The Blue Jays have many players on the roster who are in the early stages of their MLB careers. Players such as these are often the subject of contract extension discussions. Which Blue Jays are candidates for extensions, and what would a deal look like for each player?
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There are numerous examples of players signing contract extensions well before entering the free-agency eligible phase of their careers. Who are the Blue Jays who may enter into a long-term contract sooner rather than later? How could the contract value of such a deal be determined? Let’s explore those questions.
Based upon history, the common elements of a contract extension are as follows:
- At a minimum, the player is good.
- The team identified the player to be part of their core. In other words, a player that the club envisages as being an integral part of a championship team.
- The club is confident that they can reasonably project the future performance of the ballplayer.
- The length of a deal will include free-agency eligible seasons.
- The player accepts that they are exchanging financial upside (more potential dollars) for financial security (more guaranteed money).
I do not have access to the model(s) that teams use to calculate an extension’s contract value. Accordingly, below are the critical assumptions of my model:
- A contract extension will be seven years in length, comprised of the current season and six additional years.
- The deal will be signed before the 2021 campaign and will end after the 2027 season.
- In the first arbitration-eligible year, a player makes 25% of what a free agent would make on a one-year deal with an identical projected fWAR.
- A player in their second year of arbitration eligibility makes 40% of what a free agent would make on a one-year deal with an identical projected fWAR.
- In the third arbitration-eligibility year, a player makes 60% of what a free agent would make on a one-year deal with an identical projected fWAR.
- The free-agent $/fWAR is estimated to be USD 8 million in 2021.
- I inflated the 2021 $/fWAR rate by 3% per year to account for salary inflation.
- In recognition of the Canada premium, which appears necessary to attract free agents to Toronto, I increased the $/fWAR by 20% in the player’s scheduled free agency years.
- Once the preliminary contract value is determined, I applied a 20% discount. The discount reflects the projected value that the player foregoes in exchange for financial security.
There is an additional item to note. Concerning the 25%/40%/60% arbitration salary estimate, I used the conclusions from the research conducted by Kevin Creagh.
I have identified Bo Bichette, Cavan Biggio, Danny Jansen, Teoscar Hernandez, and Lourdes Gurriel Jr. as the candidates for contract extensions. Noticeably absent from the list are Vlad Guerrero Jr. and Nate Pearson.
I excluded Guerrero Jr. and Pearson because it is difficult to project their future performance. In the case of Vlad Jr., he has not established a position on the field. Is he a third baseman, first baseman or a full-time designated hitter? Therefore, because Vlad Jr.’s fWAR depends on his position, I could not project his future value. Likewise, I could not estimate Pearson’s value to the Blue Jays because he has fewer than 20 MLB innings under his belt. As a result, it is too soon to contemplate a contract extension for Pearson.
What factors influence a player’s decision to sign a contract extension?
Candidates for contract extensions are unique people. Players have different personalities, life experiences, backgrounds, and family situations. Some players are sons of former MLB players who made a considerable amount of money during their careers. For example, Craig Biggio, the father of Cavan, earned more than $80 million during his career. Presumably, Cavan will not feel the need to provide for his parents. As a result, he may decide to roll the dice and reject a contract extension. On the other hand, Cavan may want an extension to show his parents that he can secure a large contract independently.
Some players grew up in poverty or near-poverty and may find a lucrative deal to be very attractive. Consequently, a rewarding, long-term contract can provide financial security for current and future generations.
The analysis to follow will only present the financial details of various contract extensions. In other words, my Ouija board will remain silent regarding whether the players examined will accept the suggested deals.
Appendix A contains profile information for each player, including when they are eligible for arbitration and free agency and the estimated fWAR used in their salary projection.
Table 1 shows that Bichette’s undiscounted seven-year contract extension would be worth $153.8 million or a $22.0 million AAV. After applying the 20% discount, Bichette’s contract extension would amount to $123.0 million, with a $17.6 million AAV.
Table 2 illustrates that Biggio’s undiscounted seven-year contract extension would be worth $86.0 million or a $12.3 million AAV. After employing the 20% discount, Biggio’s contract extension would amount to $68.8 million, with a $9.8 million AAV.
Table 3 shows that Jansen’s undiscounted seven-year contract extension would be worth $116.5 million or a $16.6 million AAV. After utilizing the 20% discount, Jansen’s contract extension would amount to $93.2 million, with a $13.3 million AAV.
At first glance, it may seem odd that the value of Jansen’s contract extension is higher than Biggio’s despite identical fWAR projections. One reason for the difference is that Jansen is arbitration-eligible one season sooner than Biggio. The other factor is that Jansen’s extension includes three free-agency eligible seasons, one more than Biggio.
Table 4 shows that Hernandez’s undiscounted seven-year contract extension would be worth $79.1 million or an $11.3 million AAV. After using the 20% discount, Hernandez’s contract extension would amount to $63.3 million, with a $9.0 million AAV.
Gurriel Jr. has three years left on his seven-year contract and is eligible for arbitration in 2024 and free agency after the 2024 season. For Gurriel Jr.’s contract extension, I focused upon the post-2023 campaigns.
Table 5 shows that Gurriel Jr.’s undiscounted four-year contract extension would be worth $62.9 million or a $15.7 million AAV. After applying the 20% discount, Gurriel Jr.’s contract extension would amount to $50.3 million, with a $12.6 million AAV.
The last word
There are many Blue Jays who are candidates for contract extensions. Furthermore, those contracts’ value varies greatly depending upon projected performance, when a player is eligible for arbitration and free agency, and age. As a result, it will be interesting to see if Mark Shapiro and Ross Atkins pursue contract extensions. If they do, which Blue Jays will Management approach, and what will be the value of any signed contract?
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Bob was a St. Louis Cardinals fan until the Blue Jays arrived on the baseball scene, although he still has a soft spot for the Cards. Similar to straddling the Greenwich Meridian, as depicted in the avatar, Bob applies sabermetrics when applicable, but his heart tells him that Lou Brock belongs in the Hall of Fame.