Over the next couple of months, much of the focus in the baseball world will be on free agents. Their potential destinations, dollar demands and the inside dope on where they might be going will dominate Hot Stove conversation. Below the radar — and perhaps later into the offseason, as the time for arbitration and contract renewals approaches — transactions that are arguably more important will take place, as teams work out contract extensions with players still under their control.
Such extensions are smart and sound management. While long-term contracts always carry risk, locking up key players before they reach free agency is safer and more cost-effective for a few key reasons. First, because these players are already in the fold, general managers and managers have far more information about their makeups, medical histories and comfort levels with their current surroundings than they would with free agents; there's no need to ask whether Player X can handle the spotlight in a given city, or get along with the current manager. Second, there's greater likelihood that the years in question are closer to a player's prime, their mid-to-late 20s instead of early-to-mid 30s. Finally, the resulting contracts are likely to be lower than they would be because of a lack of competition from other teams. It only takes one to throw silly money a a player to throw the market out of whack.
Consider the case of Matt Kemp. Fresh off an MVP-caliber season in 2011 in which he led or tied for the National League lead in homers, runs, RBI, total bases and OPS+, the Dodgers locked him up last November, a year before he would have hit free agency, with an eight-year, $160 million deal. While it's true they were buying high — a point when Kemp's skills were framed in the most flattering light imaginable — the then-cash-strapped franchise avoided what would have been a dramatic one-year jump in his annual salary from $6.95 million via arbitration (or at least its threat).
Los Angeles paid Kemp "just" $10 million (plus a $2 million signing bonus) for his services in 2012, took control of his age 27-34 seasons, and bought in before the winter's TV revenue-driven free agent cashfest made him look like a bargain. Teams committed far more in terms of time and dollars for free agents Albert Pujols ($240 million for 10 years, covering ages 32-41) and Prince Fielder ($214 million for nine years, covering ages 28-36), while subsequent extensions for Joey Votto ($225 million for nine years, covering ages 29-37), CC Sabathia ($122 million for five years after technically reaching free agency by opting out of his existing deal), Matt Cain ($127.5 million for six years) and Cole Hamels ($144 million for six years) exceeded the average annual value of Kemp's deal. Had the Dodgers waited until their new owners — who purchased the team in April for a record $2.15 billion — took control, Kemp's price tag would have been much higher.
With that in mind, here's a look at five players whom teams would be wise to lock up with extensions this winter, listed from youngest to oldest.
Mike Trout, Angels: He doesn't even have a full major league season under his belt, and he didn't even reach the legal drinking age until Aug. 7, but it's very clear that Trout is a special player, one already capable of putting up an MVP-caliber season for a big-market contender. Trout can't even become a free agent until after the 2017 season, but if he puts together more seasons that are anywhere near as valuable as his 2012 one, he's going to become very pricey as soon as he reaches arbitration eligibility.
Though one can make a case that for the Angels to do an extension now would be buying too high, the flip side of that is that they would be wise to follow the model of the small-market Rays and Brewers, who locked up Evan Longoria and Ryan Braun, respectively, long before the dawn of their arbitration eligibility. Longoria signed a six-year, $17.5 million deal just a week into his major league career in 2008. Through five seasons, he's been worth an average of 5.2 WARP, and yet he'll make just $6 million in 2013, with three years of affordable club options to follow; his 2016 one is for $11.5 million, which could be around half of what he'd fetch on the open market by that time.
Braun signed an eight-year, $45 million deal just a month into his second major league season, and will make $10 million in 2014, which would have been his first year of free agency. Thus far, he has averaged 4.9 WARP. The Brewers have already doubled down with a five-year, $105 million extension that runs from 2016-2020, and maxes out at $19 million in 2017-2018. By comparison, former teammate Fielder will make $24 million in each of those years.
Giancarlo Stanton, Marlins: Though he missed a month due to knee surgery, Stanton still blasted 37 homers while hitting .290/.361/.608 — all career highs — in his age 22 season (he turns 23 on Thursday). He has one more season before reaching arbitration eligibility, and he could become the youngest player to receive a deal in excess of $100 million. Even so, he's playing for a team that's run about as badly as any in the majors in terms of sticking to a plan and not alienating key players or the fan base. The penny-pinching Marlins would be wise to open their wallets, and they've considered doing so, though Stanton could just as wisely decide to stay on a year-to-year track and bolt for bigger dollars and a better-run organization after the 2016 season.
Clayton Kershaw, Dodgers: Kershaw turns 25 on March 19, and by then he may have a second Cy Young under his belt. He'll make $11 million in 2013, and won't reach free agency until after the 2014 season. Pitchers are inherently riskier than position players on any contract, and Kershaw's late-2012 hip injury is cause for some concern. But if he reaches free agency, the going rate for frontline lefties is $24 million a year (Sabathia, Hamels and Cliff Lee all average that figure), and you can be sure Kershaw will aim to top that. The Dodgers are already about to join the $200 million payroll club, but they'll be able to time their ace's next pact to kick in after Josh Beckett and Hanley Ramirez come off the books.
Buster Posey, Giants: In part because he missed most of 2011 with a broken leg from a serious collision, San Francisco's catcher has just 308 major league games under his belt, but he already owns two World Series rings, and he may be adding the NL MVP award to his mantelpiece as well in a few weeks. Posey will turn 26 in March, and he's arbitration eligible for the first time. With Cain and Madison Bumgarner their only players locked up after 2014, the Giants have plenty of room to maneuver, and while they would be wise to consider the possibility that at some point it will make sense to move Posey out from behind the plate, that day isn't here yet.
Chase Headley, Padres: Headley enjoyed a monster second half, smacking 23 homers after the All-Star break — a number that itself would have been a career high — despite playing half his games in Petco Park. Early on amid his second-half breakout, I argued that the Padres, who had just changed owners, should trade him this winter, but the team's late-season surge (42-33 after the All-Star break, second-best in the NL West) suggests they're closer to returning to contention than most observers believed at the time. Headley is only 28 (29 in May), coming off a salary of $3.475 million, and as a Super Two, he still has two more years of arbitration eligibility left. The Padres are planning to move their fences in, making their park more hitter-friendly and increasing the likelihood that Headley can pad his resumé with similar numbers under more hospitable circumstances. While San Diego could reap a windfall if it trades him, locking up makes far more sense than it did a few months ago. Undoubtedly, one could include other players on this list. Bryce Harper is even younger than Trout, and coming off a season in which he set all kinds of records for a teenager, but he's already operating under the five-year, $9.9 million deal that he signed when the Nationals made him the first pick of the 2010 draft, and you can bet agent Scott Boras is content to let his client appreciate in value while the baseball world finds out whether the Nationals can sustain this year's breakout. At the other end of the age spectrum, Robinson Cano is one year away from free agency, but he's already 30 and in search of a 10-year deal, a concept that must make Yankees general manager Brian Cashman cringe as he watches Alex Rodriguez decline — particularly given that second basemen tend to age more quickly due to the demands and risks of the position. Arguably, the Yankees should let him shop his services once he reaches free agency to let the market set the going rate, knowing that they can top most any offer he receives.