“…..or the effect it might have had on agent malpractice insurance premiums.”
I think this statement is made with the benefit of hindsight, but the deal made perfect sense for both agent and player when it was signed.
Evan Longoria made his major league debut on April 12th 2008. On April 18th, with six days of service time under his belt, he signed a deal that guaranteed him a minimum of $17.5 million.
When a team offers that much money, a player with such little service time would be a fool to turn it down. In fact, I’m surprised other teams haven’t struck similar deals since; they have all the leverage at that point (except against Scott Boras clients, of course) and it’s such a low risk for them.
Really though, he’s in his first arb year (though I think he would have been super two last year) So that 2 mil is roughly 40% of his supposed value – 5 mil. Still absurdly low, but it does knock quite afew names off your list.
Maybe other teams will chip in to correct this injustice, similar to Yuniesky Betancourt.
Comment by neuter_your_dogma — January 28, 2011 @ 5:24 pm
Assuming that an injury is equally likely to happen at any time between the ages of 25 and 30 (a large assumption), I think this was a positive deal for both club and player. He’s guaranteed $17.5M, even if he has a career-ending injury back in 2009. He has no idea what the market will bear for his option years ($11M&$11.5M may be perfectly reasonable still in ’15/’16).
And, to top it all off, if he stays healthy he’s reaching free agency right at the peak of his marketability (30 years old), plenty of time to get a large and lengthy contract wherever the big-money is by then.
Sure. But it’s not meant to be a detailed analysis (I wanted to do something different in this post) along those lines. It’s more, “here’s what $2 million is getting the Rays as opposed to other stuff out there.” It’s the entertaining absurdity of the situation that’s fun to look at.
I think this commentary is more reflective of what’s wrong with the system as a whole. Not whether or not it was a good/bad move by agent/GM at the time–like Mike pointed out above, it’s pretty hard for Longoria or anyone with eight days of service time to pass up over $17 mil guaranteed.
But that’s the problem isn’t it? It’s perfectly reasonable and acceptable today for a player of Longoria’s immense value to be compensated this way, while players who produce a fraction of his value at ten years older “earn” much more than twice as much.
Hopefully the player’s union can rectify this gross inefficiency come next CBA, because the player’s share of revenue just keeps dropping and its because remarkably productive players like Longoria are paid peanuts. Longoria is just a symptom of a much larger problem.
Comment by Steve Phillips — January 28, 2011 @ 6:24 pm
You are right.
Looking at some extremes:
1) He far outplays his contract. He signed away some of his free agent years. he stays healthy. he makes more than $40M but missed out on maybe the same amount. But he’s healthy, 31 and the top FA on the market. In line for maybe $100M or more. What a shame. he has to live his life on only $140M.
2) He gets hurt on the last day of 2016. he has to live on only $40M and missed out on same. Never makes another dime.
3) He gets hurt the day after he signs it. He is stuck with only $17.5M.
4) He doesn’t sign the contract and gets hurt or flames out, costing himself most of the $17.5. Maybe he has to get by on less than 1 million and he’s not yet 25. This is the only way he ever has to work again.
Look, I know the owners are a bunch of rich guys and they don’t need this money either but I just don’t see a real big downside in “only” getting $17.5M
Of course pre-arb deals are team friendly. That’s because the team is taking on a tremendous risk. If the player is injured or flakes they incur huge losses. Longoria took the safe deal instead of risking it.
Look at the Rangers with Rick DiPietro. Amazingly talented young goalie that they signed to a 15 year deal averaging under 5mil a year. If he plays to his potential they have the best contract in hockey. But, he instead has a few respectable seasons and gets injured and the team is boned.
The system exists partly so that clubs can recoup some of the cost of player development. How would you suggest changing the system to maintain the incentive to scout and train prospects?
I guess you could change the pre-FA salary structure to pay per WAR. Or $ per WAR per $ club revenue. This way you reward performance, but remove some of the club-born risk. You reward successful young players, but failed young players don’t hamstring a club like failed FAs. And since you’re paying a fixed $ per WAR per $ revenue (so that the $ for your pre-FA players are fixed), there’s no motivation to fiddle with the lineup (unless you’re just going to throw games).
Perhaps a slotting system in exchange for a quicker path to free agency? Or base the time it takes to reach free agency on performance, not service time. I’m just spitballing.
The bottom line, for me, is that the most productive players in baseball remain the most undercompensated, and that’s primarily why their share of the revenue pie keeps slipping every year…front offices just won’t pay much for past-their-prime washed-up 30-something veterans anymore, nor should they. Tango posted something about this earlier this week.
The thing is the Rays get lucky with the type of dude Longoria seems to be. But I don’t think it would be terribly unreasonable for Longoria (if he has anohter excellent season next year) to go to the F.O and say “Listen you got me absurdly cheap. so far, I think we need to renegotiatie this up somewhat. Take care of me now.”
WOuld it be outrageous for LOngoria to go to them and say that he would like to be be paid 2 million more a year? It would be a nominal outlay and it would help to keep a player happy.
It may have seemed to be a good deal at the time but actually siging on the line to take away the FA years was the error. IF htis deal simply cought out the arbitration years I wouldn’t find it quite as repugnant and expoitative as I do.
Sure, at that very time it made sense for him to sign for guaranteed millions. However, it wasn’t as if he was forced to signing a contract at that specific time. If he had waited, even a year or two, he would have been in line for much much, more money.
Hopefully New Era is hooking him up a bit while he hovers averages 4 mil a year for the next three seasons.
Longorias agent should be investigated to see if he got a kickback sent to an off shore account. Seriously, how does an agent stay in business after getting his client the worst contract in all of baseball.
Longoria was just a kid, and obviously jumped at getting some money earlier than a whole lot more later. Maybe he or his family had some financial problems and it was not the agents doing. Would be interested to know what prompted him to sign and if he had any regrets, not to mention if he still has the same agent.
yes he is underpaid, and maybe he and his agent even knew it at the time, but there is some upside to what he did:-
1) starts his career early – he gets to play at 22, 23 etc.. – gives him a much better shot at the HoF, and to make money later on in his career (if you don’t think an early start is important, ask Chase Utley and poss. Ryan Howard in a few years if they would’ve like to start their HoF caliber careers a bit earlier) – this is important becasue…
2) many teams, and especially those under salary contraints like the Rays would want hold back their best players so that they can maximise their cost-contolled years during the players peak
If the choice to Longoria was:-
a) sign this 17mil guaranteed contract and it means you get your shot at an everyday gig; or,
b) don’t sign and spend the next 3 years in the minors
then he might have reasonably forgone the cash to play
And the knocks on his agent…well maybe they are valid, but who knows, the agent ultimately gets overruled by the player, if Longoria wanted to play and instructed his agent to get the best contract he could to enable him to play in the majors right away, then maybe the agent did a decent job.
You are joking about the accusations of fraud from the agent and the Rays aren’t you?
No-one knows what type of job the agent did for Longoria other than the result – he may have pleaded with Longoria not to leave so much on the table for all we know…Longoria may have said, thanks for the advice, but I know what I am doing
To remind you Longoria got a 3Mil signing bonus when drafted, he had plenty of money, the idea that he didn’t know his worth is ludicrous. He simply wanted to play baseball in the majors ASAP. 3Mil Signing bonus + 17mil guaranteed = plenty of cash for life
He just wanted to get on with his career and find out if chicks really did dig the Longoria Ball
The contract is not that different from those signed by two other players in the top 10 of the Trade Value Leaderboard, Jon Lester and Dustin Pedroia with the Red Sox. Those are for more money but were signed after 2 years of high level performance; so a longer track record which reduced the risk to the team while strenghtening the players’ negotiating position.
Are there any examples of one of these pre-arb contracts not working out so well for the team?
Even with Pedroia’s injury, the Sox have to happy with these contracts so far.
worst from a greed standpoint yes, but for a team its without a doubt the best
Comment by fredsbank — January 29, 2011 @ 11:18 am
Like I said, buying out the arbitration years is fine. Where his agent screwed him was to allow this contract to go through TWO free agency years. The rays still woudl have gotten an excellent cost controlled contract that saved them tens of millions of dollars if the contract had merely gone through the arb years. Everyone knew Longoria was goin to be a player. At very least the agent shoudl have insisted on one of those final two years being a player option,. Or written in significant performance incentives into those years based upon MVP votes, HR’s or the like.
Giving away the two free agency years is whats so outrageous
I agree the contract is ridiculous but fangraphs gives too much credit to the Rays here. This is not about the Rays front office being smarter than everyone else (they do have a great front office, mind you, but speaking of the Longoria contract in particular). This is about Longoria’s agent being a complete and total moron. He was a 1st round pick with great potential from the start. His agent knew he could land a big contract in free agency. The Rays low-balled him and for some reason he accepted.
This isn’t about a brilliant front office. Any FO can lowball. This is about a moronic agent.
Ummmm, no…. unless you are doing the typical $/WAR thinking that seems to pervade all arguments these days. There were a few people more valuable than Longo in baseball last year (just look at the WAR leaders or whatever statistic you prefer). Don’t confuse the best “bargain” with most valuable….
If I buy a slow computer but pay only pennies for it… does it somehow become the most valuable or is it simply a great deal or bargain?
I was wondering when someone would bring Alex Gordon’s name up, as he might have been the ideal reason for Longoria to sign a deal like he did. It was just a year earlier when Gordon came up as the can’t miss stud at third base for the Royals…. In fact, he and Longoria’s system-mate (Delmon Young) were widely considered some of the better hitting prospects who had come up in years. Neither of them had the success in their rookie year that Longoria did, but they did show Longoria (and his agent) that there could be some wisdom in striking while the iron was hot and assuring that he’d make enough money to live on for the rest of his life… even if he flamed out.
In truth, Gordon has had times where he’s looked to be a serviceable big leaguer. He’ll probably enjoy a decent career and make more than enough money to live the rest of his life on. The fact of the matter, however, is that you’d have to think that Gordon would LOVE to have $17.5 million guaranteed. The disappointing thing about Gordon is that he actually showed some progress in his second season. He nearly doubled his walk rate (6.8% to 11.6); he cut down on the strikeouts some (OK… not much, but 25% to 24%); his OBP jumped from .314 to .351 and his wOBA jumped from .317 to .344.
Then he got injured early on in 2009, and the Royals don’t seem to have handled him very well since. They’ve shuffled him back and forth between AAA and the bigs for the past two years AND they turned him into an outfielder. He’s regressed significantly in his end of season stats in each of the past two seasons, and he badly looks like a change of scenery would do him some good. He came up pretty much exactly one year before Longoria did, and while the chances are extremely strong that he makes more than $17.5 million in his baseball career, he almost certainly won’t get there by 2013.
It’s been a great deal for the Rays, certainly. However, it was essentially a great insurance policy for Longoria to take at the time. Hindsight tells us he probably hits free agency as a 31-year-old in 2016 with $44.5 million in hand rather than as a 29-year-old (as they probably delay his FA clock for a month without the contract) with roughtly $40 million in hand. Is guaranteeing you’re set for life even if you flame out worth the risk? Considering the rate of attrition even with “can’t miss” prospects, I’d say it is.
Trying to figure out Longoria’s utility curve is difficult. To consider his agent guilt of “malpractice” is completely moronic. To suggest that he’s have been offered a significantly better contract is god damn comical. (BZA contract)
Its results oriented analysis at its finest. Longoria has become basically the best possible player he could be. Why is the (median) expectation of players with high prospect status and 8 days service time? We can adjust that figure significantly downward due the non-linear nature of money. This is where we’d start to achieve something resembling decent analysis. Simply measuring wins in dollars and then claiming players should “receive” that amount in compensation is retardation of the highest order.
Interesting that there is some odd form of scorn at Longoria, or his agent, or even the big bad owner because of an “inexpensive” contract. Yet Albert Pujols is looking to make $30 each year and that isn’t a little insulting to the St. Louis fanbase?
You want to be a true hero in the city, get your eight figure paycheck ($10,000,000) then negotiate a certain amount for fan kickback, and a certain amount of league-ranking-based salary cap expenditures. Whatever, you get the drift.
How any fanbase could see him make $111,000,000 out of their wallets and still support him is beyond me. The team around him can’t help but be diminished in some way sooner or later.
And particularly in these economic times, when certainly a portion of his salary starts in fans’ wallets, for a guy ending that contract to want three times as much…just made me puke a little in my mouth. How is there no scorn at HIM?
Or am I way off? Is he just expecting filthy rich owners to give him over a quarter-billion dollars? That I’d have no problem with. ;-)
Paul, that makes no sense. The choice for Longoria wasn’t minors or this contract. It was this contract or playing in the majors with a standard rookie contract, getting paid peanuts for a couple of years, and hitting arbitration. Or third, playing his rookie year, and THEN negotiating an extension.
He wasn’t going to be sent down to the minors if he didn’t sign.
I’m saying there’s a difference between value and what you pay for the value… if I buy a 4 karat diamond for 2million and a 4.5karat diamond for 4 million which diamond is more valuable?
Does that make folks feel better? (or will people argue over the dollar amount now?)
It is a valid point because the comparison is not between Longoria and a slow computer, it’s a comparison to $ spent on relative value… but why would I expect folks to understand that nuance? He’s a great player – most valuable in all sports? Hardly. Best investment or bargain – certainly arguable.
he makes tons in endorsements and commercials and stuff too, so it’s not like he doesn’t have money. he doesn’t have as much money as Arod, certainly, but making a couple million a year plus the endorsements, as well as the 3 mil signing bonus means he has some money and he really honestly seems to love playing for the rays. it’s bad compared to what he could have had, but he’s luckier than many.
Comment by phoenix2042 — January 30, 2011 @ 6:29 pm
The money is going to go somewhere. It is NOT going to go to the fans.
Any reduction in budget/payroll is not going to result in lower ticket prices.
Pujols is just figuring (rightly so, IMO) that a bulk of the money should go to him, since he’s the one producing it on the field. His value has been a team surplus of 200M since he’s been in the league.
The analogy I use is cigarettes. When the government decided to impose “sin taxes”, the tobacco companies did not take less of a profit. They raised the price of cigarettes, and whatever fines or payments the Tab Co had to make for a dangerous product was paid for by smokers. I’m fine with that. It’s a great illustration of how owners will not accept something that reduces profit. They’ll just charge more.
Fans, like smokers, are addicted to baseball. We say we won’t pay or won’t attend … but we always do. We always do.
Comment by CircleChange11 — January 30, 2011 @ 9:07 pm
If he gets a nickel for every time “Hey, that guy stole my cap” airs on MLB Network, he’s already a bajillionaire.
I was GM from 1997-2003. I signed Bonilla in 1999. I traded for Vaughn in 2001. At least that’s what I wrote in my Wikipedia entry.
Please excuse me while I go edit my Wikipedia entry.
Comment by Steve Phillips — January 31, 2011 @ 10:04 am
“Fans, like smokers, are addicted to baseball. We say we won’t pay or won’t attend … but we always do. We always do.”
I’m in the group that *would* go if it were more reasonably priced. Which it could be if folks had any sense of what “enough” looks like.
Totally lost me with the smoking analogy. I’d like my kids to go to baseball games for a fun, TV-less experience of sport. I don’t want them addicted to going, just as I don’t want them to smoke.
Perhaps your point is that THOSE WHO DO pay for season tickets or attend a lot of games every year are addicted. In that case, forget the ‘average fan’ so the team can just milk the addicts for profit? Gotta love modern-day capitalism.
Any way you look at it there’s greed at the forefront. You basically suggest Pujols should be greedy because the team owners are. That’s messed up imo.