In his recent article, Alex Duvall discusses the extension of Brandon Lowe by the Rays, proposes a trade, and expresses his interest in extending some of the Royals current crop of players. He spitballed some extension estimations for Brad Keller, Jakob Junis and Adalberto Mondesi, and it led me to ask myself “What would extensions for these players look like?”
First, we have to examine the purpose of an extension and how teams and players approach the discussions. Extensions happen when two parties (the front office (FO), and player/agent) with competing interests reach a mutually beneficial position.
For the FO, the goal is simple; they want to control the best players for the longest part of their prime for the least money possible. For the players and their agents, the goal is to maximize the guaranteed money while not selling themselves short in terms of their potential earnings. There is also pressure from the MLBPA to not take deals that are drastically team-friendly as it sets a precedent for future players, but in general players and agents make decisions strictly for themselves and their families.
The starting point for any negotiated extension between a player with arbitration years remaining is their projected arbitration salary. Both sides will determine what they expect the player to make through arbitration, assuming they continue to perform at roughly the same level and remain healthy.
I am approaching all of these as though they improve in 2019, and the extension takes place near the end of the season or during the off season.
The Royals have control over Junis through his age-30 season. 2019/2020 are team control years, with ‘21-’23 being his arbitration seasons. Junis saw his production drop off last season, after posting 1 fWAR in 98.1 innings in 2017, he posted just 1.4 fWAR in 177 innings last season. Let’s get bullish and project Junis at 2.5 fWAR in 200 innings this season due to an improved change-up.
At age 27, he’s unlikely to see drastic improvement in 2020 over his 2019 season, but is also unlikely to be hit by the aging curve. It’s safe to project him to be about a 2.5 fWAR pitcher for his remaining four years, and likely about that for the next two seasons (age 31/32), with drop off after that point.
Kevin Gausman is not a perfect comp but is probably as close as you can get to find a player who actually went year-to-year recently with arbitration. He earned $3.45 million, $5.6 million and $9.35 million in his arbitration years, for a total of $18.4 million. Call it $19 million for his final pre-arb season and arbitration years.
What is Junis worth on the free agent market? The value of a win (WAR) varies depending on your sources, but we’ll call it $8 million for easy figuring. This means Junis is worth about $40 million for his first two years. Couple that with our $19 million arbitration estimate, and we can figure that Junis is worth at most about $59 million over our 6 year window.
Now, the Royals shouldn’t offer this as the new guaranteed money would be basically the entirety of the contract (only his 2020 season at league minimum would be counted as guaranteed already). If I were the Royals I would put the two final years as team options. So something like Whit’s deal, say 4 years/$16.5 million seems fair, with two team options at $12 million apiece, for a total of 6 years/$40.5 million if both are exercised. There would likely be some buy-outs and incentives as well.
Seem too low? Corey Kluber signed a 5 year/$38.5 million deal with two extra team options after being worth 10 fWAR in his first two seasons, several times more than Junis.
I should say now, this was written before Opening Day and Keller’s fanastic start. Keller is a bit more interesting than Junis. His production last year was better (2.6 fWAR) and it was mostly done through his prolific ground ball rate (54.4%). There is concern that Keller might drop off a cliff as the league adjusts, but let’s assume he increases his K rate without increasing his BB rate and maintaining his ground ball rate (basically, he becomes Dallas Keuchel) and is worth 3.5 fWAR.
Keller’s control is identical to Junis’s, so he’ll have one year at roughly league minimum, then three arbitration years. Since Keller is a nearly three full years younger than Junis, there is more hope for upside and improvement in him. Keuchel followed up his 2014 with a Cy Young award and 5.6 fWAR in 2015 and went on to earn $29.6 million through his arbitration years. His production was merely good, not great, following his 2015 breakout season, and he has failed to obtain a contract this year as of this writing, though MLBTradeRumors estimated him to receive 4 years/$82 million.
Keller will be entering his age-28 season during his current first free agency year, whereas Keuchel is 31, so the deal for Keller would likely be both longer and for more money. Keller would likely command something around 6/$150 if he continues on this projected track, so his first two FA years might be valued at something like $25 million apiece. So 6/$80 is likely the max possible value of this contract. If I were the Royals after he produced a 3.4 fWAR season, I’d offer him 4/$24 with two option years averaging $18 million each, for a total of 6/$60 million possible. Buyouts and incentives again, of course.
Finally we reach Mondesi, saved for last both because the research for the first two was very similar, and because I’m very bullish on Mondesi. I believe Mondesi will put up 4+ fWAR this season. After posting 2.8 fWAR in 75 games, it’s not absurd to suggest he could be worth as much as 6 fWAR in a full season, especially given his age.
Let’s take a step back and assume that Mondesi is only worth about 4 fWAR this season. He is under team control through 2023 (as were Junis and Keller), and like Keller, he’s entering his age 23 season.
Kyle Seager’s extension appears to be a good starting point when discussing one for Mondesi. Mondesi is younger than Seager and plays higher skilled position but Seager had been more productive at the point of signing. He also had one less year of team control available. Seager signed a 7 year/$100 million deal. Since we are looking at six-year deals for these players, we’ll examine only the first 6 years of the Seager deal.
For his arbitration years, Seager was paid $4 million, $7.5 million and $10.5 million. The next two season were paid at $18.5 million and $19 million. Mondesi’s contract will start a year earlier in his career, so we need to backfill the value of his team controlled season rather than adding another high-value season at the end. If we say his first year is $3 million, we’re talking total of 6 years/$62.5 million. Given his age it might behoove the Royals to ask for an extra couple of options, or just flat-out guarantee another two years. Seagers last two years are $19 and $18 million, so 8 years/$100 million doesn’t seem too absurd.
Paying Mondesi $7 million for a year of team control plus his first arbitration season appears to be in line what the best shortstops in the game are making through early arbitration years. Carlos Correa jumps off the sheet as a potential comp. He was worth 3.4 fWAR in 2015, 5.2 in both 2016 and 2017 (with a drop off in 2018 due to injuries), and still earned $5 million in his first year of arbitration. Trevor Story also signed for $5 million after producing 9.4 fWAR in his first 3 seasons, coming off a 5 fWAR season.
So we’ve signed three of our players to long-term deals, and this is what our payroll looks like moving forward.
The figures I used following the Whit Merrifield signing looked like this:
2020: $61.61 million
2021: $36.45 million
2022: $2.75 million (Whits final year)
2023: $.75 million (Whits buyout, only here for the sake of completeness)
It would now look something like this:
2020: $69.61 million
2021: $48.95 million
2022: $21.25 million (Whits final year)
2023: $27.25 million
2024: $18.5 million ($41.85 million if Junis/Keller options are exercised)
2025: $18.5 million ($41.85 million if Junis/Keller options are exercised)
2026: $19 million
2027: $19 million
This still leaves the team with wiggle room to bring on pieces, pay their players through arbitration and extend others as needed.
Obviously this is all just conjecture, but at least we now have a starting point when discussing the future of these players in our organization.