Contract extensions are all the rage right now. But is the deal as good as it seems? What about free agency? Here's what to expect when extending.
Editor's note: Given the enormous spike of elite players foregoing free agency to remain with their current clubs, we present a one-size-fits-all road map regarding your favorite player's new contract extension.
Congratulations! You have signed a contract extension with [TALENTED YOUNG BALLPLAYER]. You’re in good company, utilizing the same roster building strategy as [OTHER TEAM] and [OTHER TEAM] and [OTHER TEAM] and [OTHER TEAM]. And that’s in just the last two weeks! But you may still have some questions about the process, which, don’t worry, is perfectly normal. Here, then, is what to expect when you’re extending:
Is this deal really as good as it seems?
Yes. Oh, yes. He’s barely old enough to [LEGALLY DRINK / RENT A CAR / RUN FOR SENATE]. At this point, the aging curve is concerned primarily with development, instead of deterioration. As is the case with just about any notable pre-free-agency guy, [TALENTED YOUNG BALLPLAYER] has been ridiculously underpaid compared to the current market rate for what he’s been doing on the field. The deal you’ve been getting from him is so good as to be almost criminal—at least, it might be, if not for the fact that this whole system is built on those deals. Whoops! Anyway. You’re talking about the prime of a player’s career here. You’re likely still going to get it on an incredible deal. It will just look slightly less criminal, and in exchange, it will last for slightly longer. If [TALENTED YOUNG BALLPLAYER] simply maintains his current level of production, you’re looking at a handful of wins above replacement per year, and, remember, those are worth several million each. Deal! If he continues to develop—say, closer to two handfuls of wins above replacement, even if only for two or three seasons—well, wow. Great deal! And you can go ahead and scale all of this down, for players who aren’t quite so young or quite so talented. The math is typically still going to work out in your favor.
What if he collapses? The public projection systems don’t expect this to happen. More importantly, your projection systems don’t expect this to happen; if they did, you wouldn’t be here. If he does, though? Hey, there’s risk in every part of this game. You’re taking on a lot less here than you would be if, say, you were signing him for an in free agency. (Perish the thought, right?) And even when you’ve taken all of this into account, the reward is still big enough to make the risk look small.
Okay. It still looks like a lot of money to lock down in advance.
Sure. It is! It absolutely is. But there’s a decent chance that you would have soon been paying him something closer to this anyway, given that players have lately been more successful in arbitration. And consider the value for however many seasons are tacked on here after [TALENTED YOUNG PLAYER] would have otherwise hit free agency. You’re locking in those years of production without having to negotiate against other teams for them. Throw in the other benefits—goodwill from fans! ability to save some cash by mass-ordering half a decade’s worth of bobbleheads right now!—and, well, it’s still a lot of money, but it’s very likely smartly spent.
Speaking of free agency… what’s going to happen there?
Oh, there’s still going to be plenty happening in free agency. Just think of all of the players who don’t sign extensions. There’ll be plenty of fringe-y defensive specialists, decently capable long relievers, back-of-the-rotation starters… more than enough to keep your front office occupied through those long winter months, making sure they’re maximizing value from the bottom of your depth chart. Remember—a waiver claim on a fourth outfielder can do just as much to light the hot stove as a long-term contract for a much-heralded ace. They’re both transactions, after all. Does anything else matter?
Sure, this sounds fine. What about everyone else, though? What about the fans? What does this mean for the game? Scrapping the countdown to free agency for Whit Merrifield or Aaron Nola or Nolan Arenado or Aaron Hicks or Alex Bregman or Mike Trout or Eloy Jimenez or Blake Snell or Xander Bogaerts or Jacob deGrom or Ronald Acuna, Jr. or [TALENTED YOUNG PLAYER] or [TALENTED YOUNG PLAYER] or [TALENTED YOUNG PLAYER]?
Well, there’s still something to keep an eye out for. The collective bargaining agreement expires in December 2021. Set a countdown for that.