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Orioles get some short-term flexibility with new Darren O'Day contract

The new contract between Darren O'Day and the Orioles has some deferred money that will allow the O's more short-term flexibility. What can you do with an extra $3 million or so? Not much, but it's better than nothing.

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After some uncertainty earlier in the week, it's now clear that the deal between the Orioles and Darren O'Day is complete. The only thing left to do is officially announce it. Maybe they are holding that back for Saturday's FanFest to build some easy good will with an already friendly crowd. The contract details that have come out in the meantime reveal a deal that looks very good for the Orioles in the short term.

O'Day's new contract is for four years and $31 million, as was previously reported. However, the money is not spread out evenly over the length of the contract. A total of $4 million worth of the money is deferred, to be paid out in $1 million installments each year after the contract expires (that is, 2020-23). What that means is that the cost of O'Day to the Orioles next year is only $5 million, rather than the $7.75 million average annual value.

That difference of $2.75 million, while not a lot in the grand scheme of money in the game of baseball, is also not a trivial amount. It gives the Orioles just a little bit extra of flexibility in the short term, when the Orioles still have a lot of the core of the 2014 division championship team remaining.

That kind of money won't let them go out and get a top free agent, or any free agent, but there's still plenty they can do with it. Maybe it gives them the option to set their sights on a $13 million AAV free agent instead of a $10 million AAV free agent, or by a similar token, maybe it lets them have a little extra power to win a bidding war for a mid-tier free agent who they really think will help the team.

The extra few million could also go towards a player at the trade deadline next season. The Orioles can target a wider range of players if they know they won't have to stretch themselves to pay that player for the final two months of the season. We saw what happens when the team acquires a player they have to clear some money to pay this year, as the acquisition of Gerardo Parra sure looked like it necessitated the trade of Tommy Hunter.

Perhaps the money would give them the flexibility to target a salary dump player, which would presumably cost less in the way of prospects to get any hypothetical upgrade.

Another way to use an extra $2.75 million is to have it go into non-major league payroll expenses. Specifically, it could go into the money set aside for the draft. This year's draft will cost the Orioles more money if they spend their full slot values. That's because their picks will be higher up in each round as a result of a worse 2015 record. It's also because they have more picks, including two potential compensation picks, an extra second round pick for failing to sign last year's second rounder, and the competitive balance pick at the end of the second round.

So if the Orioles don't lose any picks, either from signing a qualifying offer-attached free agent or trading the competitive balance pick, their draft pool will be higher by approximately $2.7 million. That assumes the Orioles ultimately re-sign Chris Davis but not Wei-Yin Chen - if they have two compensation picks, their pool will be about $4.5 million higher than last year. That money has to come from somewhere.

The draft is an important area for the O's to add talent to their system that can potentially help the MLB team in the future. They can't go cheap there. Speaking of draft picks, I should note that the O's unwillingness to eat a similar amount of money last year (Ryan Webb's $2.7 million salary) ended up costing them the #74 overall pick in the draft. The Orioles could have just released Webb, but instead they sent him, along with that pick, to the Dodgers - who promptly released Webb themselves.

Whether the Orioles end up doing anything worthwhile with the money they've "saved" from deferring part of the contract remains to be seen. It can't be a bad thing that they've given themselves the chance to do more with it. A host of options are available to them. So long as they choose wisely, they can make a small but meaningful impact with a few million dollars. And on top of that, they get to keep O'Day, his leadership, and his strong performance in their bullpen as well. O's fans are hoping that means everybody wins.