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Camden Depot: How Much Is An Opt-Out Worth?


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From the team perspective, the issue is about not being saddled with responsibility for the worst case scenario. Again, we will use the three tracks to consider where it makes sense for the club to agree to an option out. From our perspective, this is done by considering the probability of value in the Mean and Best cases evening out with the losses potentially accrued. With a 7/151 contract, the worst track results in a loss of 51.9 MM. There are no points along the way for the club to come close to that value. The greatest probable gain is 30.2 MM after the final season of the contract.

Are there any lengths of contract where it would work? Yes, roughly. A 4/85 deal could have an opt out any year of that deal. A 5/106 deal would make sense to allow an opt out after four seasons.

How much less would Upton need to lower his annual earning in order to have an option out make sense with a seven year contract?

7/142; option after six years

7/137; option after five years

7/134; option after four years

7/127; option after three years

7/124; option after two years

7/116; option after one year

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