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March 23, 2017

Transaction Analysis

The Three Types of Extension

by Bryan Grosnick


IN THIS ISSUE

American League
National League

CHICAGO WHITE SOX
Team Audit | Player Cards | Depth Chart
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Signed SS-R Tim Anderson to a six-year, $25 million contract extension. [3/21]

This kind of contract is the team-betting-on-performance extension. Granted, there aren’t too many deals quite like this one these days—the White Sox’s young shortstop is signing this deal despite not reaching free agency until 2023—but teams like the Rays and Astros have been looking to lock down even the youngest of their potential stars for years. Signing a yet unproven pre-arbitration player to a move like this where free agency gets delayed at the club’s option gives a franchise both cost certainty and amazing value if the player’s performance blows up.

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<< Previous Article
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