It’s nearly January, and the ten best players on this winter’s free agent market according to MLBTR haven’t been signed (Masahiro Tanaka opted in to the remaining three years on his contract with the Yankees, so he never reached free agency). With teams being incredibly patient this year, some in the industry have suggested that one or more of these players could be willing to sign one-year “pillow contracts” at high average annual values, if they can’t find a long-term deal close enough to their current asking prices.
The idea of a pillow contract isn’t altogether farfetched. It’s not uncommon for smaller name free agents to accept one year deals in order to reestablish value after an injury-plagued (or otherwise subpar) season. Though it’s a bit less common for prominent healthy players to do this, there’s some precedent. Yoenis Cespedes’ three-year, $75MM deal with the Mets back during the 2015-2016 offseason was in some sense a pillow contract; the deal paid him $27.5MM over the first year, with an opt out the following offseason. It worked out well for Cespedes; he ultimately exercised the opt-out and agreed to a more lucrative four-year, $110MM pact (again with the Mets) the following winter.
Such contracts could also act as a failsafe should the top free agents find themselves unable to achieve their desired guarantees by the time February draws to a close. After all, one need not look any further than Stephen Drew and Kendrys Morales for a cautionary tale about players overestimating the market for their services; both players remained unsigned well into the 2014 season and ultimately lost out on significant money. Of course, it should be noted that their markets were significantly affected by the old qualifying offer system.
On the other hand, a pillow contract carries its own type of risk. Injuries, stark drop-offs in performance, and a number other factors could hurt a player’s earning potential when he reaches free agency again. What’s more, the free agent market next year boasts some incredibly high-end talent; the 2018-2019 crop will probably include the likes of Bryce Harper, Clayton Kershaw, Manny Machado and Josh Donaldson. Should any of this year’s free agents opt to settle for high-value one-year contract, they could end up struggling for attention in a crowded market next winter, with the added downside of being a year older.
Obviously, no player will agree to a pillow contract except as a last resort prior to spring training. If they can’t get the guarantees they’re seeking now, it’s far more likely that these players would accept a smaller (but still hefty) multi-year guarantee rather than take a one-year deal and risk losing out on tens of millions of dollars. But the agents of these players have a greater agenda, and if the best offers their clients are getting would set a poor precedent for future contracts, it’s conceivable that the agents could become proponents of pillow contracts for their clients.
There are clear pros and cons to these deals, but I’ll open the conversation up to our reader base at this point. What do you think? (Poll link for app users)