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Orioles will pay a price for not offering opt-out to Dexter Fowler - only question is how much

The Orioles wouldn't budge on offering Dexter Fowler an opt-out and he ended up re-signing with the Cubs instead. They'll pay a price for that principle - the only question is how much.

For a day, we thought the Orioles had their hands on a leadoff hitter, believing that the O's had agreed to terms with outfielder Dexter Fowler. Why the whole baseball media ran with the idea that the O's and Fowler had settled is a whole different story. Whatever the case there, what we now know is that the O's and Fowler never had a deal, and the reason there was no deal is that Fowler's camp was insisting on an opt-out in the contract.

As you know by now (and if you didn't, I'm sorry to be the one to tell you,) Fowler instead agreed on a two-year contract to return to the Cubs, with only one year and $13 million being guaranteed. There is a mutual option for the second year at a $9 million salary. This effectively amounts to a player opt-out in the contract, which is ground on which the O's won't tread. The maximum value of that deal is $17 million. The O's made Fowler a three year contract offer with $33 million guaranteed.

From Fowler's perspective, wanting an opt-out in the contract makes perfect sense. He had what was a bit of a down year for him in 2015, batting "only" .250/.346/.411. If he performs better in 2016, then he gets to opt out and collect $13 million. That's with an $8 million base salary for 2016, plus a $5 million buyout on the 2017 option if it's declined.

Even if the Cubs hit Fowler with a qualifying offer again, Fowler would have the option of accepting it - giving him effectively a two year, $29 million contract. Or Fowler might decline the qualifying offer and then hit a free agent market where he'd be one of the two best outfielders available. That's a big difference from this year, where he had to wait for his turn after Justin Upton, Jason Heyward, and Yoenis Cespedes all took up money from the market.

So, yes, he's left $20 million in guaranteed money on the table, but he has good reason to believe he can do better than $33 million guaranteed over the next three years in total. If he has a great 2016, he can probably get a contract that locks him in at a good salary beyond just 2018 as well, rather than having to come off of a three year O's contract looking for more work starting with his age 33 season.

It stings for O's fans who felt like the O's had Fowler wrapped up, but this is sensible reasoning for him.

The Orioles and their no-opt-out principle

Orioles GM-type Dan Duquette confirmed to O's media that it was the opt-out issue that kept Fowler and the O's from reaching an agreement. He repeated a stance that, both to him and club ownership, opt-outs don't make sense for the Orioles. They are not wrong in that, in general, offering an opt-out means that the team is absorbing additional risk in the contract. If the player is good, he will leave; if he's not good, the team eats money for an underperformer regardless.

This has the feeling of a strongly-held principle, one the O's have maintained in the face of more and more opt-outs being offered to players through the offseason. The gut reaction is understandable: Why should the Orioles sacrifice the #28 overall pick to get only one guaranteed year of Fowler? Draft picks are important for the franchise, and pick #28 in what's believed to be a good draft for depth has some value that they can't just toss away.

However, Fowler being on this year's team would have also had value, and the O's sticking to their principle has cost them. The specific situation for Fowler would have resulted in the O's absorbing much less risk in an early opt-out compared to some of these other free agent deals. The downside is simply not as great for them.

Let's say the O's had put in an opt-out after one year and $11 million. That's assuming a constant average annual value of the deal. If Fowler played well enough in 2016 that he'd opt out, now it would be the O's who could QO him again. Maybe he'd take it and effectively get two years, $27 million from the O's. Maybe he'd decline it and go sign elsewhere, allowing the Orioles to recoup a similar pick to the one they'd have given up to sign Fowler.

The cost of sticking to your guns

The range of picks for QO compensation in this year's draft runs from 25th-34th. If the O's are better in 2016, they'll pick a little lower. So would it have been so bad to set up a possible scenario where the O's give up pick #28 in 2016, but get either a year of Fowler for $10-13 million plus a low-30s draft pick in 2017, or two years of Fowler for $27-30 million?

That doesn't sound so bad. You're still not talking any money being locked in to a future where the O's need to be able to pay for Manny Machado's next contract.

If the O's are holding to it as a principle, then I guess that's that. Maybe they feel like in the long run, they will benefit more by never offering opt-outs to free agents, with players who negotiate with them knowing that if they ask for one, they'll never get one from the Orioles. They might be right. Those of us who don't negotiate baseball contracts for a living will probably never know about that.

Heck, if it wasn't for the Cubs swooping in at the eleventh hour, their stance might well have worked with Fowler. If the O's were negotiating under the assumption that they were more or less the only team still remaining with money to offer to Fowler, they probably believed they had the upper hand and could afford to hold firm in their position. Fowler would have had to take the O's offer for lack of any other offers.

An interesting question to ask would be: If the Orioles had known the Cubs were still lurking on the periphery, might they have been more willing to offer an opt-out? Fans will probably never know the answer to that, because there's no benefit to anyone in the O's front office answering it truthfully, or at all, if any reporter would even take the initiative to ask such a question.

Another interesting question to ask would be: If the Orioles situation with Yovani Gallardo had been fully settled sooner, would they have approached the Fowler negotiation differently? There may have been time where they believed they'd be giving up the #14 pick for Fowler only, if Gallardo had fallen through. The idea of losing the #14 pick for one year of a player is much less palatable than losing the 28th pick. We will also not get that answer from anyone who knows.

There's no sense lamenting the what-ifs in life, but sometimes you can't help it. In this case, the Orioles were so close to having a good player in a position where last year they had a real need. Now their 2016 team will be worse for not having signed him over an apparent matter of principle that they might have been better off ignoring or never having in the first place.

O's fans can only hope we're not spending all year wistfully staring at the one who got away.