Tigers' contract offer to Alex Bregman reveals failure in deferred money strategy

The Detroit Tigers officially lost the 2025 Alex Bregman sweepstakes when the free agent slugger agreed to terms on a three-year, $120 million contract with the Boston Red Sox with opt-outs after the 2025 and 2026 seasons.

After the news broke, Evan Petzold of the Detroit Free Press reported that the Tigers had offered Bregman a six-year contract worth $171.5 million (with some deferred money) and an opt-out clause after the 2026 season. Despite the Tigers offering more guaranteed money over a longer period of time, Bregman still chose the Red Sox due to some other key differences between the two offers.

Tigers' offer to Alex Bregman shows they clearly did not use deferred money strategy correctly

First of all, let's give credit where it's due to the Tigers for actually doing what few thought they would – offering Bregman a six-year, nine-figure contract. It goes against everything this team has done in the Scott Harris era and gave fans comfort in the knowledge that the club is willing to spend for the right pieces in free agency. And if ever there was a right piece for the Tigers, Bregman was it.

The Tigers also deserve some credit for their valiant, if not slightly misguided attempt to deploy the deferred money strategy. Deferrals can allow clubs to spend big on deserving talent without wrecking their financials, as players receive a smaller annual salary while a large portion of their total salary is not paid out until a later date. The biggest benefit for clubs awarding deferred money is, of course, that it helps to keep them from exceeding baseball's Competitive Balance Tax threshold – and therein lies the problem for Detroit.

The Tigers' 2025 payroll currently sits at just over $128.35 million; unless they were offering Bregman a contract worth more than $100 million annually, there was absolutely no reason for them to defer any of the money. (For reference, the $171.5 million contract they offered Bregman carried an annual value of $28.58 million, which puts them nowhere near the first tax penalty threshold.)

Now, Bregman's deal with the Red Sox also contains some deferred money, though it's unknown exactly how much. Regardless, he chose the option that offered a higher annual value at $40 million per season and gave him more flexibility to pursue a megadeal again in less than a year with opt outs after each season. The Tigers' offer, in addition to carrying a lower annual value (even without the deferred money) only contained an opt-out after the 2026 season.

By going with the Red Sox's offer, Bregman gets $40 million this season (a $9.5 million pay raise over what he made last season) and gets to test the free agent market again next offseason. The opt outs in his new contract could create an opportunity for the Tigers to try again next season if they want to; but if they do, hopefully they will deploy the deferred money strategy correctly this time — defer the money if you're in danger of a tax penalty or if you're offering significantly more on an AAV basis than your competitors.

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