The ramifications of the opt-out on the free agent market

The opt-out, as I examined in one of my previous articles, is an extremely interesting clause. It has rather obvious upside for the player, and, again, as I examined previously, has some interesting potential upside for the team. But, I've already offered my opinion on that. This time, I'm going to delve into the potential impact the clause might have on the free agent market in the future.

There are two possible scenarios when a player is faced with his opt-out: test the market once more, or honour the rest of the deal he originally signed. First, let's examine if the player tests the free agent market, what impact will this have on the market itself? Immediately, perhaps, one would presume that this would benefit the larger market teams. With contracts inevitably becoming shorter, long terms deals will begin to diminish, and money will take centre stage.

If money is taking centre stage, we would, once more, assume that this will benefit the larger market teams. Free agency, for the prized possessions at least, is dominated by the big money teams. Prized players on the open market demand big contracts, and only certain teams can truly afford to dish out the money to sign them. If long term deals in a player's prime become a thing of the past, and the opt-out reigns supreme, free agency becomes so much more important.

The market will therefore become clogged, team's rosters will therefore become thinner, and as a result the importance of free agency may well elevate. If the importance of free agency elevates, it should have a negative impact on smaller market teams, on the face of it, anyway. If we borrow from a rather simple and elementary business principle, our view may be different. By applying the theory of supply and demand to the free agent market, there is a huge benefit to smaller market teams.

With more supply there is less demand. With less demand, prices will fall. Typically, there are one or two quality free agents available. Take, for example, this year's class which was headlined by David Price and Johnny Cueto. Thanks to the opt-out, Zack Greinke joined them. With Greinke available, the market and stock for Cueto dropped. Imagine that on a bigger scale. If not just one quality free agent opts out of his contract, but many more, the stock and market for otherwise premier free agents should drop. It isn't a bulletproof argument, but there is some merit to it.

If the opt-out craze continues into next season, and the season after that, the free agent market should become busier. It should become more crowded, and there should be more choice. With the following parameters in place, it could open the door to become more friendly for smaller market teams. Premier free agents could become more available to smaller market teams. There is, however, one rather large caveat to the said argument: assuming players will continue to opt out.

The sole purpose of the opt-out clause is to further the interests of the player. It exists to allow the player to opt-out of an abundance of money, to try and pursue an even bigger contract, even deeper into his career. Which is where we run into a bit of an issue. If the market becomes more populated, there may not be a chance of pursuing a bigger deal in free agency, and the guaranteed money already on the table may be more attractive.

In the now tennis match of evaluating the opt-out craze and its ramifications on the free agent market, I'm actually putting the ball back into the court of the smaller market teams. By placing the opt-out into the contract, it's highly likely that the dollar value deal of the contract will fall a little. A cheaper contract, when the odds may stipulate that the player won't even opt-out of the deal because of overcrowding on the market. Point, David. Take that, Goliath.

It's an interesting, and somewhat confusing narrative. But, in the grand scheme of it all, it may well help the smaller market teams. Taking a detour from the dollar value of the deals, let's take a look at the length of the deal, assuming the player is likely to opt-out. The one true hinderance of signing a player in free agency, certainly a big named player, is the inevitable length of the deal. We give the player years we don't really want to, in the hope that he can provide enough value in the early years of the deal to offset the burden he will be in the latter years of his deal.

The opt-out, in a sense, can safeguard against this (assuming the player is likely to opt-out, which is a rather large caveat, once more). Of course, they may well lose potential value in the deal in the middle years of the deal, but they are guaranteed to protect themselves from the horrible, ugly, overpaid years of the deal. Beggars can't be choosers, you see. It's another positive for the smaller market teams, in a rather backward, and twisted sense.

It's a rather complex situation (which, in fairness, I haven't really simplified). But, again, in a rather backward and twisted sense, there could be some benefits to the smaller market team in free agency, if the opt-out craze continues. Supply and demand may well stipulate that free agents could become a little cheaper (not thinking about inflation, that is). On the other hand, a more populated free agent market goes against everything the opt-out clause stands for: more money.

There are a lot of caveats, there are a lot of assumptions, but the opt-out craze may well just help out the smaller market teams. It encourages resourcefulness, which after all, is the aim of the game for teams that don't have infinitely deep pockets. It also places lots of emphasis on the draft (but that's for another time, sorry). The year of the opt-out, you have me suitably confused. I'm not sure whether to love you, or whether to hate you.