Baseball games are often won by stars, and those stars often get paid. However, teams that are able to acquire players on the cheap have an advantage. Justin Gorman presents the 2016 bargain basement team, featuring the five best contracts in baseball.
Baseball contracts are an exercise in timing, situational value and a tremendous amount of risk. The Los Angeles Dodgers are a perfect case study, as they enter 2016 sporting a payroll in excess of $247M, by far the highest in MLB. Their most recent big-ticket acquisition may be their shrewdest to date – signing Japanese RHP Kenta Maeda to one of the most incentive-driven contracts in recent memory. Maeda’s physical showed him to be a potential injury risk, so he will make a $3M base salary each year for the next eight years, but could make as much as $66M in incentives.
There’s no telling what Maeda will do in the majors, but whatever the result, this deal will go down as the most team-friendly free agent signing in baseball history. If Maeda maxes out his contract and performs at a perennial All-Star level, the Dodgers will have paid him the bargain basement rate of approximately $11.25M per year. Even if Maeda’s arm falls off during spring training, the Dodgers will be obligated to pay him just $24M.
While the most likely result is somewhere in the middle of those extremes, we can find plenty of players who play at a level that far exceeds their free market value. Here are five great examples of contracts that have proven (or will likely prove) to be extremely team-friendly, in no particular order:
Andrew McCutchen, Pittsburgh Pirates
McCutchen leads off this list, and deservedly so. The Pittsburgh Pirates have turned into a perennial contender once again, and owe a lot of that success to their star centerfielder carrying the offense on his back. After McCutchen put together back-to-back All-Star campaigns at the league minimum in 2011 and 2012, the Bucs wisely signed him to a six-year deal, buying out his arbitration and prime years. Since then, he has performed at a level that would have been worth much more on the free agent market:
|2013||$4.5M||.317/.404/.508, 27 SB, 21 HR, 84 RBI, 157 OPS+||All-Star, NL MVP|
|2014||$7.25M||.314/.410/.542, 18 SB, 25 HR, 83 RBI, 166 OPS+||All-Star, 3rd place MVP|
|2015||$10M||.292/.401/.488, 11 SB, 23 HR, 96 RBI, 145 OPS+||All-Star, 5th place MVP|
These numbers are nothing short of spectacular – and Cutch is only 29 years old. Pittsburgh invested in him early, and they have already been handsomely rewarded for taking that risk. Additionally, they have McCutcheon locked up through the end of 2018 – he is due $13M in 2016 and $14M in 2017, and the Pirates hold a team option of $14.75M for 2018, when he’s 31 years old. While he is not stealing bases as proficiently as he once was, the rest of his offensive numbers ask, “who cares?”
Paul Goldschmidt, Arizona Diamondbacks
If anyone wonders why the Diamondbacks have traded almost every prospect in their system and made some massive free agent signings, it is because the core of their lineup was picked up at the dollar store. Goldschmidt has put together three consecutive All-Star seasons, finishing second in NL MVP voting in 2013 and again last year. The D-Backs saw him through the arbitration process once in 2014, and then locked him up to a five-year contract that will take him through his age-31 season. Last year, he put up a MVP-caliber slash line of .321/.435/.570, while crushing 33 homers, driving in 110 runs and even swiping 21 bases. Goldschmidt put up an OPS+ of 170 while drawing a paltry $3.1M salary. To put that in perspective, the Boston Red Sox paid Justin Masterson over three times as much ($9.5M) in 2015 – and they released him in August after he appeared in 18 games, nine of which he came out of the bullpen.
As astonishing as those numbers are in retrospect, so too are the salary numbers for future years for the anchor of the D-Backs lineup. Goldschmidt will be owed $5.875M in 2016, $8.875M in 2017, $11.1M in 2018, and the D-Backs will, no doubt, struggle with the decision to exercise their $14.5M team option in 2019 when Goldschmidt reaches the age of 31. Arizona executed this plan perfectly, while Goldschmidt is performing at an unconsciously high level and is financially set for life with his current deal. Plus, he gets to be a free agent first baseman at 31, when he will fit into an American League lineup as a 1B/DH quite nicely.
Madison Bumgarner, San Francisco Giants
2014 World Series MVP Madison Bumgarner has (like those mentioned before him) rewarded his club for buying out his arbitration years. Bumgarner has been named to the All-Star team the last three years running, and has finished in the top 10 in Cy Young voting all three of those years. He has accomplished all of this while throwing over 200 innings each of the last five years and entering 2016 at age 26. The Giants signed Bumgarner to a 5-year deal beginning in 2014:
|2014||$3.75M||116 ERA+, 217.1 IP, 219 SO, 43 BB, 1.090 WHIP||All-Star, 4th Cy Young|
|2015||$6.75M||129 ERA+, 218.1 IP, 234 SO, 39 BB, 1.008 WHIP||All-Star, 6th Cy Young|
Meanwhile, the Giants get this modern-day Old Hoss Radbourn at $9.75M in 2016 and $11.5M in 2017, and they hold team options for 2018 and 2019 at $12M each. The 2018 option vests if Bumgarner pitches 200 innings in 2017 or a combined 400 innings in 2016-2017.
If he stays healthy, the Giants will have had their ace for nine full “arbitration onward” seasons at an average salary just north of $8M per year by the end of 2019. And at that point Bumgarner will still be younger than David Price is today.
Edwin Encarnacion, Toronto Blue Jays
The Blue Jays signed Encarnacion to a 6-year, $43M contract on December 16, 2010. At the time, the contract would have been considered a somewhat stunning gamble, not because of the average annual salary of $7M-plus, but because of the length of the contract – Encarnacion was just entering his age 28 season and had shown only flashes of brilliance. However, this is a contract that looks amazingly team-friendly in retrospect:
|2011||$2.5M||.272/.334/.453, 17 HR, 55 RBI, OPS+ 111||None|
|2012||$3.5M||.280/.384/.557, 42 HR, 110 RBI, OPS+ 153||11th in MVP Voting|
|2013||$8M||.272/.370/.534, 36 HR, 104 RBI, OPS+ 145||All-Star, 14th MVP|
|2014||$9M||.268/.354/.547, 34 HR, 98 RBI, OPS+ 152||All-Star|
|2015||$10M||.277/.372/.557, 39 HR, 111 RBI, OPS+ 153||All-Star, 12th MVP|
Encarnacion came to Toronto and began systematically mashing – and the Blue Jays look like geniuses to have invested the way they did. His performance has actually escalated proportionally with his salary increases year over year, and he is due $10M again in 2016. No matter what happens this season, Encarnacion has provided Toronto a tremendous return on their investment, and will become a free agent going into his age 34 year.
Chris Sale, Chicago White Sox
The White Sox, like the aforementioned Giants, did the right thing by tying up their ace, Chris Sale, through his arbitration years and beyond. After the White Sox converted Sale from a closer to a starter before the 2012 season, they were not sure what they would get – and Sale turned in an All-Star season and finished sixth in Cy Young voting. The White Sox smartly locked the then-23 year old up with a five-year deal, and the results have already been incredible:
|2013||$850k||137 ERA+, 214.1 IP, 226 SO, 46 BB, 1.073 WHIP||All-Star, 5th Cy Young|
|2014||$3.5M||173 ERA+, 174 IP, 208 SO, 39 BB, 0.966 WHIP||All-Star, 3rd Cy Young|
|2015||$6M||114 ERA+, 208.2 IP, 274 SO, 42 BB, 1.088 WHIP||All-Star, 4th Cy Young, 19th MVP|
Sale, entering his age-27 year, will pull down a $9.15M salary in 2016, and will be due $12M in 2017. The White Sox then have a $12.5M team option in 2018, and a $13.5M buyout in 2019, when Sale will be just 30 years old and, barring another extension, will be an extremely sought-after free agent to anchor some team’s 2020 starting rotation.
All eyes will be on the Dodgers to see if their Maeda experiment works, but there is already ample evidence of teams being able to enter into very advantageous contracts (even though some may not appear that way until after the fact). At the very least, the examples above bolster the argument that new Red Sox general manager (and other league executives) should go ahead and sign their young stars to extensions so Dave Dombrowski can reap the long-term rewards and avoid arbitration. While there is an inherent risk in going all-in early, and every contract signing is a gamble, the above examples show that there is potential for an extremely high payoff.
Justin Gorman has written about manager tirades, baseball contracts, an illegal delivery, and the case for expansion.
Follow Justin on Twitter @j1gorman.