Earlier today, Mike Petriello wrote an article over at ESPN looking at the curse of the contract extension. Petriello pointed out a lot of big extensions that were given out from 2010-2014, well before an extension was needed. A lot of those extensions are now backfiring, such as Ryan Howard’s five-year, $125 M deal, and Joey Votto’s ten-year, $225 M deal, which is currently in year one and is seeing Votto miss a lot of time due to injury.
All of the deals pointed out in the article were signed two years before the extensions actually started. Most of the teams gave out contracts that paid free agent dollars, well before the players reached free agency. Had they waited until the player was actually a free agent, they might have avoided these huge mistakes. For example, Justin Verlander got a five-year, $140 M extension, which starts next year. He would have been a free agent at the end of the 2014 season, and with the way his season has been going, I don’t think he would have touched $140 M this off-season without that extension.
There are two contract situations with the Pirates where we can learn from these lessons, and avoid potential mistakes. Those two situations are with Neil Walker and Andrew McCutchen.
First up is Walker, who is currently having a career year at the plate, which is happening during his age 28 season. He turns 29 in early September. The Pirates have him under control for two more seasons, and he’s eligible for arbitration both years. Walker will be 31 when he’s eligible for free agency.
There have been a lot of calls to extend Walker over the last few years, and that didn’t stop with the season he is currently having. But an extension really doesn’t make sense. At this point, the Pirates aren’t getting any discounts by guaranteeing money to Walker under an extension. It’s not like extending a player after 1-2 years, where you get his first few free agent years at a potential lower rate. The best the Pirates would get by extending Walker is cost certainty over the next two years, along with buying out his free agent years at a rate that probably won’t be different than what he will get after the 2016 season.
Since the Pirates aren’t getting a discount on his free agent years, it makes no sense to extend him two years early. He’s had a history of nagging injuries, and those only project to get worse as he gets older. He’s having a career year at the plate this year, but there’s no guarantee he continues with this performance. It was only two years ago that Chase Headley was having a career year at the age of 28. He dropped back to his career average the following year, and this year he has seen a big decline. If Walker does the same thing, dropping back to his career norm next year, then really falling off in 2016, then an extension would look extremely foolish.
The best thing to do with Walker is to go year-to-year, and then revisit the subject of extending him after the 2016 season.
In McCutchen’s case, there is less of a need for an extension right now. He’s one of the best players in the game, but he’s also under control through the 2018 season. That’s also his age 31 season. A lot of players, even impact players, start to see a steady decline at that point, or shortly after. Even if it’s a shorter extension, the Pirates would be paying for McCutchen’s age 32-36 seasons.
It’s entirely possible that McCutchen could be productive beyond his age 31 season, and even into his age 36 season. He’s not Ryan Howard or Joey Votto, where his body will start to break down faster when he gets older. But that’s still four years away, not counting the current season.
A lot can happen in four years. McCutchen could suffer a serious injury. He could start to show signs of a decline. The Pirates could even run into a situation where they don’t need to spend money on his expected declining years, which would happen if Austin Meadows emerges as an elite outfield talent, to join Gregory Polanco and Starling Marte.
To put this timeline in perspective, four years ago McCutchen was in his first full season in the majors. He wasn’t even thought of as an MVP candidate, or a guy who was one of the best players in baseball. Starling Marte was in A-ball, and was having a breakout year as a prospect. Gregory Polanco was playing his first year in pro ball in the US, spending his first of two seasons in the GCL. Meanwhile, Josh Hamilton (age 29), Carl Crawford (29), and Albert Pujols (30) were three of the top hitters in baseball.
Four years ago, it would have been insane to say that the Pirates would have the potential for one of the best outfields in baseball with McCutchen, Marte, and Polanco. It might not have been insane to predict the sudden decline of the likes of Hamilton, Crawford, and Pujols, but I don’t think anyone expected the decline to be so sudden in each case.
I don’t think McCutchen is signing an extension with the Pirates at any point without a team friendly deal. Considering their recent history of developing outfielders, and the extreme uncertainty of what could happen four years from now, it would be crazy to extend McCutchen again. I haven’t seen too much “extend McCutchen” talk yet, outside of the hope that this could happen down the line. But this whole topic is something to remember even two years from now, when McCutchen is only two years away from free agency. The Walker discussion is an easy one, because even in his best year he’s not an elite player. If McCutchen is still an MVP candidate two years from now, that’s going to lead to a big debate about extending him because of his current production at the time, versus the risks of extending him for fear of the unknown two years down the line.
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