April 21, 2008
There's No Crying in Baseball Contracting
Portfolio.com reports here on the death of mega-contracts in baseball. Yes, we're thinking of you, Troy Tulowitzki (pictured), and also of Evan Longoria. These are two young baseball players who signed rich but not jaw-dropping contracts with their teams either as rookies or after one year.
This blog has suggested elsewhere that agreeing to pay any 42-year-old player nearly $30 million a year might be irrational. Portfolio.com suggests the same, as the average player peaks at age 26. Rational ball clubs thus offer reasonable multi-year contracts to very young players with huge potential, hoping to avoid having to pay them eye-popping contracts for post-prime years.
But nobody will walk away from the negotiating table crying. Mr. Longoria negotiated a deal that will pay him $17.5 million over the next six years. At the time he signed, he had played six games in the major leagues. Tulowitzki will get over $5 million a year over a six-year period, but he had already proved himself last year as a rookie. These contracts may seem rich, but with what you pay Tulowitzki to play every day for a full season you can barely get Roger Clemens to sit on the bench four games out of five for a month.
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Yes, Evan Longoria is going to take a lot of heat from other players and members of the Players Union over his contract. However, just think about it. He is six games into his major league career and the team he is with is offering him a six-year deal worth $17.5 million, and I believe it has incentives/options for a contract worth upwards of $40 million.
I don't see anything wrong with this deal. It's great for Tampa Bay. Right now, it's great for Longoria. It's great for owners. Who is it not great for? Super agents like Scott Boras. It's also not great for those up-and-coming players in the minors that will soon be in the shoes of Longoria.
Posted by: Tony Baldwin | Apr 21, 2008 11:54:46 AM