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Monday, May 14, 2007
Valuing Loyalty & Situation: Tim Wakefield and The Reserve Clause

Red Sox starting pitcher Tim Wakefield is off to a fantastic start this season, his 13th with the Sox. The 40-year-old knuckleballer leads the American League with 1.73 Earned Run Average. Operating on a one-year contract, he would seem well poised to have a great free agent season.

But Tim Wakefield won't become a free agent after the 2007 season--unless the Red Sox let him, that is. See, in April 2005, Wakefield agreed to a one-year, $4 million contract extension that included a perpetual team option for one-year, $4 million. In other words, the Sox can keep Wakefield for as long as they want (assuming he wants to keep playing baseball), and the team can revisit that decision every year, provided they are willing to pay him $4 million for the next year. If the Sox decline to extend his contract, they don't even owe him a buyout. It should be noted that Wakefield's annual salary does contain several incentive clauses: he receives an additional $50,000 for each start between 11 and 20, and $75,000 for each start between 21 and 30; he can conceivably make up to $5.25 million--still a far cry from the annual base salaries for pitchers like Roger Clemens ($28 million), Barry Zito ($18 million), and Andy Pettitte ($16 million).

Wakefield's contract is essentially a throw-back to an era before Curt Flood sued Major League Baseball in the historic antitrust case Flood v. Kuhn, 401 U.S. 258 (1972). The case arose after then MLB Commissioner Bowie Kuhn rejected Flood's written request that the reserve clause, which was standard in baseball contracts and allowed teams to retain the rights of players after their contracts expired, should not apply to his employment. Here was Flood's famous letter to Kuhn, in which he likened himself to being treated like a piece of property:
December 24, 1969
After twelve years in the major leagues, I do not feel I am a piece of property to be bought and sold irrespective of my wishes. I believe that any system which produces that result violates my basic rights as a citizen and is inconsistent with the laws of the United States and of the several States.
It is my desire to play baseball in 1970, and I am capable of playing. I have received a contract offer from the Philadelphia club, but I believe I have the right to consider offers from other clubs before making any decision. I, therefore, request that you make known to all Major League clubs my feelings in this matter, and advise them of my availability for the 1970 season.
Unfortunately for Flood, the U.S. Supreme Court ruled 5-3 in favor of Major League Baseball. The Court upheld Major League Baseball's antitrust exemption (as detailed in Federal Baseball Club v. National League, 259 U.S. 200 (1922)) and, through stare decisis, reasoned that changing the exemption is a matter for legislative, not judicial, resolution. But Flood's loss became other players' gain, as Marvin Miller led the MLBPA to successfully demand from the owners the ability to obtain free agency.

This past March, Rany Jazayerli of Baseball Prospectus argued that Wakefield's contract was the worst contract in baseball. By implication, his analysis suggests that Wakefield's contract may be considered a disservice to other players and perhaps even a repudiation of the legacies of Flood and Miller et al.:
[Wakefield's contract] was signed less than two years ago, on April 19th, 2005, by a veteran pitcher who had already made his millions, and who was a free agent at the time. This pitcher, who was about to complete a three-year deal that paid him a little north of $13 million, agreed to a one-year extension worth 4 million dollars--a one-year deal, and a pay-cut, even though said pitcher had just gone 12-10 with a league-average ERA the year before. At the time he signed the extension, he had started the new season 2-0 with a 1.37 ERA; he would finish 16-12 with a 4.15 ERA ...

Then keep in mind that this pitcher had gone 22-12 the two years before that, with ERAs of 4.09 and 2.81 (the latter was 4th-best in the league). This pitcher was in his 13th major-league season and had never suffered a significant arm injury.

To the best of my knowledge, since the dawn of free agency, no player has signed a comparable contract ... We used to have a term for this type of contract in the annals of baseball history. What was it…oh yeah, we called it the Reserve Clause.
But let's look at the contract from Wakefield's perspective. First consider loyalty (a topic that I examined from a scholarly perspective in my Brooklyn Law Review article "It's Not About the Money"). It can be argued that without the Red Sox, Tim Wakefield's baseball career would have ended in 1995. At that time, he was 28-years-old and coming off a disastrous season for Triple A Buffalo in which he had a 5-15 record, a 5.84 ERA, more walks (98) than strikeouts (83), and 27 home runs given up--worst in Triple A. Sure, he was the National League Rookie of the Year in 1992 for the Pittsburgh Pirates, but that was three years earlier; in the interim, he had devolved into one of the worst pitchers in Triple A, and was seemingly destined for another profession--especially after the Pirates unceremoniously released him on April 20, 1995.

But former Red Sox general manager Dan Duquette had a different idea. Six days after the Pirates released Wakefield, Duquette signed Wakefield to a minor-league contract and hired Hall of Fame kunckleballer Phil Niekro to work with him.

Wakefield proceeded to pitch extremely well for the Sox' Triple A team in Pawtucket, and was then promoted to Boston--and hasn't look back since. In that 1995 season, Wakefield finished with a 16-8 record, along with a 2.95 ERA, and he was essential to the Sox winning a division title. He also won the AL's comeback player of the year award and finished third in the A.L. Cy Young Award balloting. Since that extraordinary comeback season, Wakefield has been a mainstay in the Sox rotation, and has even pitched out the bullpen when asked. For a guy who was probably close to leaving baseball at age 28, Wakefield almost certainly feels a deep gratitude to the organization that may have saved his baseball career and extended it at least 12 additional years. That has to count for something.

Wakefield also seems to appreciate the situation of playing for the Sox. The team's longest-serving active member, Wakefield is perhaps also its most popular member and seems to thrive living in Boston. He married a woman from Boston and is very close friends with a number of his teammates, including Mike Timlin, with whom he regularly hunts (see photo of Wakefield with his bow and arrow, with Timlin in the background). Put more bluntly, he's got a great gig playing for the Sox and living in Boston. Perhaps that is why he engaged in the following conversation with his agent, Barry Meister, in 2005:
Wakefield's agent, Barry Meister, told the knuckleballer during this past offseason that, given age and productivity, he might command $6 million from some club at the end of the season.

"He said, `Is that club the Red Sox?' " Meister said. "I said, `No, might not be.' He said, `If you said the Red Sox, that's one thing.'

"He waved me off and said, `Money is important, but it's kind of down the list for me. My desire is to be in Boston and be a Red Sox. That's just who I am now.' "

But did Wakefield owe a duty to other players to not take a contract with a perpetual team option? We considered players' implied contractual duties to the MLBPA when we examined how the MLBPA pressured Washington Nationals' closer Chad Cordero to turn down a two-year contract offer, and Rick has written extensively about the related topic of using unions to negotiate contracts for players. And we know that three decades ago, many players and union lawyers fought hard against the very type of contract Wakefield signed. Has Wakefield been disloyal to the players' association as a price for being loyal to his employer, and how should we regard that?

Or should we applaud Tim Wakefield for not putting money first and instead putting his loyalty and situation ahead? Who are we--and who is the MLBPA and its members--to question what a player considers "valuable"?


Of course the other element is that because of his long tenure and loyalty to the Red Sox his potential for local endorsement money is probably higher than it would be if he had moved on to another club and will likely remain so even after retiring.

If AJ Burnett can turn down a shot at a World Series ring with St. Louis in order to play for a former coach he likes in Toronto (and make a little bit more) why can't a player seek the contract that provides the greatest satisfaction whether that satisfaction be playing for a contender, playing for a friend, or playing in a town they love.

Watching the Tori Hunter saga unfold is sad. He clearly would like to remain a Twin but it is starting to become apparent that the club doesn't believe they can offer him a competitive salary and may not even make an offer.

Anonymous Anonymous -- 5/14/2007 5:12 PM  

Tim Wakefield should do what is best for him and his family. If I tried to explain to my wife that I was uprooting the family and taking a job with another employer in another city simply because I felt I owed it to the others in my profession... well, it wouldn't be pretty.

Tim Wakefield should be lauded for his loyalty, not criticized. I say more power to him.

Blogger hully -- 5/14/2007 11:33 PM  

Interesting question whether a player owes a duty to other players not to agree to a contract with a perpetual team option at a fixed annual salary. Unions negotiate terms and conditions that apply to all players collectively, and the unions (the players) have decided that it is vital for each player to negotiate his own salary/term within the parameters of the CBA. So on the one hand, a perpetual team option could be viewed as contradicting free agency as provided in the CBA. But on the other hand, is a perpetual team option at $4M/yr. any different than if he had agreed to a 5 year deal that basically takes him through the end of his career (or possibly beyond) with an annual salary of $4M?

Blogger Rick Karcher -- 5/15/2007 9:06 AM  

"But on the other hand, is a perpetual team option at $4M/yr. any different than if he had agreed to a 5 year deal that basically takes him through the end of his career (or possibly beyond) with an annual salary of $4M?"

There's a significant difference in Wakefield's case, that gives hime more control over his career (especially at a stage where money isn't the primary concern). If he signed a longterm deal at below-market rates, it would make him much MORE attractive to other teams, and he would still be bound by the terms of the contract if the Red Sox traded him. (And the Red Sox rarely give no-trade clauses, as a matter of policy.) In fact, that's exactly what happened to Bronson Arroyo, who signed a deal that he thought would keep him with the Red Sox, only to find it made him much more attractive to other teams, leading to a too-good-to-refuse trade offer from Cincinnati. By making this a one-year deal with options, it stays a below-market contract only as long as Wakefield plays with the Red Sox.

One aspect of the contract I find especially interesting is that earlier in his career Wakefield was very vocal in his dislike for how the Red Sox used him in a variety of roles, and always seemed vocally discontented. Yet when he had a chance at the open market he turned it down and re-signed a longterm deal with the team (the contract that preceded the one under discussion).

Wakefield is popular locally and has some local endorsement deals, but he's certainly nowhere near the most popular player on the team - far behind players like David Ortiz and Jonathan Papelbon and Manny and various folk heroes like the since-departed Kevin Millar - more on the level of a Mike Lowell or Coco Crisp, in the way that Boston fans have always tended to lionize working class, middle-of-the-pack players. (Witness the way backup catcher Doug Mirabelli, who catches Wakefield, was given a police escort and standing ovation when he was returned to Boston in a trade after being sent to San Diego the previous season.)

I suspect Wakefield's reasons for staying are complex. Boston is a unique playing environment, but not necessarily ideal for Wakefield, a knuckleball pitcher who is more successful in hot weather. The contract is well below value for star pitchers, but Wakefield has only briefly been a star: He's had a quirky career in which he's mostly been dead average, but at three different points has morphed into the best pitcher in the game for a 2-3 month stretch. And he's signing a contract that's designed to maximize his chances of staying in Boston, rather than following the typical path of 40-year-old pitchers, who tend to get released and have to keep proving themselves for minimal salaries the first time they have a poor season. In other words, it's not a contract designed to maximize his money, but instead to maximize the amount of time he gets to spend doing something he loves in a place he really enjoys working. While it's not surprising that the MLBPA opposes the deal (and Wakefield, as longtime player rep, is certainly an informed participant), the MLBPA is also perhaps the only union on the planet that focuses on average salary as the only metric of success, even when that strategy led to job losses and significant declines in the median salary. And Wakefield has been around long enough to have seen some notable examples of players who left good situations for marginal (or not-so-marginal) salary increases, only to see their careers destroyed by it.

Blogger Leigh -- 5/16/2007 12:04 AM  

It is still a bad deal whatever the factors because the simple fact is that it is highly likely that Wakefield could have gotten what he wanted (finishing his career with the Red Sox) and gotten paid more to do it. Even simply getting arbitration each year would have paid him significantly more.

Anonymous Anonymous -- 4/15/2009 5:55 PM  

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