Upon being called up to the Tampa Bay Rays on June 22, 2021, twenty year-old shortstop Wander Franco earned the Major League Baseball minimum of $570,500 for the remainder of the season. The extension which Franco signed with the Rays on Tuesday pays him more than that per each of his 308 career MLB plate appearances.
Franco, who prior to being called up was the consensus #1 prospect in the sport, inked an eleven-year, $182 million contract with the Rays, which includes a $25 million club option for 2033. Franco, who cannot toast with celebratory champagne in Tampa until Spring Training 2022 is underway, will reach free agency no later than the age of 32, but in the meantime is more than financially secure for the rest of his life.
Ultimately, from Franco’s perspective, this is where I land–the security of $182 million would be too tempting for me to pass up, so I don’t demand that others do it. If you simulated Wander Franco’s career a million times, Franco would make more than $182 million through 2032 (or $207 million through 2033, or the $223 million maximum worth of the contract in the event of MVP voting bonuses) in both the median and average universe. But Franco only gets one MLB career, and the $182 million he has just secured for himself is far more valuable than the next $182 million he could perhaps have gotten by gambling on his future. The odds are high that, without an extension and by playing it year-to-year, Wander Franco would earn more money than he could ever possibly spend. With the extension, the odds are 100%.
But the Tampa Bay Rays know what they are doing, and unlike Franco, they will have several cracks at signing long-term extensions. This is the organization that signed Evan Longoria to a six-year extension with three separate team options six days after he was promoted to the big leagues. For the Rays, it was a historically great deal: Longoria is the greatest player in franchise history, and he far outperformed the $17.5 million the Rays owed him for those six years. For Longoria, it was an assurance that he would be comfortably wealthy for the rest of his life. Had Longoria suddenly flopped, the $17.5 million the Rays would have lost meant far less to an MLB franchise than it would have to an individual 22 year-old.
By my count, in the 21st century, the St. Louis Cardinals have signed ten players to contract extensions which locked up the player for at least one year of salary arbitration and one year of free agency (or at least a team option to do so)–this list excludes, say, Scott Rolen’s 2002-signed extension (it only bought out free agency years) and the extensions signed by Jon Jay and Lance Lynn in the mid-2010s (they only bought out arbitration years). None of these totals were as large by years or dollars as Franco’s, but they did inform many future transactions.
The player’s motivation in each case is simple–each of these contracts assured players enormous bumps in their career earnings. But how did each contract work for the team? And I mean this from a front office perspective–a “I get a set budget and I’m spending some of it on this guy, how did it work out?” perspective. Billionaires losing a few million bucks mean nothing to me, but working around that constraint, I would still prefer my hometown baseball team does as well as they can possibly do. So let’s look at the contracts.
February 18, 2004–Cardinals sign Albert Pujols to seven-year, $100 million contract with team option for 2011
Albert Pujols was coming off three consecutive MVP-caliber seasons to begin his career, and he was heading into his first of three years of salary arbitration before signing a nine-figure deal a month after his 24th birthday. While the deal bought out 4-5 years of his free agency years, Pujols would still have a chance to hit the open market at 31 while securing generational wealth for his family. And in the end, this became arguably the most significant Cardinals transaction since drafting Pujols in the first place. Pujols spent the next seven seasons continuing his MVP-caliber career, and while his performance dipped a little bit in 2011, he was still very much worth the $14.5 million he was due. By FanGraphs’s estimates, his 2004-2011 performance would have been worth $328.9 million on the open market, and the Cardinals paid just over $102.3 million to employ him. Because of the salary-suppressing nature of arbitration, the Cardinals could’ve played out the next three years and still come out ahead, but not this ahead. Cardinals win.
January 21, 2008–Cardinals sign Yadier Molina to four-year, $15.5 million contract with team option for 2012
Signing Albert Pujols, a perennial MVP candidate, to an extension was beyond obvious, but Yadier Molina was far less so. Although heralded for his defense, Yadier Molina had been a dreadful offensive player throughout his career. But he almost immediately improved at the plate while not losing at all behind the plate, and while the contract only bought out two free agency years (once the team option was exercised, quite easily), it was additionally valuable based on how quickly Molina would’ve received arbitration raises in 2009 and 2010 with his ascending offense. On the whole, Molina was paid $21.5 million from 2008 through 2012 and was worth $185.1 million. And by extending Molina again right before the 2012 season (in a contract outside the scope of this analysis), the Cardinals further capitalized on their development of the catcher. As for Molina, he seems real happy and has a nine figure net worth, so he’s fine. Cardinals win.
March 20, 2008–Cardinals sign Adam Wainwright to four-year, $15.5 million contract with team options for 2012 and 2013
While the contract signed by Wainwright prior to the 2008 season looks identical the one signed by Yadier Molina, this one did not buy out any free agency years in and of itself–Wainwright received a bump from the league minimum salary in 2008, forfeited three years of salary arbitration, and the Cardinals had the option to buy out two years of his free agency. Unlike the offensively deficient Molina, Wainwright wasn’t considered especially risky, but he too found a new level during this contract. A strong 2008 would have upped his arbitration rates, and his three Cy Young Award finalist seasons would have increased his value even more. In a world where the Cardinals go year-to-year with Wainwright, the Cardinals would’ve likely paid him eight figures in 2011 alone (an amount that would’ve been locked in prior to Wainwright’s season-ending injury), but instead, the Cardinals got $149.8 million in value out of Wainwright, even with a season lost to injury, and owed him just $36 million–his surplus in his option years alone made this a worthwhile move. Cardinals win.
July 13, 2011–Cardinals sign Jaime García to four-year, $27 million contract with team options for 2016 and 2017
Jaime García was a Rookie of the Year finalist in 2010 and was off to a strong start in 2011 when he inked an extension with the Cardinals which could keep him with the organization until he turned 31. The contract bought out his arbitration years and 1-3 free agency years, though unlike Adam Wainwright, who turned into a superstar, García’s soon became rather injury-prone, and while generally pretty effective while pitching, he was never quite a Cy Young-caliber ace. But despite his injuries, García passed the surplus value threshold with his contract–he provided $55 million in value while costing $37.5 million. Declaring this an automatic win for the Cardinals is a bit of flawed logic, though, as going year-to-year in arbitration was also a choice, and based on the 40/60/80 rule (a player is worth 40% of his prior year’s value in Year 1 of arbitration, 60% in Year 2, 80% in Year 3) and adjusting for the fact that players almost never lose money year-over-year in arbitration, García…wouldn’t have made much less than $27 million just over those years. And then the Cardinals wouldn’t have gotten 2015, with 129 2/3 innings and a 2.43 ERA/3.00 FIP, as part of the process. While the Cardinals were likely disappointed with García’s underwhelming 2016, the 2017 option meant that the Cardinals could deal him for John Gant, an unspectacular return in some ways but also a nonzero one. It’s not quite the laugher of the first three extensions, but the Cardinals still did come out ahead. Cardinals win.
March 8, 2013–Cardinals sign Allen Craig to five-year, $31 million contract with team option for 2018
Although Craig was a late-bloomer still making the league minimum a few months shy of his 29th birthday, the all-around solid hitter capable of competent defense at first base, left field, or right field seemed like a decent case to age relatively well, and given his MVP vote-receiving 2012 season, locking up his arbitration years didn’t seem like a bad idea. But then came one of the most precipitous declines in recent memory. 2013 was another solid year from Craig, and million-and-change raise for the year was mostly immaterial, but in 2014, he was an outright bad hitter, of so little value that the Cardinals traded him and Joe Kelly to the Boston Red Sox for John Lackey and a minor leaguer who never reached the big leagues. Craig somehow got worse in Boston and he took his final MLB at-bats in 2015. By a mile, this extension was, on paper, a disaster–Craig was a sub-Replacement Level player throughout the length of it, and the team could’ve declined to tender an offer to Craig following his disastrous 2014. The easy defense is that very little of the extension was paid for by the Cardinals and that Craig helped to net the Cardinals an effective starting pitcher in John Lackey, but that trade could have still easily happened with an Arb-1 Craig, and maybe could’ve saved the Cardinals from having to add Joe Kelly. Cardinals lose.
March 8, 2014–Cardinals sign Matt Carpenter to six-year, $52 million contract with team option for 2020
Coming off a breakout, MVP-caliber 2013 season, the now-third baseman signed a contract that could conceivably keep him in St. Louis until he was 35. And while Carpenter never again quite reached the heights of his 2013 season, he spent the next five seasons performing somewhere between good and awesome, to the tune of $160 million in value, including $40.4 million in a 2018 season that, without a contract, could have been spent somewhere else. Carpenter’s performance dipped in 2019 and 2020, but he was still an above-Replacement Level player. This extension was an unqualified win for the Cardinals–the legitimately awful extension Carpenter signed before the 2019 season may have sullied his reputation as a bargain, but the first extension was glorious for the team. Cardinals win.
March 2, 2016–Cardinals sign Kolten Wong to five-year, $25.5 million contract with team option for 2021
Prior to the more elaborate instances of Mike Matheny jerking Kolten Wong around, he was a moderately well-regarded young second baseman entering the wonderful world of cost control, with the Cardinals buying out his arbitration years plus one more year at a little over $6 million per year (considering the first year of the contract would have been at the league minimum). His total paid by the Cardinals ended up being a little over $19 million (his most expensive year, 2020, being prorated based on the 60-game schedule) while his open market value was $91.1 million, a massive surplus, but given that he was going to be paid for a league-minimum season plus three suppressed seasons, a surplus would be expected without an extension. But the 40/60/80 rule estimates that Wong would sit at around $28.6 million in 2016-2019 salary without an extension–the Cardinals effectively got a bonus 5.1 WAR season out of Wong in 2019, another solid Gold Glove-winning campaign in 2020, and the right to extend him in 2021–relitigate the decision to void the option year all you want, the Cardinals had run away with the trade enough that spending a million bucks to void it wasn’t going to change the outcome. Cardinals win.
February 2, 2017–Cardinals sign Carlos Martínez to five-year, $51 million contract with team options for 2022 and 2023
Carlos Martínez was coming off of two excellent seasons in a row and was reaching arbitration for the first time, so the Cardinals were proactive, buying out two years of free agency with two additional option years tacked out at the end. Martínez took a slight step back in 2017, but remained an innings-eater, but in 2018, injuries started to take their toll on the once-durable Martínez. In 2019, Martínez was effective, but as a relief pitcher, not in a role which best served his talents, and in 2020 and 2021, he was quite awful, making the decision to pay $500,000 to void the 2022 and 2023 options an easy one for the Cardinals. While the deal was celebrated as a massive bargain for the team in the moment, the last few years have been rough. That said, Martínez was worth $54.4 million on the open market, $3.4 million than the club ultimately paid the pitcher. That does not, however, make the trade a minor win–in hindsight, the Cardinals would have been far better off taking Martínez year-by-year in arbitration through 2019. At $40.8 million for arbitration (which is likely an oversell, considering Martínez was reportedly offered $4.25 million for Arb 1 prior to the extension being signed), Martínez produced $52 million in value. It wasn’t an Allen Craig-esque extension, but it’s impossible to pretend the contract worked out as the Cardinals intended. Cardinals lose.
April 3, 2017–Cardinals sign Stephen Piscotty to six-year, $33.5 million contract with team option for 2023
Although Piscotty was a less glamorous player than Carlos Martínez, the right fielder seemed like an extremely safe player who could be a decent contributor to a winning team. With two years until salary arbitration, Piscotty got a solid cash advance on his salaries in exchange for foregoing one year of free agency and agreeing to a (fairly robust) $14 million team option for 2023. Piscotty ended up being a unique case, as the Cardinals traded him one year later for largely non-baseball reasons, though the $3.5 million in value, while underwhelming by his standards, Piscotty produced in 2017, was an exact match for what the Cardinals ended up paying him (a $2 million signing bonus, a $1 million salary for 2017, a $500,000 bonus for being traded that I can’t find any record of them not paying). So in that sense, the extension was a push, but also, the cost-certainly likely made him more attractive to the Oakland Athletics, who gave up two minor leaguers, Yairo Muñoz and Max Schrock, who eventually made the majors with the Cardinals. While Muñoz was very marginally below Replacement Level and Schrock was exactly Replacement Level in St. Louis, the margins on all sides of this trade are so small that I’m making a judgment call. Push.
March 6, 2018–Cardinals sign Paul DeJong to six-year, $26 million contract with team options for 2024 and 2025
The Cardinals made history with how quickly they offered DeJong, who had debuted in late May 2017, an extension of this size, but given that DeJong was a Rookie of the Year runner-up, the organization was excited to keep DeJong under team control. This was an unusual extension in the sense that the Cardinals were buying out three years of DeJong at league minimum and three years of arbitration in exchange for the options for two more years at the end. Paul DeJong has easily been worth the money in a vacuum–his post-extension value since signing it, even without adjusting for the truncated 2020 schedule, stands at $77.9 million. The 40/60/80 rule would put DeJong around $32 million in total arbitration salaries–this is yet another example where I suspect it wouldn’t be that much (though his strong 2019 would likely set the initial bar quite high), but having the options for 2024 and 2025 at quite reasonable prices ($10.5 million and $14 million over buyouts, respectively) for an All-Star, Gold Glove finalist shortstop is huge. Maybe DeJong is awful for the next two years, which would keep this contract from a massive win, but no matter what, it looks like a win nonetheless. Cardinals win.
Of these ten contracts, seven worked out for the Cardinals, some spectacularly. One was a relative push. Two were bad for the team. But on the whole, the Cardinals have some out way ahead. I haven’t done the math for every team, but I doubt the Cardinals are outpacing the industry that much. There is a reason teams are offering these extensions. They are extremely beneficial when working in these numbers. Taking the L on Allen Craig is an acceptable cost of doing business when the massive windfalls of an Albert Pujols or Yadier Molina extension are considered.
But for the players, these make sense too. Perhaps on some level, Albert Pujols regrets signing his extension. But which is a stronger pull–how much Albert Pujols regrets being merely a very wealthy man rather than a very very wealthy man, or how relieved Allen Craig is that he got doesn’t-have-to-work-another-day-in-his-life money while he could? By dollars, Albert Pujols lost out on more than Allen Craig won, but players only get one chance at this.
I wish the financial system of baseball were different for many reasons, but this is a part of the system which, while flawed, I do not consider awful. Ultimately, I try not to sweat how much the one-percenter-of-one-percenter baseball superstars are making–I would happily accept an environment where the best players don’t make more than $30 million per season but also the lowest-paid players still crack seven figures. This system enables my dream on a small level–everyone gets paid something, and even though players don’t get as much of a share as I would like, there is more reasonable distribution because of it.
The Cardinals don’t have a ton of great options for this kind of extension right now–Harrison Bader a couple years ago would have been sensible, but they seem inclined to run out the clock and gamble that a speed decline will make them not look foolish–but they do have a few decent ones. Tyler O’Neill, Tommy Edman, or especially Dylan Carlson might make more sense, but the Cardinals’ 2010s run on extension appears to be over.