Jose Reyes: Three Year Deal Candidate?

The Florida Marlins don’t officially get a new name and logo until this Friday, but they are already working overtime on creating a new identity for their franchise. Over the past few weeks, there has been so much excitement swirling around the Marlins: new stadium, new uniforms, new identity, new payroll, new optimism. They are looking like a team reborn. So long with those small market days; the Marlins have been talking like they’re ready to jump to mid-market status, maintaining a payroll around the $80-100 million level.

So when I first heard this morning’s rumor that the Marlins are preparing to offer Jose Reyes a three-year deal, I had to chuckle to myself. There’s the small market Marlins we know and love (/not really). They can talk the talk all they want, but if they’re not going to make serious offers to any of the players they are “interested” in, little has changed in the end. They can create a short-term stir, but words will only take them so far without corresponding actions.

After the giggles went away, though, I began to have a new-found appreciation for the Marlins. This deal isn’t stupid, nor is it likely to be ignored by Reyes. In fact, a three-year deal may be perfect for him.

It feels odd to consider Reyes signing for only three years, as he’s one of the biggest names on the free agent market this season. The best players on the market rarely sign for fewer than five years, and the contract crowdsourcing here at FanGraphs suggested he’ll sign for around 6 years at $17.5 million per year ($105m total value). That’d make Reyes the highest paid shortstop in baseball at the moment, and would be the second most lucrative contract ever given to a shortstop (by AAV, at least). If he can get a deal like that, why would he ever sign for less?

Two words: maximizing profits. If Reyes signs a six year deal, it will likely be the last major contract he signs. He just finished his age 28 season, meaning with a six year deal, he would become a free agent again after his age 34 season. Could Reyes get another large contract at that point in his career? Certainly. Derek Jeter is currently making $17 million a year from ages 36-38, so anything is possible. I just wouldn’t necessarily bet on Reyes getting that another big deal based on a few points:

– Shortstops don’t generally age well. Even star shortstops normally get moved off the position by the time they hit their mid-to-late 30s, and Reyes would lose a large chunk of his value if he needed to be moved to third base or the outfield. Derek Jeter is the exception to the norm, and we all know there are extenuating circumstances keeping him at short.

– Reyes has a checkered injury history, so I wonder how well he will hold up as he gets older. Fast players age slightly better than other players, but six years is a long time for any player to remain healthy. It seems likely that Reyes would be considered an albatross by the time his six year deal was finished…or at the very least, well overpaid.

If he’s lucky and remains healthy, Reyes’ best-case scenario at that point would be to receive a deal like Jeter’s current one: three years, $17m per season. Market inflation would work in his favor, and he might find a team willing to tack on another year, but I still see that as a very optimistic projection.

What is Reyes decided to sign a three-year deal now, though? The Marlins sound ready to offer him a three-year deal worth over $20 million a year, which would make him the highest paid shortstop (AAV again) ever. More to the point, though, Reyes would have just finished his age 31 season when that contract expires. Coming off three peak seasons, Reyes could be putting himself in a prime position to make another large payday. Assuming he stays healthy and produces over the next few years — it’s easier to stay healthy for three years than six, especially when those years are in the middle of your physical peak — he could hit the market as a star shortstop, and still command a five or six year contract.

Of course, this line of reasoning is risky. He’d be passing on around $40 million right now, with the hope that he could make that back in spades the next time he hits the market. It’d be a relatively safe bet, though, as I think this chart generally shows:

As I said above, a three year, $17m contract at 35 years old seem quite optimistic, and I think Reyes could easily command more than $15m per year when signing his next deal. The market will have grown — thanks in part to his own deal —  and he could be just as big a target as he is this offseason. Even if he doesn’t make quite $15m/year in his second deal, it’s also worth remembering that Florida doesn’t charge a personal income tax, so he would be able to retain more of his salary there than he would elsewhere.

So what will Reyes decide to do? Only time will tell, but I think this is a smart move by the Marlins. They may have to shell out more money for Reyes in the short term, but signing him to a three year deal would minimize the risk of his contract becoming a long term burden. And who knows, Reyes may actually find a three-year deal to be quite an attractive possibility.



Print This Post



Steve is the editor-in-chief of DRaysBay and the keeper of the FanGraphs Library. You can follow him on Twitter at @steveslow.


Sort by:   newest | oldest | most voted
Tanner Scheppers
Guest
Tanner Scheppers
4 years 7 months ago

“The Marlins sound ready to offer him a three-year deal worth over $20 million a year, which would make him the highest paid shortstop (AAV again) ever”

Wouldn’t A-Rod’s contract with Texas easily beat this?

JayT
Guest
JayT
4 years 7 months ago

Yeah, it’s kind of funny that the link Steve uses to show that Reyes would be the second highest paid shortstop ever, shows two shortstops at the top of the heap.
A six year $105 million deal would be the fourth biggest shortstop contract by total value, and the third largest by AAV.

Paul
Guest
4 years 7 months ago

Under AAV, A-Rod’s 2001 deal is a shortstop deal and the next-highest SS deal by AAV is Jeter’s 18.9 mil one. A-Rod’s second deal starting in 08 is as a 3B.

What exactly are you two talking about?

JayT
Guest
JayT
4 years 7 months ago

A-Rod’s first contract was for $252 million from ’01-10, for an AAV of $25.2 million.
Jeter’s contract was for $189 million from ’01-’10, for an AAV of $18.9 million.

If Reyes signs a 6 year $105 million deal, that would put his AAV at $17.5 million, making it the third highest AAV for a shortstop, not “second most lucrative contract ever given to a shortstop (by AAV, at least).”

Tanner Scheppers
Guest
Tanner Scheppers
4 years 7 months ago

@JayT

And a 3yr/$60mm contract from Miami wouldn’t “make him the highest paid shortstop (AAV again) ever”

YP
Guest
YP
4 years 7 months ago

wait…so what happens to Hanley?

BSally
Guest
BSally
4 years 7 months ago

Trade him to the Braves please

Gary
Guest
Gary
4 years 7 months ago

Open question: Hanley for Teheran. Would you do it?

BSally
Guest
BSally
4 years 7 months ago

Probably, especially because that would almost necessitate that Fredi leaves as well.

Ironsides
Guest
Ironsides
4 years 7 months ago

Position switch.

chiefglockandhummer
Guest
chiefglockandhummer
4 years 7 months ago

the marlins have neither a real 3B nor a real CF. isn’t that the answer?

YP
Guest
YP
4 years 7 months ago

can he play either of those?

Will
Guest
Will
4 years 7 months ago

Can he play shortstop?

Anish
Guest
Anish
4 years 7 months ago

If Reyes wants to maximize his earnings potential while locking into a long-term contract for security, he should sign a 6 year contract with a player’s option to opt out after 3. Given his status as one of the biggest names this off-season, I am sure one team will oblige, even if it means reyes needs to take a slight hit on his AAV on the duration of the 6 year deal.

Eric
Guest
Eric
4 years 7 months ago

Signing a 6 year deal with a player option to opt out after 3 sounds great from Reyes point of view, but he would get far less money from a team offering it to him. I mean why would they? If he wants the overall $$$, they’ll make him sign longterm. If he wants the higher salary per year, they will want a shorter deal. Nobody will give him the higher salary and the longer deal and allow him to void it halfway through.

The side holding the option in the contract always comes up better if they exercise whatever option it is. I mean if they didn’t, they wouldn’t exercise the option. But both sides know this ahead of time. So if Reyes wanted a contract with those parameters, he’d knowingly be getting less money in the deal.

Josh
Guest
Josh
4 years 7 months ago

Don’t really see how taking the 2 three year deals is a “relatively safe bet.” His production is pretty checkered over the years and is probably only going to get worse as he ages

Dunston
Guest
Dunston
4 years 7 months ago

I’m sorry, but I’m having a hard time seeing how this would ever be in Reyes’ favor. I think it’s crazy to assume that at age 32, any team will commit 6 years to him. Look at Furcal and Jimmy Rollins (who happen to be 1 and 2 on Reyes’ similar player comps through age 28), and how much their value has fallen off after hitting 30. In 2009, Furcal hit the market as a 31 year old free agent, and the best he could get was 3 years/10m. Rollins is a FA this year and is 32, and crowdsourcing has him at 3.5 years/12m.

Jack Nugent
Guest
4 years 7 months ago

If he were really confident that he’d stay healthy for the next three years, then it could definitely pay off for him. Although, I don’t think he’s got much reason to be confident he can do that. So I tink it’s safe to say he’ll demand more than three years.

Steve
Guest
Steve
4 years 7 months ago

What’s the expression, a bird in the hand?

Players don’t think like this.

vivalajeter
Guest
vivalajeter
4 years 7 months ago

If he wants to settle for a 3-year contract (or 2-year, or 4-year) then I’m sure there will be plenty of teams willing to oblige. I just can’t imagine he would do such a thing. The downside risk is too great for someone who has missed as much time as him. He’s just finished his (arguably) best season, and I would think he’d want to lock in as much guaranteed money as possible. His next contract, if he’s still playing, would be gravy.

Also, you’re implying that he’d be a hot commodity when he’s 31 years old (good enough to sign a 6-year deal), but you also say that he’s likely to be an overpaid albatross when he’s 34. Unless he’s a standout player for the next 3 years, I’m not so sure he’d get a 6-year deal when he’s 31.

Jack Nugent
Guest
4 years 7 months ago

Rafael Furcal is a recent example of a guy who did pretty much the exact same thing, although it didn’t work out particularly well for him. Of course, he missed most of his contract year with an injury, so he was forced to settle for a lot smaller salary when he re-signed with the Dodgers after his first three years there.

chuckb
Guest
chuckb
4 years 7 months ago

Like others, I don’t really see how this benefits Reyes. If he passes on a 6 year deal today with the hope of getting a 3 year, $45 M deal in 3 years, he ends up with the same amount in total dollars. I realize that the time value of $ means he ends up with more real dollars today by doing the 2 3 year deals but he gives up the security of being paid for 6 years. There’s a huge what-if attached to your scenario that should be valued much more than the inflation rate.

It seems to me that for Reyes to go for your scenario, the payoff today should have to be much bigger than $22 M per (maybe $25 M per) or the scenario in 3 years should be bigger than $15 M (maybe the $17 or $18 he’s going to make today). Otherwise, it’s not worth giving up the security of the 6 year deal just to account for the value of inflation.

vivalajeter
Guest
vivalajeter
4 years 7 months ago

I think you and Josh read the article wrong. He’s not suggesting two 3-year contracts. He’s suggesting a 3-year contract now, and a 6-year contract when the first one expires.

The Real Neal
Guest
4 years 7 months ago

And that makes more sense somehow?

chuckb
Guest
chuckb
4 years 7 months ago

You’re right. I did. I simply looked at the endpoints and saw that he managed to reach the same number in the 2 scenarios. I think my basic argument still holds up even if the particulars are wrong.

Reyes is going to need more than $20 M, it seems to me, in order to justify taking just 3 years now instead of 6 or 7. The value of the security of a 6 or 7 year deal is substantial and it’s got to be worth more than $2 or $3 M per year early on.

Jasper C Jensen, Esq.
Guest
Jasper C Jensen, Esq.
4 years 7 months ago

I downed three neat scotches prior to reading this article and was convinced it was justifying a three year contract for Jo-Jo Reyes for at least the first two paragraphs.

I also thought it was a NotGraphs article – and given it argues the best player available at a hugely underrepresented position will sign for fewer years that five it perhaps also belongs with Carston and Dayn’s writings…

ofMontreal
Guest
ofMontreal
4 years 7 months ago

I like the three scotches part. I’m going to smoke another bowl and consider your offer to Jo-Jo, then get back to you.

Dan
Guest
Dan
4 years 7 months ago

Rafael Furcal did the exact same thing in 2006. As a free agent, he was expected to sign a 4 or 5 year deal, but he signed a 3 year deal with the Dodgers instead. Then another 3 year deal after that.

David
Guest
David
4 years 7 months ago

99% of the time the player always takes the big dollars. By which I mean the total contract value. AAV is a nice ego thing, but it’s also fairly pointless. The Marlins would have to offer an enormous but short deal for this to be a worthwhile gamble. I’m talking $5M+ per year over the 6 year offers. That way if he slips as he ages, getting a Furcal-ish deal ($13M per) at age 31 breaks him about even.

Jonathan
Guest
Jonathan
4 years 7 months ago

I think the summary is simply:
– If he takes 3 years now at higher AAV, there is potential huge reward and huge risk.
– If he takes 6 years now, there’s still very big reward, and some risk.

Over the course of the next 8-9 years, the difference between “very big” and “huge” reward isn’t so much, but the difference between “some risk” and “huge risk” is, well, too big to risk.

Brandon Warne
Guest
4 years 7 months ago

With his wheels the way they are (risk-wise, not overall), gotta believe his agent will angle for longer term deal just to save the potential that he’s a less than adequate player 3-4 years from now.

Colin
Guest
Colin
4 years 7 months ago

Reyes presumably has an agent who gets a percentage of the total deal.

How confident do you think Reyes’s agent is that he’ll still be his agent in 3 years and get a cut of the “additional” money? Certainly less confident than he is of taking the large total deal.

Zen Madman
Guest
4 years 7 months ago

I think he’s very confident that he’ll remain Reyes’ agent. There was a whole hullabaloo about Boras trying to meet with Reyes, and Jose just wasn’t interested. He’s been with the same agency since he was 16. I think his agent is one of his kid’s godfather.

kick me in the GO NATS
Guest
kick me in the GO NATS
4 years 7 months ago

Reyes would be exactly what the Marlins need to contend besides a lot more health from the rotation. if Reyes wants to be regularly in the post season and get a shot at the hall of fame then staying in the NL would be wiser than going to the AL. Florida accomplishes those goals, so it is a decent idea for Reyes to go Marlin.

Chris
Guest
Chris
4 years 7 months ago

The 3-year theory is interesting but I think Reyes has enough leverage to do something similar to Sabathia: ~6 years with an opt-out clause after a few.

Warde
Guest
Warde
4 years 7 months ago

3yrs 17m at age 35? gtfo

No way that happens

Nick
Guest
Nick
4 years 7 months ago

Just a general question, but what positions DO age well?

Steve
Guest
Steve
4 years 7 months ago

Hall of Fame starting pitcher

TK
Guest
TK
4 years 7 months ago

DH

section223
Guest
section223
4 years 7 months ago

It makes more sense to look at his expected PV from the next 6 years if that’s the expected potential length of the longer deal he could sign. If we assume the 6/105 vs 3/66, we need to find a projected value for years 4-6 under Deal #2.

This guy is in line for a huge AAV even with his multiple injuries over the last few years. Even if he misses the same amount of time but shows the same amount of production, we can figure he could get a similar 3 year deal with some inflation — let’s say 3/72. This puts his PV for Deal #2 at >$26M higher than Deal #1. In order for the 6/105 deal to have a higher PV, we’d have to say his production declines enough in the next 3 years to only get a second 3-yr deal at a 12M AAV… and there’s obviously potential upside for much larger deal in 3 years.

One could build a risk analysis showing his potential outcomes and then assign probabilities and an expected contract value to each for a more complete picture, but the quick math tells us he could come out way ahead with a shorter deal.

A Washington
Guest
A Washington
4 years 7 months ago

Yeah, I think to make sense for Reyes a deal like this would have to be an overpay, something like 3/80.

wpDiscuz