Archive for the ‘Washington Nationals’ category

Atlanta Braves Extend Ronald Acuna for Eight Years at $100 Million

April 2, 2019

In the latest of the year’s big contract extensions, the Braves extended 21 year old phenom Ronald Acuna for a minimum of eight years at a guarantee of $100M.  The contract could be (and probably will be) worth $124M over ten seasons.  The contract is almost certainly a record for a player with less than a full year’s major league service time.

The contract is high risk and high reward for the Braves and all about safety for Acuna.  I don’t think it will be the last such extension we’ll see in the near future for the current crop of very young budding stars.

Acuna has guaranteed himself what constitute enormous riches for a poor kid from Venezuela who didn’t get a seven figure bonus to sign his first pro contract.  Nonetheless, it’s entirely possible Acuna is surrendering $150M in future income to get this security.  Still, I don’t see how you could consider this a bad deal for Acuna.  How much money do you really need to live extremely well?  $124M over ten years should cover it, even after the big tax hit (probably close to 50%) that comes with all the money being earned as salary.

Obviously, the Braves have to hope and pray that Acuna stays healthy and develops into his potential.  Regardless, this is a risk all but the wealthiest 12 teams will be actively seeking to take going forward, at least with respect to the few players of Acuna’s age and demonstrated talent level.

The Nationals’ Juan Soto is represented by Scott Boras and he received a $1.5M signing bonus when he signed with the Nats as a 16 year old amateur, so it’s safe to say that Soto won’t be signing an extension like this before he becomes arbitration eligible, at the earliest.  Boras stridently advises any player with Soto’s talent to become a free agent and get the ginormous contract that comes with it.  Just ask Bryce Harper.

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Jacob DeGrom’s Deferred Money

March 28, 2019

The terms of Jacob DeGrom‘s new five-year $137.5 million are being reported, revealing that a whopping $52.5M is being deferred without interest for 15 years to the period between 2035 and 2038.  As a result the current value of the deal could be as little as $109M.

The deal defers between $12M and $15M each year between 2020 and 2023, and the $30M team option for 2024 includes $15M deferred to 2039.

I am generally in favor of deferred money contracts for athletes, because it pushes back money they don’t need now to years when their careers and annual earnings are likely to be much lower.  There can be significant federal and state income tax savings by deferring money, although DeGrom’s contract doesn’t really do that, except for the fact that he may be living in state without state income tax come 2035.

If it was up to me, I would start the payments in 2028, the year DeGrom turns 40 and continue the payments until the year he turns 60 and can cash out his IRAs or the year he can get the largest possible pension benefit, assumably somewhere between age 60 and 70.  That way, the $52.M is spread out so more of it is in lower federal tax brackets and he can rely on a steady income stream throughout his life.

What gets a lot of professional athletes in trouble is that during their top earning years, they spend money like the seven figure annual earnings will go on forever.  Then, when their pro careers wind down and they very rapidly see their annual incomes plummet, it takes them several years to adjust their life styles and spending to their new incomes.  In the meantime, they burn through much of the money they did save during their peak earning years.  It’s a lot easier to adjust to a new lifestyle when you’re still making $2M+ a year than it is when you are making less than $200,000.

As I wrote back when Max Scherzer signed his big contract with the Nationals featuring significant deferred money, the irony is that the players who sign these kind of contracts are almost always the ones who least need to do so.  The big stars who are already thinking about how they are going to support themselves in their 40’s and 50’s can probably be trusted to save and prudently invest the money they are making now so their retirements will be comfortable and thus don’t really need to defer money.

Anaheim Angels and Mike Trout in Agreement on 10-Year $360 Million Extension

March 20, 2019

The Angels and Mike Trout are reportedly in agreement on a ten-year extension for the 2021 through 2030 seasons that will pay $360M for these seasons and nearly $430M guaranteed going forward.  Mike Trout is certainly worth a record-setting deal, although I have my doubts about Trout’s ability to remain healthy during the second half of the commitment.

Some commentators think the Angels got a bargain, given that Trout has arguably been worth about twice the annual contract average since becoming a full-time major leaguer in 2012.  Even so, $36M per season takes up a big chunk of budget (although the big market Angels can afford it), and Trout can’t win by himself no matter how well he plays, as evidenced by the fact that he has played in only three post-season games in his eight seasons with the Halos.

My guess is that this will be a great contract for the Angels for the next six seasons through 2024, but will become an albatross like Albert Pujols‘ deal, which still has three expensive years to run even though Prince Albert is no longer even a replacement level player.  Mike Trout is just too big (listed at 6’2″ and 235 lbs, roughly the same as Pujols) to expect that he will age gracefully once he passes the age of 32.  It could happen, but I sure wouldn’t bet on it.

In short, it is probably a fair contract that well benefits all concerned.  The Angels get to hold on to the game’s best player for all or nearly all of his major league career; Mike Trout gets a record-setting deal that well tops the deals that Bryce Harper, Manny Machado and Giancarlo Stanton got; and future major league superstars and their agents get a new record to shoot for in future contract negotiations.  It’s a win-win all the way around, and, as I like to say, Mike Trout won’t be going to bed hungry any time soon, even if he did leave some money on the table.

 

Philadelphia Phillies to Sign Bryce Harper for $330 Million

February 28, 2019

Now I feel like I know why it took so long for Bryce Harper to sign a deal.  It was a obvious that Harper and Scott Boras were determined to top the $325 million guarantee that Giancarlo Stanton got no matter what, but it didn’t happen until the Phillies were able to spread it out over a 13 year period.

I had been expecting that Harper would get an 11 year, $330M contract — in other words, the same deal that Manny Machado got with an extra year at $30M tacked on at the end.  The reports had been so fixated on a ten-year contract length, that I hadn’t expected this fairly obvious final outcome — Harper gets the same 13 years as Stanton for $5M more, which allows Harper and Boras to claim victory while the Phillies at least get to spread the money out over two or three more seasons.

Harper also reportedly will receive a full no-trade clause with no opt-outs in the deal.  If Phillies’ fans don’t take to Harper and vice versa if could be a long 13 years.  Of course, no trade clauses are made to be bought out if the player and team are both no longer happy with the arrangement.

Meanwhile, the Giants are s@#$ out of luck.  The Phillies now have at least one too many major league outfielders, and I imagine that even with the sorry state of the Giants’ farm system, a cheap trade could be worked out for 28 year old Aaron Altherr.

Nick Williams would be a better trade chip for the Phillies, not least because Williams sure isn’t going to be happy about being relegated to a back-up role, but he might be too costly in terms of the prospects that the Giants would have to surrender to acquire him.  I would expect the Phils to hold onto Odubel Herrera and Roman Quinn, as giving them the strongest outfield as the Phillies obviously try to win their division.

P.S.  The latest reports are that the Giants offered Harper $310M over 12 years, but that due to the difference in state taxes between California and Pennsylvania (and no doubt taking into account that the Phillies play in a much better hitters’ park), the Giants would have to beat the Phillies’ final offer by $20M.

San Francisco Giants Back in on the Hunt for Bryce Harper

February 27, 2019

The Giants are reportedly back in on the hunt for Bryce Harper and now willing to offer him the record-setting ten year deal he has been seeking.  It is not particularly surprising that the first few games of spring training action have made the Giants worried about the apparently sorry bunch of outfielders they have on hand.  The Dodgers are also reportedly considering meeting Harper’s and Scott Boras’ ten-year contract demand, but the fact remains that the Gints sorely need Harper in their 2019 outfield a lot more than either the Phillies or the Bums do.

Even with the Giants seemingly starting to move toward true rebuild mode, a ten-year deal would keep Harper around long enough to be a part of any rebuilt team come 2022 or 2023 while Harper is still in his prime.  Even with Harper, I am doubtful that the Giants would be anything better than a .500 team in 2019, so I expect the rebuilding to begin in earnest around the 2019 trade deadline.

I think the Giants will hold onto Buster Posey (and they’re stuck with Evan Longoria), but any of Madison Bumgarner, Brandon Crawford, Brandon Belt or Joe Panik who is playing well in the first half will get traded, unless, of course, they are all playing well and the Giants are in contention.

Harper and Boras have been holding out for at least a $330 million guarantee and it now looks like they are going to get it.  The seven year contract extension with $234 million of new money the Rockies just gave Nolan Arenado, not to mention Manny Machado‘s $300 million ten-year deal with the Padres, suggest strongly that one of the three remaining pursuers will set a new salary guarantee record with Harper.  While teams seem more reticent about signing free agents, the contract extensions of Arenado, Mile Mikolas and Aaron Hicks this past week all suggest that teams will still spend big money to hold onto their best players through their age 34 or 35 seasons.

The Mikolas four-year contract extension is particularly eye-opening, given Mikolas’ short major league track record plus the fact that it reportedly includes a complete no-trade clause in addition to the $68M guarantee.  The Hicks’ contract extension is notable more for the length (seven years) than the amount guaranteed ($70M).  However, because Hicks runs well and has improved dramatically at the plate the last two seasons, it looks like a great risk for the Bombers to take, even if Hicks can’t be expected to stick in center field for more than three or four more seasons.

Some Order Has Been Restored to the (Baseball) Universe

February 20, 2019

It’s being reported that Manny Machado and the San Diego Padres have reached agreement on a deal that will last ten years and guarantee Machado $300 million, with an opt-out after the fifth season, the money fairly evenly spread over the ten year term and a limited no trade clause.  It was a long time in coming, but it sure seems in line with the other free agent contracts already signed this off-season.

I was figuring that unless the teams were in fact colluding, Machado would get at a minimum eight years and a $250 million guarantee, because that would a bargain for the age 26 through 33 seasons for a player of Machado’s caliber.  This is, in fact, what the White Sox offered Machado, although the ChiSox offer also included a whopping $100M in performance incentives and additional years.

That Machado got an extra two years and $50M guaranteed over an eight year, $250M deal seems in line with what the best offer would be in light of the tough negotiating teams have been performing this off-season.  Still, until the deal was finally reported with Spring Training already underway, one certainly couldn’t be sure what Machado would finally get.

I agree with Justin Verlander that signing Machado or Bryce Harper to a long-term deal is actually a good move for a rebuilding team like the Padres.  Even if the Friars need another three years to put together a contender, they’ll still have Machado for another five years (barring injury) of peak or close-to-peak performance.

Paying generational players like Machado or Harper even record-setting contracts tends to be a better risk than signing most other free agents, because they reach free agency younger and their peak performance lasts longer.  Of course, there is risk, since ten years is a lot of time for a debilitating injury to occur.

Machado’s offensive numbers are going to drop playing half his games at Petco Park, but the fact that Machado is not a “Johnny Hustle” type who gets too high or too low may actually be a good thing.  I don’t see Machado losing confidence in his abilities just because his offensive numbers drop off a little.

Now we’ll see what Harper gets, most likely from the Phillies.  I’d guess at least $330M guaranteed and possibly as much as $360M guaranteed over 10 to 12 seasons.

San Francisco Giants Loading Up on Marginal Players

February 17, 2019

With it now looking like the Giants will be bridesmaids in the Bryce Harper sweepstakes (mlbtraderumors suggests today that the Phillies are now the clear favorites to sign Harper), the Giants are continuing to load up on marginal players to address weaknesses throughout the major league and AAA rosters.  I listed the earlier signings about a month ago.

Since then, the Giants have added outfielders Cameron Maybin (age 32 in 2019), John Andreoli (29), Gerardo Parra (32), Craig Gentry (35) and Anthony Garcia (27); infielder Yangervis Solarte (31); catchers Stephen Vogt (34) and Rene Rivera (35); and right-handed pitchers Trevor Gott (26), Jose Lopez (25), Jake Barrett (27) and Brandon Beachy (32).  That’s whole lot of names but not much to get excited about.

In fact, the Giants have accumulated so many possibly has-been or never-will-be outfielders that one has to wonder how the team will get all of them enough Spring Training plate appearances to reasonably separate all the chaff from whatever remaining wheat there might be.

On a more positive note, the Giants have been good at identifying relief pitching candidates who suddenly become useful major league arms once they get to pitch their home games in the pitcher-friendly confines of McCovey Park (name sponsors come and go, but Willie McCovey is eternal, at least in the hearts of Giants’ fans).  Trevor Gott or Jake Barrett could well be the bullpen diamond in the rough the Giants turn up in 2019.

The Giants have been linked to still free agents Gio Gonzalez and Josh Harrison, and there has been rumored interest in the Yankees’ Jacoby Ellsbury.  Still, it looks to me like the Giants are starting a rebuild without yet disclosing that fact to the fan base.  If the Giants don’t make any more significant moves between now and the start of the 2019 regular season, the fans are likely to figure it out on their own soon enough.