Evaluating Nolan Arenado’s Opt-Out Clause
It would be a scurrilous lie to suggest that adding Nolan Arenado to the St. Louis Cardinals has been anything but a roaring success for the franchise. Arenado’s first season with the Cards may have been a bit down compared to his previous campaigns, but he’s rebounded to have arguably his best season ever in 2022. And with a .292/.358/. 533, 151 wRC+ line good for 7.2 WAR, he’s making a solid case for votes in this year’s National League MVP race, especially with teammate Paul Goldschmidt coming back to the pack thanks to a weak September. The near-certain MVP in the American League, Aaron Judge, will be a free agent this offseason. Could the National League MVP join him? Arenado has an important decision to make.
The Rockies originally signed Arenado to an eight-year, $260 million contract in early 2019. That contract came with an opt-out after the 2021 season, an escape hatch if he wanted to take a crack at free agency. Sadly for Rockies fans, opening that hatch became a possibility almost immediately, with Arenado reportedly becoming unhappy with the path the organization was taking before the first season of the new deal was even complete. Per The Denver Post’s Patrick Saunders:
Although Arenado declined to talk publicly about the details of his deteriorating relationship with Bridich, multiple sources told The Post that Arenado feels like “promises were broken” after he signed an eight-year, $260 million contract last February. At that point, Arenado believed the Rockies were going to make roster moves to further improve a team that made the playoffs in 2017 and 2018.
The rumor mill churned out the trade butter furiously, though no swap occurred during the 2020 season. The COVID-shortened season again saw the Rockies finish below .500; again, the organizational direction was akin to a compass in a magnet factory. With the opt-out after the 2021 season looming large, the Rockies finally pulled the trigger on a trade, sending Arenado and up to $51 million to St. Louis for a relatively unimpressive group of prospects and Austin Gomber. The trade also resulted in some changes to his deal. In exchange for agreeing to waive his no-trade clause and defer some of his salary, Arenado received an extra opt-out after the 2022 season (the Cardinals also tacked on an extra year worth $15 million to the end of the contract). After a down season last year — I use “down” very loosely here — the case for exercising the 2021 opt-out became less compelling. Given the drop-off in performance and his age (Arenado was entering his age-31 season), ZiPS only projected the third baseman to get six years, $120 million as a free agent after 2021. But his monster 2022 season requires a re-evaluation of Arenado’s free agent prospects. There’s no third bite of the apple, so it’s “use it or lose it” time. So, should he? Let’s start with the ZiPS projection:
| Year | BA | OBP | SLG | AB | R | H | 2B | 3B | HR | RBI | BB | SO | SB | OPS+ | DR | WAR |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | .282 | .343 | .479 | 547 | 69 | 154 | 34 | 1 | 24 | 88 | 49 | 72 | 4 | 127 | 12 | 5.7 |
| 2024 | .277 | .338 | .466 | 513 | 62 | 142 | 32 | 1 | 21 | 80 | 45 | 66 | 4 | 123 | 10 | 5.0 |
| 2025 | .272 | .330 | .447 | 486 | 56 | 132 | 29 | 1 | 18 | 72 | 40 | 61 | 3 | 115 | 9 | 4.1 |
| 2026 | .263 | .317 | .420 | 457 | 49 | 120 | 25 | 1 | 15 | 63 | 35 | 54 | 3 | 105 | 8 | 3.1 |
| 2027 | .256 | .309 | .395 | 425 | 43 | 109 | 21 | 1 | 12 | 54 | 30 | 46 | 2 | 96 | 7 | 2.2 |
| 2028 | .249 | .298 | .369 | 374 | 34 | 93 | 16 | 1 | 9 | 42 | 24 | 37 | 2 | 86 | 5 | 1.4 |
As great as Arenado has been this year, as with Judge, his age (he’ll turn 32 a couple weeks into the 2023 season) works against him in terms of length and maximum dollar amount. As a free agent, ZiPS thinks that a deal around six years and $180 million would be a fair offer, which is amusingly similar to the seven-year, $182 million deal Kris Bryant signed with the Rockies. If those numbers are accurate, I’m not sure it’s necessarily to Arenado’s benefit to opt out. The five-year, $144 million contract he already has isn’t that much worse when you consider the uncertainty that comes with testing the market, and it seems unlikely that there’s a $250 million deal out there for him. Third base is one of those tweener positions in the middle of the defensive spectrum, with only a handful of third basemen having received $100 million deals. (Here I should note, that several of ZiPS’ biggest misses have come at the position. For example, the computer remains utterly perplexed as to why Justin Turner was only able to get a four-year, $64 million after the 2016 season. On the other side, ZiPS has guessed low a few times, missing on Alex Rodriguez‘s second contract, as well as Pablo Sandoval’s and Bryant’s deals. The first two didn’t work out particularly well for their teams and the latter is off to an inauspicious start.)
With all that in mind, I’m not surprised to see a flurry of reports and speculation pointing to Arenadochoosing to stay put after this season. After all, there are some real benefits to playing for the Cardinals. In marked contrast with Colorado, St. Louis is a very stable organization that is almost always a contender. And being the successor to Ken Boyer, Scott Rolen, and Joe Torre likely has some draw if Arenado has any interest in how his legacy may fit in major league history. St. Louis is one of the places where his glove is most likely to be fully appreciated by both the franchise and the fanbase.
ZiPS projects Arenado to finish with around 400 career homers, and he seems likely to add his 10th Gold Glove in 10 seasons to his collection this fall. The projection leaves him at about 68 WAR, which is Hall of Fame territory, and a JAWS of 60.5 (now calculated in ZiPS). That last number would leave him ninth in major league history just behind Ron Santo and Brooks Robinson, with Manny Machado 10th. Rolen’s prospects for induction have steadily improved since his first year on the ballot, and it’s unlikely that the voter base in 12 to 15 years will be less inclined to vote for a sabermetrically viable candidate. Plus, leaving Denver may have saved Arenado from what I call the Preposterous Performance Paradox, whereby middling Rockies hitters like Vinny Castilla and Dante Bichette become very overrated, but the truly elite ones like Larry Walker and Todd Helton somehow remain under-appreciated. My working theory is that when Coors Field makes average numbers look excellent, people look at them and say, “Hey, that’s an excellent season,” but when Coors Field makes excellent numbers look absolutely absurd, there’s a tendency to think that something isn’t quite right.
In any case, we’ll know more about Arenado’s future in a few weeks. If he chooses to stay in St. Louis, he’ll remain in a situation that fits him like a (Gold) glove.
Dan Szymborski is a senior writer for FanGraphs and the developer of the ZiPS projection system. He was a writer for ESPN.com from 2010-2018, a regular guest on a number of radio shows and podcasts, and a voting BBWAA member. He also maintains a terrible Twitter account at @DSzymborski.
How is the decision affected by the 5/144M being worth less because of the 6M in deferred money for 23-26?
I wonder if we’ll see something like the CC Sabathia situation with the Yankees where the threat of the opt-out has the Cardinals just add another year at a pretty high dollar amount, say $30M on the end and forgoe the whole FA thing, seems like it could be a win-win that gets Arenado about to where he would be on the market and the Cardinals avoid the risk of a bidding war and get to keep a stud 3B around
That was my thoughts too – add enough to take it pretty well outside the realm of consideration (which, as the article points to, shouldn’t take a lot)
I am sort of surprised this hasn’t already happened. It makes too much sense for everyone involved.
Cards get $20.5M from the Rockies in future payments if Arenado doesn’t opt-out. I’m not sure how that matches up with your scenario, but I think adding $30M to the end of the contract would likely cost the Cards $50.5M.
If I understand correctly, you’re saying if he stays then the Cards get another $20.5MM? If that’s the case, then I’m sure the Cards and Arenado will arrange it so he gets a year extension without ever opting out. They’ll tack it on to the current deal.
IIRC, the Yankees and A-Rod had a similar situation with the Rangers paying down millions of A-Rod’s contract every season. The original contract that the Yankees inherited was a great deal for the Yankees. They tried negotiating with him during his final season on a new extension that would allow them to keep receiving money from the Rangers. A-Rod, through Boras, refused to negotiate and he eventually opted out (during the World Series!). It so pissed off Cashman that he wanted nothing to do with A-Rod after that. Cashman had moved on. A-Rod, however, wanted to return, especially after he found the open market wasn’t as strong for his services without the Yankees involved, so he went first to Warren Buffett (yup, that guy) for advice, who basically told him to follow the money. In this case, that meant contacting Goldman Sachs, who were the part owners of the YES Network, and they knew that A-Rod increased their ratings. They, in turn, pushed the Yankees to reconsider A-Rod. When one of your money partners asks you to reconsider, well, I guess you reconsider no matter what your GM says. Hank Steinbrenner (RIP) basically led the negotiations to bring back A-Rod because Goldman wanted him back. They wanted to make their YES investment as attractive as possible since they knew they’d eventually sell it.
This type of drama won’t happen with Arenado and the Cards, but I do suspect he will be back with the Cardinals with another year added on, but it will be structured so that the Cardinals still get their money from the Rockies.
Wouldn’t it only add $10.5M since Arenado would not opt out with the extra year with the extra year tacked on?
According to Cot’s, “Colorado agreed to pay up to $51M, including . . . conditional payments: $5,570,500 in 2022 and $5M each in 2024-26 if Arenado does not exercise right to opt out.” The reason for the conditional payments was to insure the Cardinals of the risk of a long-term dead-weight contract. He either opts out or doesn’t.
I’m skeptical that the agreement would be written to allow the Cards and Arenado to reach a new agreement that would subvert the purpose of the conditional payments.
While this makes sense I think the reason it hasn’t happened is there’s not really a plausible scenario where Arenado actually opts out. So the Cardinals aren’t going to throw money at a problem that’s not going to come to pass.
Arenado currently is sitting at 40:1 odds to win MVP per Vegas Insider. That seems so low that I am actually tempted to put money on him. Am I totally delusional here or is Goldschmidt that much of a favorite over him?
It’s weird right? Across the board though Goldschmidt is the top 3-5 five in every single offensive counting category & every single metric category in the NL …and even though Dan mentions Goldschmidt’s weak Septmeber, Arenado has actually been even worse offensively so it’s somewhat confusing to me how the last month could have “closed the gap” so much…I mean I know fWAR isn’t kind to first basemen defensively but damn!
It makes sense to my dumb brain.
There was kind of a perception that Goldschmidt was ahead of the pack, but then he’s fallen back. I dont’ think people have been paying as much to others, so individual splits don’t matter quite as much.
Wait – are you saying Goldschmidt is *underrated*? Because that’s the opposite of what I am saying. I feel like there is a greater than 2.5% chance that Arenado wins the award. I know voters traditionally prefer sluggers, but is that gap that wide with the voters? WAR has become a much more common over the last several years.
No not necessarily underrated…I was basically just confused as to how the last month was what closed the gap when both of them struggled offensively but now I see what Dan meant…either way I am always somewhat fascinated with how WAR measures defense at first base
Speaking of which…how did Freddie Freeman get erased when he had just as good a year as Goldschmidt? Better defense, more consistent hitting, and a stronger finish, to boot, though less power. Virtual tie in fWAR; yet, you hear more calls for Mookie than Freddie (not that Mookie is ever a bad choice)
More consistent hitter is irrelevant. Goldschmidt has an over 20 point lead in wRC+, him being a better defender is irrelevant too. It’s about value, regardless of what form it’s in
You can make an argument for Freeman over Goldschmidt for MVP, but not because he’s “more consistent” and had a “stronger finish”. Your value is your value regardless of what months you were best in.
I would say there is definitely greater than a 2.5% chance for Arenado to win, but I still don’t think he’s going to win so I wouldn’t bet on it.
“The rumor mill churned out the trade butter furiously”
*shudder*
Thanks, Dan! Do you know what the effect on the Rockies’ payroll will be if he opts out? I don’t recall what happened when A-Rod opted out (then re-signed with the Yankees). I don’t think the Rockies would have a leg to stand on if Arenado simply stayed, but if the Cardinals sweetened the pot to avoid the opt-out, would the Rockies have a legitimate beef?
It’s interesting, because if the Cardinals value him at, let’s say 6/$170 million, but they are getting, let’s say $40 million from the Rockies on the current deal, then Arenado could ask for a $50 million extra year and it would make sense for the Cardinals to make that deal as they’d only really lose $10 million and Arenado remains a plus asset.
Whatever the real numbers are, there is room for Arenado to squeeze a little from the Cards knowing that they stand to lose out if he opts out on a lot of money from Colorado.
STL is the type of team to consider that possible $10 million as a dealbreaker. They simultaneously spend a decent amount of cash on players while also drawing hard lines on what they plan on spending. It’s easy to imagine them stretching a bit, but that’s not something we see. They never stretch in free agency or in trades (for Soto, for example).
The exact numbers weren’t really the point of what I was saying. I remember being flabbergasted that the Yankees didn’t figure out a way to keep Arod from opting out, because it ended the money coming from Texas.
That $31 million is sitting there (I looked up what Arenado had left, it is $31 from Colorado) able to be doled out in some manner that would keep him from opting out. But Arenado knows this. So he should be able to negotiate a deal where he is essentially getting some of that $31 million. If the Cardinals like Arenado for $X, using X to avoid any arguments about his worth, and Arenado is asking for an extension that is $X+$20 million, well then that is still really $11 million less than what the Cardinals value him at. Of course, this only works if the Cardinals actually do value him above what is remaining on his deal. But that seems likely, especially with the deferred money.
Haven’t the Rockies already payed out most if not all of that $51M, though? I know they essentially payed his entire 2021 salary at the very least.
They have $31 million more coming: $21 million in 2023 and $5 million in each of 24 and 25.
I am confident that arenado would get around 6/200 if he were to opt out. Now of course it’s possible (probable) that he is happy in STL and doesn’t want to leave. So from a pure financial sense i think it would be smart for him to opt out, but there are other factors involved
Not so sure. That’s a higher AAV than the Yankees offered Judge prior to 2022. It comes to 7/$213.5m for Judge’s 31-37 seasons, vs. 6/200m for Arenado’s 32-37 seasons.
But, hey, there may still be GMs out there willing to overpay for an old player’s career year. Seems to happen a lot, and if Bryant—who I thought might warrant 3/60m (the highish AAV to avoid a longer deal thanks to his frailty and likely quick decline)—can get 7/$bazillion, what do I know?
Yeah, 3/60 was about what I thought Bryant would get, too. And it’s probably all anyone but the Rockies would have given him — but they needed a BIG splash for the sake of public relations after trading away their star who (whaddayaknow!) happened to play the same position.
I wouldn’t say it’s ever probable that someone is happy in St. Louis, but those are just my biases coming through.
Thanks for chiming in, Ryan Dempster!
I don’t see him getting close to that before his age 32 season. He can get a huge AAV, but not for 6 years
Goldschmidt got five years around the same age, and he was a first baseman with worse stats in the year before his contract was signed. I think six years would be a stretch for a lot of teams, but someone would bite.
The Rockies….oh man.
So the contract situation is confusing but after reading through it from multiple sources, I’m fairly confident that the Cardinals are owed an additional $16M from the Rockies regardless of the opt out, however, they do stand to lose $20,570,500 in conditional payments if Arenado does opt out. So, for all intents and purposes, the 5/$144 left on Arenado’s contract is essentially 5/$123.5 to the Cardinals. If they are allowed to tack on an extra year or two to sweeten the deal, they would be foolish not to. As others have mentioned, even an extra year at $30M makes this a 6/$153.5M deal for the Cardinals which is still well under market. The real questions is, are the allowed to do that. It’s quite the conundrum.
I don’t understand how the Rockies could possibly owe the Cardinals for years where Arenado is not playing for or being paid by the Cardinals. That is straight up “buying” a player which I understood was not allowed.
The $16M still owed is for the 2021 season.
“The COVID-shortened season again saw the Rockies finish below .500; again, the organizational direction was akin to a compass in a magnet factory.”
Bravo