Aramis Ramirez and the Mutual Option


Yesterday we reviewed Aramis Ramirez’ 2014 and he earned a C, which is perfectly fine. It is awfully hard to find average sometimes, and Ramirez was average for the Brewers last year.

Today we’re going to look at Ramirez contract status and possibilities for the 2015 season. Once again, as I discussed yesterday I have to point out that I’m a big fan of Aramis Ramirez.

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The Option

Ramirez signed a three-year contract with the Brewers on December 13, 2011, with a fourth option year. Ramirez made $6 million in 2012, $10 million in 2013 and $16 million in 2014 for the Brewers.

His 2015 option is for $14,000,000. It is a mutual option so both Ramirez and the Brewers have to exercise the option for it to kick in. If Ramirez declines, the Brewers don’t owe him anything. If Ramirez exercises his half of the option but the Brewers decline theirs, they owe him a $4 million buyout, meaning they only save $10 million on his salary, not the full $14 million.

Got it? Ok.

Possibility One: Both Sides Exercise

Sep 21, 2014; Pittsburgh, PA, USA; Milwaukee Brewers third baseman Aramis Ramirez (16) reacts while in the field against the Pittsburgh Pirates during the first inning at PNC Park. Mandatory Credit: Charles LeClaire-USA TODAY Sports

I’m having trouble digging up the actual numbers on this, but it is apparently fairly rare that mutual options are actually exercised. Ramirez stated after the All Star break that he wants to play another 500 games.

If he picks up his half of the option with Milwaukee, and he continues to suffer age-related decline he could seriously put that number in jeopardy. A bad 2015 on a one-year deal could spell the end of his career, as he’ll be 38 after the 2015 season.

The Brewers have two reasons to pick up Ramirez option. First, he’s actually slightly cheaper than he was last year, although still expensive. Second, it would allow them to narrow their free agent priorities for the offseason from first and third base, to just one or the other (with the possibility of Ramirez moving to first).

I don’t think it is likely that the Brewers and Ramirez will both exercise his option. I see very little incentive for Ramirez.

Possibility Two: Ramirez Signs an Extension

I think this is the most likely scenario right now, but it is contingent on both sides coming together, and despite how much Ramirez says he likes Milwaukee, you never know what that will mean in negotiations (ask Corey Hart).

In this scenario Ramirez gives up his $14 million option and signs a new two-or-three-year deal with the Brewers for something less than his option, probably in the $10 million per year range.

This is beneficial for Ramirez because it gets him a second guaranteed season, which helps him reach toward his games played goal and also makes him a more attractive trade candidate should things go belly-up by the deadline.

This benefits the Brewers in that they avoid spending $4 million on a buyout, which is just wasted money. It also locks down one of the corner positions with what is probably league-average (at worst) performance with cost certainty for two seasons. I doubt that Milwaukee would offer Ramirez a three year extension.

Like in the first scenario, this gives the Brewers more focus going into free agency, as they don’t need to find a first baseman and a third baseman. The Brewers only have a few days to pull this off.

Possibility Three: Ramirez Declines, Brewers Make Qualifying Offer

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Reports are that the one-year qualifying offer for free agent compensation this year are $14 million, which just happens to be the value of Ramirez option year. If Ramirez declines his side of the option, I think there is little to no chance that the Brewers don’t make him a qualifying offer.

Making Ramirez a qualifying offer would lower Ramirez free agent potential, as the team signing him would have to give up draft picks to Milwaukee. I’m not sure how many teams are willing to trade those high-round picks for a 37-year-old third baseman with bad knees.

Making Ramirez the qualifying offer could lead to Milwaukee signing him to the same two-year deal I discussed in scenario two, but he would still have free agency available to him.

Possibility Four: The Brewers Let Him Leave

The fourth, and I think least likely, possibility is that the Brewers decline Ramirez option, triggering the buyout clause and then let him walk away. They may decide that his age and declining performance mean that it is better to just pay him to go away.

The Brewers were in first place for 150 days this summer, and most of the team is coming back. They aren’t far away from being a playoff contender again, but having to track down first and third basemen via free agency just seems like a lot to ask for.

Sure there are internal options, but you never know how they’ll respond to the majors and the Brewers aren’t good enough to bury a couple rookies in the lineup every day.

So fans, what do you think will happen?