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Economics of Baseball: Podsednik's Option

Back in November Scott Podsednik had a 1-year, $2 million offer, including a guaranteed roster spot, to play for the Los Angeles Dodgers in 2011. The Dodgers had exercised their $2 million club option, but it was one that Podsednik had the power to void. He declined the offer (voided the option)--presumably seeking a bigger salary--and hit the free agent market. Yesterday Podsednik signed a minor-league deal with the Toronto Blue Jays worth $1 million if he makes the team. Clearly Podsednik would have been better off not voiding the option (unless he likes Toronto $1-million-and-a-guaranteed-roster-spot more than Los Angeles), but I'm not convinced doing so was the incorrect decision.

Podsednik is not a good player. At his best, he's harmless. Over the past two years he's reached base nearly 35 percent of the time. Even if he doesn't continue to hit .300, he's not likely to be an automatic out. He doesn't hit for much power or field particularly well at this stage of his career, but a respectable on-base average and little else is worth something. Especially in a relatively weak outfield market beyond the top two players--Carl Crawford and Jayson Werth. To be fair, Podsednik's skills don't stack up favorably even in said weak class, but several teams get less from their LF'ers than Podsednik figures to provide. He may be dull and seriously flawed, he's still an upgrade over some of the downright toxic LF situations. The Diamondbacks have Xavier Nady listed as their primary left fielder on the depth chart, for example. Considering the demand for corner outfielders and the available free agents, it wasn't unreasonable to think Podsednik would sign a major-league deal worth more than $2 million guaranteed in November.

Then something happened that Podsednik's representatives didn't--and most likely couldn't--anticipate: the demand side of the market for corner outfielders collapsed within a month of Podsednik making his decision to void the option. The Dodgers took the $2 million they had allocated to Podsednik and turned it into Jay Gibbons, Tony Gwynn Jr., and Marcus Thames, electing to fill their vacancy with a slew of cheaper options. The Cardinals filled their corner outfield vacancy by signing Lance Berkman--a former first baseman. The Braves made their own corner outfielder, too, acquiring Dan Uggla from the Marlins and shifting Martin Prado to left field. Effectively, three every-day corner outfield jobs were eliminated without a single corner outfielder from the free agent pool landing one. By the time the rest of the major corner outfielder free agents signed deals, there were no every-day jobs remaining, forcing Podsednik to settle for a chance rather than a guarantee.

While voiding the option did not work out for Podsednik, I wouldn't say his representatives handled the situation incorrectly. Market fluctuations happen--we could have just as easily seen the demand for Podsednik increase over the winter. It's possible to make the correct decision and still lose, that's probably what happened here. Scott has every right to be upset with the way things turned out, but the situation should be chalked up to bad luck, rather than bad decisions.