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February 27, 2012

Future Shock

Harper, Trout, and Moore: Free Agents?

by Kevin Goldstein

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The offseason deals handed out to Japanese superstar Yu Darvish and Cuban tools king Yoenis Cespedes, as well as the returns generated in the trade market for young talent like Gio Gonzalez, are further proof that there is nothing more valuable to a baseball team than a cost-controlled star player.

While free agents get huge money, both the draft and the CBA-imposed system of team control prior to free agency are designed to keep costs down. My good friend Sam Miller of the Orange County Register (@SamMillerOCR), however, asked an interesting question (via Twitter) in January that has been bouncing around in my head for some time now:

@Kevin_Goldstein If Trout and/or Harper were a free agent, no strings, service time irrelevant, would either get paid what TEX paid for Yu?

Just think about that one for a moment. And since he's part of the big three when it comes to the top prospects in the game, let's throw Tampa left-hander Matt Moore into the mix as well. Three players universally considered the top trio of prospects in baseball. Three players universally seen as future stars and, by many, as MVP or Cy Young candidates. Three players who are as much as half a decade, if not more, away from their primes. If Cespedes is worth nearly $40 million for four years and Darvish is worth a total outlay of well over $100 million for six, what would teams be willing to pay for these kind of once in a generation talents?

To find out, I posed the following question to a variety of industry insiders at every level of baseball operations, from area scout to general manager. “The agents for the three top prospects in baseball discover a loophole and Rays’ lefty Matt Moore, Nationals’ slugger Bryce Harper, and Angels’ outfielder Mike Trout are all made free agents. Your predictions for how crazy the bidding would get and which player would get the most money?

The answers were wide ranging, but in the end, teams are all-in on the trio.

Nearly all respondents focused on how these hypothetical deals require a different approach; in many ways, they are the opposite of free agent deals. “The toughest thing for me is how the contract structure would go,” said an American League scouting official. “If I’m to spend money on an untested player that probably hasn't fully physically matured yet and lose him before his prime physical years, I would want added club protection on the back side. It's the inverse of a major free agent deal where you pay for the first couple of years in prime production and usually suck on the back end. With these players, you would be sucking on the front end (in all likelihood) in order to reap the back-end benefits of years three to seven-plus.” Contract length quickly turned into the big issue for teams; six years from now, the three might be just hitting their peaks, set to become high-priced free agents at maximum productivity. “I'm not sure this should play into the discussion, but how valuable are Harper or Trout for their age 24-27 seasons?” asked a National League team official. “It would be interesting to see if agents would prefer a shorter or longer deal for their clients in search of not only money now but bigger paydays down the road.”

In addition, Moore's position worked against him in the open market, at least in comparison to the two outfielders. For Harper and Trout, insiders split into two camps: those looking at a five or six-year deal in the neighborhood of $80 million and those looking to go a decade or more, well exceeding nine figures. For Moore, no team was willing to commit to a deal that long, but he often had the best deal in terms of annual salary. “I think Moore gets the biggest deal just based on the starting pitching market and major league readiness,” said an American League GM. “He'd get fewer years for sure, but he might get the most guaranteed money,” added a National League front office member, while another official with an American League team predicted teams would throw rationality to the wind. “We'd have some caution doing [a huge deal] for a relatively untested pitcher but would pay him those dollars anyway to land that type of talent.”

The Results
Bryce Harper, OF, Washington Nationals

Average offer: Eight years, $113 million
Best offer: Eight years, $150 million

“I would place the highest value on Harper,” said an American League official, “when given the lockup period for a young, All-Star-caliber position player with elite hit and power skills.”

Mike Trout, OF, Los Angeles Angels
Average offer:
Eight years, $102 million
Best offer: Eight years, $120 million

“I favor Trout because I think teams would have more certainty that he's big-league-ready right now and can step in as an average major league player at his position,” said a National League front office member. “Harper might be a tick behind that.”

Matt Moore, LHP, Tampa Bay Rays
Average offer:
Six years, $83 million
Best offer: Eight years, $144 million

“Moore has a ton of talent, and the Rays signed him to a great deal,” said a National League front office member, “But there is some risk involved with him just because he's a pitcher. Plus, he's somebody who has struggled in the past to control the strike zone.”

Those numbers might be shocking, but they shouldn't be. One American League official said, “Based on our organizational assessments, all three would be ahead of Darvish and Cespedes.” But beyond all of the hypothetical offers, nearly all respondents made a point of discussing how fascinating, if not downright entertaining, the entire process would be. Even the official who submitted the highest bid on Harper added, “...and I might be way light on the position players.”

One of the most interesting dynamics of this market that will never exist is the numbers of teams potentially involved in the bidding. In traditional free agency, part of the way clubs assess the market on a player is by counting potential suitors, but on these prospective long-term deals, both good teams and rebuilding teams buying into a future prime would be interested. “The bidding would be insane because what team would not at least check in with all three of these guys' agents?” asked a National League official. “Wouldn't twenty-plus teams make serious offers and at least half the teams make competitive ones?

That kind of unprecedented bidding war could produce final tallies far higher than the predicted numbers that, at first blush, already seem inflated. “We may be building on contracts that lack rationality to some extent,” said an American League assistant GM. “In the universe of free agent contracts, we are usually surprised by the size of the deals—and rarely the opposite. I would guess this hypothetical situation would turn out the same and we would be stunned by the size of the deals these players would receive.”

While an American League scouting official agreed, he actually found the numbers to be quite rational considering the youth and talent level. “I hesitate to put a figure out there, but honestly, nothing would surprise me,” he explained. “I also think they'd have a chance to be on par with the best of the best free agent contracts in the game.”

Kevin Goldstein is an author of Baseball Prospectus. 
Click here to see Kevin's other articles. You can contact Kevin by clicking here

24 comments have been left for this article. (Click to hide comments)

BP Comment Quick Links

Pat Folz

As an outsider sitting in the proverbial mother's basement, I have to say that I'd rather have any of these guys at their maximum predicted contract than Pujols, Prince, Reyes, Wilson, or Darvish (inc. posting fee) at the ones they actually got.

Awesome article! If I may ask, how many teams did you poll? I'm curious how Moore got an average of six years but a max of eight. Were some teams really hesitant to sign a young pitcher for more than a few years?

Feb 27, 2012 09:56 AM
rating: 0
 
Yarky1

I'm not sure. Think about how many elite (as in, arguably the best in the game) prospects have flopped or at least disappointed, even ones considered very safe who had already done well in the high minors. Patterson, Young, Anderson, Upton, Marte, Gordon, Weiters. Some of those guys have become good players or still might, but you wouldn't be happy paying top dollar for their first few years. What makes those guys exciting is that you have them for a long time and for cheap. But if you didn't or you had to pay a lot to have them long term, I'm not sure they'd be better bets than established stars.

Feb 27, 2012 15:14 PM
rating: 4
 
bheikoop

I guess "best" was based on average annual salary and the "average" was a collective average. Presumably Moore's contract offers looked like a bell curve, with 96% offering either 5, 6, or 7 year contracts. Not a lot of baseball teams like to stray from those maximums for pitchers.

I'm curious what the max years for any of the players was. Neither Harper nor Trout have been hurt, why not offer 12+ years? It seems the worst case scenario for both is a Vernon Wells career who has been worth close to $90M for his career. I'd hand out a Ricky Williams-type deal of 12 for $7M + incentives.

Feb 27, 2012 15:22 PM
rating: 0
 
viconquest

As alluded to towards the end, even the best offers seem below current market.

At worst, they don't pan out and become good MLB regulars, so you get saddled with a Werth contract (bad but not crippling). At best, you get modern day Pujols-esque productivity for $100 million less.

With their competitiveness, drive to be the best, and all-out effort on the field, I'd go all-in as well (if all-in < 9/$200).

Feb 27, 2012 10:12 AM
rating: 0
 
Yarky1

I think you're really overestimating the worst-case scenario. I'd say at worst they never appear in the majors or are significantly below-average MLB starters.

Feb 27, 2012 15:16 PM
rating: 0
 
Behemoth

Some skills translate better from the minors than others - pitching is one, as are defence and baserunning. The difficulty that hitters often have is that hitting major league pitching is harder than hitting AAA pitching, and that being able to hit AAA pitching is not a guarantee of being able to hit MLB pitching. For me, Trout's defence and baserunning mean that he should have a good MLB career even if the hit tool doesn't work out as well as projected. Moore has already shown he can get major league hitters out. I think it's very unlikely that, outside of catastrophic injury, either of these players would be below average MLB starters, and any player can get injured. I see no real reason why Trout or Moore are more likely to get injured than anyone else. Harper is more of a risk, because much more of his value is bound up in his bat, and it's possible he'll struggle more against big league pitchers, but he still seems a pretty good bet to me.

Feb 27, 2012 15:28 PM
rating: 1
 
Kyle Matte

Sort of puts into perspective how amazingly team friendly some of the deals given to young players like Evan Longoria (9/44 with options) and Ryan Braun (8/45) turn out to be. Obviously it's different as the team is accounting for pre-arb and arb years instead of straight free agent years, but teams definitely love locking up franchise level young talent.

Feb 27, 2012 10:14 AM
rating: 2
 
BP staff member Mike Ferrin
Guest Commenter

I'd be curious to see what the low offers were for each and if there was any explanation from your people as to why they'd go low.

Feb 27, 2012 10:24 AM
 
John Carter

Baseball executives would not like to see these amounts very high - in case something like this actually happens. Perhaps, some of them deliberately deflated the layouts they would offer and don't want to say that is the reason.

Feb 27, 2012 15:06 PM
rating: -2
 
jahoffmn

Kevin (and Sam) this is a great article and brilliant idea.

Even for the best offers, I would be very happy if my favorite team went out and got one of these guys. But, I bet the contracts they signed would soar above even these numbers.

Just think about how insane this entire situation would be if it actually happened. These three are so good, that there would probably be at least one (if not several) team that was willing to make an insanely crazy offer to win the bidding. I bet Harper and Trout could each get 10 years and close to 200 million, and Moore might as well.

Feb 27, 2012 10:25 AM
rating: 0
 
cdmyers

Very interesting. Which player had the highest variance in his offer?

Feb 27, 2012 10:27 AM
rating: 1
 
Adam Hobson

I think a more interesting situation would be one where the draft went away completely, and all that mattered was the free agent contract, with no team control past the contract's expiration. I'd think that would suppress some of the veteran contracts as they are partly paid for by the ability for teams to use severely cost controlled youngsters.

Would the Angels pay Pujols 200+ million and CJ Wilson another $70+ million if they weren't getting Trout, Walden, Trumbo, Aybar and Bougos at below market rates? Would the Yankees have signed Kuroda for $10 million if they had to pay Pineda a market contract?

Feb 27, 2012 10:36 AM
rating: 5
 
abcjr2

When the Messersmith arbitration occurred, Charlie Finley said "make 'em all free agents." He understood that a distorted market in which most players are tied up and only a few are available would cause prices to spike (and then cause blowback as those prices became the expectations for others).

Mark Cuban also observed once that the NFL "has it right" in that no contracts are guaranteed. If you get hurt, it is "88 and out." But this means that players who produce are paid more because the limited pool of funds is not siphoned off into contracts for non-performing players.

Feb 27, 2012 13:02 PM
rating: 2
 
John Carter

Right. Teams squander their profits on free agents. If all players were free agents - majors and minors, that wouldn't happen to the few who make it to free agency. Well, theoretically.

Feb 27, 2012 15:04 PM
rating: 0
 
Behemoth

The money would go to players whatever. All that would be achieved by making everyone free agents would be to transfer money from veterans to younger players.

Feb 27, 2012 15:07 PM
rating: 4
 
John Carter

Yes, I agree.

Feb 27, 2012 15:26 PM
rating: 1
 
BurrRutledge

Darn iPhone flagged this for moderation when I tried to plus it. Can't digger out how to unflagging it now...

Feb 28, 2012 04:27 AM
rating: 2
 
Behemoth

A suggestion for a similar article. Ask all the same people which current MLBer would get the biggest deal if all players were free agents.

Also, agree with the others who are suggesting these figures are pretty conservative. I'd be pretty surprised if nobody would go 10 years for the position players, and 8/$120 for Trout is clearly a worse deal than Jayson Werth got, for a period which should include most of Trout's prime.

Feb 27, 2012 15:06 PM
rating: 1
 
eliyahu

To build on the point made above, it seems like these club officials looked at inferior players -- or players perceived to be inferior -- and applied a premium to those contracts. But why does no one take superior players -- e.g. Longoria, Braun -- and use that as a figurative cap on the contract? If anything, those are the more comparable players, since they're the ones locked up at a similar stage in their development. (Unlike Darvish, who is expected to provide top-of-the-rotation value from Day 1.)

I have to believe that an unproved minor leauger would jump at the chance to lock in tens of millions of guaranteed $$.

Feb 27, 2012 16:53 PM
rating: -1
 
John Carter

. . . because Longoria and Braun were not free agents when they signed those contracts. Not only must they otherwise accept whatever the club would give them at first, and take only market rates for their experience and accomplishments for the next three years, but they were bidding with just one team - one teams where they will be tied to for their first six years establishing their fanhood and families in the community - not the foolhardiest of the 30 teams.

Feb 27, 2012 19:08 PM
rating: 3
 
eliyahu

But, at least in the case of Longoria, there was minimal major league experience to speak of. Put it another way: Do you really think that a player with zero major league experience would turn down a deal for half of what Kevin's talking about above -- say, 8 years and $50M for Trout? I'd have to believe that Trout -- or others in his situation -- would jump at that if they could. And if that assumption is accurate, it would be a mistake for a team to pay double that, just because he may end up being worth it.

Feb 27, 2012 21:06 PM
rating: 0
 
Mr. Cthulhu

Okay, let's say you are right, Trout would love to sign for $50M.

So a team A offers him $50M for 8 years, even if they value his expected production at $100M over the next 8 years. However, you seem to be forgetting about teams B-Z, who for simplicity sake, we will say also value Trout at $100M over 8 years.

Trout would love to have $50M in assured money, but he would probably love $60M even more, and one of the other teams will offer him that, because they would still expect to get $40M in surplus value out of that deal. In fact teams will keep offering him more until he reaches that $100M that they all believe him to really be worth and thus have no incentive to bid over that amount.

In actuality, teams would probably value Trout differently with ranges of $70M-$120M over eight years (numbers made up of course), meaning one team will likely keep upping their offer until no other team still expects to extract value out of that contract.

Even if Trout would love to get a guaranteed $50M, there is no reason he would have to accept that offer and no real reason he would accept it, without at least talking to other teams (some of which would gladly offer him more money).

Feb 27, 2012 21:21 PM
rating: 6
 
Behemoth

You're approaching this backward. The question that matters is not what Trout would like. It's what teams would offer in a competitive situation, where likely every team in baseball would have an interest. That's going to be a lot more than 8/$50.

Feb 28, 2012 02:47 AM
rating: 1
 
Karl T

Very interesting article. The numbers are going to vary wildly in large part because in this hypothetical these three are the only top prospects available as free agents.
If things were ideal for the players union, with no draft and everyone available as a free agent, these guys would still get hefty checks but every team in the league would not be killing themselves for them because every team would also have had recent opportunities to sign all of the last decade of top prospects, and each team would be able to calculate making an offer to Shelby Miller or Gerrit Cole or Bauer as a "value" way to get a very good prospect without paying for these guys.
Of course, all of these guys would have been paid and signed long before they were a year or two away from the bigs, so the players would not have the leverage of someone who had proven themselves in the lower minor leagues. The free agent market would not start at time=MLB minus one, it would be more like time=MLB minus five. If you could have signed Bryce Harper as a 15-year old free agent, what would THAT contract look like?

Feb 28, 2012 10:45 AM
rating: 3
 
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