Death, taxes, bad long-term deals


 

 

This year’s crop of free agents is particularly deep with high-profile names like Zack Greinke, David Price, Johnny Cueto, Jason Heyward, and Justin Upton among the headliners. The first player in this group to sign with a team was Price, who agreed to a reported seven-year/$217 million deal with the Boston Red Sox just two days ago.

Price won’t be the only player who’ll hit the jackpot. The San Francisco Giants and the Los Angeles Dodgers are reportedly in hot pursuit of Greinke. The former Dodger may not get a seven-year deal like Price because he’s a few years older. But, his potential contract is expected to have a higher annual average value (AAV) than Boston’s new ace. At least a few others will get longer commitments than Greinke though.

It might take seven years to secure the services of Cueto and Upton and it’s possible that it’ll take to a 10-year commitment to get Heyward, who will be 26-years old next season. Obviously, teams have money to spend, but is committing to a player for nearly a decade a wise strategy?

Unfortunately for teams and their respective fan bases, the majority of these long-term deals won’t help their team win a championship. By year-six, fans are more likely to suffer from buyer’s remorse than a hangover from overindulging at a World Series victory party. Bad long-term deals are almost as inevitable as death and taxes.

Sure, it’s a great day when a team presents their freshly signed player to the media and fans for the first time. He’ll strut out and model his new jersey and ball cap for the cameras and his smiling face with his new team colors will saturate the internet. During that introductory press conference, the newly imported star will likely explain why he chose his new team, while omitting the fact that his new employer was the highest bidder.

At the time, most fans won’t care if their team overbid for their new star or just outbid themselves. Their team spent the big bucks to get their man and that’s all that will matter. Naturally, the blogosphere will erupt and season ticket and team merchandise sales will escalate. But, how long will it be before the jubilation turns to frustration?

Big dollars, lots of years
Take a look at the 15 biggest major league contracts of all-time to see why fans could go from ecstatic to pessimistic just a few years after the big name signed with their team. The players highlighted in yellow have appeared in a World Series after signing their monster deals.

Player Current Age Tm Total Value (million)
Duration
Giancarlo Stanton 26 MIA $325 2015-27
Alex Rodriguez TEX $275 2008-17
Alex Rodriguez 40 NYY $252 2001-10
Miguel Cabrera 32 DET $248 2016-23
Albert Pujols 35 LAA $240 2012-21
Robinson Cano 32 SEA $240 2014-23
Joey Votto 32 CIN $225 2014-23
Clayton Kershaw 27 LAD $215 2014-20
Prince Fielder 31 DET $214 2012-20
Max Scherzer 31 WAS $210 2015-21
Derek Jeter (retired) 41 NYY $189 2001-10
Joe Mauer 32 MIN $184 2011-18
Mark Teixeira 35 NYY $180 2009-16
Justin Verlander 32 DET $180 2013-19
Felix Hernandez 29 SEA $175 2013-19

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On the surface, that may not seem that bad since so many of the above deals are relatively new. On the other hand, only three contracts – Alex Rodriguez, Derek Jeter, and Mark Teixeira – have helped a team win a World Series and that was the 2009 New York Yankees.

A couple of Detroit Tigers did appear in the Fall Classic during a losing effort – Prince Fielder and Miguel Cabrera. Fielder was traded the Texas Rangers after being with the Tigers for just one season and appearing in the 2012 World Series loss to the San Francisco Giants. Cabrera is starting his second eight-year extension with Detroit.

There’s no doubt that Cabrera’s his first extension paid dividends for the Tigers. He’s a two-time league Most Valuable Player and a perennial Silver Slugger award winner. But, he’s age-33 next season and his current deal runs to at least 2023. Will he still be worth $32 million annually at age-40?

Ironically, the Tigers are one of two teams with players on the list that finished in last place in their division last season – the Cincinnati Reds is the other. They’re not the only teams that had big contract players and were unsuccessful in 2015.  The Seattle Mariners, Washington Nationals, Los Angeles Angels, and Miami Marlins all underachieved last season.

Long-term deals can affect a team’s executive suite also. Six of the 10 clubs with players on the top-15 list have replaced their GM after their high-dollar signing(s). Spending an owner’s money can be risky business, depending on the outcome.

The Yankees or the Dodgers can afford to overpay – if they choose – and not overextend themselves financially. Conversely, Cincinnati’s signing of Joey Votto may have thrilled the masses when the deal was announced. Now, the team is reportedly ready to trade away major leaguers that they’re no longer willing or able to pay due to Votto’s increasing salary.

In 2015, Votto’s paycheck accounted for nearly 13-percent of the Reds’ payroll. Depending on offseason acquisitions, that could rise to nearly one-quarter of player salaries for next season. Plus, his pay continues to climb throughout the term of the contract. By the time that Cincinnati climbs back to relevance, their high paid star may no longer be a star, but he’ll still be high paid.

Sure, there’s still hope for the above organizations and I’m not trying to say that teams shouldn’t strike deals of seven years or longer. It comes down to making wise choices and understanding the risk being accepted.

Sometimes, it makes sense for a team to go all-in on signing a big name. Perhaps, ownership wants to make a statement on their commitment to winning or they’re in a “win now” mode. That’s why the Mariners signed Robinson Cano to an enormous contract.

Cano’s legacy with Seattle fans will hinge on whether the team wins a World Series during his tenure. If they don’t, his 10-year/$240 million deal will only cause angst among Mariners faithful. Especially, when he inevitably declines during the last five years of his contract.

Other times, winning isn’t the only priority. Creating goodwill by retaining a homegrown star who’s become an icon in the local community matters too. Examples of that practice would be the Mariners and New York Mets, who signed the face of their franchise to long-term extensions. Those players are Felix Hernandez and David Wright respectively.

“King Felix” is still at the top of his game. But, how long will that last? Yes, he’ll only be entering his 30-year-old season next year. However, his 2,262 innings pitched is third highest by any active pitcher since his debut in 2005. Who’s right behind him? C.C. Sabathia, James Shields, and Justin Verlander who all had a down year in 2015.

I’m not saying that the end is near for Hernandez. Every pitcher is different. But, seeing his peers struggle should give fans a reason to pause since he’s signed through at least 2019.

Wright is suffering from spinal stenosis and his long-term future is questionable. He’s under contract through 2020, which is his age-37 season. Fortunately for the cash-strapped Mets, his annual income drops from its current level of $20 million to $12 million during the last year of his deal

I grew up as a Mets fan and I’m married to a Mariners lifer, so I appreciate the reasoning behind both teams signing own stars. With that said, both players could fall into the “overpaid, under-performing ” category by the end of their deals.

Big dollar bats
Since the majority of the above contracts kicked-in during the last three years, I decided to look back at 12 current long-term deals that were signed in 2012 or earlier to see how they look with the benefit of 20/20 hindsight. You’ll notice that there are a few familiar names already mentioned.

I focused on games played (G) to gauge durability and the “slash” statistics of batting average, on-base percentage, and slugging percentage to measure performance. Average games played for 2012-2015 and games played for last season that were below 120 have been highlighted in yellow. I did the same with below league-average slash stats. All league-averages for 2015 and every season can be found here at baseball-reference.com.

Player Age Tm Avg G (2012-2015) 2015 G PA 2B 3B HR BA OBP SLG Term 2016 Salary
Adrian Gonzalez 33 LAD 158 156 643 33 0 28 .275 .350 .480 2012-18 $21.9M
Mark Teixeira 35 NYY 93 111 462 22 0 31 .255 .357 .548 2009-16 $23.1M
Albert Pujols 35 LAA 142 157 661 22 0 40 .244 .307 .480 2012-21 $25M
Alex Rodriguez 39 NYY 106 151 620 22 1 33 .250 .356 .486 2008-17 $21M
Prince Fielder 31 TEX 131 158 693 28 0 23 .305 .378 .463 2012-20 $24M
Joe Mauer 32 MIN 134 158 666 34 2 10 .265 .338 .380 2011-18 $23M
Matt Holliday 35 STL 132 73 277 16 1 4 .279 .394 .410 2010-16 $17M
Ryan Zimmerman 30 WSN 112 95 390 25 1 16 .249 .308 .465 2009-19 $14M
Matt Kemp 30 SDP 121 154 648 31 3 23 .265 .312 .443 2012-19 $21.8M
David Wright 32 NYM 110 38 174 7 0 5 .289 .379 .434 2014-20 $20M
Carl Crawford 33 LAD 80 69 193 9 2 4 .265 .304 .403 2011-17 $21.6M
Jayson Werth 36 WSN 111 88 378 16 1 12 .221 .302 .384 2011-17 $21M
Provided by Baseball-Reference.com: View Play Index Tool Used
Generated 11/14/2015.

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Several of the players listed above had “decent” years. But, the majority struggled with poor performance and/or injury in 2015. For some, their struggles started before last season.

Adrian Gonzalez continues to provide value, as did Teixeira. But, “Tex” only played in 111 games. Injuries have plagued the 35-year-old first baseman during the majority of his contract – he hasn’t played in more than 123 games since 2011. Teixeira isn’t alone when it comes to having injuries affect both playing time and performance.

Rodriguez averaged just 88 games-per-season between 2011 and 2013 due to hip issues. As a result of his physical limitations, he’s been restricted to the designated hitter position. “A-Rod” enjoyed a strong start to 2015 and his overall numbers look good. But, a closer look at his stats uncovers a paltry .191/.300/.377 slash during the last two months of the season.

Albert Pujols hasn’t missed much playing time during the last two seasons, but he’s been hampered by foot problems and is projected to miss the start of the 2016 season due to foot surgery. His overall numbers fell below expectations and were buoyed by a strong June. Like A-Rod, he struggled during the second half of 2015 with a .231/.288/.419 slash.

Losing playing time due to injury shouldn’t necessarily be viewed as a curse unless it’s been a trend. For example, Fielder hadn’t missed a game in three consecutive seasons until he had neck surgery in 2014 and missed all but 42 games. He bounced back to play in 158 games in 2015 and was named the American League Comeback Player of the Year. Hopefully for the team and player, he’ll stay healthy through 2020 when he’s age-36 and earning $24 million annually.

Hired guns
Let’s turn our attention to starting pitchers where the list is much smaller. Until recently, clubs were very reluctant to go seven years or longer with a starter.

Since 2013, four pitchers have signed deals of seven years or greater – Masahiro Tanaka, Felix Hernandez, Clayton Kershaw, and Justin Verlander. Only Tanaka’s signing wasn’t an extension deal with the player’s original club. Price’s signing suggests that some teams are willing to commit to elite free agent pitchers on the grandest scale.

Like with the position players, I reviewed starting pitchers with deals greater than seven years and signed in 2012 or prior. Only two pitchers fit the bill. Depending on your outlook, both could be viewed as either worthwhile or a bust.

Player Age Tm G GS CG Avg IP (2012-15) 2015 IP ERA FIP HR BA OBP SLG Term 2016 Salary
CC Sabathia 34 NYY 29 29 1 156 167.1 4.73 4.68 28 .285 .338 .458 2009-16 $25M
Matt Cain 30 SFG 13 11 0 139 60.2 5.79 5.54 12 .293 .352 .545 2010-17 $20M
Provided by Baseball-Reference.com: View Play Index Tool Used
Generated 11/14/2015.

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Sabathia started strongly with the Yankees by helping the team win the 2009 World Series and finishing in the top-four of Cy Young award voting during his first three seasons. Since then, he’s declined with each passing season. There are many fan bases that would accept the down years of Sabathia if it meant winning a championship. I’m not sure that Yankee fans feel that way though.

Perhaps, carrying the long-term deals for fading players like Teixeira, Rodriguez, Sabathia, and the recently retired Derek Jeter is the reason that the Bomber’s World Series chances have dimmed lately.

Similarly, Matt Cain initially did well after signing his long-term deal and has gone on to struggle in recent years. During the early years of his contract, his team was successful in the World Series. Unfortunately for the pitcher and his team, he’s suffered injuries that have restricted his innings during the last two seasons.

Some Giants fans may view the Cain deal as a waste, while others probably don’t mind. The fact that Cain pitched in two of their three victorious World Series has to help lessen any frustration.

Final thoughts
Signing an elite free agent can be a defining moment for a baseball organization. Sometimes it’s a good moment, more often it’s not. Especially, if a team ventured outside of it’s financial comfort-zone to seal the deal or went significantly above market value to get their man. The cold, hard truth is there’s no guarantee that signing the biggest name on the market will ever translate into a championship.

Fans who want to see a World Series championship parade in their town shouldn’t necessarily pine for the next Albert Pujols or Robinson Cano. They’d be better off hoping that their team’s GM takes a balanced approach between developing homegrown players and acquiring reasonably priced talent. It’s not sexy, but five of the last six World Series champs were built that way.

Ironically, the only big spender to win it all lately – the Red Sox in 2013 – just signed Price. It’ll be interesting to see if they can avoid the same fate of the other two most recent big-spending champions – the Yankees and Philadelphia Phillies. Both clubs have been weighed down by bloated contracts of aging players over the past half-decade.

History isn’t on Boston’s side. Death, taxes, bad long-term deals…

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Luke Arkins

Luke is a native New Yorker, who grew up a Mets fan. After the US Navy moved him to the Pacific Northwest in 2009, he decided to make Seattle his home. During the baseball season, he can be seen often observing the local team at Safeco Field. You can follow Luke on Twitter @luke_arkins
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