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Incentive laden contracts

Something I have thrown around in my head and discussed with friends is the contract with incentives.  I don't see why we don't see more of these contracts in MLB (in all Pro sports for that matter).  If players would sign for a lower salary (would still vary for quality of players) and then recieved higher payouts for more production it would entice the players to perform better.  There are numerous points opposing this stance (probably to many to list) but with this day and age of agents causing the biggest problems, this will never happen.  For example lets take Albert:  sign for 2 mil per season, with incentives for AB, HR, RBI, OBP%, SLG%, OPS% whatever the GM wants from that player will give the team the true value of their player.  He could still make 10+ mil a year after recieving 2 mil for 40+ HR, 2 mil for 100+ RBI, etc.  But looking at some of the recent signings like Burnett for example, if he doesn't change into a game winnig pitcher (don't look at just wins but other important stats as well) teams don't throw away millions on players that don't do squat.  Some of the bigger market team would still give higher starting salaries to better players which would still hurt smaller market teams.  One problem that could arise is when someone they expected to have an average year (say 8 mil total) plays out of his ass and doubles his salary from incentives, he could hurt the teams total payroll.  I also think that MLB could set standards for the incentives to make things more even for teams.

But all together this won't happen due to MLBPA and player agents wanting more and more money. Just a little idea in my head.

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I wish
it would happen, but as you mention there is no way the agents (or players union) would allow it. The agents make their money from the cash deals--they get their cut of 10 million or whatever whether the player performs like a champ or goes down in flames. No chance they're gonna risk a penny of that on the future performance of their clients. Nice fantasy though.

by rockin redbird on Dec 14, 2005 5:21 PM EST reply actions  

Economics of auctions and players won't risk it.
First in a free agent market the bidder that has the highest expectations of a player and therefore pays the most is almost assured of over bidding.  (Its called the winner's curse- and it also applies to take-over bids in the stock market.)  But simply put this means the teams that sign prominent free agents almost always expect them to play close to their ceiling, so incentives don't mean a lot.

Secondly, from a players perspective a heavily incentive ladden contract is a big risk.  Put yourself in their shoes...  Would you rather take a $50K/ year job or take a heavily incentive ladden jon where your base is $30K but you can earn up to $100K.  Most of us are risk adverse and would take the former...  

by Zubin on Dec 15, 2005 4:00 AM EST reply actions  

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