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Why Justin Upton's opt out clause is a good thing for the Tigers

Opt out clauses are bad business, but Justin Upton's is less bad than you think.

Denis Poroy/Getty Images

Three years ago, the Los Angeles Dodgers signed Zack Greinke to a six-year, $147 million contract. Already a legitimate ace, Greinke evolved into one of the most dominant pitchers in baseball in Los Angeles, and posted an MLB-best 1.66 ERA in 2015. Thanks to a specific clause in his contract, Greinke opted out of his contract with the Dodgers and signed an even bigger deal with the Arizona Diamondbacks this offseason. Bad news for L.A., right?

Well, yeah. But, for some reason, every free agent and their brother is receiving a similar opt out clause this offseason. David Price got one with the Boston Red Sox. Ditto Ian Kennedy with the Kansas City Royals. Even Wei-Yin Chen, who signed with the notoriously stingy Miami Marlins, received an opt out clause in his deal.

Closer to home, Justin Upton can opt out of his contract with the Tigers after two seasons, which is a good thing for Detroit.

Before I explain why this innocuous statement deserves a few fire emojis, let's backtrack. In a vacuum, opt out clauses are bad news because they place all the risk of a contract on the team. If Upton blows up in the next two seasons, he opts out and leaves the Tigers with nothing.* If he gets hurt or fails to perform to expectations, the Tigers are on the hook for $132.75 million in dead weight over the next six seasons. It's a lose-lose proposition for the team signing the contract.

*Save for free agent compensation, which may change with the next collective bargaining agreement.

The Tigers already have payroll issues

We aren't in a vacuum, though. Upton's opt out clause is perfectly timed for the Tigers, who have several other big contracts on the books. Including Upton's $22.1 million salary, the Tigers already have $122.1 million committed to five players in 2018, with at least another $10 million due to Ian Kinsler and Anibal Sanchez, both of whom have team options with pricey buyouts in their respective contracts. Justin Verlander's contract extends another season beyond that, while Jordan Zimmermann is on the books for two more years. Oh, and Miguel Cabrera will still be owed another $154 million over five years.

Player 2016 2017 2018 2019 2020+
Miguel Cabrera $28M $28M $30M $30M $124M
Justin Verlander $28M $28M $28M $28M -
Justin Upton $22.12M $22.12M $22.12M* $22.12M* $44.24M*
Jordan Zimmermann $18M $18M $24M $25M $25M
Ian Kinsler $14M $11M $5M** - -
Anibal Sanchez $16.8M $16.8M $5M** - -
Victor Martinez $18M $18M $18M - -
Total $144.92M $141.92M $132.12M $105.12M $193.24M

*Upton can opt out after the 2017 season
**Kinsler and Sanchez have team options for $12 million and $16 million, respectively, during the 2018 season.

While Upton's contract isn't exactly a get out of jail free card for the payroll, it does help lighten the load as the Tigers move into a period of increased roster uncertainty. Cabrera and Verlander will be getting older, while the team's other key role players will need to be replaced. The Tigers are refocusing their efforts on growing through the farm system under new general manager Al Avila, but there are no blue-chip prospects yet on the horizon capable of fully replacing players like Kinsler, Martinez, or Sanchez. If Mike Ilitch continues to miss out on his coveted World Series, his itchy trigger finger could bring even more costly free agents to Detroit.

He's almost guaranteed to take it

One of the drawbacks to free agency in this era is the deterioration of a player's skills as they age. Free agent contracts are becoming longer and more expensive, and most big money deals are a year or two longer than many teams are comfortable with. Upton is a rare case given his age, but it also makes him more likely to opt out. His diverse skill set may not decline much from age 30 to 34, and it's possible that he continues to produce surplus value throughout the life of his six-year deal.

However, Upton will have the chance to enter free agency again as a 30-year-old, in what appears to be a barren free agent market. He is the perfect mix of youth and talent to entice into more riches in free agency, and it will take a major injury or a decline on par with his older brother's for him to not exercise that opt out clause. Signing a free agent of Upton's caliber to a two-year deal for a fair annual value would have been viewed as a major coup, and the Tigers essentially did that with the two-year opt out.

Replacements may come cheap

Of the big money players the Tigers are set to lose over the next few years, they appear best equipped to replace Upton (rather than Kinsler, Sanchez, etc.). The Tigers' thin farm system features a few promising outfield prospects, including Christin Stewart and Michael Gerber of Single-A West Michigan, as well as some toolsy Venezuelan talents like Jose Azocar and Julio Martinez.

While these players are a long way from the major leagues right now, the next two years could give the team more insight into whether any of them will contribute at the major league level for a fraction of Upton's cost. Developing homegrown talent is the most cost-effective way for teams to win these days, and replacing Upton will be one of the first steps in creating a sustainable winner under the Avila regime.