Article: Ten To Extend: A Five-Part Series (Part 4)

[Jeremy Nygaard]

Over the past few days, we’ve looked at a variety of potential extensions for a half-dozen players. Remember, these aren’t necessarily players that deserve extensions, nor that I would sign to extensions.

 

Today, we’ll take a closer look at two other players. Two players that are on different ends of the spectrum.4) Kevin Jepsen, relief pitcher

 

Jepsen reached an agreement with the Twins to avoid arbitration. Jepsen sought $5.4 million, the Twins offered $5.05 million and the team settled at $5,312,500. While it was taking a few extra weeks to come to an agreement, it seemed there was a possibility that the Twins might be interested in securing an extra year of Jepsen’s services - the first year of Jepsen’s free agency.

 

After coming over to the Twins in a deadline deal with Tampa Bay, Jepsen filled in as the club’s closer, saving 10 games and finishing seven others in his 29 appearances. He’s likely to be the set-up man in the 2016 bullpen and be the back-up closer.

 

The Twins did make a similar deal with Jared Burton in the winter of 2012. Burton struggled after an impressive first year and the club chose to buy out the team’s option. Coincidentally enough, when you visit Kevin Jepsen’s Baseball Reference page, Burton shows up as the player most similar to Jepsen. Maybe that’s reason enough to play the year out.

 

It would have been best - if the parties involved were interested - to agree to an extension when the sides were negotiating for 2016. When a player is this close to free agency for the first time, tacking on a year probably isn’t very appealing. And once the 2016 contract was signed, free agency is only one step away.

 

Could the Twins consider an in-season deal? I wouldn’t call it an impossibility, but at any rate, there would have to be some incentives that pay Jepsen extra if he assumes the closer role. Incentives that, by rule, would have to pay him for “games finished” in addition to another incentive that is likely to be included for “games pitched.”

 

3) Miguel Sano, monster playing right field

 

There’s literally no way to start thinking about signing Sano to an extension without considering the record contract that Giancarlo Stanton signed 16 months ago with Miami.

 

The difference, or course, is that Stanton had over four years of service when he signed his deal and Sano is still short of a full year. Another notable difference is that Stanton is in Miami and Sano, represented by CAA and Roc Nation, is in flyover country. If I were representing Sano, my advice would be: Play out these next few years and enormous bags of money will be awaiting you in New York or wherever it is you’d like to make hundreds of millions of dollars.

 

That doesn’t mean that there’s no risk for Sano to go year-to-year with the Twins. He’s already missed a year of baseball after undergoing Tommy John surgery. He’s in the midst of a positional move that many around baseball are questioning whether he can handle. And if you can’t play defense, you’re limited to the American League (for now).

 

My belief is ALWAYS that if a team is willing to guarantee money, that the return should be at least a year of free agency. Though I’m not picky enough to say it needs to include or not include a team option. At a minimum we’re talking about a seven-year deal.

 

If we were going year-to-year, I’d renew Sano’s deal for $530,000 in 2016. In the event of a long-term deal, I’d be willing to bump that up. The increase for his 1+ and 2+ seasons will make Stanton’s raises (a total of $121,000) look tiny as I’d be comfortable hitting $1 million in 2018. In comparison, Stanton made only $537,000 in his season before hitting arbitration (though that was without an extension).

 

2016 (0+): $550,000

2017 (1+): $775,000

2018 (2+): $1 million

 

Arbitration is where it gets tricky. Stanton avoided his first year of arbitration by agreeing to a deal worth $5.5 million. And he’ll get a total of $22 million for his three arbitration years. By comparison, Mike Trout signed a deal that guarantees him nearly $20 million in his third year of arbitration alone. Josh Donaldson signed a two-year deal that will pay him $17 million in his third (of four) years of arbitration. (He was a Super 2.) Prince Fielder was awarded $15.5 in his final arbitration year… in 2011. The point is not that Sano is Mike Trout or Josh Donaldson or Prince Fielder, but instead how expensive arbitration can be going year-by-year or by an extension.

 

So let’s enter in the extension signed by Anthony Rizzo. Another player who had four years of arbitration in front of him, Rizzo agreed to be paid $5 million for the first two and $7 million for the last two. Getting a guy to sign early - Rizzo signed his deal as a 1+ player - locks him in at a significantly lower price.

 

2019 (3+): $5 million

2020 (4+): $8 million

2021 (5+): $11 million

 

That puts Sano’s arbitration years about 10% higher than what Stanton earned. Rizzo has escalators in his deal that increase his salary based on MVP finishes. Sano can have those too. If he wins an MVP or finishes Top 5 in the voting twice any time between 2016 and 2020, all ensuing salaries and options increase by $1 million. We’ll even tack on an extra $2 million for a second MVP or a third Top 5 finish.

 

This particular proposal buys out one free agency year guaranteed and adds a team option for the 2023 season.

 

2022 (6+): $14.5 million

2023 (7+): $17.5 million ($1.75 million buyout)

 

The seven-year, $42.575 million pact eclipses Rizzo’s $41 million deal, could grow to be over $65 million and guarantees that Sano hits free agency at age 30. While there’s certainly risk for both parties involved, would this be a deal that both sides could/would agree on?

 

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[Vanimal46]

I figured Sano would be #1 on this list for sure... Jepsen's a hard pass for me as an extension candidate, and I'd focus all my efforts on Sano's next contract. 7/42.5 sounds like a good start.. But what would it look like if the Twins shoot for the stars and buys out multiple FA years? Would $30 million for each of his FA years be enough to keep him on board?

[Thrylos]

Now you got one correct

 

Jepsen?  based on 3 months of stellar play?  No way.  He is 32 years old.  He is in his declining phase for sure (1015 average velocities:  FB -2.2 off his peak, SL -2.7 off his peak.)   SIERA and xFIP for 2015 well above career average. K% in 2015, way below career average.

 

Burdi, Chargois, Reed all will be better than him in 2017.  No need to extend.

[jorgenswest]

It would be typical of the Twins to extend a decline phase player based on a an outlier year or even half year performance. Suzuki, Doumit and Burton are recent examples. Let's hope they have learned from those contracts.

[ttreadway]

I would be happy with that deal for Sano. I'd like to lock him up through his age 31 season, so that would mean buying out another two years on top of what you threw out. I think the twins should do 20-25 million a year for those free agent years. This would likely put the Twins north of 100 million, but for what will likely end up being the prime of Sano's career, it could end up being a bargain.

[spinowner]

 

I would be happy with that deal for Sano. I'd like to lock him up through his age 31 season, so that would mean buying out another two years on top of what you threw out. I think the twins should do 20-25 million a year for those free agent years. This would likely put the Twins north of 100 million, but for what will likely end up being the prime of Sano's career, it could end up being a bargain.

Those are reasons that make me think that Sano and his agent(s) would negotiate for a lot more. That said, I predict Sano will get the biggest and longest contract ever signed by the Twins, probably in two years or sooner.

[Vanimal46]

Those are reasons that make me think that Sano and his agent(s) would negotiate for a lot more. That said, I predict Sano will get the biggest and longest contract ever signed by the Twins, probably in two years or sooner.

Yep Sano could be the first player to get a $200+ million contract from the Twins. He'd be worth it. Hopefully there's a way to afford him when the time comes.

[blairpaul715]

 

Those are reasons that make me think that Sano and his agent(s) would negotiate for a lot more. That said, I predict Sano will get the biggest and longest contract ever signed by the Twins, probably in two years or sooner.

In  another thread, I posted that either/or both Buxton and Sano should be  given 8 yr 90-$100 contracts after this season IF IF they look like potential stars in the making.......I believe my proposal was this: 2017-2018 ,$1M; 2019, $6M; 2020, $9M; 2021, $12M; 2022, $20M; 2023-2024 team options $25M.

[tobi0040]

I thought Sano was number 1. Guessing you have Gobson and Berrios

[Mike Sixel]

No chance on Jepsen. I just don't see the value over using all the guys they've been drafting, or signing whatever FA RP looks legit when the need arises.

 

I would sign that Sano deal today, I don't think he should. Not enough reward, imo, for him. Another $15MM would probably need to be found for him, I think, for his agents to want that deal.

[REPETE]

I think we need to wait on Sano.  After all, he could end up eating his way out of baseball with a contract that big!

[alarp33]

Jepsen. NO

 

Sano. Of course, but he's not going to sign a contract like that.  

[terrydactyls]

The sad (or sickening) part of this is that $100 million isn't considered "enough" by players or agents. The average US two-income family makes about $5.5 million over a 45-year career (assuming $60,000 a year for each person) and they are very content. Players get that much for part of one season. And the two-income family (assuming they have children) can hardly afford tickets to more than one or two games a year. The entire system is perverse. And before I get jumped on for being "jealous", I don't begrudge the players for taking what the owners want to hand out. I just wish that the owners would use a lot of this money and give away tickets to low-income families, lower tickets prices for families, and just donate half of what they spend on players to charities.

[Loosey]

Jepsen no from both a player and a team perspective.  Jepsen is 1 year away from being able to sign a pretty nice multi-year deal assuming he pitches well again this year.  The Twins for their part don't need to press and pay a guy who had the best 2 month stretch of his career (they have done this and been burned before).

 

Sano, a very big yes.  Although I think the numbers you put out there may be light.  

[Jeremy Nygaard]

 

No chance on Jepsen. I just don't see the value over using all the guys they've been drafting, or signing whatever FA RP looks legit when the need arises.

 

I would sign that Sano deal today, I don't think he should. Not enough reward, imo, for him. Another $15MM would probably need to be found for him, I think, for his agents to want that deal.

 

I don't know that the money is the thing so much. I mean, bottom line... yes, the money is the thing. But with a new CBA coming, more revenue than ever before, etc. It's going to be all about the opt-outs. Guaranteed money is and should always be an incentive for the players. The uberprospects aren't guaranteed anything past the half million they have coming this year... being guaranteed something counts for a lot.

[Thrylos]

 

I don't know that the money is the thing so much. I mean, bottom line... yes, the money is the thing. But with a new CBA coming, more revenue than ever before, etc. It's going to be all about the opt-outs.

 

If you are going to extend someone under 5 more years of control and have them opt-out after the 5th year of an extension, there is close to zero incentive to extend them other than (maybe) the total amount of the extension will be less that what he would have gotten in arbitration and that is a gamble...

 

So if you are going to have opt outs for Sano, they better start after the 7th year or so.   I would have not problem signing Sano to a 10 year contract with a couple of options after than.  That would take care of him until age 32, which will include most of his prime. 

[Jeremy Nygaard]

 

If you are going to extend someone under 5 more years of control and have them opt-out after the 5th year of an extension, there is close to zero incentive to extend them other than (maybe) the total amount of the extension will be less that what he would have gotten in arbitration and that is a gamble...

 

So if you are going to have opt outs for Sano, they better start after the 7th year or so.   I would have not problem signing Sano to a 10 year contract with a couple of options after than.  That would take care of him until age 32, which will include most of his prime. 

 

Right. It depends on how much you value cost-certainty. My point all along is that the Twins shouldn't have bothered with the Dozier extension because that was ALL they got. They, as an organization, obviously do value it. And those are the glasses I tried to look through as I wrote these pieces.

[markos]

 

I don't know that the money is the thing so much. I mean, bottom line... yes, the money is the thing. But with a new CBA coming, more revenue than ever before, etc. It's going to be all about the opt-outs. Guaranteed money is and should always be an incentive for the players. The uberprospects aren't guaranteed anything past the half million they have coming this year... being guaranteed something counts for a lot.

Uberprospects aren't guaranteed anything, but at the same time they are expected to be the players to push the salary expectations forward. Your Sano extension is very close to Rizzo's, even though Rizzo signed his 3 years ago and after a less impressive season. I wouldn't be surprised if Sano got a lot of push back from the player's union on a deal with those parameters.

[Mike Sixel]

 

Right. It depends on how much you value cost-certainty. My point all along is that the Twins shouldn't have bothered with the Dozier extension because that was ALL they got. They, as an organization, obviously do value it. And those are the glasses I tried to look through as I wrote these pieces.

 

Good point on looking thru their lens, I had not thought about it that way.

[Willihammer]

Could really care less about the exact $$ of a Sano extension. It should be a priority though, to lock up at least a couple FA years. Prospects like him don't come down the pipe very often at all. And the longer they wait, the harder its going to be to get done, barring injury, underperformance, etc.

[Drew]

 

The sad (or sickening) part of this is that $100 million isn't considered "enough" by players or agents. The average US two-income family makes about $5.5 million over a 45-year career (assuming $60,000 a year for each person) and they are very content. Players get that much for part of one season. And the two-income family (assuming they have children) can hardly afford tickets to more than one or two games a year. The entire system is perverse. And before I get jumped on for being "jealous", I don't begrudge the players for taking what the owners want to hand out. I just wish that the owners would use a lot of this money and give away tickets to low-income families, lower tickets prices for families, and just donate half of what they spend on players to charities.

I wish Best Buy would give out free iPads and AT&T would give out free phones. Unfortunately none of the above are ever happening.

 

But I'd much rather the players get paid these crazy amounts than the owners. I've never gone to Target Field to see a Pohlad but I've done it several times to see Sano already. 

[spinowner]

 

The sad (or sickening) part of this is that $100 million isn't considered "enough" by players or agents. The average US two-income family makes about $5.5 million over a 45-year career (assuming $60,000 a year for each person) and they are very content. Players get that much for part of one season. And the two-income family (assuming they have children) can hardly afford tickets to more than one or two games a year. The entire system is perverse. And before I get jumped on for being "jealous", I don't begrudge the players for taking what the owners want to hand out. I just wish that the owners would use a lot of this money and give away tickets to low-income families, lower tickets prices for families, and just donate half of what they spend on players to charities.

Keep in mind that revenue comes from the public, either directly via sales of tickets, concessions, licensed merchandise and so forth or indirectly via advertising, sales of broadcast rights and so forth. The owners only collect and redistribute it (with a small cut for themselves for the trouble       ). So if you decry the size of salaries of any entertainers, whether musicians, actors or athletes, then the only way you can make a difference is to ignore the entertainment.

Edited March 8, 2016 by spinowner