed $5.25 million and figures to provide around +1 win as a set-up man, which is at least what teams on the playoff bubble should be willing to pay for a win. The 2012 vesting option has a $3.5 million buyout attached which the Mets would presumably send along to Rodriguez's new team, meaning all that's involved for the acquiring party is Rodriguez's 2011 value versus his 2011 salary. The Mets have to pay $3.5 million for nothing in 2012, but they'd be paying $17.5 million for Francisco Rodriguez in 2012, otherwise. Given that Francisco Rodriguez figures to provide the Mets with about $11 million in value, they're looking at -$3.5 million surplus value if they trade him, or -$6.5 million surplus value if they keep him and his option vests. The decision to deal Rodriguez becomes obvious.

The Mets could probably get an ordinary prospect for him if they eat only his 2012 buyout. If they're willing to eat more money--some of his 2011 salary--the return would potentially increase. I recommend consulting this piece by Erik Manning for a more granular look at what type of prospect package they could expect in return depending on how much money they eat. Still, trading him and $3.5 million for basically nothing would be a good deal for the Mets, because ensuring they won't have to pay Rodriguez $17.5 million in 2012 or deal with his agent filing a grievance should be their number one priority.