The Red Sox have done a remarkable job in two respects this off-season. They’ve upgraded the roster, and they’ve done it really fast! That would seem to leave lots of time for other stuff, like extending their young stars. I speak of course of Xander Bogaerts and Mookie Betts. When he signed, David Price mentioned the Red Sox’s young core of players as one of the aspects that attracted him to the team. There were $217 million other reasons, too, but if Price knows what the Red Sox have, the Red Sox should know what the Red Sox have also.
The good news for the Red Sox and their fans is Betts and Bogaerts are still years away from free agency and wildly underpaid compared to what their skills would fetch on the free agent market. Teams often use that to get players to agree to longer term contracts that would, at a minimum, provide cost certainty to the team rather than deciding the player’s salary every year through the arbitration process. The best case from the team’s perspective is that a long term deal would keep those players from the free agent market and under team control for a few extra seasons. In effect, the team buys free agent years at a discount because they’re taking on the risk that the player might not be worth the total value of his deal. The Red Sox have done this before with Kevin Youkilis, David Ortiz, Dustin Pedroia, Clay Buchholz and Jon Lester. They would have likely done it with Jonathan Papelbon and Jacoby Ellsbury had the players been amenable to it, but both preferred to go year-to-year (a strategy which likely cost Ellsbury some money) to test the free agent market as quickly as possible (a strategy which netted Ellsbury lots of money).
Even if both Betts and Bogaerts take steps backwards in 2016, the Red Sox would likely get some value out of extending their servitude. Of course, the players and their agents know that, so it complicates things. What is the player’s incentive to sign a long term deal with the Red Sox? Well, money, but they’re going to get money even if they don’t sign. So we’re talking degrees here. Would you sign for 75 percent of your value in order to lock in the guarantee, or do you take the chance and go for 100 percent of everything you might be offered (keeping in mind even if you don’t reach your best case scenario you’re still going to be crazy rich)? When we’re talking about millions of dollars, 25 percent can be a substantial, life-altering amount of money.
From the Red Sox’s perspective, they can afford to wait and pay that extra percentage if the player’s performance warrants it, should the decide to play it that way. In fact, that’s kind of the ideal scenario. If Betts hits .300/.370/.480 with 25 stolen bases and amazing defense in the outfield next season, the Red Sox will gladly pony up the extra money that season would garner through the the arbitration process. The bigger issue isn’t if they can pay the overage on a good performance, but if they can keep Mookie Betts and Xander Bogaerts on the Boston Red Sox for as long as they are good players. The primary danger in not locking up young players for a team with lots of money like the Red Sox isn’t extra money paid in free agency, it’s losing the player entirely, and seasons before you would have with an extension.
The primary danger in not locking up young players for a team with lots of money like the Red Sox isn’t extra money paid in free agency, it’s losing the player entirely, and seasons before you would have with an extension.
Jason Heyward might be a good comparison for both players, not because he is or isn’t extraordinarily similar to them in any particular skill set, but because he’s so young. Heyward will be 26 next season, a year younger than Bogaerts and two younger than Betts will be when they reach free agency. Heyward is expected to make around $200 million in total money in large part because of his youth. This illustrates both the urgency with which the Red Sox should operate when it comes to extending Betts and Bogaerts, and how hard it will be to do it. Can they really afford to spend whatever the 2020 version of a $200 million contract is on both players? If Heyward can get his $200 million now, it’s a fair guess Bogaerts and Betts will get that too, and maybe more, should they reach free agency in their mid-to-late 20s four and five years from now.
The total dollars are staggering to think about. But perhaps it’s more instructive to look at Average Annual Value (AAV), and in that capacity, we are starting to see more and more players reach the mid $25-to-$30 million a year range. Heyward may not reach the high end of that range, but it wouldn’t be shocking if he hit the low end. That is likely the neighborhood we’re playing in when it comes to Betts and Bogaerts as free agents, and thus what we’re talking about as a reference point when it comes to extending them.
Of course, part of the problem with this is Bogaerts and Betts won’t reach free agency for four and five seasons, respectively, and we won’t know until then how they performed over those seasons. That performance will be paramount in deciding what they make on the free agent market. Last season each guy was worth between four and five wins, depending on which WAR metric you look at. WARP has Betts at 5.5 and Bogaerts at 3.5. The market is valuing free agent wins at about $8 million per season which means, if he just repeated 2015, the market would value Betts’ season 2015 at about $40 million and Bogaerts’ at a bit under $30 million. Then multiply that times the number of seasons and… yikes. Now, the market doesn’t quite do what I just did, as it tends to drop the price in AAV for long-term security, and move it around based on positional scarcity, and some intangibles. Put all this together and Betts might not reach $40 million a year on a seven-year contract, but he could get $30 million, or $25 million, or, heck, it’ll be 2020, so maybe more than $30 million.
These are all reasons for the players not to sign before they have to. And the team, maybe feeling some pre-sticker shock, might not want to acquiesce to such numbers either. However, that’s part of the beauty of a pre-free agency extension. If Betts is worth $40 million per season on the open market (I know, but let’s just go with it), that’s wonderful and all, but he’s not on the open market yet. The Red Sox could offer him a seven-year contract right now worth around $100 million and that might be in the ballpark. Bogaerts is a year closer to free agency so that would likely mean he might be more expensive, though if you buy into WAR, Betts has been the better player. In any case, we’re looking at $100 million contracts for both players and I could very easily be on the low side here.
If the Red Sox act quickly, they might be able to get some $30+ million seasons at a bargain price. Dave Dombrowski has generally been reticent to make these sort of deals when he was with the Tigers though, so maybe the Red Sox would be more content going year to year and paying the extra money if it’s earned. Maybe that’s the best strategy, but given the money available on the free agent market, and especially to younger players, the dangers of not locking up your core beyond their free agent seasons are very real. The best case then is you’re out a lot more money than you would have been, and the worst case is you lose a player central to your organization’s success. Neither is ideal, but if you’re in the business of winning baseball games the second outcome is much worse.
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