It pays to invest in young stars early, but Padres’ moves don’t add up
Being a good young baseball player right now is a little bit like going on that famous episode of Oprah: "You get a long-term deal, and you get a long-term deal, and you get a long-term deal!" On Monday, Jedd Gyorko became the latest youngster to land a big contract, signing a six-year contract with the San Diego Padres; the deal guarantees him at least $35 million and includes a team option that could push it closer to $50 million over seven seasons. The league is enjoying record profitability, and instead of chasing aging pricey free agents, teams like the Padres have chosen to take their newfound wealth and use it to keep their best young players around for six or seven prime years.
These deals have historically been big winners for MLB teams, as they’ve traded on young players’ desire for financial security to hold down salaries for future superstars like Evan Longoria, Andrew McCutchen, Paul Goldschmidt, Chris Sale, and many others. The return on investment has been so consistently positive that teams are now racing to get similar deals done with every player who shows that they might have the ability to be a core building block for the future.
From 2008 through the end of the 2013 season, there were 47 contract extensions that covered at least four seasons, and most of them were in the six- or seven-year range, especially if you account for the team options that the players gave up in order to get their first big paycheck. As I noted in that analysis of those contracts, only a half dozen or so of those contracts have ended up not working out for the organization. The success rate on these deals has been extraordinarily high, especially when compared to the minefield that is free agency.
However, if there’s one team that hasn’t reaped the benefits of the recent extension craze, it’s probably these very same San Diego Padres. Two of the half dozen or so deals that haven’t worked out in the team’s favor have been signed by the Padres: Cameron Maybin’s five-year, $25 million deal and Cory Luebke’s four-year, $12 million contract, both signed in March of 2012.
Since the start of the 2012 season, Maybin has managed just 618 plate appearances and hit a meager .235/.300/.339, racking up just 1.7 Wins Above Replacement in the process. Things have been even worse for Luebke, as he’s managed just 31 innings over the last two years, and he’s going to spend all of 2014 rehabbing from a second Tommy John surgery as well. Neither Maybin nor Luebke are making big money on the deals they signed, but they combine to represent just a little less than 10 percent of San Diego’s 2014 payroll. It’s unclear if the Padres will get any value from either one this year.
Even the more minor deals the Padres have done haven’t worked out particularly well of late. That March 2012 contract-palooza included giving a three-year, $9 million commitment to catcher Nick Hundley; he proceeded to hit .157/.219/.245 that year and played himself right out of a job. Even with a decent rebound season last year, the Padres certainly didn’t save any money by giving Hundley a multi-year deal right before he fell apart.
The Padres haven’t really hit a home run with a long-term extension since they re-signed Adrian Gonzalez on April 1, 2007. Including the team option that they eventually exercised, the Padres signed Gonzalez for five years at a ludicrously low total of just $15 million. Not per year; for the whole five years. By the time Gonzalez turned into one of the league’s best hitters, he was making about 20 percent of his market value. That kind of deal is why teams are giving players with short track records big guaranteed paydays. If you get just one Adrian Gonzalez, the savings from that one deal alone can pay for a bunch of guys who don’t ever get any better.
But there’s a difference between signing Adrian Gonzalez and signing Cameron Maybin or Cory Luebke. If we know one thing about the baseball economy, it’s that power-hitting RBI guys get paid ridiculous amounts of money. Miguel Cabrera, Albert Pujols, Joey Votto and Prince Fielder have all landed contracts totaling north of $200 million in recent years, while Adrian Gonzalez’s long-term deal with the Red Sox totaled $154 million. Mark Teixeira got $180 million. Ryan Howard got $125 million. Freddie Freeman, who was three years away from reaching free agency, got $130 million just a few months ago, and his career high in home runs for a season is 23.
Maybin was a speed-and-defense center fielder whose value came in posting a decent batting line once you adjusted for the pitcher’s paradise of Petco Park. Those guys are valuable, but they certainly don’t get paid like cleanup-hitting first basemen. The same goes for Luebke, a pitcher with an average fastball who was never considered a premium prospect in the minors, and didn’t have the kind of stuff or durability that teams look for when giving huge paychecks to starting pitchers. These guys are solid contributors when healthy, but neither had the kind of credentials that lead to huge arbitration awards or eventual free-agent bidding wars. The upside of signing a player like Maybin or Luebke was always a bit limited, simply because they didn’t possess the same potential for huge future earnings like Gonzalez did.
And I think the same can be said of this deal for Gyorko. He’s a nice, young player with decent power for a middle infielder, but it’s not entirely clear that his long-term future remains at second base, especially with incumbent third baseman Chase Headley likely to leave as a free agent after the 2014 season. If Gyorko slides back over to third base, his power becomes unremarkable compared to his peer group, and he’s never going to hit for a particularly high average or steal a bunch of bases.
In many ways, Gyorko as a third baseman might be comparable to a guy like David Freese, the now-Angels third baseman who was a playoff hero for the Cardinals back in 2011. After a couple of very productive years in St. Louis, he was awarded $3 million in his first trip through arbitration, and then got a meager raise to $5 million for the 2014 season. Guys who hit .270 with 20 to 25 home runs, don’t steal many bases and aren’t defensive specialists just don’t really command significant salaries before they get to free agency, and even when they get within a year of the open market, Gyorko can ask Chase Headley about the Padres’ willingness to spend big bucks to keep him around.
Gyorko is a good player, just like Maybin was a good player and Luebke was a good player. You want to have these guys on your team. It’s not clear, however, that any of them were headed for the kinds of big paydays that make buying their futures in advance a good idea. When you sign a young player to a long-term deal, you take on the risk that he’ll get injured or just never develop into more than what he already is. To make the deal work for the team, you want to try to lock up potential superstars before they become superstars so you can keep them around at non-superstar salaries.
The Padres, though, haven’t developed any superstars since Gonzalez, and so they’ve ended up giving their long-term deals to injury-prone role players. Even if Gyorko avoids the health problems that his predecessors have faced, it’s still not entirely clear to me that he has the kind of upside that will turn this contract into a huge bargain for the Padres. That doesn’t make it a bad contract — $35 million in today’s baseball economy is a drop in the bucket, even for the Padres — or even one the Padres will regret, but until San Diego starts developing real franchise players again, these early career extensions won’t work out as well for them as they have for the rest of the league.