Extending An Offer
Contract extensions awarded to unestablished players carry clues about the future
As we discussed last week, former Indians GM John Hart achieved baseball immortality in part through a series of groundbreaking contract extensions that allowed him to keep a core of stars together long enough to reach the 1995 and 1997 World Series.
Andrew Friedman, now president of baseball operations for the Dodgers, engineered a brilliant contract extension just six days into Evan Longoria’s career with Tampa Bay that saved the Rays tens of millions of dollars. Meanwhile, the Astros handed $10 million to Jonathan Singleton in return for two seasons of well below average performance and a third failed drug test. (And to think that Singleton was once the albatross around Jeff Luhnow’s neck.)
The stage was set for the next contestant, and in Spring Training of 2018, the Phillies rewarded prospect Scott Kingery with a six-year, $24 million deal before he had ever played one big league game. Kingery has landed with a thud, creating a dissonance that reverberates through Philadelphia more than it would in most other cities.
Ego. Has it become about ego? Perhaps it always has been and now there’s a more accessible and universally appealing way for front office leadership to flex muscle, a new way to dazzle beat writers and verified twitter jockeys, a new way to manage up and demonstrate creativity, vision, and intelligence to ownership, a new way to signal to Michael Lewis in the hopes that his pen will meet paper and tell another team’s story.
Prior to the 2017 season, the Phillies front office extended center fielder Odubel Herrera – fresh off an All-Star campaign – securing his final year before arbitration, all three arb years, and one free agent year (in addition to two club options deeper into his free agency). His on-field performance wasn’t the problem; the domestic violence charges two years later – the “visible signs of injury to her arms and neck that was sustained after being assaulted… by Herrera,” according to the police report – were. Quite a problem.
At the time of the signing, the Phillies touted not only Herrera’s baseball ability but his off-field behavior and character as well.
This is where the signing team is expected to have an advantage. Nobody knows the player better than his club, and the most important evaluations a front office makes are those of its own roster and prospects.
Kingery began this season in the minors to work on his swing, but was recalled after a few weeks when the Phillies had a need on the Major League roster. On May 3, the Phillies optioned Kingery to the minor leagues again. Two days later, however, as a result of an injury to a player on the Major League roster, Kingery was recalled. Whatever he intended to work on in the minor leagues – away from the bright lights and big league pitching – was halted before it ever really began.
Kingery offered comments earlier this month in an article in The Athletic that I had never before heard from a player. He was essentially pleading with the Phillies to send him back to the minors. He knew that he wasn’t going to get the regular playing time he needed in Philly, and he conceded that the big league stage is not the place for a player to test a reconstructed swing.
Here’s the funny thing about these kinds of deals: On one hand, the total dollars invested are not going to doom a franchise. If Kingery never plays another game for the Phillies, it’s only $24 million – and only $15 million backloaded over the final two years of the deal. The Phillies brass cares a lot more about the health and success of Bryce Harper and J.T. Realmuto, and rightly so.
On the other hand — and I’m gonna need some extra hands here – it can be indicative of the overall decision making by the office, not to mention a stain on their evaluative abilities.
Also (third hand, please) at a time when many teams, Phillies included, have shrunk their scouting staffs, the money committed to undeserving players certainly could be allocated more effectively. While I’d prefer that some of that money be spent on scouts, there are a multitude of places it could go, such as to a couple decent middle relievers or for a down payment on a state-of-the-art facility like the one the Blue Jays recently built in Dunedin. (Check out this video of the Jays’ new complex!)
The fun part about these deals is there is absolutely no need for them, neither for the player nor for the team. A player’s desire to choose guaranteed life-altering money over any sort of risk involved with adding a ninth figure to a contract is easy enough to understand. For the club, what’s the benefit?
Cost certainty. It’s a term that may have first been used by a baseball operations executive in an attempt to impress an owner or CFO. It’s become the kind of term that is thrown around in the media scrum because writers eat it up like press box nachos.
However, the cost certainty of Scott Kingery’s $6 million next season and $8 million in 2023 isn’t exactly helping new GM Dave Dombrowski’s roster flexibility. Cost certainty can cost certainly.
In Seattle, first baseman Evan White received a deal very similar to Kingery’s prior to the 2020 season. Before he ever appeared in a Major League game, White had a guaranteed $24 million deal that covered all six of his seasons under team control and included three club options.
Though allocated slightly differently, Kingery and White are receiving an identical $18 million over the three years accounting for arbitration eligibility. No doubt, Jerry Dipoto and other leaders in the Mariners’ front office looked at Kingery’s deal while shaping that of their first baseman. But clearly, they didn’t view the aftermath as a cautionary tale.
White had a WAR of -0.2 last season and, so far this year, he’s posted a -0.6. In simple language, it means that he’s been less productive than a hypothetical minor-league replacement player who, in all likelihood, would be paid the minimum.
Back to ego, huh?
There are games of one-upmanship that exist among executives.
Contract extensions provide general managers a platform to demonstrate savvy. It’s really got nothing to do with cost certainty or next year’s payroll. And, in the vast majority of these extensions, the player’s agent is not one of the industry leaders. Teams sense an opportunity to take advantage of a willing agent, but as we are learning, results vary.
As John Hart knew, securing would-be free agent years at a discount was the way to retain talent for longer than the industry model had allowed. The reward for the team is in those option years, which provide great value and come free of long-term commitment.
The Phillies and M’s bargained for the right to exercise Kingery and White’s options, respectively, one year at a time. That’s where the $24 million gamble pays off for the teams.
Meanwhile, the White Sox have a roster that is leading the league in, uh, cost certainty. Eloy Jimenez and Luis Robert both signed six-year deals prior to their first ML at bats. Jimenez is guaranteed $43 million; Robert $50 million. Both deals have two club options.
The biggest difference from the other deals, though, is that both players are positive contributors. Jimenez hit 31 home runs in his rookie campaign, and last season his offensive rates improved in the shortened season.
Robert finished second in the Rookie of the Year voting last season and won a Gold Glove for his play in center field. He was off to a fantastic start this year before a hip flexor injury put his season on pause.
Similarly, Jimenez ruptured a pectoral tendon at the end of Spring Training and may miss the entire season. Again, these are both instances of the guaranteed contract providing security to a player.
If the White Sox duo can mend and return to form, though, their contracts can still turn out to be very beneficial to the club. A similar deal with shortstop Tim Anderson, signed before the 2017 season when Anderson still had less than one full year of Major League service, should allow the White Sox to retain one of their leaders at a discount in what would have been his first two free agent years.
Chicago is fascinating because they have locked up so many of their players prior to arbitration years. As the team’s on-field success brings national attention to the South Side, it will be interesting to see how many contractual copycats it breeds.
Kingery, White, Robert and Jimenez. Those are the next wave of the rookie multi-millionaires, the players whose clubs believe that immediate wealth and financial security will not deleteriously impact their motivation, behavior, or performance.
So far, the Phillies and Mariners have misevaluated their players. The teams’ on-field performances — let’s not forget, that’s what really matters! — have disappointed too. For Philly, Kingery’s struggles are consistent with the team’s overall problems. Could White’s early troubles be indicative of the direction of the Mariners' rebuild?
Meanwhile, the White Sox young core — including Jose Abreu and Yoan Moncada — are locked up for years to come. Could they become the Indians of the nineties? I think they could be even better.
Thank you for reading Warning Track Power. Subscribe now to have WTP delivered to your inbox every week.