Tuesday, March 6, 2012

The Pirates and Contract Extensions

What do Evan Longoria and Matt Moore
have to do with the Pirates and
Contract  Extensions? Click to find out!
Big news! The Pirates signed Andrew McCutchen to an extension! By now, whoever is reading this probably already knows.  It's awesome news.  Digging a bit further though, I'd like to comment on an interesting observation I had, specifically about contract extensions.

The McCutchen extension fell in line with two recent extensions that have created a model.  The Arizona Diamondbacks were able to sign Justin Upton followed by the Cincinnati Reds signing Jay Bruce to virtually identical contracts. Both players were like McCutchen, young outfielders going into the third year, their last year prior to arbitration.  Point being, the parallels are more than obvious.  That's not the only model though and it may not be the best.

The Rays have created the other model.  It started with Evan Longoria.  Back in 2008, he was signed to an insanely team-friendly contract that will pay the Rays 3B a total of 44.5 million dollars over 9 years.  2008 was Longoria's rookie year and he had played a total of six games in the major leagues.  It was a risky move for the Rays, but it's paid off, arguably for both sides.  Longoria was immediately guaranteed 17.5 million dollars well before proving himself. On the other side, Longoria has 26.9 WAR in his first 4 years in the big leagues and it's a strong possibility that in an alternate universe Longoria would make close to 44.5 million dollars in his first six years, with the large chunk coming via his arbitration years.  As such, that means the Rays will get three free agency years from one of the best 3B in baseball during his prime for essentially free.  That's why Dave Cameron has ranked him as having the highest trade value of any player in baseball for four straight years.

The Rays decided to try again with their latest hotshot prospect, pitcher Matt Moore.  He signed a deal this past year for what could turn into a 8 year deal for slightly less than 40 million dollars with the possibility of a bit more through escalators. From the Rays viewpoint... Risky? Yes. Genius? Probably.  They could get an ace pitcher for free for two of his prime free agency years.  It's possible that Dave Cameron's 2012 list could be topped by two Rays players next years, mainly due to their contracts.  In my books, that's a huge indicator of something being done right by a small-market team.

On the flipside, the sentiment about the Pirates is they want to avoid risk to the point where they won't give themselves a chance to succeed.  By refusing to role the dice, the Pirates will never hit a homerun or two and as a small-market team, they need to hit a few balls out of the park.  Is that sentiment argument though? Not necessarily.  Skeptics figured there was a much greater chance of McCutchen being traded than extended.  The Pirates proved that wrong.  Still, they didn't take the plunge and signed McCutchen to a Upton/Bruce model contract rather than a Longoria/Moore model contract.  However - and this is is my observation - that is seemingly not the fault of the Pirates.
Buried in a Washington Post article is this quote from McCutchen's agent Steven Hammond, “There was some risk in that,” Hammond said. “We were willing to take that on and we did.”" The risk he was talking about refers to this, "Hammond said McCutchen wanted to wait until he played at least two full seasons before getting serious about an extension."  That proclaims that an Upton/Bruce extension was forced by McCutchen's hand.  I certainly don't blame McCutchen for that.  He took a risk in waiting two years - he had to avoid injury, etc - and it paid off with a bigger pay check.  However, it's possible the Pirates would have tried a Longoria/Moore extension had McCutchen been willing.  Luckily, there is evidence that sheds light on that possibility and it supports that notion.  That evidence is the contract extension the Pirates gave Jose Tabata.  They didn't do it as quickly as the Rays did with Longoria and Moore - Tabata had played nearly 200 games when the extension was completed - but by signing Tabata last August to a 9 year contract that could be worth 37.5 million the Pirates struck early.  Instead of buying out four years before free agency plus three free agency years, they were able to buy out five years prior and three years after.  Now Tabata isn't on the Longoria or Moore talent level so his contract isn't as team-friendly, but the Pirates quickly made sure they had a future core piece in Tabata, and then didn't hesitate to lock him up for several years on the cheap.  Ultimately the Pirates may not be as aggressive as the Rays, but they seem to be pushing the bar more than they are given credit for.  That should bode well for the future.  Oh, and McCutchen is a Pirate until 2018!

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