Blake Snell and Extending a Player Without Service Time

You can probably be forgiven if you heard about a possible Blake Snell contract extension and your first reaction was to wonder, “Who?” Snell has never pitched in a major-league baseball game. He is not one of the top-ten prospects in baseball. Rather, he’s made just 21 starts above Class-A, has produced a walk rate above 10% in every year of the minors, and (perhaps as a result of playing in the Tampa Bay Rays organization) is generally unknown to the masses. However, Snell is one of the top-20 prospects in baseball, his walk rate has moved down as he’s moved up the minor-league ladder, he struck out more than 30% of batters last season, and he allowed just 21 runs in 134 innings last season (1.41 ERA). He’s also likely to see the majors this season, and the Rays have had talks with Snell about a contract extension.

Contract extensions for players with no service time are incredibly rare. The last one was Jon Singleton in June 2014, and prior to Singleton, Evan Longoria‘s contract extension in April 2008 — which was not announced until after a week in the majors — was the closest comparison. The Rays are not strangers to similar deals. Matt Moore is in the final guaranteed year of his contract that he signed after pitching just 9.1 innings back in the 2011 regular season. They also approached Melvin Upton as a teenager, but were unsuccessful in reaching an agreement. Since 2010, there have only been four contract extensions for players with under one year of service time and the Rays are responsible for two of them in Moore and Chris Archer. (Singleton and Salvador Perez are the others.)

Contract extensions are much more likely to occur after a player gets established in the big leagues, however. The graph below shows the number of extensions of at least three years by service time since 2010, per MLB Trade Rumors.

contract_extensions_by_service_time

Extending a player with less than one year of service time is rare — for reasons that affect both team and player. First, from the team’s perspective, there’s the knowledge the jump from Triple-A to the majors is very difficult. Without observing a player’s performance at the highest level, there remains a high degree of uncertainty concerning that player’s future. Second, there’s not necessarily much rush for a club. Teams can pay the minimum salary for close to three full years, meaning they’re unlikely to owe a player more than $1.5 million for three years — and, even if the player works out, no more than $5 million over the first four years. Given the current pay structure in MLB, there’s a pretty strong disincentive to guarantee money to a player who won’t be owed much for roughly four seasons of production.

On the player’s side, these deals usually involve relatively small guarantees. Moore received just $14 million. Salvador Perez got $7 million and Singleton received just $10 million. There’s also the presence both of peer and union pressure. When Singleton signed his contract, there was considerable consternation from some players about Singleton potentially signing years of free agency away for such a small guarantee. A year after the signing, when Singleton was sent back to the minors, the deal looked a little more favorable for Singleton.

When the Astros signed Singleton to his extension, they hoped he would be in the majors for the rest of 2014 and all of the 2015 season. That would have rendered him a super-two candidate following the 2016 season and entitled the Astros to one free-agent year (2021) for a potential bargain at $13 million. Singleton finished last season with less than one year of service time, which means the Astros no longer have an option on Singleton’s first free-agent year. If Singleton plays well from here on out, the Astros will have paid $30 million for Singleton’s arbitration years with no free-agent years after.

The possibility that a prospect might need further seasoning in the minors — that, along with service-time manipulation — makes contracts like these difficult to pull off. Singleton’s contract covered eight years and yet will have no free-agent seasons attached to it. For Blake Snell, the Rays could keep him down in the minors for a few weeks like the Chicago Cubs did with Kris Bryant last year, and then they would have Snell under control for almost seven full seasons. If the Rays and Snell reach an agreement before the season starts and the contract has options through 2023, then Snell will start the season with the Rays and the contract will seem to have bought out two years of free agency.

The reality of the situation is that, under those terms, the Rays will have bought out just one year, while also receiving the benefit, however, of inserting Snell directly into the rotation — as opposed to keeping him down in the minors for a couple weeks. That said, it’s not clear there’s an immediate spot for Snell in the rotation at the moment unless the team moves Moore to the bullpen. Adding another option to go to 2024 would make it more palatable for the Rays, but we are pushing the benefit way down the line. So are the Rays willing to guarantee $10 to $20 million for a player who has never pitched in the majors for a real benefit they are not likely to receive until 2023 and would last just one season? Is Snell willing to put off free agency and potentially forego larger arbitration awards should he be successful in the big leagues?

Placing a value on these considerations is difficult. When Jeff Zimmerman recently put a surplus WAR value on prospects for the farm systems, he used 8.5 total WAR and 6.0 surplus WAR for a 65-grade prospect like Snell. The study from Creagh and Miceli placed pitching prospects ranked 11 through 25 at 8.1 average WAR — a result which matches up nicely with Zimmerman’s work. The problem with translating those values into a contract is that the team already has control of the player through those years, and they already receive that benefit. A contract extension would put Snell on the Opening Day roster, but bringing him up two weeks later will not materially affect the team. The Rays could get a discount on arbitration seasons, but even those benefits are five to six years away, and a lot can happen to a pitcher in the meantime.

Snell is represented by the same agency that negotiated both the Singleton and Moore contracts, and both contracts look to have worked out fine for the player while also creating minimal risk on the part of the team. The lack of middle ground due to the far off benefit and the relatively light guaranteed money makes it difficult for the parties to negotiate. If Snell is willing to give up two free-agent years, the risk becomes worth it for the Rays and if the Rays only want one free-agent year, the guaranteed stability becomes worth it for Snell. One of the parties will have to cave a bit on its desires for the parties to reach a deal. There is less middle ground when a player is so young, and that is why we see so few of these deals in the first place.



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Craig Edwards can be found on twitter @craigjedwards. His writing also appears regularly at VivaElBirdos.com where he is an Editor.


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Hamachi
Member
Hamachi
3 months 4 days ago

“That would have rendered him a super-two candidate following the 2016 season and entitled the Rays to one free-agent year (2021) for a potential bargain at $13 million.”

Probably should say Astros instead of Rays, since you are still talking about
Singleton.

burritooverdose
Member
burritooverdose
3 months 4 days ago

i never understood the incentive for a team to give the money to players that are way more risky and far less likely to pan out. I think a player should at least prove he can be valuable to the team before they extend him.

Legeisc
Member
Member
Legeisc
3 months 4 days ago

It is standard risk assessment. If you think 33% of the deals work out in your favor and you can pay 20% of what a success is per contract, you do the deals. You just understand you look like an idiot twice as often as you look smart in this over-simplified scenario.

LHPSU
Member
LHPSU
3 months 4 days ago

Because that’s how you can get discounts on the players that do pan out.

conradparrish53
Member
conradparrish53
3 months 3 days ago

It’s a simple concept of Low-Medium risk, High reward contract. The potential for them saving money outweighs the risk. For even a small-market team like the Rays, one albatross of a contract won’t hurt them much if he’s a bust.

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