The Devil is always in the details. I'll admit that when the news broke yesterday that Chase Utley and the Phillies had agreed to a 2 year deal in the "25-30 million dollar neighborhood" with possible multiple vesting options I was at first giddy and immediately overcome with the notion that it had to be too good to be true. "Ruben will find a way to screw up the options" was what was going through my head. Boy was I wrong.
By now most of you Have read the details of the new deal. For those that haven't, the deal is essentially a two year guaranteed contract with three extremely creative options.
The base deal:
- $15,000,000 guaranteed salary in 2014
- $10,000,000 guaranteed salary in 2015
- $5,000,000 BONUS in 2015 if He is not on the DL for more than 15 days with a specified knee condition.
- $2,000,000 buyout.
- $15,000,000 guaranteed in 2016-2018 provided Utley reaches 500 plate appearances in the preceding season. (something he has not done since 2010)
- Should Utley fail to attain those 500 plate appearances, the option would revert to a conditional CLUB option between $5,000,000 and $11,000,000 depending on how many days he spends on the DL.
- The creativity in the guaranteed portion of the deal (The $5,000,000 bonus part in 2015) allows the Phillies to allocate only *$13,500,000 towards the luxury tax in 2014 and 2015. They basically pay Utley the same amount of money if he's healthy as he made this year and last, but get to take a $1,500,000 discount on paper. To put that into perspective, That $1,500,00 equals the equivalent of a John Lannan, Chad Durbin, three rookies, or almost Kevin Frandsen Dom Brown and Ben Revere. It also was just south of what Chicago paid for Nate Schierholtz.... How Ruben spends that money is key, but its a big deal for 2014. 2015 will be a little trickier if utley hits his bonus, as that year would count at $18,500,000 but even if that puts them over for one year, his option for 2016 would be at a minimum $3,500,000 less. instant savings and at worst a one time hit.
- Because of the ways the options work out, the third year and beyond count as stand alone deals. So for luxury tax purposes, there's no averaging. That's important because the Phillies will continue to look long term as if Utley is on the books but there's no commitment unless he's attaining the 500 PA plateau. More importantly, should Utley pull a Howard, and suddenly stop hitting left handed pitching? But they want to keep him to platoon? Once they START the platoon his next year he gets paid as a platoon player. (If I didn't know better I;d think someone has learned a little on the job....)
- The conditional club options, if he doesn't hit the 500 AB's? That's the team's decision. They can walk away if Utley gets 499 plate appearances, so it's not automatic. But consider this. As Utley ages and his knees do continue to weaken; let's assume for a minute that in three years, Utley can only HANDLE 80 starts a year. But hes still able to produce at an elite level for those 80 starts? They can pay him ACCORDINGLY!! Now the option details for the structure haven't been released but lets just assume for the same of argument that its $11,000,000 for 400-499 PA, $9,000,000 for 300-350 PA and $10,000,000 for 350-399 PA. In '11, '12 and '13, Utley made $45mm and amassed 10 fWAR for those shortened seasons. So even at a reduced level of play he was worth roughly half a win more than his contract (assuming $5,000,000 per fWAR) If this contract were in place then? The Phillies would have paid him $15,000,000 guaranteed for 2011, but just $21,000,000 total for 12 and 13. $36,000,000 for 10 fWAR, roughly 1.4 wins MORE than the contract. That doesn't even take into account the luxury tax benefits and the additional flexibility. That's unheard of.
- What's so amazing about this to me is not that the deal is structured this way, but that a player like Chase Utley would agree to be paid based on his ability to produce. There is literally NO RISK here, past the first two years, for the team, save the unlikely scenario in which Utley reaches 500 plate appearances but suddenly can't hit anymore.
- The options also allow Chase Utley to decide when it's time to hang them up, and when that happens he's virtually guaranteed to do that here. Make no mistake, this deal was designed with that in mind, with the reality of his knees in the back of the decision making process.