KBO Increasingly Using Options for Foreign Players

As the 2018 season approaches, South Korea’s KBO has already filled 29 of the 30 roster spots available to foreign players.  Today, mykbo.net published a schedule of the foreign players signed so far with the known details of their contracts.

What I found interesting about the contract details is that both the SK Wyverns and the NC Dinos each signed all three of their foreign players to contracts that contain options for a second season.  As background, the KBO allows its teams to sign foreign players to only single year contracts.  This keeps KBO teams from getting stuck with albatross contracts, but it’s also very hard to build a successful ball club when several of your best players may well leave after only one season.

If a foreign player has a big season in the KBO, he may elect to move to Japan or return to the MLB system the next season.  Also, the player may feel he deserves a raise bigger than what the KBO team wants to pay, resulting in the player and team unable to reach an agreement, forcing the team to find a new, unproven foreign player to fill that roster spot.

Also, new foreign players controlled by MLB teams require the KBO team to pay the MLB team a buyout, usually in the $500,000 range if the MLB team still deems that player to have some value.  [Note that the Angels allowed the Hanwha Eagles to sign the soon to be 29 year old Jared Hoying for a token transfer payment of only $1 because of a specific arrangement Hoying and his agent made with the Angels at the time the Angels signed him.]

Finally, there’s no guarantee that each time a KBO team brings in a foreign player, that player will succeed in the KBO.  Even though the odds of success are better than for rookie foreigners in NPB, a lot of highly paid foreigners who looked like great bets don’t perform in South Korea as hoped.

At least two KBO teams (I think it’s a lot more) have now decided that an option for a second year is a way to avoid the pitfalls of single season contracts while still obeying the KBO’s one-year contract limit.

The first such foreign player I am aware of who agreed to give his KBO team a second year option is Eric Thames.  After his big first season in the KBO, the NC Dinos signed him to what was in many reports referred to as a two-year contract.  It was almost certainly a one-year deal with an option for a second season.

The deal ended up working well for both player and team.  The NC Dinos were able to hold onto Thames for three full seasons, in each of which he performed at an MVP caliber level, instead of having him run off to NPB for a better deal after two big KBO seasons.  Meanwhile, the deal ended up working out for Thames, who performed so well that he was able to get an MLB deal for more money guaranteed than he could have gotten from either a KBO or NPB team.

The option payments SK and NC handed out to their foreign players this off-season are fairly generous relative to the players’ salary amounts.  My guess is that in all six contracts, the amount to be paid in the second season is roughly the same amount of money as the first year of the contract plus the option amount.

For example, after a big year in 2017, Xavier Scruggs received a contract from the Dinos that could pay him as much as $1.3 million in 2018 in the form of a $400K signing bonus, a $700K salary (probably not guaranteed) and a $200K option for 2018.  My educated guess is that the 2019 contract will give Scruggs a $400K signing bonus and a $900,000 salary.

Scruggs is older than Thames was at the same point in their respective KBO careers, so it’s unlikely that Scruggs will get a future MLB contract anything like the one Thames signed last winter.  However, another big season in the KBO in 2018, and the likelihood that Scruggs would jump over to the NPB’s greener pastures is relatively high.  Now, the Dinos have Scruggs locked into a third season, if they want it, and Scruggs is guaranteed an additional $200,000 in 2018 if his option is not picked up.

The Wyverns handed out bigger option guarantee amounts than the Dinos did, but the thinking appears to be the same.  The Wyverns locked in Merrill Kelly, who was a threat to jump to NPB this off-season, for two seasons, at prices near the top of the KBO foreign player salary scale, which an NPB team might have been willing to beat for Kelly’s 2019 season, if Kelly pitches as well in 2018 as he did in 2017.

These options obviously give SK and NC more time and opportunity to build or field a winning team since they’ve now locked in some of their best players for two years.  The option deals also prevent any player-team arguments over the amount of the second season, since the contract amount was agreed to already.  I’m certain we’ll see more of these options contracts going forward, unless the KBO changes its rules and allows teams to sign foreign players to multi-year contracts.

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Explore posts in the same categories: Baseball Abroad, KBO, Milwaukee Brewers, NPB

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