I'm trying option #2 in Branch Rickey, a league where the prospect budget is hard capped at $20M. BR started out a very talent poor world and some of the SIMMY teams were just awful. The slow builders (draft, IFA, develop) have really suffered because there just isn't the same level of talent, so guys with mediocre ratings in another world is an above average talent in BR.
Anyway, mid way through last season I figured out that the window had closed on my team. So, I started trading the long term deals for major league ready "prospects". These guys were not pieces of an eventual rebuild - they were the protective tent I'm putting around the rebuilding project. BR also has W-L standards, so staying reasonably competitive is important.
I picked up a bunch of defensively talented guys with big power/eye numbers and marginal splits. I picked up a handful of 25-27 year old pitchers. Then, after rollover, I poached older FA in decline, but still able to give a decent performance. Then I traded the ace for 4 players and have begun marketing all remaining vets. I have all season to unload them. I'll stockpile 5 or 6 young pitchers and a decent position player or two. I'll draft well and watch the development of last year's picks. I'll eat a couple bad contracts to get another RP prospect or two. And next year, with my new collection of young guys, I'll hit the FA market, hard. I'll start to try and trade my transitional guys who will be hitting arb for more 3 year pros. And I'll hope that my division continues to suck and that 85 wins might not be out of reach.