SOUTH HILLS COMMAND CENTER – On Monday the Cubs locked up their young, talented first baseman Anthony Rizzo¬†with a seven-year, $41 million deal, a contract that includes a couple club options. While it’s life-changing money for a 23-year-old, it’s probably going to be a mega bargain for the Cubs.
In the early 1990s, then Cleveland GM John Hart began the trend of signing ¬†young, core players to long-term contracts, buying out arbitration years and in some cases several years of free agency. It was smart business for the small-market Indians, allowing the Tribe to keep their core together through the mid ’90s.
Most recently Tampa Bay has been the most aggressive in locking up young talent, most famously signing Evan Longoria to a six-year $17.5 million deal six days after he was called up in 2008. In total the deal will be worth $44 million over nine years, as it included three club options which were incorporated into his recent 10-year contract extension.
It’s widely regarded as the most club-friendly deal in modern history.
Evan why are you smiling, Evan? You left tens of millions on the table? (OK, I’d probably take a deal, too, if I was a young player. $44 million looks pretty good)
Consider that one win above replacement is worth approximately $5 million in value to a club.
Now consider that through 5.2 seasons, Longoria has produced 31.7 WAR. That’s $158 million in value. The club has paid him $15 million.
Advantage: Andrew Friedman.
Now the baseball compensation scale is rigged against young players, who often work their first three years for near the game’s minimum wage before becoming arbitration eligible. It’s six years of serfdom. So Longoria was going to be value to Tampa Bay regardless if agree to the deal ed or not. But by buying out Longoria’s arbitration years and three years of free agency the Rays did save tens of millions of dollars in arbitration costs and prevented him from testing the free-agency waters.
A number of other young players have signed such extensions in recent years – like the Pirates’ Andrew McCutchen, Atlanta’s Justin Upton, the Reds’ ¬†Jay Bruce – but the Longoria was the most aggressive such deal because it came so early in his career.
The Rays took on more risk because Longoria had played all of five Major League games, but clubs also have more negotiating leverage the further players are from arbitration and free agency.
So that takes us back to the confluence of the Allegheny and Monongahela ¬†…
Starling Marte might already be the Pirates’ most valuable asset (this subject will be coming to a blog near you in the near future) when considering present talent, projection and contract/service time.
He has already produced $10 million in value this season, having a 2.0 WAR as of May 14. He has the potential t produce tens of millions worth of value over the course of the next five+years.
Now most clubs, like the Pirates, prefer to hedge their bets with young players. McCutchen had 2 1/2 years of service time when he signed his 6-year, $51 million extension prior to last season. It was similar to the Justin Upton and Bruce deals. But by hedging bets, the player gains leverage.
With Marte I think the risk would be worthwhile to lock him into a long term deal … yesterday.
Sometimes these deals do not work because of injury (See: Grady Sizemore) or regression. But often they are great values for clubs, which is so critical for small market clubs. And even if such a deal is a bust, it’s a relatively small risk when considering veteran free agents are singing for $25 million per season.
Even if Marte was just a three-win player for the remainder of his pre-free agency club control, which is conservative, he’d still be worth $90 million to the club over his first six years of service, a figure that doesn’t include inflation. ¬†If the Pirates do not buyout his arbitration years they could be looking at 10+ million arbitration prices.
Over at BucsDugout.com, Charlie Wilmoth¬†asserted¬†the closest comp to Marte would be Denard Span, who signed a five-year $19 million deal in 2010. Span was a year closer to free agency than Marte. I’d guess the Marte camp would feel his value is closer to that of the Cubs’ Starlin Castro, who signed an eight-year, $60 million deal two full years into his big league career. Still, it bought out four years of free agency and will likely be another mega-bargain for the Cubs.
I asked Pirates GM Neal Huntington if the club has reached out to Marte, but Huntington declined to answer.
If the Pirates gave Marte an eight-year, $60 million deal tomorrow it would still likely be a bargain for the club. A conservative estimate ¬†would have Marte producing double that value to the club over eight years, $120 million.
Yes, there’ some risk. But he’s not a pitcher. He’s young, athletic, talented and improving (see: improvement against breaking balls). It’s not my money. Maybe Marte would not be interested, but I think the smart money is with small-market clubs being more aggressive in signing pre-arbitration talents. I’m surprised it’s not done more often.
This quote is posted in the Rays’ locker room: “Fortune favors the bold.” It is especially true with locking in prices for small-market clubs.