Pillow Contracts: The Latest Trend in MLB Free Agency
The baseball world is abuzz with the latest trend in MLB free agency: pillow contracts. These short-term deals provide players with a soft landing after a hard fall, giving them the opportunity to prove themselves and potentially earn a bigger contract in the future. The concept of a pillow contract was first introduced by agent Scott Boras in 2010, and it has since become a popular strategy for both players and teams.
The recent signing of Cody Bellinger by the Chicago Cubs has brought pillow contracts back into the spotlight. Bellinger agreed to a three-year deal worth $80 million, with player opt-outs after each of the first two years. Essentially, it’s a series of three one-year contracts for Bellinger, allowing him to test free agency again if something better comes along. This type of contract gives the Cubs another year of Bellinger’s services while also providing flexibility for both parties.
For the Texas Rangers, pillow contracts offer an opportunity to address their pressing need for starting pitching. One player who could fit the bill is Jordan Montgomery, who is represented by the same agent as Bellinger. Montgomery has expressed his desire to be with the Rangers this offseason, and a pillow contract could be a win-win situation for both parties.
Rangers owner Ray Davis holds the key to whether the team will pursue another contract. With the team’s payroll already at an all-time high of $243 million, every additional dollar spent comes at a cost due to the competitive balance tax (CBT). Pushing the payroll above $257 million would result in even higher costs. However, Davis understands the importance of bolstering the pitching staff and may be willing to make an exception.
The Rangers have invested heavily in pitching over the past two years, but injuries and developmental delays can create uncertainties. Adding Montgomery to the roster would strengthen both the rotation and bullpen, providing much-needed depth. It would also allow the team’s general manager, Chris Young, and agent Scott Boras to collaborate once again, leveraging their past successful deals.
A theoretical proposal for Montgomery’s pillow contract could include a three-year guarantee with a mutual option for a fourth year. The financial terms could total $75 million guaranteed, with the potential to earn $90 million if the option is exercised. Incentives for innings pitched and awards could also be included. The average annual value (AAV) of the contract would be between $22.5 million and $25 million, aligning with offseason projections.
To accommodate the CBT and address financial uncertainties, the proposal suggests deferring half of the AAV for 2024 for at least five years. This would slightly lessen tax implications while still providing Montgomery with a competitive salary. Opt-outs after the first two years, similar to Bellinger’s contract, would give Montgomery the opportunity to retest free agency if he performs well.
While this proposal may not satisfy all parties involved, it presents the Rangers with an opportunity to improve their pitching staff. The team would look very different with Montgomery on board, and it would be a significant boost for the entire staff. Ultimately, a pillow contract could be the solution to the Rangers’ pitching needs and provide Montgomery with another chance to end up where he wants to be.
In the world of baseball, where contracts and negotiations can be complex and unpredictable, pillow contracts offer a unique approach to free agency. They provide players with a soft landing and teams with flexibility. As the trend continues to gain traction, it will be interesting to see how teams utilize pillow contracts in the future. For now, it’s clear that pillow contracts are here to stay, and they may just be the latest trend in MLB free agency.
