Missing the $1.8 Billion Forest for the $600 Million Trees

While baseball fans obsessed over the free agent sagas of Harper and Machado, some of the sport’s best players signed nearly $2B in extensions.

The 2019 MLB season is just around the corner. With Opening Day upon us, fans can turn from talking about contracts to talking about contact — bat on ball, ball on mitt.

As an avid follower of both the on-season and the off-season, I want to get in one last word about the business of baseball before I cheer on my Nats (in what’s bound to be a thrilling NL East division battle this year).

Much of the 2018–2019 offseason was spent obsessing over just two players:

• 3B/SS Manny Machado, who on Feb. 21 signed a 10-year/$300 million deal with the San Diego Padres
• OF Bryce Harper, who eight long days later inked a 13-year/$330M pact with the Philadelphia Phillies

That $630M was at the center of all the speculation this winter — thousands of tweets, hundreds of articles, endless whispers and rumors.

Forest vs. Trees

While the baseball universe (including this author) fixated on Machado and Harper, though, we missed a $1.8 billion forest for the $630M trees.

How? Through baseball’s least sexy type of transaction: the contract extension.

Harper’s and Machado’s contracts are second and fourth on the all-time list of top MLB contracts by total value (source: Cot’s Baseball Contracts). But two other contracts signed this winter crack the all-time top 10 too:

• OF Mike Trout, already a Hall of Fame lock at age 27, eclipsed Harper’s record contract by a cool $96.5M, signing for 12 years/$426.5M just last week
• 3B Nolan Arenado became a lifetime Rockie this winter with the sixth biggest contract of all time, at 8 years/$260M

Only one free agent this winter besides Harper and Machado signed a contract in the top 95 all time (Patrick Corbin to the Nats, 6 years/$140M). Meanwhile, five other players signed contract extensions in the top 95:

• LHP Chris Sale extended his stay with the Red Sox (5 years/$145M)
• RHP and NL Cy Young winner Jacob deGrom agreed this week to stick around Flushing with the Mets (5 years/$137.5M)
• 1B Paul Goldschmidt decided to hang with St. Louis following Arizona’s decision to trade him last year (5 years/$130M)
• 3B Alex Bregman sealed his first big contract by extending with the Astros (5 years/$100M)
• LHP Clayton Kershaw continued his career-long track with the Dodgers (3 years/$93M)

Also worth an honorable mention on the contract front, RHP Justin Verlander just signed a 2-year/$66M extension with the Astros. Why so notable? The $33M Verlander will make a year is the second-highest average annual value (AAV) ever on an MLB contract. The #1 AAV? Trout’s deal signed last week.

16 vs. 6

All in all, some of baseball’s best stars signed contract extensions worth a total of $1.78B this winter. This includes the aforementioned Trout, Arenado, Sale, deGrom, Goldschmidt, Bregman, Kershaw, and Verlander deals, but also:

• LHP and AL Cy Young Winner Blake Snell’s 5-year/$50M extension with the Rays
• RHP Kyle Hendricks’ 4-year/$55.5M deal to stay with the Cubs
• OF Eloy Jimenez’s 6-year/$43M deal with the other Chicago team (a record for a player who has yet to reach MLB)
• RHP Miles Mikolas’ 4-year/$68M with the Cards
• Two Yankees deals: OF Aaron Hicks (7 years/$70M) and ace RHP Luis Severino (4 years/$40M)
• Top Phillies RHP Aaron Nola (4 years/$45M)
• Cleveland RHP Carlos Carrasco (4 years/$47M)

(Source for most of the above extensions: the great Spotrac.)

That’s 16 contract extensions worth at least $40M since November 2018. For comparison’s sake, there were only six free-agent contracts worth $40M+ in the same period (Harper, Machado, Corbin, Nathan Eovaldi, A.J. Pollock, and Andrew McCutchen).

Why Care?

Besides a passing interest in those big paychecks, and what they may mean for ticket prices, why should a baseball fan care?

Several reasons:

1. The contract extension boom puts to rest some of the concerns that team owners are colluding to keep the growth in player contracts down; those concerns have led to rumors an MLB strike may happen in 2021. Don’t want a strike? Pray for more big contracts that put off player concerns.
2. The money pouring in to players’ bank accounts through extensions — and the difficulties superstars Harper and Machado faced getting their $300M contracts this winter — may lead top pending free agents to take a serious look at extending with their current teams rather than testing the market. This list includes Xander Bogaerts (Red Sox SS), Gerrit Cole (Astros RHP), Anthony Rendon (Nats 3B), and Zack Wheeler (Mets RHP).
3. Sports media — from the ESPNs of the world to blogs like MLB Trade Rumors and Fangraphs — should consider investing more time and resources into covering extension talks. It feels like fans become privy to extension news only hours or days before they happen, as opposed to the free agent drama that can last months. No fault on reporters, who work their butts off, but a vigorous focus on extensions could leave MLB fans more informed.

Regardless of whether the next record-breaking MLB contract comes from an extension or from free agency, the current trends can’t be ignored. It’s important not to miss the forest for the trees.

However, I must note that this rule applies to “baseball as business” talk too: Opening Day is hours away, and it’s time to spend the next 6 months focused on the glorious game.