The New Normal? Examining MLB's Latest Batch Of Contract Extensions
This story has been updated to reflect Jacob deGrom's reported five-year extension Tuesday morning.
"You’re going to see more players sign team-friendly extensions because they’re afraid of free agency,” the agent said. "They’re realizing the money’s not in free agency and owners are going to keep getting more and more of the profit share.”
Less than two weeks later, Aaron Nola signed a four-year, $45 million extension with the Phillies. It was the first domino to fall in what has become a cascade of multi-year extensions.
Since the start of February, 19 players have signed guaranteed multi-year extensions with their clubs according to MLB Trade Rumors. The entire 2017-18 offseason saw 12 such extensions.
On the heels of a free agent freeze that saw accomplished veterans reduced to signing minor league deals, the spike is not a coincidence.
"I talked to some clients about this last year,” a second agent said, "where based upon how the free agent market was and how teams basically used the luxury tax as an artificial salary cap, it’s almost beneficial to have a long-term deal early. It’s trending that way, that these long-term extensions will probably become the norm for those players that their particular team deems worthy of these kind of extensions.”
The recent extension wave has not been limited to one age group or type of player.
It includes players in their 30s (Paul Goldschmidt and Justin Verlander) and players who are still prospects (Brandon Lowe and Eloy Jimenez). It includes elite players (Mike Trout, Chris Sale and Jacob deGrom) and complementary ones (Jorge Polanco and Jose Martinez). It includes starters (Miles Mikolas, Luis Severino) and relievers (Jose Leclerc, Ryan Pressly), rising young standouts (Alex Bregman) and late-bloomers (Aaron Hicks), former top prospects who have lived up to their hype (Nolan Arenado) and those still finding their way (Max Kepler).
There is one common thread. All but one deal signed by a player under 30 guaranteed them at least $24 million, a significant measure of financial security.
For those over 30, the extensions will largely take them through the end of their careers.
Guaranteeing financial security early and avoiding entering the free agent market in their 30s if possible have become the goals for players and their agents, even at the cost of potentially outperforming the dollar value of their extensions.
"Teams don’t want to spend on free agents after age 30,” the first agent said. "You’re lucky if you get a three-year deal after age 30. (Andrew) McCutchen is one example, but he’s a former MVP. He has a resume. To hit free agency at age 30, you have to be established already at age 23. How many players really get established at age 23? It’s not that many. You can count them on one hand. So when you do the math and you realize the team controls you for six or seven years…”
Indeed, the average age of a player who made his major league debut in 2018 was 24.6 years old, per Baseball-Reference. With teams entitled to six years of control from the moment the player debuts, the average of those players won’t reach free agency until they are 30 going on 31.
With teams largely unwilling to shell out significant money in free agency at those ages, extensions are beginning to look more appealing to even the game’s elite players.
Sale, Verlander, Goldschmidt and Arenado were all set to be free agents after the 2019 seasons. So were Hicks and Mikolas. All took the historically unusual but increasingly common step of signing an extension a year before hitting the market.
Even Trout, who received the largest contract in North American sports history when he signed his extension with the Angels, acknowledged this winter’s free agent market played a role in his thinking.
“I kind of saw what Bryce and Manny went through and it drew a red flag for me,” Trout said Sunday per The Athletic’s Fabian Ardaya,” I talked to Manny and Bryce. It was a tough couple months in the offseason. They put it (in) perspective in my mind.”
There is a growing sense among agents that this will be the new normal. One potential wrinkle, however, is the pending increase of active rosters to 26 players in 2020.
“I think when the rosters shift from 25 to 26 next year, those free agent guys that may be signing minor league contracts at the moment ultimately may sign a major league contract moving forward,” the second agent said. “I think for now this is the norm and then once we get into next year it wouldn’t surprise me if this happens again going into spring training, extensions for internal players. But then the following year, once teams and players have seen how the 26th man roster spot is utilized, there may be a pause on the extensions.”
Whether that happens is to be determined. For now, the calculation has shifted, and agents are increasingly seeing a long-term extension—even a “team-friendly” one— as the best way to guarantee their clients a payday, rather than getting them to free agency.
“They sold these players on ‘you’re going to make nothing for three years and then you’re going to go up little by little in arbitration. It’s going to take time, but there’s a light at the end of the tunnel and there is going to be this huge payday,’” the first agent said. “And now they’re not getting it, so I don’t know where this is going.”
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Since the start of February, 19 players have signed guaranteed multi-year extensions. Here are those deals, with the guaranteed amount of their contracts listed.
|Mike Trout||Angels||10||$360 million|
|Aaron Hicks||Yankees||7||$70 million|
|Nolan Arenado||Rockies||7||$234 million|
|Brandon Lowe||Rays||6||$24 million|
|Eloy Jimenez||White Sox||6||$43 million|
|Jacob deGrom||Mets||5||$137.5 million|
|Max Kepler||Twins||5||$35 million|
|Jorge Polanco||Twins||5||$27.25 million|
|Alex Bregman||Astros||5||$100 million|
|Ryan Pressly||Astros||5||$100 million|
|Blake Snell||Rays||5||$50 million|
|Chris Sale||Red Sox||5||$145 million|
|Paul Goldschmidt||Cardinals||5||$130 million|
|Aaron Nola||Phillies||4||$45 million|
|Luis Severino||Yankees||4||$40 million|
|Miles Mikolas||Cardinals||4||$68 million|
|Jose Leclerc||Rangers||4||$14.75 million|
|Jose Martinez||Cardinals||2||$3.25 million|
|Justin Verlander||Astros||2||$66 million|
Source: MLB Trade Rumors
With Nolan Arenado, Justin Verlander, Paul Goldcschmidt, Chris Sale, Aaron Hicks and Miles Mikolas off the board after signing extensions, here are the top players whose contracts expire after the after the 2019 season
Gerrit Cole, Astros
Anthony Rendon, Nationals
Xander Bogaerts, Red Sox
Madison Bumgarner, Giants
Didi Gregorius, Yankees
Zack Wheeler, Mets
Marcell Ozuna, Cardinals
Rick Porcello, Red Sox
Khris Davis, Athletics
Cole Hamels, Cubs
Dellin Betances, Yankees
Nicholas Castellanos, Tigers
Scooter Gennett, Reds
Jose Abreu, White Sox
Starlin Castro, Marlins
Corey Dickerson, Pirates
Josh Donaldson, Braves
Yasiel Puig, Reds
Francisco Cervelli, Pirates