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The Team-Friendly Extension’s Death Is Greatly Exaggerated

Felipe Rivero and Jameson Taillon could be extension candidates for reasons other than just their talent.

Last week, Dave Cameron at Fangraphs opined that early career extensions, defined as occurring in the pre-arbitration years of a player’s career, were on the decline due to the presence of all the money in the game of baseball nowadays. His article, a very good read of course, stated that players viewed as future stars would no longer be signing away their free agent years, like many have in the recent past. Players such as Andrew McCutchen, Buster Posey, Anthony Rizzo, and Mike Trout (just to name a few) have all signed deals in the past five years that have greatly benefited their ownership groups, while shorting the player on substantial earnings in their prime free agent years.

There’s so much money flowing into the game of baseball today, as I’ve covered many times before on this site. We’ve dedicated an entire header on the top of our site to the Business of Baseball since we discuss it so much. The typical rule-of-thumb is that a team should spend 50% of revenue on payroll, but in recent years that has declined into the low 40’s, on average, around the league. With the influx of local and national TV revenues, coupled with the burgeoning multi-media arm of MLB Advanced Media (that all clubs started with seed money), revenues are pouring in one side of the building, but only trickling out the other to the players.

While I generally agree with Cameron that the readily identifiable future superstars aren’t going to be signing up for these types of deals, especially at the deeply discounted rates we’ve seen in the past, I don’t see the early-career extension going anywhere soon.

The simple reason? Players like money. Especially when they have yet to taste much of it. I used MLB Trade Rumors Extension Tracker and calibrated for all extensions signed since the start of last offseason for 3 years or greater. Deals for 2 years are typically bridge deals to cover arbitration years and don’t really indicate much of a commitment on either side.

Player Team Years Amount Service Time Orig. Signing Bonus
Stephen Piscotty STL 6+1 $33.5M 1.076 $1,400,000
Roberto Perez CLE 4+2 $9.0M 2.083 ?
Rougned Odor TEX 6+1 $49.5M 2.121 $425,000
Jose Ramirez CLE 5+2 $26.0M 2.074 $50,000
Tim Anderson CWS 6+2 $25.0M 0.115 $2,164,000
Kevin Kiermaier TB 6+1 $53.5M 2.131 $75,000
Carlos Martinez STL 5+2 $51.0M 3.073 $1,500,000
Kole Calhoun LAA 3+1 $26.0M 3.130 $36,000
Wil Myers SDP 6+1 $83.0M 3.104 $2,000,000
Danny Duffy KCR 5 $65.0M 5.085 $365,000
Ender Inciarte ATL 5+1 $30.525M 2.157 ?
Odubel Herrera PHI 5+2 $30.5M 2.000 ?

I added an element to this table that wasn’t in Dave Cameron’s linked article above: original signing bonus. I believe that this is the untapped element that triggers a player’s willingness to do a deal. Of the 12 players above, only 2 were first-round picks (Myers and Anderson). Three of the players had bonuses that were most likely so small that they’ve never been reported. Others, like Jose Ramirez, Kevin Kiermaier and Kole Calhoun, had token signing bonuses that were mostly consumed by taxes and agent fees, or buscones for the Latin players.

Prior injury history also plays into these extensions, as well. Wil Myers received a healthy signing bonus out of the draft, but has been dinged up with a variety of injuries over the years, including injuring both wrists in separate occurrences and missing large chunks of the season. He had an eye-opening 28 HR/28 SB season in 2016 and put up 3.8 WAR, so the two sides instantly struck while the iron was hot and hammered out a deal. Myers gets financial security for life and the Padres get a marketable up-and-comer during their extremely lean short-term future.

Danny Duffy is a Tommy John survivor, but it’s still surprising to see him forgo his test of free agency going into his walk year. Yes, he gets peace of mind and I’m sure I wouldn’t be turning down $65M of guaranteed money, either, but he’s so close to the promised land. Notice, too, that he didn’t get a huge original signing bonus and has heretofore ‘only’ earned $8.1M in his career. This was his big payday and now all the stress is off of him and the next 3 generations of Duffys.

Six of the twelve players listed above are Latino. I hesitate to use the word ‘exploit’ too loosely, but I’m thinking that front offices are leaning heavily on the fact that these players (by and large) are coming from very impoverished backgrounds. The allure of any sort of guaranteed contract, especially for a good-not-great level of player, is too tempting to turn down.

So if the baseline to determine who may get an extension in the future is that they are talented and possess at least two of these three traits:

  • Small signing bonus and/or
  • Injury history and/or
  • Latino

…then who on the Pirates may be a candidate for an extension?

Setting aside an obvious one like Gerrit Cole, who won’t be signing due to the presence of his agent, Scott Boras, there are others.

Jameson Taillon is the most logical candidate, but he’s already got a huge amount of money in the bank from his 2010 $6.5M signing bonus. With the outset of his career looking sharp, he may be willing to bank on himself and go year-to-year in arbitration. His Tommy John surgery could be an interesting mitigating factor, though. Taillon is age-25 this year, which means he’ll be entering free agency at 30. Is he willing to gamble that he doesn’t need another TJ surgery by the time he gets to free agency? From Tom Verducci’s Sports Illustrated article in 2015, the average length between players that needed a 2nd TJ surgery was 4.97 years. Would Taillon be willing to lock in his team-controlled years and 1-2 free agent years to skirt that hurdle of getting injured right before free agency? Would the Pirates?

Felipe Rivero is Latino and has an undiscovered signing bonus and is talented, so he checks off three boxes. He’s also going to be a Super Two candidate, which means he’s going to get pricey, especially if he starts accumulating saves. I’m loathe to give multi-year deals to relievers and Neal Huntington apparently is, too, so he doesn’t seem to be a viable candidate.

Josh Bell is a little bit like the hitting version of Taillon. He banked a monster $5M bonus out of high school in 2011 and appears to be quite talented. He also has an injury history with his knee. If the Pirates don’t fear it to be degenerative or persistent like they did with Neil Walker’s back, they could try to swoop in and get a deal in exchange for making Bell even richer with guaranteed money. But the ultimate limiting factor is that Josh Bell is also represented by Scott Boras, so no dice.

Most of the other realistic candidates just don’t have enough experience to even entertain the notion of an extension yet. Both sides would essentially be dancing in the dark on what that player’s ultimate future would be.

The early-career extension isn’t dead. It’s just not as en vogue as it was before, but the Pirates will continue to rely on it to stabilize their payroll for future teams.

About Kevin Creagh (257 Articles)
Nerd engineer by day, nerd writer at night. Kevin is the co-founder of The Point of Pittsburgh. He is the author of Creating Christ, a sci-fi novel available on Amazon.

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