Friday, April 18, 2008

The new wave of player contracts

According to ESPN, the Devil Rays have locked up Evan Longoria for six years. Or seven. Or nine, if they feel like it.
Rookie third baseman Evan Longoria and the Tampa Bay Rays agreed Friday to a $17.5 million, six-year contract, a deal that could be worth up to $44 million over nine seasons.
Essentially, Longoria gets $17.5 million for the six years that he'll be under control of Tampa Bay anyway. At that point, he'll be 28, and the Rays can pick up an option for his first free agent year. The following year, he'll be 29 and the Rays can essentially lock him up for the remainder of his prime, the next two years, bringing the total value to $44 million.

This is an awesome deal for both sides, and we've been seeing more and more of these recently. Teams have figured out that a couple million dollars a year is chicken scratch to them but means an enormous amount to a player who is still not yet eligible for arbitration.

Essentially, Longoria is now set for life. No matter what happens, he can bank on receiving $17.5 million. Before he signed this deal, if he had gotten hurt during the next three years he would have made less than a million dollars. He does give up the chance to sign an outrageously lucrative contract when he's 28, but for any young player, divesting yourself of all that risk is too great an opportunity to pass up. This is a deal he should take ten times out of ten.

The Rays have assumed all of Longoria's injury and performance risk, but at a very affordable rate: less than three million dollars a year. Longoria is as "can't miss" as prospects come, but even if he does "miss," the Rays would have to make five bad deals of this nature for every success in order for them to be substantially hurt. On the other hand, if Longoria doesn't miss, they have a potential All-Star locked up for nine years at less than five million dollars a year. That's an absolute steal for them.

This is the new baseball market. I think it's awesome.

** EDIT ** The discussion going on here, in which I am a heavy participant, is worth reading, if only to see other people's reactions.

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