Option Clause for Baseball Contracts – The Kiss of Death?

Introduction to an Option Clause for Baseball Contracts:

I need your undivided attention to discuss an option clause for baseball contracts.  Often, baseball commentators like to discuss the infamous option clause for baseball contracts because it makes them sound sophisticated.

As a result, lets get one thing straight:  it is highly probable the commentator trying to sound smart through their analysis of an option contract have neither scrutinized the specific language applicable to the option clause itself and likely don’t understand the legal principals behind an option clause.  In other words, option clauses for any contract regardless whether it is baseball related or not is a complicated discussion

For this reason, an option clause for baseball contracts put players at risk of of unfavorable events and can be the kiss of death for the player if they do not draft these types of clauses effectively.

Assumptions for an Option Clause for Baseball Contracts:

First, an option clause for baseball contracts assumes one thing – you already have a contract.  Assuming you have a baseball contract, an option clause means there is language that unilaterally binds the baseball player to performance upon the occurrence of a condition.  Generally, the option clause for baseball contracts is proposed in favor of the team versus the player.

Thus, you need to be on alert when entering into a contract such that the option (if proposed) is written fairly and clearly so the player knows what will happen when a specific condition isn’t satisfied.Option Clause for Baseball Contracts

Kiss of Death for an Option Clause for Baseball Contracts:

An option clause for baseball contracts can be the kiss of death for the following reason:  it can force you into a contract that reduces your compensation and or wages.  Lets face it, you have a limited number of years in which you can play baseball and be paid accordingly.  An option contract that compels you into a continued agreement using terms likely negotiated many years in the past prevents you from increasing your wages going forward for your abilities as they are today and going forward.

Generally, the actions in which the player is compelled to perform is called the condition precedent and the actions performed after the event is the condition subsequent.  In other words, the baseball player must perform a specific task before an act is executed by the Team.  An option clause for baseball contracts in which the player gains the most usually means the Team is required to perform the condition precedent and the player is required to perform the condition subsequent.

Examples relevant to an Option Clause for Baseball Contracts:

Because this is issue is complicated, let me use the following example to help clarify why an option clause for baseball contracts can be the kiss of death.  Have you ever leased an apartment for 12 months?  Imagine paying your rent on the 13th month and automatically renewing your lease for another 12 months.  In other words, your one year lease turned into a two year lease without your consent.

Applying this example to an option clause for baseball contracts, imagine signing a 3 year contract with a team option.  Next, imagine your team executed the option and locked you into another 3 years.  In other words, your contract went from 3 years to 6 years without having your pay increased and without your ability to seek free agency.

Risks of an Option Clause for Baseball Contracts:

Imagine the team having an unlimited number of options allowing the team to initiate an option for one year….but having it occur over and over again.  This means the team locks you into a salary that binds you for many years going forward without seeing an increase in compensation.  Don’t believe this could happen?  Unfortunately, it has happened more than once.  As a reference point, please consider a legal case called Hennigan v. Chargers Football Co.  as proof players players can be taken advantage of when it comes to an option clause for baseball contracts.

Advantages of an Option Clause for Baseball Contracts:

An option clause for baseball contracts are extremely advantageous to baseball players provided they reduce the risks referenced above and carry benefits of the original contract to the option year(s).

Help with an Option Clause for Baseball Contracts:

If you need help negotiating an option clause for baseball contracts, consider contacting Royal Sports Group, LLC.  Royal Sports Group, LLC is a full service sports agency, specializing in rendering representation as a baseball agent to professional baseball players.

This sports agency is owned and operated by lawyer  Jasper Berg.  In addition to the services rendered through Royal Sports Group, Jasper Berg practices employment law in Minnesota.

You can contact Royal Sports Group by e-mail, phone, or any way you find reasonable.  To send an e-mail, click HERE.