Why all the incentives are aligned in favor of contracts like the Astros' new first baseman's, and how that could change.
Leave it to the Astros, a team that's spent the last few years sending fans running to the record books, to the legal dictionary, and occasionally to the therapist, to be the team that in 2014 is sending us back to economics class.
Their general manager, Jeff Luhnow, has both an undergraduate business degree and a Kellogg MBA. Their assistant GM, David Stearns, came from the salary arbitration and collective bargaining team at MLB headquarters. Down the depth chart, their baseball operations analyst, Brandon Taubman, came from the derivatives trading world. Hell, their analogue of a traveling secretary (on this team a more comprehensive “manager of team operations”), Dan O’Neill, per his bio:
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Are recent Tommy John surgery victims about to become a new kind of contract extension candidate?
About a year ago, Sam Millerspeculated about the future of contract extensions, which had by then been embraced by big-market teams after years of mostly being the province of small-market clubs. “When that happens,” Sam wrote, “the market inefficiency might as well be gone.” To regain an edge, teams would have to get more creative with the kind of extensions they offered.
One of Sam’s suggestions was that we might start to see much longer extensions—contracts that would pay a player for 15 years or more. That hasn’t happened yet. However, Sam made two more predictions that have come to pass. First, he suggested that a team might offer a player an extension before his big-league debut, which has since occurred in the cases of George Springer and the Astros and Gregory Polanco and the Pirates. And second, he proposed that teams that lock up more marginal players than had previously been considered extendable. “Of the 20 players who have signed extensions longer than four years since the start of last season, all are, if not stars, something close to it,” Sam wrote. Since then, non-stars Jedd Gyorko, Yan Gomes (debatable), and Jose Quintana have signed five-year deals, not to mention Michael Brantley and Sean Doolittle, who’ve inked four-year pacts.
Have extensions killed the free agent star, or just the 2014-15 free agent class?
“I think the toughest thing facing all of us is the future of free agency and the limited resources that are going to be out there.” —Cardinals general manager John Mozeliak, November 2013
Last week, the Braves signed Ervin Santana, which lowered the count of remaining top 50 free agents to three. One of these months, Kendrys Morales, Stephen Drew, and Joel Hanrahan will get jobs, at which point we can officially close the book on the 2013-14 free-agent class. Even with the book cracked open, though, we can come to one conclusion: Teams just spent a fortune on free agents.
An interview about extensions with the man who pioneered them.
Last month, I wrote about what looked like a coming contract crisis for the Atlanta Braves’ young core, wondering when the Braves would approach their young players about long-term deals and speculating that Atlanta’s hiring of senior advisor John Hart—who pioneered the concept of contract extensions for young players while serving as the Indians’ general manager in the 1990s—might portend an extension spree. None of this was news to Braves president John Schuerholz and GM Frank Wren, who had already been laying the groundwork for contract talks with their young stars. Since then, we’ve seen Atlanta swiftly defuse any fears that they would be priced out of their own players, buying out Jason Heyward’s remaining arbitration years and signing Freddie Freeman, Julio Teheran, Craig Kimbrel, and Andrelton Simmons to extensions of various lengths. (Links to Transaction Analysis: Freeman; Teheran and Kimbrel; Simmons.)
We just want to say three words to the Braves: "service time" and "extensions."
When it comes to building baseball teams, it’s generally good to be young, but bad to be the youngest. A young team tends to have fewer players who’ll get hurt or head downhill, which bodes well, all else being equal. But fielding an especially high percentage of young players is often a sign that a team plans to throw in the towel short term, making do with league minimum instead of ponying up for performance.
This is more true on offense than it is on the mound, because pitchers tend to arrive in the majors roughly as good as they’re going to get. Of the 10 clubs projected to have the youngest pitching staffs this season, six made the playoffs in 2013, and seven were winning teams. Of the 10 clubs projected to have the youngest batters, only two are coming off playoff appearances. Which is why it stood out, as I researched the potentially historically old Yankees, that the Atlanta Braves bucked that trend. Here are the teams with the five lowest projected average team batting ages for 2014, based on our depth charts:
Let the other teams sign their players to extensions. The 2014-15 free agent market's got a great deal for you!
Greetings, friend, and WELCOME to Free Agent Emporium, home of the finest free agents your non-CBA-restricted spending can buy! If you’re trying to turn your team around quickly, you’ve come to the right place. Why settle for the same old players year after year when you could bring some excitement to your roster construction instead? No Extensions, Reinventions!™ We’ll help you pick out the right free agents to fit your needs, and you can take them home today. No need to spend time training them: all our free agents come completely clubhousebroken, so you won’t have to worry that they’ll high-five the fans or forget they’re in the field. Now with no draft-pick compensation required!
Is that a shopping list? Let me take a look. [Reads] Hey, you’ve got quite a few positions to fill. Seems like someone’s been “neglecting” their drafting and player development! Ha, ha. That’s what we like to see. Those Who Build from Within, Never Win.™
Now that even big-market teams are signing young players to long-term deals, can extensions still give small-market teams an edge?
There’s a quote that gets attributed to Gandhi in a variety of iterations that follows this idea: “First they ignore you, then they laugh at you, then they fight you, then you win.” Baseball isn’t quite as combative as British colonialism, but baseball’s history of finding inefficiencies fits the structure. Small-market teams come up with new ideas, incubate them, and, if they work, eventually see their ideas incorporated by big-market teams. Virtually any strategy works better with money, so once that happens the edge is trimmed or eliminated. Small-market teams can win but, the thinking goes, not by playing the same game in the same way. I’m not telling you anything new.
This is pretty clearly where we’re going with extensions. A year ago, in a piece on MLB.com, Jordan Bastian ran down the list of teams that had signed players to extensions before the players reached two years of service time.