The Odds on Tyler Glasnow’s Option Concoction

Last week, Ben Clemens broke down the trade that sent Tyler Glasnow to the Dodgers, as well as the extension that Glasnow signed soon afterward. In this article, our focus is the conditional option at the very end of the contract. Before the 2028 season, the Dodgers have a $30 million team option. If they decline to exercise it, Glasnow has his own $21.5 million player option. When I read about the structure of the options, my first thought was to wonder why this doesn’t happen all the time. Here’s how Ben interpreted the situation:
“It seems likely to me that one of those two will be exercised; in my mind, it’s a five-year, $135 million deal with a $10 million kicker if he’s pitching well in year four. The circumstances where neither side exercises their option just feel much less likely than one side or the other being an obvious yes.”
I was inclined to agree. It is sort of like a performance bonus: Pitch well and we’ll bring you back for $30 million, but if you don’t, then you’ll be back for $21.5 million. The $8.5 million difference is a lot of money, but it’s also small enough that, depending on the market and their own particular health and performance, a player might not be certain that they’d make it up in free agency. It might just be easier and safer to stick around. The more I thought about it, though, the more wrinkles I saw. Read the rest of this entry »