Several years ago, my colleague Mike Axisa, writing for MLB Trade Rumors, noticed a trend. Teams and players had started to use “mutual options” in contracts, in the place of a player option or team option.

Previously, options generally worked one of two ways: With a player option, it’s in the player’s sole discretion whether to stay with the team for the option year at the option price. If the player walks away, he becomes a free agent. With a team option, it’s in the club’s sole discretion whether to keep the player for the option year. If the team exercises the option, the player stays with the team for the option year at the agreed-upon salary. Unless the player has a no-trade clause, the team can trade him once the option is exercised. That’s exactly what the Rays just did with James Shields. If the club declines the  option, then it typically pays the player a certain sum of money, called the buyout.

So what is a mutual option and why is it used?

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The Dodgers are rich. Very rich. After spending $2.15 billion to buy the team, the new owners have opened the checkbook again and again and again. First, in the trade with the Red Sox that netted Adrian Gonzalez, Josh Beckett, Carl Crawford and Nick Punto. Next with the winning bid for Korean pitcher Hyun-Jin Ryu. Then with the free-agent signings of Zack Greinke and Brandon League — and the contract for Ryu.

Over on his blog, my colleague Mike Petriello estimates the Dodgers’ current commitments for 2013 at $246.9 million. That figure includes deferred payments still owed to Manny Ramirez, Andruw Jones and Hiroki Kuroda, but excludes Ryu’s $25.73 million posting fee. Salaries for A.J. Ellis and Ronald Belisario — who are entering their first year of arbitration — still need to be added. And perhaps the Dodgers make another small move here or there. But let’s not quibble over pennies.

Instead, let’s assume the Dodgers’ Opening Day payroll is $250 million. A nice, big, round number. A quarter-of-a-billion dollars. Unprecedented, right? Blows anything the Yankees have ever done out of the water, correct? The most the Yankees ever spent on an Opening Day payroll was $209 million, back in 2008. But you can’t just compare $250 million spent in 2013 to $209 million spent in 2008 without adjusting for inflation. That’s not how money works. The value changes over time. Let’s take a look.

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Before the 2007 season, Major League Baseball Advanced Media partnered with StubHub as the official secondary ticket marketplace for Major League Baseball. All 30 MLB teams participated. Anyone could list MLB game tickets for sale on StubHub, at any price. StubHub charged buyers a handling fee and a delivery fee, often totaling more than $10, regardless of the selling price. The “delivery fee” was the key to the deal, as it allowed buyers to print the tickets at home. Gone were the days of sellers tossing tickets out a window to buyers at midnight. Sellers also paid a fee to StubHub, charged as a percentage of the sale price. StubHub shared about half its fees with MLBAM. In 2011, that amounted to more than $60 million. MBLAM then funneled a portion of those funds to the 30 teams.

Fans rejoiced. During the 2011 season, more than 8 million MLB tickets sold on StubHub, up from 6 million in 2010.

But many teams weren’t as thrilled. The Yankees, in particular, were a vocal critic of StubHub’s pricing policies. With no price floor, Yankees tickets were often available on StubHub for less than $5, a price significantly below the lowest ticket price available at the box office or on Yankees.com.  Critics countered that Yankees ticket prices were too high, creating a fertile market for very cheap tickets on the secondary market. But even teams with lower ticket prices lost sales to StubHub.

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This was written in December, but with recent stories surrounding Rodriguez, we’ve pushed it back to the front page for reference.

After his monster MVP season in 2007, Alex Rodriguez signed a new 10-year deal with the Yankees for $275 million, plus an additional $30 million in marketing incentives linked to home-run milestones. So far, the Yankees have paid Rodriguez $161 million, leaving $114 million on the contract. That breaks down to $28 million for 2013, $25 million for 2014, $21 million for 2015 and $20 million in 2016 and 2017.

This week, we learned A-Rod will undergo left-hip surgery surgery in January to repair a torn labrum, a bone impingement and a cyst. The surgery is being delayed to give Rodriguez time for physical therapy to strengthen the hip. Recovery time is estimated at four to six months, which means a return to the Yankees lineup in June — at the earliest.

But what if A-Rod’s recovery doesn’t go as planned? What if the surgery isn’t successful? What if A-Rod doesn’t recuperate as quickly as expected? What if A-Rod doesn’t play in 2013? What if his career is over?

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Last week, I reported on local TV contracts for all 30 major-league teams. The article’s lede was the Dodgers’ potential $6 billion-to-$7 billion deal with Fox Sports West that was slated to start in 2014 and would run for 25 years. It turns out the Dodgers and Fox did not come to agreement by last Friday’s deadline. Under their existing contract, the Dodgers can make one final demand by this Friday, which Fox can either accept or reject outright. If that doesn’t lead to an agreement, the Dodgers are free to negotiate with others. Time Warner Cable is waiting in the wings.

Whomever the Dodgers ultimately cut a deal with to broadcast the team’s 162 games, expect the deal’s value to stay in the $6 billion-to-$7 billion range. But it may not be a straight-cash deal. As Bill Shaikin of the Los Angeles Times reported, the Dodgers may end up with a significant ownership interest in Fox Sports West or another broadcast partner, much like the Rangers’, Angels’, Astros’ and Padres’ new deals.

At first glance, a part-equity deal would seem to counter some of the outrage elicited by the all-cash deal, which was estimated to net the Dodgers $240 million to $280 million per year in broadcast-rights fees. But in reality, an all-cash deal is better for the league as a whole, because rights fees paid to the Dodgers (as opposed to profits from an equity stake in a regional sports network) would be included in a team’s “Net Local Revenue” — essentially the bundle of money subject to MLB’s Revenue Sharing Program.

Or would they?

Remember the Dodgers have something of a sweetheart provision when it comes to local TV fees and revenue sharing: As part of the former owner Frank McCourt’s bankruptcy proceedings, the court ruled the Dodgers’ new TV contract would be “valued” at $84 million for purposes of revenue sharing. In other words, if the Dodgers go with a straight-cash deal, only the first $84 million in yearly fees will be subject to revenue sharing; the rest can be pocketed for the team’s own use. The result will be the same if L.A. goes the partial-equity route, as long as the cash payments exceed $84 million per year.

But put aside the Dodgers’ $84 million revenue cap. The revenue-sharing program in the current collective bargaining agreement is designed to capture a significant portion of the additional cash teams will rake in with the new local television deals. In fact, the revenue-sharing language in the current CBA changed fairly dramatically from the CBA that was in place from 2007 through 2011. Remember that the first wave of new TV contracts came in late 2010, when the Rangers and Fox Sports West reached a 20-year, $1.7 billion deal to commence before the 2015 season. It appears that deal was very much on players’ and owners’ minds when the current CBA was negotiated in 2011.

A few weeks ago, I explained the current revenue-sharing program in this post. If you didn’t read that post, do it now, as I won’t repeat that detailed discussion here. Here’s the basic outline:

• Teams share their “Net Local Revenue” — essentially all money made from baseball operations other than money earned through MLB’s Central Fund.

• The Central Fund includes revenue generated by MLB’s national TV contracts, MLB Advanced Media (which operates MLB AtBat, MLB.tv), licensed merchandise and the All-Star Game.

• Under the Base Plan, every team contributes 34% of its Net Local Revenue to the pool, which is then divided equally among all 30 teams.

• The Supplemental Plan adds an additional 14%, putting the total percentage of Net Local Revenue shared at 48.

• Teams do not contribute and receive revenue from the Supplemental Plan by equivalent percentages. Instead, each team pays into the pool or receives from the pool in accordance with its Performance Factor. For example, the Yankees’ Performance Factor in 2012 is 27.7%; the Royals’ is -8.2%. In other words, the wealthiest teams pay the most. The least wealthy teams receive the most.

• Starting in 2013, big market teams (Yankees, Red Sox, Mets, Dodgers, Angels, Cubs, White Sox, Giants, Phillies, Blue Jays, Nationals, Braves, Rangers and Astros) will forfeit an increasing percentage of revenue-sharing proceeds, but those forfeited funds will be funneled back to most of those same teams according to the Performance Factors.

Early Sunday morning, Twitter was abuzz with news that the Dodgers and Fox Sports West had agreed to a 25-year broadcast deal valued between $6 billion and $7 billion. By Sunday afternoon, Bill Shaikin of the Los Angeles Times had confirmed the outline of the deal, but cautioned that the Dodgers and Fox were still negotiating, with a November 30 deadline looming.

As I explained last week in this post, the parties’ existing agreement gave Fox an exclusive, 45-day window in which to negotiate a new deal to govern the 2014 season and beyond. Hence, the November 30 deadline. If an agreement isn’t inked by Friday, the Dodgers must submit a final offer to Fox by December 7. Fox then has 30 days to accept or reject the offer. If Fox rejects the offer, the Dodgers are free to negotiate with whomever they want.

However the negotiations play out, it’s clear now that the Dodgers’ local TV revenue is about to enter the stratosphere. A 25-year deal worth between $6 billion and $7 billion would net the Dodgers between $240 million and $280 million per year. Per year. That’s more than any team has ever spent on player salaries in a single season — even the Yankees. And it’s nearly double the amount of local TV revenue pulled in annually by the team with the second-most lucrative deal — the other Los Angeles team (the Angels) — which entered into a 17-year deal with Fox Sports West worth $2.5 billion.

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No.

The Marlins didn’t kill publicly-financed ballparks. Or arenas. Or stadiums. Not in Florida. Not anywhere. Sure, the Marlins’ fire-sale trade with the Blue Jays — which came less than a year after the opening of the publicly-financed Marlins Ballpark — won’t help the cause of those seeking public monies to build new sports facilities. But teams will continue to seek public financing and municipalities will continue to say yes.

Why?

Because the Marlins’ swindling of the Miami-Dade taxpayers is nothing new. It’s simply the latest example of public officials falling prey to threats that a city’s team will leave and fancy reports prepared by team consultants that say a new ballpark will bring jobs, tax revenue and economic development — despite study after study that shows those claims hardly ever are true.

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News Corporation is reportedly set to buy a 49 percent stake in the YES Network and it may be a hedge against losing its local TV contract with the Dodgers.

The YES Network broadcasts Yankee games and a full slate of Yankees-related programming. It is also the broadcast home of the Brooklyn Nets of the NBA. YES is considered the most successful and profitable regional sports network in the country.

Over the weekend, the New York Times reported that News Corp. is close to acquiring a 49 percent share of YES, which has been valued for purposes of the transaction at $3 billion. A 49 percent share, then, will cost News Corp. $1.47 billion. Until now, shares in YES were divided among the Yankees (34 percent), investment banks Goldman Sachs and Provident Equity (40 percent) and a group of former Nets owners (26 percent). The deal includes an option for News Corp. to increase its stake to 80 percent within five years.

News Corp. is the parent company of Fox Sports, which owns 19 regional sports networks around the country. One of those regional sports networks is Fox Sports West, the current broadcast partner to both the Angels and the Dodgers. Last December, the Angels hit gold when they signed a new, 17-year contract with Fox Sports West valued at more than $2.5 billion. That deal gave the Angels tremendous financial flexibility when approaching the free-agent market. The result? A  10-year/$240 million contract for Albert Pujols and a 5-year/$77.5 million contract for CJ Wilson.

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Last night, the Marlins traded every player on their active roster with a 2013 salary greater than $1.6 million, save for Ricky Nolasco, who’s owed $11.5 million next season. And Nolasco may be gone soon, too. The Marlins’ latest fire sale came less than a year after Miami signed free agents Jose Reyes, Mark Buehrle, and Heath Bell to great fanfare, as the team prepared to christen the new, publicly-financed Marlins Ballpark. Now, all those players are gone. Reyes and Buerhle were traded last night to the Blue Jays, along with starter Josh Johnson, outfielder Emilio Bonifacio, and catcher John Buck.  Bell was sent to the Diamondbacks in late October. When the Marlins open their second season in the new ballpark, fans will see Giancarlo Stanton in right field and a lot of unknown young players scattered around the diamond.

Tuesday’s trade was just the latest purge by Marlins’ owner Jeffrey Loria, after the latest spending binge, after the prior purge. Loria’s pattern is well-known and has landed him in hot water occasionally, although not nearly as frequently — or as hot — as his critics demand.  One such critic is the players’ union. The Major League Baseball Players Association complained for years that the Marlins violated the league’s revenue-sharing plan by using the money received under the plan for everything but improving the product on the field, as is required. Between 2002 and 2010, the Marlins reportedly received close to $300 million in revenue sharing. With the threat of a formal grievance, the Players Association forced an agreement from the Marlins to use all revenue-sharing proceeds on player development and salaries for three seasons. The agreement was announced in January 2010 and now, three seasons later, has expired. Imagine that.

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Major League Baseball’s general managers are meeting in Palm Springs, Calif., this week, which kicks the Hot Stove burner from simmer to medium-low. The burner will turn to high next month at the Winter Meetings in Nashville.

Even on simmer, there is word from the Bronx that the Yankees won’t pursue “big time” — or even “less-than-big-time” — free agents this winter, despite rotation and outfield needs. We can debate whether to accept the “word from the Bronx” as true or just a negotiating ploy. What we do know is this: Yankees owner Hal Steinbrenner has said repeatedly that he wants to bring the Yankees below the $189 million luxury tax threshold in 2014. Why? Well, that takes some explaining.

The luxury tax is a shorthand term for the Competitive Balance Tax provisions in the Collective Bargaining Agreement. It imposes a penalty on teams with player payrolls above a set threshold.  The tax is levied only on the portion of a team’s payroll that exceeds the predetermined amount. The luxury tax was first introduced in the 2003-2006 CBA and was designed to keep player payrolls from skyrocketing, without setting a hard salary cap.

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