Brewers Extend Ryan Braun

The news this afternoon broke seemingly out of nowhere. Ryan Braun had just signed a five-year, $105 million extension that locks him in through the 2020 season. If it feels as though we just experienced a similar situation, it’s because we did. The Rockies signed Troy Tulowitzki to a six-year, $119 million extension in November even though he was under contract through 2014. Similarly, Braun’s current contract with the Brewers runs through 2015.

Before we dive into what this means for the Brewers, I suggest taking a moment to re-read Dave’s article on the Tulowitzki extension. It helps put in perspective part of the Brewers’ motivation for enacting this deal now and not a few years down the road. If they’re not betting on significant inflation affecting the market in the next four years, then their motives become a bit more questionable.

As if Braun weren’t already the face of the franchise, this seals it. His contract with the team now runs through his age-36 season, and has an option for the next year. He joins a small group of players — which include Derek Jeter, Todd Helton, and Tulowtizki — who have signed large contract extensions that keep them with their original teams through their most productive years. There’s some value to that, in that it signals to fans that the team won’t just let every homegrown player walk to a large market team after six years. That, I’m sure, factored into the Brewers’ decision.

Braun’s prowess at the plate is also no secret. His .388 wOBA from 2008 through 2010 ranks 14th among all qualified players, and the difference between Braun and the No. 8 player is a mere 5 points. His overall value gets downgraded a bit because he plays left field, and, according to our aggregate defensive rankings, doesn’t play it particularly well. His WAR in the past three years, 13.7, ranks 20th among his peers. He’s entering his prime years now, though, and it’s not difficult to envision him outpacing that production in the next few years. But that just raises another issue.

The Brewers already have Braun locked up through the bulk of his most productive years. His current contract runs through 2015, his age-31 season, at which point he would have reached free agency. Barring injury or other unexpected occurrence in the next five years, Braun will likely provide considerable, if not elite, value past that point. But his production in those years is less certain than in the years covered by his current contract. Again, this points back to Dave’s point about the Rockies betting on future inflation. For this deal to make sense for the Brewers, they have to be betting that salaries will inflate considerably between now and 2016, and that their extension will look like something of a steal by that point. Otherwise, signing him for his age-32 through age-36 seasons during his age-27 season seems a bit foolish.

In this way, the Brewers have shielded themselves from a bit of criticism at this point. They’re making a bet that won’t become a factor for another five years. Is it a smart bet? I ask you, would you place a similar bet, that baseball salaries will inflate considerably in the next four years, with your own money? I wouldn’t. I’m not sure that provides us with any further insight about the wisdom of the Brewers’ move, but it’s an interesting question to ponder.

I’d add a note about this meaning the Brewers unofficially waving goodbye to Prince Fielder after this season, but that was apparent long before the Braun extension. The Brewers are already at $57.4 million in 2012 salary, and that’s just for six players. They have a lot of third-year arbitration cases beyond that. The Brewers have never topped $91 million in payroll, so it appears unlikely that they’ll even make a valiant effort to keep Prince. It’s a shame, since he and Braun represent one of the best 3-4 combos in the game. But, again, the Braun extension doesn’t change this situation much, if at all.

Any time we’re dealing with an extension keeps a player under contract for 10 seasons is going to draw some level of criticism. That criticism gets amplified when the player was already under contract for the next five years. But the Brewers have decided that Braun is their guy, the face of their franchise, and they’re putting in their chips on him. They’re also putting in their chips on inflation changing the salary landscape in the next few years. If they’re not, it becomes a lot more difficult to justify a five-year extension to a player under contract for five more already.




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Joe also writes about the Yankees at River Ave. Blues.


66 Responses to “Brewers Extend Ryan Braun”

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  1. guayzimi says:

    The problem isn’t the bet on inflation – it’s having a mid-30s Braun be the guy you’re paying. He’s a four win player now. A move to first might be helpful, but he’ll have to remain the same hitter he is now to keep this from being an albatross.

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    • robdeer says:

      Presumably the cost per win on the open market goes up if the Brewers win the inflation bet they’ve placed, so he wouldn’t need to be a 4-win player at the end of the deal to generate positive value.

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    • Dealer A says:

      It’s hard to keep a player like Braun on a team like the Brewers. Even without considering economics you have to consider this a win for the Brewers.

      He’ll be revered like Robin Yount, I’m sure.

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      • Reverend Black says:

        “Even without considering economics you have to consider this a win for the Brewers.”

        This is exactly the kind of definition of a “win” that keeps teams like the Brewers from doing much winning.

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      • NEPP says:

        It might help them with future negotiations with guys like Greinke…but overall, this is one hell of a risk for them to take and a completely unnecessary one.

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  2. notsellingjeans says:

    “I ask you, would you place a similar bet, that baseball salaries will inflate considerably in the next four years, with your own money? I wouldn’t.”

    I would. I’d bet my life on it. Free agent classes will continue to get worse and worse. Teams are locking up their young players to long-term extensions at faster rates than ever, and paying them better than ever, for the right to delay their free agency an extra few years.

    The effect of this is that practically zero players reach free agency during their prime. And the effect of that is that mediocre players, or stars about to enter their decline phase, will continue to get paid incredible amounts, because there’s simply no alternative available on the FA market.

    This deal will look great – not as good as Tulo’s, but still great – when the cost of a win on the free agent market is $7M in a few years.

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    • baty says:

      Yeah… If I’m the Yankees, I’m gritting my teeth every time the future FA market looses a Braun / Tulowitzki type, cause that leaves more room for potential “2011 Jeter-esque contracts” to be dished out for filling gaps. It seems to me that the trend is slowly removing the 26-28 year old super star tier from free agency.

      Not to be extreme and all, but if you start projecting future free agent classes as slowly loosing reliability / stability with talent, couldn’t that drive more teams to dish out more and more contracts to arbitration eligible youngsters? Couldn’t that leave even shallower future FA pools to sift through? Couldn’t that lead to FA overspending?

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      • Jay says:

        There will be a market correction before that happens. Players will see that less skilled FAs are making huge money, and will then either demand more in their extensions or refuse the extensions outright to reach free agency.

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      • Jerome S. says:

        This would make a lot more sense if you replaced Yankees with Phillies, or Red Sox.

        Those are teams that are really going to rely on the FA market in the coming years.

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    • LionoftheSenate says:

      I agree with this.

      Further, think of the Macro-US economic situation. Mark Attanasio is a financial genius, you don’t think he is factoring in what $100 million will be worth in 2016-2020 vs today?

      If the US fed keeps printing money….Braun will be holding out before this extension kicks in. This is a REAL factor that nobody’s analysis has mentioned. Forget MLB inflation, talk US Dollar inflation.

      Win.

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      • notsellingjeans says:

        (Slowly nodding my head in agreement).

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      • PhillR says:

        The Fed doesn’t print money. The Treasury does. The Fed distributes it.

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      • LionoftheSenate says:

        The fed decides if the money supply is increased…..so they very much do print money. The treasury does that actual printing, yes you are correct.

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      • PhillR says:

        “Bureaucrat Conrad, you are technically correct — the best kind of correct. I hereby promote you to grade 37″

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      • lex logan says:

        “If the US fed keeps creating money” would be correct. Money primarily exists as checking account deposits, and the Federal Reserve guides the quantity of those by expanding or contracting bank reserves. Physical printing of money is not the source of inflation.

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    • Michael says:

      If that were the case, then teams would just place more importance on trading, the main viable substitute for FA. That would lessen the increase in free agency salaries.

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  3. Dustin says:

    I also wouldn’t just peg Braun to be a 4 win player over the next four years. His defense isn’t very good, but I think he is a bit better than the metrics indicate and he has made a concerted effort this year to increase his power numbers. I expect a big couple of years for him.

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    • notsellingjeans says:

      Is there any chance they put him at first after Fielder leaves? I realize that negates his best defensive tool (speed) but it also mitigates some of the damage he can do in the field, too.

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  4. CWB says:

    The issue isn’t just salary inflation. It’s that the Brewers have sold a massive put option on Braun’s health, and any extension signed beyond his current contract should have been discounted to reflect this additional risk.

    The same with Tulowitzki’s contract extension. We have to consider not only what the dollar value per win will be in the future, but also the monetary value of the club’s option to walk away after the current contract ends, which it gives up in premature extensions.

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    • notsellingjeans says:

      Yes, but Tulo is a $30M per year guy, value-wise, right now if he was on the open market. So, to extend him through his entire prime for $20M per is a reflection of the discount you speak of – the discount the team receives for taking on additional risk that he gets hurt.

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      • Dustin says:

        I agree with you cwb and jeans. The problem I see is Braun isn’t a $30 million a year guy now, so the Brewers didn’t get a discount(or much of one). I think this extension would have made a lot more sense(and included a discount) if it was closer to 5/90 then the 5/105 he got.

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  5. Craig says:

    As a Brewers fan, here is why I really like the deal. First, I consider it a 13 year, 150 million dollar deal. For a player like Braun, that sounds lie a steal to me. Second, I really do think there will be salary inflation in the next 5 years and paying 20 mill for a player in his low to mid-30s will not be that absurd. Third, I think Braun will continue to be a productive hitter into his 30s. His power might drop, but I believe he will continue to excel in hitting high average and good plate discipline. As a hitter, Braun has lowered his K% and increased his BB% every year. This year, it looks like he has power stroke back to go with good plate discipline. He knows how to improve as player and works on improving every year. He is a special hitter and I’m happy that his entire career has the potential to be in Milwaukee.

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    • Septimus says:

      You can “consider it a 13 year, 150 million dollar deal” — but the fact remains that they already had the cost-effective part of the deal. They just added the part where the Braun of 5-10 years in the future was making $20 million a year.

      Now, there’s a good chance that Braun will be worth $20 million a year in the second half of the decade… there’s also a good chance he won’t, whether because of injury, or decline, or a general lowering of baseball salaries.

      Now, what are the odds his open-market value will be substantially MORE than $20 million a year?

      For that to happen, there would either have to be:

      a) a massive inflation of baseball salaries, combined with Braun continuing to be a .900 OPS hitter (give or take).
      b) Braun becoming an MVP-caliber player.

      I mean, at this point, who’s earning appreciably more than $20 million a year? A-Rod is. Pujols should, and probably will.

      That’s it.

      Braun’s a good player, a really good player, but he’s not an MVP candidate. I wouldn’t call him a top-5 guy in the NL, though I suppose that’s arguable. Unless baseball reaches a point where everyone has a $25-30 million guy, Braun at $20 mil is not a bargain.

      And even if that does happen, you have to rely on Braun aging really well. Which, given his distinctly average walk/strikeout peripherals, is far from a given.

      Oh, and if he was willing to sign this deal in 2011, he would probably also be willing to sign it 2-3 years from now. That’s the real argument against this deal… it didn’t need to happen now. It probably could’ve happened the year before his current deal came up (provided the Brewers even wanted him at that price then), but it definitely could have happened in ’13-14.

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      • LionoftheSenate says:

        he would probably also be willing to sign it 2-3 years from now.>>>

        Massive assumption. Braun risks a lot passing on this and waiting 2-3 years….now the risk is on the Brewers.

        If Braun does wait 2-3 year and is able to get within 1-2 of Free Agency, his willingness to wait another year or two to test free agency goes way up and honestly, at that point the Brewers have no chance to keep him. SEE PRINCE

        The Brewers make a marketing decision here, as much as a baseball one….the stats people are unable to measure this impact so they ignore it. Rest assured there is real marketing value in this deal, worth millions……but ignored in this analysis.

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      • notsellingjeans says:

        LionoftheSenate makes a great point here. What’s the financial value of adding Braun’s retired jersey number to the outfield wall in 15 years? What is the financial value of years of jersey sales and bobbleheads in his likeness? Or that casual fans can (pretty much) safely assume that, if they take their sons and daughters to the park and teach them this guy’s name, that he’ll be around in Milwaukee until they are adults?

        That stuff’s important.

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      • Septimus says:

        You could be right. I will concede that Braun is worth more to the Brewers than he is to any other team.

        It’s possible that, at this point, Braun is worth $20 million to the Brewers. He’s had one season with an OPS slightly above .900, two in the high .800s… given that he doesn’t play a tough defensive position, and he’s a distinctly average defender at that not-tough position, that doesn’t seem too special to me.

        But let’s assume that a .900 OPS in LF is worth $20 million to the Brewers. Because of the fan loyalty thing, it stands to reason that Braun has to be worth LESS than $20 million to every other team. His open market value at this point — again, assuming that $20 million is a fair valuation of his worth to the Brewers — is what? $15 million?

        So if it’s 2015, and Braun is fielding offers of greater than $20 million a year from other teams, Braun will have to have increased drastically in value over the next four and a half years. Personally, I don’t think he has the skill set to be much more than a .900 OPS guy — so where is the added value coming from?

        Worst case scenario, if the Brewers think Braun is so irreplaceable five years from now, they overpay him. Let’s say $25 million. Nobody’s beating $25 million for Braun. And it’s not like he’s going to walk for non-monetary reasons — if Braun actively wanted out of Milwaukee, he wouldn’t have been so accommodating to them.

        Meanwhile, if Braun turns out like Andruw Jones or David Wright or… really, name HALF of the people you would have expected to be superstars after their first 4-5 years… his contract has crippled the team for a decade. That’s likely to cost the Brewers tens of millions — in addition to the tens of millions they’re overpaying Braun.

        And they’re doing all of that why? To save $4 million a year from ’16 to ’20?

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      • LionoftheSenate says:

        Septimus good take…..but Braun did have an OPS of +1.000 over his amazing rookie year. He led MLB in slugging and set the all time rookie record in slugging.

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  6. filihok says:

    I don’t get why the extension. They had him locked up to very team friendly deal. The extension looks to be around market rate-just with more risk for the Brewers.

    http://filihok.blogspot.com/2011/04/ryan-braun-contract-analysis.html

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  7. kid says:

    Ryan Braun’s bat has been one of the best in the business for the last 4 or 5 years. He’s durable, can hit for average and elite power, and he has above-average on-base skills. If a team isn’t going to lock up a player like that to a contact, who *would* they lock up?

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  8. dustygator says:

    Is it a great for the team? No. Is it an awful deal? Probably not. Look at it this way, this means they won’t have to overpay for a FA like the Nationals had to do with Werth. Werth is 31 and the Nationals are paying him $162M. Braun will be 31 and will be getting $105M. Factor in the fact that Braun is pretty much the face of the franchise with Prince about to leave and it makes some sense.

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  9. NEPP says:

    You’re forgetting about the merchandizing/branding aspect of this. I mean, the Brewers will likely sells dozens if not hundreds of more Ryan Braun jerseys now.

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  10. Garrett says:

    All of these distant extensions are completely horrible.

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  11. Slats says:

    Good to see a player like Braun staying in a small market.

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  12. CptSpandex says:

    I don’t know if the bet is on inflation as much as it is knowing what the Cardinals’ 31-year-old slugger is going to cost this offseason. Couple that with the Mauer and Tulo contracts and I can see players salaries continuing to rise in the next 4-5 years. Absolutely!

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  13. Mike says:

    Anyone else remember Griffey after he signed with the Reds? That’s a recent case of an amazing player signing a lucrative long term deal at age 30, but losing probably a couple years of production to injuries.

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  14. Htpp says:

    …if they had Braun locked up until 2015…why not extend Fielder instead? They’d have Braun and Prince through their primes, instead of Braun through his prime+decline. Would Fielder just cost way too much to extend? He’s not blocking any 1B prospects, so unless they don’t have the extra money, I don’t get it.

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    • Dustin says:

      They already offered Prince 100m over 5 years and he declined it.

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      • cs3 says:

        Http: 2 words – F’n Boras

        assuming the Brew stay in contention through July and Prince is not traded this year…
        is it too early to say Prince goes to Washington?

        NYY have no place for him to play, Mets are practically bankrupt, Red Sox just signed AGon, Phillies have Howard locked up, Dodgers arent signing ANYONE in the foreseeable future (i love that part the most)… am i missing anyone?

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      • Beaster says:

        Jays if Lind flops again this year

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  15. Scott says:

    I think the Brewers came to the conclusion that they wanted Braun for all his productive years, and then they asked themselves how they do that for as cheaply as possible.

    You have to remember the value in this deal is AVOIDING his extreme decline years beyond 36. If they had waited until he reached free agency in 2014, I am relatively sure that some team would have signed him to a Jayson Werth money or even Alfonso Soriano money. In that sense this deal is a good deal.

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  16. cs3 says:

    If this trend continues, (and at this point i dont see any way it stops since young players will almost always want to guarantee themselves long-term financial stability before maximum lifetime earning), there will eventually be close to zero elite players available via free agency, and only a small number of very good ones.

    Which has me thinking…

    Anyone think theres any chance that MLB slowly shifts to a player transfer system similar to european soccer, where players are essentially bought, developed, then sold for profit?
    Or is that system a product of many leagues competing for the same player base?

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    • cs3 says:

      the first sentence would probably read better as:
      “…young players will almost certainly continue to choose to guarantee themselves long-term financial stability *at the expense of maximizing life time earnings”

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  17. The Ruffian says:

    Why on earth are these teams locking up players through age 36 seasons?

    The Tulo extension was bad enough but at least he’s a shortshop.

    Why lock up a slow left fielder for his ages 31 through 36 seasons at $20 million plus per year?

    It doesn’t make any sense – so, so much could go wrong on this deal for the Brewers.

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  18. Ryan Braun says:

    MOZEL TOV!

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  19. The Ruffian says:

    NEPP you dumb bastard – read what I wrote:

    I said the Tulo deal is NOT as bad as the Braun one. Then you responded by saying that’s it not as bad. I just said that.

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  20. robby says:

    everyone seems to forget that trying to sign him to this extension a year or two from the end of his current deal wouldn’t have happened. by then, he’d just wait for someone to give him a 5-6 year deal then and overpay. Also factor that this isn’t changing his current contract, he’s still only making 6M this year i think, so it’s not like his current salary goes to 19M. If Werth gets 126/7 now, in five years, that same deal will probably be 150/7, and then getting Braun for 105/5 is a steal. If they waited til his FA year or close to it, why would he sign it when he could probably get an extra 30-50M on the market? It’s not like this is money they’re spending now that could go to prince next year, so don’t confuse a contract re-work with this extension. Admittedly, he won’t be as underpaid as he is now, but he will still be underpaid during that contract.

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  21. robby says:

    and yes, much could go wrong for the brewers, but they dont have the option to let him hit the open market (or sniff it) and then just match any offer he gets.

    is there risk? any -contract- has risk, and longer ones have more risk. could he get hit by a bus tomorrow, sure, but every longterm deal for a multiple allstar counts on good health and productivity, otherwise GMs wouldnt extend people if they thought that they wont be good or will get hurt. Braun in the end will be leaving money on the table. how much is debatable, but he could have earned more in his career without doing the deals he has, so that makes a win for the brewers, a matter of how much of a win is TBD.

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  22. Mr wOBAto says:

    The Rockies signed one of the best defensive players in the game, who is also one of the best hitters in the game. They signed Tulo for his age 29-35 seasons on a AAV of 19.8 million with a 14 million dollar option on his age 36 season. his 2007-2011 line is .294/.367/.514 his 2009-2011 line is .307/.384/.572

    The Brewers signed one of the Best Hitters in baseball, who is also one of the worst defensive players in baseball. They signed him for his age 31-36 seasons for an AAV of 21million dollars his 2007-2011 line is .308/.367/.557. his 2009-2011 line is .314/.381/.532

    If I had to choose one of these contracts I am going with the guy who plays a premium defensive position, has had a better SLG% and BB% over the last two years and at a lower AAV.

    That said the Brewers weren’t choosing between Tulo and Braun, they were chosing between signing Braun at 2015 market value. They likely would have been bidding against teams with deeper pockets, they likely would have had to extend his contract at least one more year. If Braun stays healthy this is a big win for the Crew

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  23. Mike D says:

    NEPP is not a smart man.

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  24. adohaj says:

    Without braun they sell no tickets. It would be like Joe Mauer leaving MN

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  25. CircleChange11 says:

    The extensions to players who already have multiple years of team control seem like more risk than reward for the teams, but that might also be the case for any multi-year mega contract.

    Having said that, I wish the Cardinals would have offered a young Pujols a 10-year, 200M extension, through his age 35-36 season.

    It will be very interesting to see how these extensions play out. This could be THE new way of doing things, or we may look back on these deals with a “what were they thinking?” perspective.

    Braun is happy with the Brewers now and they are happy with him. But if/when MIL and COL have to go through rebuilding phases, will these contracts become a hinderence? I think less with COL because of the ages of their stars.

    There also is a shortage of Brauns and Tulos, so having them locked up does occupy a rare commodity. Who knows when/if MIL ever has an opportunity to sign such a player?

    We all often comment on the need for teams to have “franchise players” that are the identity of an organization versus the continual shifting of players from team to team, and for smaller market teams, this may be the only way they keep their 26-28 stars from leaving for bigger markets.

    An interesting situation to me is the Royals. Once their young guys show that they can perform well at the MLB level, it might be a good strategy to buy out their arbitration years with long contracts through their 32-25 year seasons and have a strong core like they had in the 70s and 80s. Continually finding, developing, and replacing these stars is not a realistic scenario … and continually playing the “5-year window game” may not be the best way.

    If Braun does continue to be productive and MIL decides to “go young”, the contract does not likely make him untradeable, but perhaps even more desireable.

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    • Garrett says:

      “Continually finding, developing, and replacing these stars is not a realistic scenario …”

      Not everyone Andrew Friedman.

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  26. Matt C says:

    I just don’t see the reward justifying the risk here. What’s the best case scenario? Contracts go up a bit and Braun continues to be a mid 4 win player in his mid 30s? Even if that happens it will only be a slight win for the Brewers. I just don’t think that’s a big enough reward justifying giving a guy a 100million dollar contract 4 years in advance.

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