Five months of the way through a disappointing season Dan Haren's 2013 contract option doesn't look as team-friendly as it once did. The Angels right-hander has a 4.46 ERA with 7.2 K/9, 2.2 BB/9 and a 39.2% ground ball rate in 147 1/3 innings: unremarkable production from someone previously considered a top-of-the-rotation starter.
Haren's contract includes a $15.5MM club option for 2013 with a $3.5MM buyout. Once the season ends the Angels must decide whether to bring him back for another year or decline the option and proceed from there. The situation could unfold in a variety of ways. Here’s a closer look:
Angels’ Option Decision
After the World Series ends the Angels will have to decide whether to exercise Haren’s option at $15.5MM or buy him out for $3.5MM. The net cost of $12MM seems reasonable for a 31-year-old who was one of the league's top pitchers just one year ago, but there are warning signs -- a career-low average fastball velocity (88.5 mph) and a diminished swinging strike rate (8.8%) -- that GM Jerry Dipoto will have to consider before committing to Haren for 2013.
Angels’ Qualifying Offer Decision
If the Angels decline Haren’s option, they’ll have to decide whether to make him a qualifying offer (under the sport’s new collective bargaining agreement, teams can extend qualifying offers to players after club/player/mutual options have been declined). The Angels will be eligible for draft pick compensation in 2013 if they make Haren a qualifying offer. Draft picks have value, but it’s not that simple. Haren could accept and if he did the Angels would owe him a salary of $13MM-plus. Combine that salary with the $3.5MM buyout and the Angels would be spending more than $16.5MM for someone they could have had for $15.5MM.
If the Angels don't make Haren a qualifying offer they won't be eligible for draft pick compensation. Meanwhile, Haren would be able to sign wherever he likes as a free agent without being linked to a draft pick (the Angels would still be an option).
Haren’s Qualifying Offer Decision
If the Angels decline Haren’s option and make him a qualifying offer, he’ll have two choices: accept and return to Anaheim for another year, or decline and seek a contract on the open market while linked to draft pick compensation. Teams are never eager to surrender top draft picks for free agents, but they’ll do it for the right player.
Haren’s free agent stock has diminished, though, and some teams could decide they aren’t parting with a draft choice to sign a pitcher coming off of a disappointing year. With this in mind, the CAA Sports client might prefer the qualifying offer to the uncertainty of free agent market. There’s a good chance Haren will never have to make that choice, but it’s a possibility worth considering as the offseason approaches.