Why Mutual Options Are Such Powerful Financial Tools for Teams Like the Brewers

Free agents worth signing have quickly become thin on the ground. While the Brewers' admirable depth across the roster made players like Harrison Bader, Tommy Pham, Randal Grichuk, and Ramón Laureano tricky fits, there was a clear path to possible playing time for Yoán Moncada. Instead, Moncada signed a one-year, $5-million deal with the Angels Thursday, becoming the fifth free-agent hitter to go elsewhere this week alone. If Matt Arnold does want to bring in another player or two to brace the two-time defending division champions, he's running out of ways to do it.

Milwaukee could still take interest in a player like Connor Joe, Justin Turner, Brandon Drury, or Anthony Rizzo, to bolster the corner infield spots in various ways. They could join the scramble for the few remaining viable, versatile infielders, José Iglesias, Paul DeJong, and Brendan Rodgers. None of these should command multi-year deals. Nor should the handful of interesting pitchers still on the market, as I wrote Thursday afternoon. 

Unfortunately, though, Arnold probably has little money left to spend. According to Cot's Contracts, the Crew's projected 40-man payroll for 2025 now stands at $108 million. Nominally, that's well below last year's mark of $125.6 million. However, on the condition of anonymity, team sources have indicated that their payroll was likely to shrink in 2025. The team anticipated a loss of local TV revenue this coming season, based on their planned move to league-produced, league-distributed broadcasts. On Dec. 31, the team retreated from that course and renewed their agreement with FanDuel Sports Network, which might have stretched the wallet a bit wider again, but it's unlikely they'll spend even as much as they did last year, let alone more.

To figure out what the team has to spend, though, we need to look a bit harder at what they actually spent last year—and how they can bend their expenditures in 2025 to maximize their own spending power by spreading out their payments a bit.

That final figure of $125.6 million for 2024 is a bottom line, but for revenue-sharing payees like the Brewers, when dollars are due can matter nearly as much as how much is being doled out. Of that nominal total, the Crew paid $8.75 million in buyouts on club and mutual options for 2025, all in the first week of November. Over the regular season itself, then, their operating payroll was more like $116.9 million.

Why does that matter? Under the league's revenue-sharing plan, an administrator (jointly selected by the players union and the owners) uses prior-year earnings and projections to estimate the net payments that need to be made (by payors) and then distributed (to payees), which break up into five segments. The schedule of those payments goes like this:

The Brewers, then, are getting big chunks of money every May 25, July 25, September 25, and November 25. That eases their cash flow a ton, especially in the fall—because they hardly owe anyone salary for games played after that September payout. Thus, any money the team can defer to that final quarter of the year will hit their books less hard than money paid as straight-up salary, throughout the campaign. 

Delaying payments is always beneficial, of course, if it can be done without penalty. That's why teams are required to discount the actual value of contracts if there's an officially deferred portion of any contract, as is the case for Christian Yelich and for so many players who have signed big leagues recently throughout the league. Structuring contracts to slide payments back beyond the year or years for which a player actually suits up via buyouts on mutual or club options, though, can be effective ways to unofficially bake in deferrals.

The $108 million number I quoted above for 2025 does not include any buyouts. That's because, at the moment, the only buyouts they look likely to pay after this season are on the contracts they signed with Rhys Hoskins (two years, $34 million, but the final $4 million of that due as a buyout on an $18-million mutual option, to be paid Feb. 1, 2026) and Brandon Woodruff (a $10-million buyout on a $20-million mutual option for 2026, to be paid in two installments of $5 million, Jan. 15 and Jul. 15, 2026) last winter. It's a hefty $14-million bill, but it all comes due in 2026, on the other side of several more revenue-sharing disbursements. So, the number we should compare their current projection of $108 million to is the $116.9 million they spent in the flow of last season.

By that reckoning, they sure don't have much flexibility—unless, of course, they're willing to push more money to the fall, or into 2026. Last year, they paid Gary Sánchez $4 million of his $7 million in total earnings via a buyout in November. Could they do the same thing with a player like Turner or Kenley Jansen for 2025? The payroll actually seems to be set up perfectly for that. If, for instance, they signed Jansen to a deal worth $9 million, but made half that money payable in November by attaching a mutual option for 2026 with a $4.5-million buyout, they'd sit at $117 million for this season, with $112.5 million due during the season.

Those numbers would still be a bit down from 2025, but it would let them make a substantial addition to their roster. It also wouldn't exacerbate the problem they might otherwise run into in 2026, when they look likely to have $14 million in dead money from Woodruff and Hoskins on their ledgers and will have to go spend a bunch of money to replace likely departures Aaron Civale, Nestor Cortes, Woodruff, Hoskins and (via trade) Freddy Peralta. They'll be contending with the sharply rising arbitration cost of William Contreras and others.

This front office is very good at shaping and shuffling the money they pay to players. It's the only way for a small-market team to maximize its own spending power, and it leverages the installments in which they're paid their share of pooled revenues from throughout the league. Tedious though it might seem, this is the way the Brewers keep finding just enough money to outspend their market size and hold onto their leadership of the NL Central. Though the market is shrinking, they might just have another such move in them this winter.