Sox sign Liam Hendriks

[ChiTownTrojan]

If you want to talk age-related decline, Brantley will be 34 in May. That seems like Melky 2.0 to me.

Both of these guys have been really good the past few years and have shown no noticeable signs of decline. I'd be happy with either of them. Cruz is the better overall hitter, but Brantley is the better "fit" in that is left-handed and offers (slightly) more defensive flexibility, giving La Russa the option to rotate the DH slot. I expect Vaughn to be ready at some point (not to start the season) and it wouldn't really be possible to work him in if Cruz is holding down the DH spot. Also, I really like the idea of Brantley in the #2 spot in this lineup - it gives some protection in case Moncada is still not back to his 2019 form. But I'm not going to complain at all if they sign Cruz to add another .950+ OPS bat to the lineup.

[ChiTownTrojan]

Ken Rosenthal made an interesting point on the structure of Hendrik's contract in his article. Because of the way it is structured, the $54M is split over 3 years for luxury tax purposes. So he will count $18M towards the luxury tax for each of the next 3 years, when the Sox aren't going to come close to that limit. But in the 4th year, he will count $0 towards the tax.

Odds are the Sox will never come close enough to the tax limit that this will ever matter, but you never know. Salaries for the core guys are going to go up over the next few years, and this could be an under-the-radar wrinkle in the contract that lets them keep the group together for longer.

[voodoochile]

Ken Rosenthal made an interesting point on the structure of Hendrik's contract in his article. Because of the way it is structured, the $54M is split over 3 years for luxury tax purposes. So he will count $18M towards the luxury tax for each of the next 3 years, when the Sox aren't going to come close to that limit. But in the 4th year, he will count $0 towards the tax.

Odds are the Sox will never come close enough to the tax limit that this will ever matter, but you never know. Salaries for the core guys are going to go up over the next few years, and this could be an under-the-radar wrinkle in the contract that lets them keep the group together for longer.

So even if they keep him and pay him the $15M in 2024 he counts zero toward the cap? That's pretty freaking awesome.

[DeployEloy]

So even if they keep him and pay him the $15M in 2024 he counts zero toward the cap? That's pretty freaking awesome.

I would also imagine that would be quite appealing to teams in the event he is traded as well.

[ChiTownTrojan]

I would also imagine that would be quite appealing to teams in the event he is traded as well.

Yeah, I think that is right. Speaking of which, Rosenthal had more info on the particulars regarding Hendriks potentially getting traded down the line:

The contract includes one other twist: The option will become guaranteed if Hendriks is traded at any point during the deal. The agreement, which is pending a physical, grants Hendriks complete no-trade protection in the first year, a 10-team no-trade list in the second and a five-team no-trade list in the third.

[DeployEloy]

Yeah, I think that is right. Speaking of which, Rosenthal had more info on the particulars regarding Hendriks potentially getting traded down the line:

...thus creating a greater chance of tradability if we need to move him. Not that I want him dealt by any means, but if he is, that means the sox aren't competitive. Very good idea considering the emerging pen arms that could take over. I am liking this deal more and more as the news passes about it. Nice hedge bet.

[Dumpjerry]

Thread title updated. It's pretty much official now.

[Mohoney]

I think other players are going to see what Hendriks and the White Sox accomplished with the option year and try to copy it for themselves. It may become a standard practice in the industry. Who wouldn’t rather have a 10-year annuity for the entire option amount instead of some small buyout?

[voodoochile]

I think other players are going to see what Hendriks and the White Sox accomplished with the option year and try to copy it for themselves. It may become a standard practice in the industry. Who wouldn’t rather have a 10-year annuity for the entire option amount instead of some small buyout?

Financially it works out to about 1/2 of the $15M in present value for the Sox also. So it's like giving a 7.5M buyout but since it's spread out over 10 years they don't really feel the impact. Plus the fact his deal counts zero toward the salary cap that final year regardless is a real bonus. I expect that will be something else the owners will want to negotiate in the next CBA. It's not something they will want long term unless they come up with different way of capping salaries altogether.

[Mohoney]

Financially it works out to about 1/2 of the $15M in present value for the Sox also. So it's like giving a 7.5M buyout but since it's spread out over 10 years they don't really feel the impact. Plus the fact his deal counts zero toward the salary cap that final year regardless is a real bonus. I expect that will be something else the owners will want to negotiate in the next CBA. It's not something they will want long term unless they come up with different way of capping salaries altogether.

You think owners will fight it? Most teams never even get close to the luxury tax line, so I would imagine that diluting the financial impact of a declined big-money club option is a win for them.

[voodoochile]

You think owners will fight it? Most teams never even get close to the luxury tax line, so I would imagine that diluting the financial impact of a declined big-money club option is a win for them.

Yes, because it's a loophole around the salary tax threshold. Why does it have to be the final year of the deal? I could sign 10 guys to 10 year contracts with a provision that one of the years will be paid as money at the end of the contract spread out over several years and the contract will only hit the salary cap in 9 years. Each player could have a different year 1-10 and that would potentially circumvent the salary cap restriction. Players would love it, but the owners don't want a free for all that's why a salary cap threshold exists...

[Mohoney]

Yes, because it's a loophole around the salary tax threshold. Why does it have to be the final year of the deal? I could sign 10 guys to 10 year contracts with a provision that one of the years will be paid as money at the end of the contract spread out over several years and the contract will only hit the salary cap in 9 years. Each player could have a different year 1-10 and that would potentially circumvent the salary cap restriction. Players would love it, but the owners don't want a free for all that's why a salary cap threshold exists...

Are we 100% sure that Hendriks would count for zero dollars that last year?

[voodoochile]

Are we 100% sure that Hendriks would count for zero dollars that last year?

Just what I've read here. It was backed by a link but I didn't click on it. Scroll up and check it out.

[Mohoney]

Just what I've read here. It was backed by a link but I didn't click on it. Scroll up and check it out.

Maybe the players and owners can split the difference. Since the guarantees are 3 years and $54 million, Hendriks counts for $18 million in luxury tax salary for the next 3 years. If the option is exercised, have Hendriks (and any players who do this in the future) count for another $15 million in 2024 if the option is exercised. No big-pocketed owners get to benefit from a big-money salary not counting against the tax limit, the players earn more overall and guarantee themselves financial security for a decade after the contract ends.

[thomas35forever]

Reinsdorf apparently has used spreading out buyouts when negotiating contracts with the Bulls, too.