The worst contract in baseball
by Joshua FisherFebruary 02, 2010
The names are easy. Barry Zito, Darren Dreifort, Mike Hampton. Juan Gonzalez, Alfonso Soriano, Carlos Lee. Anyone who's hung around the baseball blogosphere for more than a couple months has seen a list or 12.
Identifying the worst contract in the game is really little more than a matter of taste. Do you prefer the "well, that sure got ugly" type? Have a Vernon Wells. Or are you more into "how did that ever happen in the first place?" I've got a Gary Matthews Jr. for you. Of course, you might go for the rare "only a fan even remembers this one" variety. Jason Schmidt's your man.
Yes, every contract listed above fits quite nicely into the "worst ever" conversation. And it's a discussion that's been going on for a long time. My work for last week's article, though, got me thinking. What if we're looking at only half the problem? The bad deals above represent a sizable-but-shrinking segment of the player population, athletes whose salaries and performance levels got on the wrong escalators. What about the players' on the complete opposite end of the spectrum?
See, there's this hitter. He'll be 24 next season, and he's made the All-Star team each of his first two years. His OPS+ during those campaigns? 127 and 130. What's more, he plays superlative defense at a position in the heart of the defensive spectrum. And if you're a fan of shiny objects, he's also got a Rookie of the Year award, a Gold Glove and a Silver Slugger to his name. Bottom line, this kid's just fabulous. Without a doubt, there's not a hitter in the game with a brighter future.
And there's this pitcher. He's also entering his third big-league season, and he'll be just 22. His ERA+ in those years was 98 and 141. He's averaging over a strikeout per inning in his young career, and he gave up just seven home runs in moe than 170 innings last season. Pitchers have funkier development patterns than hitters, but there's not a pitcher in the game with a brighter future.
The pitcher will probably make less than $500,000 next season. The hitter will make just about double that amount. Yet, by the time the pair would be expected to be eligible for free agency, the pitcher will most likely have made tens of millions of dollars more than the hitter. Why? Because Clayton Kershaw is going year-to-year, and Evan Longoria is bound by the worst contract in baseball.
In 2008, just a week after making his major league debut, Evan Longoria signed the next nine years of his life over to the Tampa Bay Rays. The contract was a stunner. It guaranteed Longoria $17.5 million over his six years of team control, and the Rays hold options for 2014-16 at $7.5, $11 and $11.5 million respectively.
We can play with those numbers for a while; they don't really get old. Longoria will make less at 30 than Tim Lincecum will at 26. And Timmy is slated to hit free agency on time. Matt Kemp, a year older than Longoria in age and service time, will make more in 2010 and 2011 than Longoria will in 2012 and 2013. And Kemp, too, is slated to hit free agency on time.
Longoria has a sympathetic ear in the Sunshine State, though. Hanley Ramirez also signed a long-term deal which ties him to the Marlins for the first nine years of his career. But it's not quite the same; if both players' contracts play out as expected, Longoria will have made about $44 million as a big leaguer by the time he can hit free agency at 31. Ramirez will have pocketed over $70 million before hitting the market at the same age.
So the question bothering me is this: What in the world was Longoria thinking? From what point of view was getting just $17.5 million for his entire time under club control an acceptable decision? And what possessed him to give the Rays those options? Looking back, his deal just puzzles me. The easy answer, of course, is risk management. Lock in that one big payday so that, even in the event of a career-ending injury, you're good to go. I get it. But isn't that what Lloyd's of London is for? Young, with no injury history, and playing a relatively "safe" sport, Longoria could have easily put some of his $3 million signing bonus to insuring himself against a career-ending injury.
And it's not as if the market for arbitration-eligible players was particularly ominous at the time. Justin Morneau avoided arbitration with the Twins in the offseason before 2007, settling for $4.5 million as a 26-year-old player in his first year of arb eligibility. Longoria, a year later, agreed to a deal that wouldn't pay him that much until his fifth year in the bigs. In the months prior to Longoria's deal, first-time eligibles Garrett Atkins ($4.3875) million, Brad Hawpe ($3.925 million)\, and Scott Kazmir ($3.785 million) all collected nice sums while not pushing back free agency one bit.
Longoria lost compared to the other young stars who signed extensions, too. As mentioned above, Hanley Ramirez's deal dwarfs his. Grady Sizemore signed a long-term deal in 2006 with just one full season under his belt, and he'll earn $31.95 million and be under club control for a year less. Joe Mauer got $33 million with just two full years' experience--and he didn't even have to delay free agency! Ask him this morning how that worked out. Chase Utley signed a seven-year, $85 million extension rather than go to arbitration with the Phillies. The Mauer and Utley deals, too, were on the books well before Longoria even sniffed the majors. The young Ray was just as highly regarded as any of the players mentioned above. He didn't need to do this deal.
The grisly side of it isn't the paltry $17.5 million Longoria will get for his first six years. In my opinion, guaranteeing that amount before you're hit with your first major league pitch is plenty reasonable. But those back-side options are just killers. $7.5 million as a 28-year-old? $11 million at 29? $11.5 at 30? This is the kind of thing that should get agents fired. Those three years must net a player with Longoria's performance and service time more than $60 million. And what's worse, the option years pretty much ensure he won't get a mega-deal when he finally hits the market; he'll be heading into his age-31 season. Coincidentally, the Yankees will be preparing to pay 41-year-old Alex Rodriguez $20 million for his 2017 services. Think teams will be eager to put Longoria in the same position? I doubt it.
This season should have been Longoria's last as a slave to the system. Next winter, he could have easily challenged the record for a first-time arb-eligible hitter. Instead, he'll draw humble paychecks while his contemporaries rocket past him on the earnings scale. And then he'll sit back and watch as the younger players, too, blow him out of the water. And as his draft-class peers finish their sixth years of club control, he'll get a letter in the mail telling him that he'll be playing the next season for a fraction of his worth. Similar letters will arrive during the next two offseasons, as well. All because he couldn't wait just a year or two. It's the worst contract in baseball.
Josh is a lawyer in the Kansas City office of Bryan Cave LLP. He created the website DodgerDivorce.com.
From outside the box, aren’t most (if not all) contract judgements made from the crystal-clear view of hindsight? Many of the “What were they thinking?” ones were doled out to studs who subsequently flopped. Hampton was peaking at his “ridiculous” signing, but then he signed a long term deal with the DL shortly thereafter.
Ramirez and Longoria are obviously progressing in the opposite direction. If they, too, would have failed to live up to their PROJECTED talent, we’d be saying their contracts were horrible going the other way.
There just seems to be too many peripheral elements that are ignored when analyzing just the numbers vs. productivity angle (injury, family security, happiness in a given city or with a certain team, youthful excitement, agent mismanagement, bad advice both ways, poor talent projections, etc., etc., etc).
I just dn’t feel that there is any level of standardization for categorization until ex post facto in most of these scenarios. There will always be exceptions, but they are…exceptions.
Besides, aren’t Tampa and Florida “small market”?
Just playing devil’s advocate here. I did enjoy the article.
Have a great Tuesday everybody.