The Trend Toward Team Options
In the last week, we’ve seen three young American League starters sign long term contracts with their teams despite minimal Major League experience. Clay Buchholz has thrown 374 innings, Trevor Cahill has thrown 388 innings, and Wade Davis has thrown just 217 innings in the big leagues, and yet all three now have long term financial security. In order to get the cash so early in their careers, however, they each had to give their organizations multiple club options on their free agent years. These three are continuing a trend that is gaining momentum, and could have some interesting ramifications for the future of salary inflation on the free agent market.
Contract extensions used to be mainly aimed toward retaining players who weren’t too far off from free agency, and it was extremely rare to see a player rewarded with a long term deal until he had established himself as a premier player. That has shifted significantly over the last few years, as teams have used the carrot of quicker paths to significant money in order to get their best young talents to sign away free agent years at an early age.
The Evan Longoria contract is the most talked about version of this kind of deal, but he’s far from the only guy who signed a team friendly extension early in his career. Ryan Braun, Troy Tulowitzki, Dustin Pedroia, Justin Upton, and Ryan ZImmerman also signed 5+ year deals before they were arbitration eligible, taking guaranteed money in exchange for some potentially lower payouts in their prime. Besides all being position players, however, these guys (minus Longoria) have something else in common – for the most part, they didn’t surrender many potential free agent years without getting a guaranteed paycheck in return.
The Red Sox got one team option at the end of Pedroia’s deal, and the Rockies got one on Tulowitzki as well, but Braun, Upton, and Zimmerman just signed straight contracts that guaranteed them a certain amount of money for a set number of years, and then both sides were free to walk away when the deals ended.
Now, though, we’re seeing teams move more aggressively toward the Longoria model, as they are seeking as many team options at the end of these contracts as they can get. And understandably so – a team option is the best of both worlds for an organization, giving them potentially huge cost savings with minimal risk. Especially with pitchers, there’s a pretty good chance that their arms are going to fall off at some point, and teams are wise to limit their long term exposure with such high attrition rates.
Limiting that risk used to mean not signing pitchers to long term deals until you had to. Now, it means signing them very early and getting their first few free agent years as team options. In many ways, it appears to be a win-win for both the team and the player. But I have to wonder what the long term ramifications of these types of deals will be.
Look at the list of the best young starting pitchers in baseball – along with Buchholz, Cahill, and Davis (who probably doesn’t qualify for that distinction, but we’ll include him here anyway, as he does have some potential), you’ve got Ubaldo Jimenez, Brett Anderson, Jon Lester, Yovani Gallardo, Ricky Romero, Chad Billingsley, and Johnny Cueto all under long term contracts that include at least one team option at the end of the deal, and in many cases, two or more option years. These guys would have made up the core of high dollar arbitration settlements, and eventually, they’d have been the premium free agents hitting the market.
Now, however, the ones that survive the injury nexus are not going to cash in with huge paydays – they’ll simply watch their organizations pick up their options and earn a salary that seemed fair when it was negotiated four or five years prior. Essentially these young arms have entered into an agreement to split the pot, to borrow a phrase from poker. Rather than letting the winner’s reap all the spoils, they’re all splitting up the pool of money before they have a chance to get hurt and lose out one big payday.
If this trend continues (and I see no sign of it slowing down), we’re going to enter into an era where the best players in the game are also going to be significantly underpaid during their primes. Teams are making these deals because they realize that, on average, they’re going to come out ahead by overpaying an injured bust $10 million but underpaying the guy who does develop by $50 million or more in some cases.
With less money going to the top end talent that sign early, we may be in for some pretty serious inflation for those who do end up making it to free agency as quality players – whether they just decided to go year to year or developed later, they’re not going to face nearly the same level of competition when they become free agents, and teams are going to have more money in their pockets from the cost savings they’ve achieved by locking up their stars at a young age.
For guys like Jered Weaver, David Price, and Clayton Kershaw, they may be looking at some monstrous contracts if they decide to keep going year to year. They’re going to find themselves free agents in a market where there are few other possible avenues to acquire top line talent, and teams will have more money to spend than they have previously.
Of course, teams may see this coming as well, which will make them even more aggressive in trying to lock up their young players before they can hit the market and demand a massive paycheck. In some ways, this looks to be a self-perpetuating cycle that will only result in larger paychecks for players signing away their free agent years in the future.
These organizations that are getting team options on all their young players now are almost certainly making good business decisions, and I can’t fault the players for taking these deals at this stage of their career either. I suspect, however, that the pendulum is currently too far to the organization’s side of things, and is setting up for a swing back toward the player’s side. With all these players signing away premium years without guaranteed paychecks, we’re going to see teams with a lot of money to spend and not a lot of places to spend it.
Assuming the world economy continues to recover, we could see some pretty insane free agent contracts in a few years. It’s going to be a good time for those who passed up the early payday and made it through to free agency after six years of service time.
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It’s definitely an interesting trend, especially to see so many star-level talents get locked up by the team they come up with.
To me, the most interesting part about it is how it may affect the huge payroll teams. If the Yankees and Red Sox, for example, don’t have the chance to sign as many star players in free agency – or if teams are less eager to trade their players because they can control them at a reasonable price for longer – it could be the thing that really makes an impact on achieving more parity in the game.
At the very least, it will push the focus back to drafting (and trading for and international signings) and developing prospects, which even if the big budget teams have some extra resources to allocate to, is going to be a much fairer competition.
Of course, this could lead to a reversed trend down the road, as Dave alluded to, as players realize the massive reward that may be available if they’re willing to take the risk of going year-to-year early in their careers.
I would expect the “price” of these options to increase as they become more prevalent and players’ agents realize their clients’ leverage in the negotiations. The increasing price could include a higher premium on the base salary for the early period and/or a higher price on exercising the options. At some point the price may increase enough that teams will figure that it is more economic to just accept the normal saving from the pre-arb and arb-eligible years.
Right – teams are probably exploiting an inefficiency right now, and by definition, once that gets popular enough to become a prevalent strategy for most teams, the price will become more efficient and teams will be less inclined to make these kinds of deals.
How exactly does understanding a different utility for a dollar become “more efficient”?
I don’t think the players do have leverage. The team’s can still go year to year and get players on the cheap for 6-7 years. The team knows the player is choosing between the risk of injury and being set for life. Ask yourself this: will Strasburg sign early? I’d bet the seven dollars in my wallet he won’t (because he’s already set for life).
Longoria’s agent has been beaten up over this, but it makes complete sense for the player – much in the same way a draft pick should never walk from a $1.2M signing bonus because he thought he deserved $1.4M. Basic economics (and common sense) is that the utility of each additional dollar decreases as you accumulate more of them. For any normal person on the street $1M is life alterning, the next million less so, and the impact of each million decreases as it goes up.
Baseball players are, but for their athletic talent, typically not wealthy. If their talent declines or disappears – due to injury, or whatever – most of them are stocking shelves at Wal-Mart. To be guaranteed tens of millions is much more important than the prospect of making a few extra million on top of it.
People like to make this argument, but forget that for most of these players, these extensions are not their first few million. Longoria got $3 million to sign out of college, Braun got $2.5 million, Upton got $6 million, Zimmerman got $3 million, Tulowitzki got $2.3 million… Pedroia is the only one of the position guys who wasn’t already set for life when he signed his life away.
Yes, there are diminishing returns. However, the initial steep drop in returns have already been passed for most of these guys, who get a pretty nice signing bonus when they are drafted. After that, it’s much more steady in terms of value for each dollar.
How so? They’re moving from “nice start” to “never gotta work”. I think you VASTLY overestimate the worth of a few million.
$6 million is a “nice start”? Seriously?
2.3m is set for life? Do you have any concept of variance/finance? Tell me what would be a reasonable yearly income to expect from 2.3m or 6m. Then you can tell me what social class that would be in. Hint: Rhymes with biddle.
Your arrogance is amusing, but absurd. Clearly every MLB ballplayer and their financial advisers suck at understanding finance/math/life/utility/etc and you are able to make major life decisions that will have a massive effect on curtailing negative skew financially via some hand waving and an inability to understand.
Did it ever occur to you that a professional athlete, when faced with the day to day trappings of wealth… may desire more than a middle class lifestyle? That was rhetorical. Obviously you didn’t consider that.
Hey Garrett – maybe you can come aboard with more hostile douchebaggery? C’mon, give it a go.
You can disagree and ask questions all you wish, just try and engage in a discussion rather than being a combative douchenozzle. Will make for a more constructive discussion.
Jason. I don’t think you read the discussion prior or perhaps you flipflopped the names when reading. DC alleges that there is an initial steep drop for the pool of people who got 2.3-6m in signing bonuses thereby causing the future utility of a dollar to drop. He uses the term “set for life”.
I ask, “How so?” and remark that he vastly overestimates the worth of a few million.
DC then responds with trolling.
I then systematically raise all the questions he can’t answer without massively tooling himself. Perhaps you should really review conversations before you chime in.
More accurate recap:
I post something. You freak out. I ask if you’re serious. You freak out. Guy calls you on freak out. You freak out again. Rest of FanGraphs readership realizes you’re ignorable. Life moves on.
So you actually can’t answer that question? You’re going to rely on an appeal to the masses rather than using actual numbers?
Here lemme help you since you’re clearly inept. I’m going to assume “set for life” means “I don’t have to work… ever”. Perhaps to you it means “Never have to work… except everyday”. But I feel that is a tidy definition. Lets only use absurd examples in this iteration.
Troy at 6m. He takes home every dollar. He manages to get a 5% after tax. 300k a year. He lives upper-middle class, borderline “rich” amongst the doctors and lawyers.
Lets try a real example.
Tulo at 2.3m. He takes home ~1.5m after taxes. He manages to get the market rate of inflation adjusted return (2.1% go check your 30y TIPS. If you wanna quibble, welcome to reality. I’d be happy to go further into explaining why correlating income to expenditures is a good idea and introduce you to a Monte Carlo sim.) 31.5k a year…
Set for life. God bless trailers and Natural Light.
Do you have a cogent response? Obv not. More rhetorical questions. I’d love to hear your definition of “set for life” and various assumptions you could make so that the pool above is “set for life”. Perhaps all of them has a secret career moonlighting with a professional degree or a gigolo? Who knows.
But don’t worry folks. 31.5k is the lifestyle a pro ballplayer is where they’re “set for life”.
Most financial planners say you can withdraw 4 percent of a lump sum a year and be solvent for life. So if you can save 50 percent of a $3 million bonus (after taxes, agent fees and paying down debt) that would give you a yearly income of $60,000. A nice start, but not set for life.
For a $30 million contract that buys out arb years, saving $15 million, you’d have an income stream of $600,000. Seems comfortable even after inflation, and would expect a lot of deals to be signed in this range.
Wow Garrett, I can literally smell the condescension from here. While you have made your point sufficiently clear to us on the misuse of “set for life” by Dave, you lose all credibility in your argument with your aggressive tone (calling people inept, absurd, and referring to babying us all thru a financial planning exercise). We all respect a dissenting opinion, as long as the tone and verse are respectful. Your point is made. At this point you are only making yourself looks worse.
“If you guys can’t separate tone from substance, that is your problem not mine. Stop being such whiners about tone.”
~MGL
Only a true idiot would mistake tone for content. If you think I was being trollish or “freaked out” in my initial responses, you’re out of your mind. My “aggression” (That should read man-on-boy-style-fact-based-rape) was in response to this comment: “$6 million is a “nice start”? Seriously?” Which was later proven to be exactly accurate and that DC has no concept of personal finance.
You can decide who to listen to based on “niceness”. I’ll prefer truth and facts over nutriding.
And only a true asshole would overreact to the misuse of a phrase. Seriously though, did you read your posts at 4:13/4:30 above? It’s NOT condescending? How is that constructive argument? As I said, you made your point, no need to call your response a “rape” of Dave’s lack of finance knowledge. Honestly, you consider your response constructive criticism? Have you ever had to teach someone something? Do they often leave in tears after you “rape” them? I’m a CPA, so I clearly understand that you are right in that without making some fantastic investments (like Ty Cobb’s investing in Coca-Cola stock with his early salary) these players will need to keep working in some fashion. Many of them did not go to college and will have a steep learning curve to survive mainstream workplaces. Perhaps you can start your own personal finance site which draws thousands of readers. Then you can call Dave inept. We all prefer truth and facts obviously, but Dave sparks consistent discussion with his bold opinions on this site – look at the comment totals on his posts compared to the other writers (no slight to them intended). If you truly feel he and I and everyone else are no good to society because of our statements or lack of understanding, feel free to leave the site for good. You will not be missed.
Clearly you’re unable to read so let me help you:
“If you think I was being trollish or “freaked out” in my initial responses, you’re out of your mind. My “aggression” (That should read man-on-boy-style-fact-based-rape) was in response to this comment: “$6 million is a “nice start”?”
The responses at 4:13/4:30 were not my initial remarks and in response to DC’s comment. You seem to struggle with reading comprehension.
“Perhaps you can start your own personal finance site which draws thousands of readers. Then you can call Dave inept.”
I wonder how teaching people basic math would enable me to make a casual observation on the limitations of DC’s knowledge. Perhaps you should read his initial condescending replies and his ignorance of my above question (that clearly gets to the core of the matter as these contracts are an exchange of $ for financial safety. (There is another overarching issue with FG contract evaluation mainly the linear dollars/wins correlation, but that is rarely, if ever, acknowledged. Well Wainwright was.) Either way, I don’t think I need to do shit to recognize that someone is talking out of their ass and to point it out.
“We all prefer truth and facts obviously”
Except wait… What did you say before? “you lose all credibility in your argument with your aggressive tone (calling people inept, absurd, and referring to babying us all thru a financial planning exercise).” So you prefer facts, but only when they’re presented in a nice tone? Or are you just another wanton hypocrite? That was also rhetorical.
“but Dave sparks consistent discussion with his bold opinions on this site”
This is equally retarded. Glenn Beck does the same thing. Because he’s an incendiary blowhard (not that DC is or is not). Merely sparking discussion is useless. As evidenced by this post. The level of discussion is trivial and mostly focused on rudimentary mathematics and DC’s inability to perform basic math and understand the decisions that other people make (and not just in an isolated instance, but a whole giant group). Bold opinions are meaningless. Being willfully ignorant and presenting an argument in a subject you have limited knowledge about in a condescending tone and with an absurd viewpoint does not behoove the site, nor the advancement of knowledge. Though you don’t care about this as you’re only interested in “niceness” being the gatekeeper to truth.
“If you truly feel he and I and everyone else are no good to society because of our statements or lack of understanding, feel free to leave the site for good. You will not be missed.”
What a fucking strawman. Holy shit. Clearly an inability to perform basic math makes you worthless to society. Or an inability to read. Summarily my eugenics program will start exclusively in Africa and I will be broadening it in future iterations until I can get every single person who misreads a passage or makes a blog post out of their ass.
Are you serious? Do you even read the shit you type? This makes no sense. And especially considering your pretentious “You’re rude. I am not” attitude, it has magical synergy with your douchiness.
Glenn Beck is a poor example – he does not stir debate, he forces his opinion down your throat, or calls you an idiot for disagreeing. There is a reason a comments section exists – so the blogger can write a post with their thoughts on a subject, then others interested in the topic can broaden the discussion and raise other relevant points. I’m not sure how you can say sparking a discussion is useless. I guess if everyone agrees with the original points being made there is no reason for it.
“So you prefer facts, but only when they’re presented in a nice tone? Or are you just another wanton hypocrite? That was also rhetorical.”
Perhaps you need to re-read my comments, as I believe you are a bright and articulate person. I prefer facts and truth, no matter their presentation. I respect the person making the point if they avoid condescension in their tone and verse. I understand and agree with the substance you present, just not the presentation. I have disagreed with Dave many times before on this site. I agree he doesn’t always respond properly. It’s unfortunate that you are fighting with the only person openly agreeing with you.
I was not trying to come off pretentious, but this is the type of misunderstanding that can arise when the only dialogue is typed and not face-to-face. I’m hoping that this just a case of “internet muscles” showing and that you aren’t truly this angry of a person. I’m not going to bother responding to you since there is no way we can come to a positive resolution here. Hopefully we can avoid this type of tangent in the future.
Don’t forget that 1/3 of that goes to Uncle Sam and a lot of these players are not only trying to set themselves up for life, but also their parents and perhaps others as well. A 2.5 million dollar signing bonus seems a lot smaller in that context, for someone who is fairly sure athletics is their only path to riches and is cognizant that “#$%@ happens.”
DD,
It appears you’re a liar in addition to engaging in rampant hyperbole. Lets look at your statement: “It’s unfortunate that you are fighting with the only person openly agreeing with you.” Now let us review another post by one “baycommuter”: “Most financial planners say you can withdraw 4 percent of a lump sum a year and be solvent for life. So if you can save 50 percent of a $3 million bonus (after taxes, agent fees and paying down debt) that would give you a yearly income of $60,000. A nice start, but not set for life.”
Sounds like he agrees as well. I can only conclude you’re either a liar, lazy, or incompetent.
I won’t touch on the Glenn Beck example again. Apparently you can’t grasp that discussion is only useful in that it creates advancement and education. Pure discussion is useless. This “discussion” has consisted of DC posting absurdity, being questioned about it, trolling, then resisting any chance to show his open-mindedness. Actually I will touch on the Glenn Beck example again. When asked for any response DC said: “I post something. You freak out. I ask if you’re serious. You freak out. Guy calls you on freak out. You freak out again. Rest of FanGraphs readership realizes you’re ignorable. Life moves on.” Interesting viewpoint from someone seeking discussion. Perhaps too butthurt to continue?
For my finale, lets play a game that has become dear to me. Then and Now.
Then: “While you have made your point sufficiently clear to us on the misuse of “set for life” by Dave, you lose all credibility in your argument with your aggressive tone (calling people inept, absurd, and referring to babying us all thru a financial planning exercise).”
Now: “I prefer facts and truth, no matter their presentation. I respect the person making the point if they avoid condescension in their tone and verse. I understand and agree with the substance you present, just not the presentation.”
Though to be fair, you made attempt to defend your original troll post and are now posting something that is reasonable. Sadly you had to overwhelm your content with the noise of your feet shuffling backward in an attempt to reach a defensible viewpoint.
I’m saddened you won’t “contribute” any longer. I think if you had read more critically my initial comments, they were in good taste by any standard. Unless you take umbrage to the capitalization of “VASTLY” which is merely meant to signify the order of magnitude that DC is off by (rather than just a 2-3x multiple or what not). Best of luck in future posts. Try to read the “discussion” at hand with an open mind before “contributing”.
Over the years the Internet has revealed the existence of the “pure discussion is useless” personality, a creature many of us did not know existed before 1995 or so. Of course, for 99.999999999% of human history, pure discussion was the only discussion there was, outside of a few monasteries and universities … the idea that data has always been king is true from a scientific point, but not a sociological one, which is to say, using data is the best way forward, but it depends on how fanatical you are about the word “best” how much that matters.
The truth is, many if not all great ideas have sprung from idle conversation. Amassing knowledge comes only rarely from data (data often being difficult or expensive to obtain) and mostly comes from pontification that leads to narrowing the parameters of data one needs to test a theory, which reduces the cost of the data and the testing until it is affordable. I wonder how many of today’s baseball fans really understand how new most data are? That within the lifetime of even some of the younger users on this site, even this week’s batting average data was hard to come by? One needn’t wonder why “pure discussion” is so prevalent in baseball. A person who finds it grating, I suppose, must prefer to spend most of his day buttonholed up in his mom’s basement rather than be exposed to so much blather. That’s a joke, but not really.
Without the socially inept, Asperger’s-fueled or 160+ IQ-havin’ fans in our midst (I suppose in most cases I’m being redundant there), we would have hardly any of the statistical advances there are today. And so, we are grateful that there are people out there who are so driven and so in love with data, although I might observe that despite the brilliance of so many, the contributions to our understanding of the game come from relatively few (and often, as in the case of Rob Neyer, they come from secondhand sources). A lot of geniuses out there simply don’t have the interpersonal skills to make a ton of use of their natural calculating skills.
Unfortunately (fortunately?) for most fans, we have to be satisfied just babbling on with little hope of getting anywhere – even on websites that purport to be on the leading edge. And of course, there is always someone out there with a bit more IQ, with a few fewer social graces, or a little bit more Asperger’s to set the rest of us straight. In the end, we both win a little, and both lose a little … though feeding the trolls has never been all that good an idea.
JE,
To clarify, Glenn Beck is one of the true vanguards of thought? Truthers? The clinically insane?
I’m struggling to understand how you lump insight in with idle chatter. And what that has to do with this discussion.
But clearly I’m one of those: “socially inept, Asperger’s-fueled… fans” so bear with me while I try to understand how all “discussion” is equivalent.
Chalk Liriano into that mix. He has the added benefit of having already undergone the elbow reconstruction. The Twins should have locked him up long term when they could.
Multiple options can present a conflict of interest for players, which can get ugly if the player is sufficiently selfish. When Manny was nearing the end of his term with the Red Sox, he had an incentive for the team NOT to pick up his option so that he could get more guaranteed years/dollars as a free agent. We all know how that turned out.
This is a good observation, but of course for those that think this means parity, wise up, this is just a cycle which will result in some other area of compensation/talent acquisition changing.
As for the guy that said “fewer players to trade” this is false. If anything, this makes the young, cheaper talent even more attractive to trade, depending of course on how well your team is positioned….
I think you actually are agreeing, but saying it differently. To summarize both of your points, these players will be more difficult for other teams to trade for, as in they will have to give up a lot more than if the player were simply approaching arbitration. This could portend less trades. But your right, if a team is willing to pay the price (see Garza or Greinke trades), the trade offer could be rich with top prospects. Tampa and KC obviously saw the value in the offer and it was too good to pass up considering their contention status (KC) or their up-and-coming replacement talnet (TB).
Is this really a new trend? Crawford, Baldelli, Haren and Sizemore all signed deals early on that contained a team option; in fact Crawford had two options and Baldelli three.
Dave is right in his response above, some teams are exploiting an inefficiency. Look at the teams doing it – Tampa (Davis, Longoria), Oakland (Anderson, Cahill, soon to be Gio as well), Boston (Lester, Pedrioa, Buckholz), and Toronto (Romero, Hill, maybe Drabek after this season if he does very well). It shows you which teams are using the Moneyball approach and which teams are stuck in the dark ages, if you will, still with room to grow in their management style.
Wouldn’t this also cause less top players to appear in arbitration cases, lowering the awards thru arbitration hearings or in settlement beforehand?
They’re also teams that drafted well (and in some cases had a lot of draft picks) so they actually had very good pre-arb players they could attempt to lock up. There may be other teams that are enlightened enough to use this strategy, but have no one to use it on.
Signing star players before FA is not a Moneyball approach, in that it was done long before that book was published. It doesn’t take genius to figure out you can sign guys for cheaper deals early in their careers as 1) they won’t be free agents and 2) they want to be set for life.
What effect might this have on arbitration awards? With more of the better players locked up, the relatively few that reach arbitration won’t have as many comparables to look at. This might help teams keep costs down as well, or it might not (thin markets tend to be more subject to wild price swings)
Disagree that there will be an impact on inflation of free agent salaries. Price is a function of supply and demand. Not cash available to spend. If this trend continues the supply of free agent talent will decrease but the demand for that talent will also decrease.
I have to assume that this trend is in response to arbitration awards to top end talent that are far too close to market value for teams’ liking, like howard and lincecum (i know, they signed in the end instead of going through with it) and this way the teams can lock in the arbitration years too since those awards have rapidly increased
Pitchers, okay, but these deals make no sense to me for position players. The arbitration system is set up so far in favor of the players it’s ridiculous. When you’re a position player, and the odds aren’t in favor of you having a career derailing injury like they are for pitchers, just go year to year.
Jacoby Ellsbury missed the entire season last year and got 2.5 in his first year of arb this offseason. And poor performance is rewarded too (see Francoer, Jeff). So you can suck or be injured and still make bank in arbitration. The risk is there, but it’s not as great as some make it out to be, whereas the potential reward is incredible.
If you suck going into arbitration, the team can choose to not offer you arbitration. If you are bad enough, you might be out of a job and have little to show for your MLB career (though admittedly top prospects would keep getting chances).
A lot of the players signing these deals are young enough that they will still be late 20s/early 30s when the contracts end. They can still have a huge payday. This way, if they aren’t good enough to get a huge payday, they will still be in good shape financially.
These deals essentially offer guaranteed stability for the player. They can cash in later.
Yeah, there’s a lot of stability in those option years. Either A) Team picks it up and you’re vastly underpaid or B) You get hurt or aren’t good anymore and you get to be a Free Agent!
Stability in that Cahill is now guaranteed to make at least $30 million in his career.
The value of the dollars isn’t equivalent. The player should give up sizable amount of EV to increase their utility by eliminating left hand outcomes. Lets take some real examples.
Rocco Baldelli – breaks in at 22, league average, league average, fringe all-star in < 400 PAs – 6m career earnings (I don't know signing bonus, nor do I have the patience to look all this stuff up, but just roll with it or amend with more exact career earning figures. I'm relying on Fangraphs to total this for me.)
Alex Gordon – lol
High end prospects that never made more than a handful of MLB PAs.
All the above would have sacrificed small children for even Longoria's contract (though considering he was a week into his MLB career, whatev). Though on the opposite side… You have Delmon Young getting infinite chances. So I guess if you seem "toolsy" enough, despite sucking at baseball… you can just bank dollars off a steadily declining, below replacement level bit of production.
It seems obvious now that Ubaldo sold his services too cheap (age 29 and 30 options of $5.75 and $8 mil), but I don’t think Cahill did. He’s only 23, so when his options come around, he’ll be making $13 and $13.5 mil in his 28 and 29 year old seasons. If he’s still worth that money then, he’ll surely get another payday before his 30th b-day. If he’s not and gets his options bought out, then he didn’t have anything to gain by going year to year.
I don’t think that $13 mil will be inexpensive for a pitcher by 2016 or 2017, so if it’s crafted well at an early age, these contracts work well for both sides. I only think it’s a mistake for the player if they don’t make the majors until they’re 25 or 26 and then they may never get a big free agent contract. If a guy gets this offer at 22 or 23 years old, he can cash twice.