Muscle - I loooov eeeet (mutual options)

Q.  Mutual options are brainless, right?

A.  Now, we've warned you about this, Egbert.  Don't make us come over there.

Right off the bat, we read  89 places that assured us that mutual options have absolutely no purpose for existing.  But give the agents and GM's credit for a little intelligence once in a while. 

Mutual options are becoming an epidemic.


Q.  Do they ever get exercised?

A.  Sure.  Just real quick, Brian Moehler, Miguel Olivo, and Jason Varitek recently re-upped because of them.  We're sure there are lots more; Google them if you want.  They tend to occur most often with veteran Scrub/Civics in the $2-5m range, IIRC.


Q.  What's the point?

A.  It makes a continued relationship far more likely than otherwise.  And it makes the present relationship more comfortable.


Q.  How?

A.  Let's say you've got a second house that you're renting to me.  We agree -- we take a "mutual option" -- that I'll buy it for $320,000 on June 1, 2012.  If I'm going to at all.

What this does, is it spares us the acrimony and hardball negotiaton if we get to June and it's worth anywhere between $290,000 and $350,000.  If we're anywhere in the ballpark, we've agreed the dollars.   If we're not, we both cut and run.

If we don't have that option pencilled out, we get down to the wire and it's anxiety for both sides.  And more often than not, hard feelings will develop during the negotations.  Very often, a deal will fall apart over trifling differences.  (Branyan walked away from the 2010 Mariners for very little gain from the Indians!)

Have you ever leased somebody a house with option to purchase?  Agreeing the price, a year or two ahead of time, makes everything radically more comfortable for both sides.


A "mutual option" for Russell Branyan, in 2010, anywhere between (say) $3M and $5M might very well have kept him here - and resulted in a far different season for the Seattle Mariners.


Q.  Wouldn't the club play hardball and just bail if the contract were at all overpriced?

A.  A lot of mutual options have buyouts, anywhere from $500k to $2m.  This strongly encourages the club to exercise its option, if the player was anywhere near his normal PT and production.

The club has to exercise first, and then the player is in the nice situation of essentially having a decent "arbitration" win in his pocket as he looks around.

And, that $5m "mutual option" with $500k "buyout" can help split the difference between a 1- and 2-year deal.  That is in fact what happened with Branyan, minus the buyout. 

The Indians signed Branyan because they offered a mutual option, right?  Obviously players like them. 


Q.  Why didn't Zduriencik just offer a mutual option, intending to decline it?  Then he'd have topped the Indians.

A.  Because he's ethical.  A mutual option is a statement of intention.   Suppose that Branyan played well and then Zduriencik, smirking, blew off the option the next year?

As a rule, baseball men are much classier than that.  Certainly Zduriencik is.


Part 2

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