Nolan Arenado, Rockies Find Security in a Precarious Market With $260 Million Extension
Earlier this month, Nolan Arenado set a record. The Rockies announced that they’d pay him $26 million in 2019—the highest salary ever given to a player eligible for arbitration—after the two parties agreed to bypass a hearing one year before the third baseman reached free agency. Already, though, this record has disappeared. However, you want to parse the language, Arenado’s $26-million 2019 isn’t happening. Instead, he’s reportedly signing a new contract and setting a new record. A $260-million, eight-year extension with Colorado—with no-trade clause, and an opt-out after the third season—will begin this year, supplanting his previously negotiated salary for the season, to give him the highest average annual payday for a position player.
It’s a highly deserved move for Arenado, and a smart one for the Rockies, as covered here by Tom Verducci. Arenado is one of 35 position players in baseball history to use his first six seasons to accumulate more than 33 Baseball-Reference WAR. His 33.1 rank a little above Ernie Banks and Lou Gehrig, a little below Rickey Henderson and Frank Thomas. The 27-year-old third baseman is among the very best in the game today, and Colorado remains poised to contend in the immediate future. Beyond what it says about player and team, however, the extension also feels telling in what it means for baseball writ large.
Arenado is not the first big name to be extended recently. In the last few weeks alone, there’s been Aaron Hicks, Luis Severino, Aaron Nola, Max Kepler, Jorge Polanco and Whit Merrifield. (The Cardinals’ Miles Mikolas’ $68-million, four-year extension was announced on the same day as Arenado’s.) It’s easy to see the appeal for both sides. For players, free agency appears to be an increasingly risky proposition.
This winter saw the middle class get squeezed. An unusually low number of deals were signed for longer than two years and a slew of major-league-caliber players settled for minor league contracts. A lengthy extension carries the possibility of missing out on a larger future payday. But it offers precious security in a precarious market, and it makes sense that there will be players whose personal calculus will work out in favor of such a move. For teams, meanwhile, it’s even more straightforward. These extensions are a way to retain talented players into their primes, often at a fraction of the price that they might command on the open market. There are plenty of teams who appear wholly disinterested in free agency, regardless of their financial ability to participate. This is just one more way to stay competitive without necessarily having to pay players at market rate. There’s risk for a team here, too, of course, but it’s usually far less than there would be in a comparable gamble in free agency. It’s not a new technique—‘90s Cleveland Indians, anyone?—but it’s one that’s been noticeably popular this winter.
Arenado’s extension isn’t exactly like any of the above, though. For one thing, there’s the price tag, which seems far similar to what he could have received in free agency than, say, Nola’s $45 million for four years. And for another, there’s that opt-out. If Arenado decides to take it, he’ll potentially still be able to test free agency in his prime. But he might not want to. His chance to opt out will come after the season finishes in 2021—just before baseball’s current collective bargaining agreement expires. Even if the third baseman continues his stellar production over the next few seasons, the threat of a work stoppage will loom over a tense winter and make opting out seem less appealing. An extension like this provides security not only for this iteration of baseball’s market, but also for whatever might come next, even if that involves a strike and a radically new framework. Regardless of whether Arenado will be on the market for 2022, though, he certainly won’t for 2019—next year’s top free agent is off the board before the season has even begun, and with the growing appeal of these extensions, it might not be so surprising to see some of his classmates follow.
