2017/2018 Contract Extensions

[Greenleaf1]

Does anybody know of a good way to estimate what a contract extension would look like for our young players right now?

 

The only player right now that makes any kind of sense to consider an extension for currently would be Jonathan Villar. After next year he'll be eligible for arbitration, and I think that either before or after next season are good times to consider signing him to a decent length contract.

 

Segura's rejected extension was supposedly for 7 years, $40M with an option for an 8th year back in the spring of 2014. At the time he had a little under a year and a half of service time, so that deal would've covered his first 2 years of FA, plus an option on his 3rd.

 

Now that we're 3 years into the future, and given the fact that Segura rejected that contract, we have to assume any similar deal to Villar would be worth a bit more. Would it be reasonable to assume a 6 year deal worth $55M with a $13M option on a 7th year? He's one year closer to free agency than Segura was, so we'll cover the same amount of free agent years.

 

So a deal like this might look like $4.5M/$6.5M/$8.5M/$10.5M/$12M/$13M, and would do what these early deals often do: Provide Villar with financial security and provide the Brewers with a team-friendly contract should Villar continue to produce at the expected level.

 

 

I think back to the deals we made for Gomez and Lucroy, and how both paid off extremely well for us, but both of those deals were signed just before those players really broke out. Gomez signed 3 years/$21M in 2014, Lucroy signed 5 years/$11M in 2012. Villar had his breakout year this year and so we're going to have to expect to pay him more. It's possible I'm overestimating how much he's worth and how much the Brewers would pay, but FanGraphs has him at nearly 3.0 WAR this year which I think means they'd say he's worth way more than even the most expensive years of this contract would pay him if he kept up that level of production or even came close to it.

 

I think this would be a good reason now as well because as the rebuild continues, money is only going to get thinner and thinner and we're likely to only be able to max out our payroll at around $110-120M when all is said and done. Locking up Villar to an average salary of <$10M/year would leave a lot more room for other player salaries than if he has a couple more great years and then we try to sign him.

 

 

I'm aware that there are risks aplenty here. Do we really want to throw our first big contract of the rebuild at a guy who has made mistakes aplenty on the bases and in the field? If he regresses tremendously, this money could've gone to much better places and could stymie the rebuild before it ever gets going. This begs the question: how did other teams handle this? When did they start locking up their young talent, and who were the types of players they locked up first?

 

Is there anybody else you guys think we should be considering extending? Right now nobody else makes sense to me because they either haven't had enough time to prove their consistency or they have so much cheap service time left that there's no need to start paying them more just yet (Broxton, Arcia, Davies, Guerra come to mind). I'd also love to see Thornburg stay a Brewer but rebuilding teams don't need great closers and his value to us seems higher on the trade market than in our bullpen.

 

Sorry for the long post, I tend to ramble, but was curious if anybody else was thinking about what happens when our young, cheap, controllable players start becoming less young, less cheap, and less controllable and how we handle that transition.

[MillerParkSouth]

I LOVE Villar, but I would not extend him until he proves that his awesome year wasn't just a blip on the radar. We frankly shouldn't be in a rush to extend anyone at this point.

[Baldkin]

He has a .394 babip this season. He leads baseball in BABIP this year.

 

His career number is .356.

If you drop his babip down to that, by simply taking away 13 singles, his OBP goes from .377 down to .353.

Still good, but suddenly that .840 OPS is a .780 OPS (or less)

 

I think extending him this off season is premature, let's see if he can have another solid season.

[Outlander]

I don't really see an extension for anybody right now, do agree that Villar has to show he can do it again next year. An outshout shot of an extension is Chris Carter for two years just so they don't have to deal with arbitration but still doubt it.

[BeerFan]

I understand wanting to wait on Villar, but I'd be willing to take the risk in order to save a little money. Coming up scouts always said this was his what they saw him becoming one day. He didn't get there the way everyone expected, but it makes me think he is a good guy to bet on to repeat his success from this year. We can wait to have a larger sample size, but it could cost us millions of dollars.

[Greenleaf1]

I'm not 100% sold on an extension for Villar this offseason, although I am leaning toward it being a good idea. If he had another year anything like this one I'd think it would be a near certainty that we should try to extend him.

 

Another thing to consider (should probably be its own thread) is the sheer amount of players entering arbitration next year. I will be curious to see what we do in all these situations:

 

Wily Peralta

Chris Carter

Martin Maldonado

Carlos Torres

Chase Anderson

Scooter Gennett

Kirk Nieuwenhuis

Tyler Thornburg

 

Nelson/Perez/Villar/Blazek/Susac start the year after that (assuming they're all at the big league level). This team is going to start getting more expensive regardless, it's important to know who we want to be there in the future.

[pacopete4]

Extensions are always tough because you'd like to do them while you can get a deal on the player, ie Braun/Lucroy but they don't always turn out to being good investments. It is truly what Mr. Stearns see's in Villar. If he believes he's the .800 plus OPS then he might consider it. But if he feels there will be a falling back to the pack next season and beyond, he'll probably hold off.

[monty57]

If I were to do a Villar extension, it wouldn't be near 6/$55. The reason to sign these extension is to save money by transferring risk, so think of it as an insurance policy for the player - they player pays by giving up potential income in return for the guaranteed income regardless of future occurrences (injuries, poor play, etc.).

 

Since the team is taking on all of the risk in a guaranteed contract, the player has to accept less than he would receive if he went year-to-year to free agency. Six years would be right, as you would get one pre-arby year, all three arby years, and two free agent years (age 30 & 31 seasons). The pre-arby year is around $550k. Arby maybe $1.5M, $3M, $5M. That's around $10M, and let's say $10-12M per free agent year, 6/$30-35 would be about where I'd be. Maybe a little higher if I'm way low on the arby years.

 

Villar could get hurt tomorrow and never play again and he's not guaranteed anything. If he signs, he is guaranteed $30-35M, which should set him and his family up for life. The only reason teams should do early extensions is to save money on guys they feel pretty secure in having on the team for an extended period. Therefore, it makes sense to extend guys who will be hitting FA when they're in their 20's. Not so much when they don't hit the majors until they're 24-25 and we already have under team control through their prime. Villar is on the cusp for this, as he'll turn 30 early in his first FA year.

 

I would consider doing these types of extensions on our top prospects early on. Arcia would be a good option for a Braun-type deal (the first one, not the second extension). Brinson could be on the table a year or two from now. I'm more leery of extending pitchers, but if guys like Hader, Ortiz, etc continue to improve, I wouldn't mind seeing one or more of them locked up for a couple extra years.

 

Bottom line is that you have to be pretty confident in the player's future, you have to sign them young, you have to get 2-3 of their free agent years, and you have to get a substantial discount from what they could potentially get if they play at a high level and went year-to-year. Otherwise, it doesn't make any sense for the team to take on the risk. It is every player's right to go year-to-year for more money, but the team needs to understand that these players are not long-term answers, and should therefore be traded before they get to free agency.

 

Finally, while I love these types of extensions, not all players deserve them. Some guys can help the team, but aren't worth the risk (or we have other options). I'd put guys like Santana, Gennett, and Perez in this category.

[MrTPlush]

I would be pretty comfortable locking up Villar to a 6 year deal if he wanted to take the plunge on that. Maybe a smaller deal that is very team friendly. Bottom line though Villar is a legit bat. That guy consistently has hammered the ball all year. Any deal would be slightly team friendly so even if he takes a small step back next year we still look great. 25 year old infielder with great OBP skills, doubles power, homerun power, switch hitter, and serious speed? Sign me up.

 

There is nothing about Villar that would concern you he might be due for a regression or can't handle a high BABIP(maybe not nearly .400 though). Look up his splits they are jaw dropping. Hard to find someone so even across the board with no weak spots.

 

There is no need to wait on Villar if he is open to it. The only thing to note value wise is the fact he won't be playing SS for us and instead(likely) 2B. Villar probably wants to value himself as a SS while the Brewers will look at him as a 2B in contract talks.

[adambr2]

I'm fine with locking Villar up long-term, but just like Lucroy did, he needs to accept a heavily discounted deal to sign him long-term. I agree with what Monty said. A deal for Villar now isn't going to be at market value, otherwise you may as well go year to year with him.

 

You look for something here that's mutually beneficial. If Villar is for real, we'll get one of our core players locked up at a substantially discounted rate compared to market value. The benefit for Villar is that with one swipe of the pen he never has to worry about money again, even if he regresses or gets hurt.

 

6/40 sounds about right to me. Off the top of my head I don't recall exactly where Lucroy was at in his career when he was extended or what he got.

[MrTPlush]

6/40 sounds about right to me. Off the top of my head I don't recall exactly where Lucroy was at in his career when he was extended or what he got.

 

You can't really compare him to Lucroy. We signed Lucroy pretty early on and got lucky. I say lucky because when we extended him before he broke out. The did it to lock up a passable young catcher long term so we could stop cycling through a bunch of old washed up catchers. Actually many fans and experts thought it was a questionable deal. Anyway moral of the story Lucroy was just an average joe when he signed and Villar has put up All Star worthy numbers.

 

I think 6/$40mil would be too low is you ask me. That is what they offered Jean Segura after one year and I would argue Jonathan Villar has been more impressive. Not only that, but the Segura deal only bought out one year of free agency and a 6 year deal with Villar would be buying out 2 years of free agency. Now it gets a bit tricky because Segura would have gone through arby as a SS and Villar will not so that effects the projected arby numbers. The Segura offer was also many years ago and inflation might raise that figure alone.

 

I wonder if the Brewers might be better off with a lower risk extension that goes through the arbitration years and we can have a couple options that are closer to perceived market value just so we can keep him around if we want when that time comes.

[adambr2]

Well, I'd probably be willing to go somewhere like 6/46. Assume half a million for next year, and I would say 4.5/7/10 for arbitration right now.

 

Then I'd go 12M each with his two FA years to put him at 6/46. I realize that's still a heavy discount off what he'd be worth as a FA, but that's the tradeoff for him to take it now this early. Big discount for us, lifetime financial security for him, with the risks gone.

[FVBrewerFan]

It's the kind of deal I think more players should jump at, but few do. Sure, you can out-perform your contract, as Lucroy did. But to me, there's more value to the player to get more money now and be set.

 

Now, should the Brewers offer that deal? Easy way out, I don't know. Probably yes, because money won't matter the next couple years. May as well offer a deal to Perez too.

[adambr2]

It's the kind of deal I think more players should jump at, but few do. Sure, you can out-perform your contract, as Lucroy did. But to me, there's more value to the player to get more money now and be set.

 

Now, should the Brewers offer that deal? Easy way out, I don't know. Probably yes, because money won't matter the next couple years. May as well offer a deal to Perez too.

 

Yeah, my personal feelings. ..If I'm in Villar's position, and my employer is offering me 40M dollars and I've never made over half a million in a season, I'm taking it. I don't know what will happen in the future, with my health or production, but I do know that myself and my whole family are going to live comfortably for the rest of my life no matter what happens from here on out. To me there's a lot that can be said for that.

 

Look at what happened with Bill Hall. Fortunately for him, he took the money when he had a chance. Look what happened with Jean Segura, although it looks like he'll be okay now.

 

Sure, there's always the risk you'll end up leaving a ton of money on the table if you sell yourself low, but are you really going to sacrifice a lot of life quality if you only make 50M in your career instead of 200M?

 

I'm a little more leery on Perez. I guess I'm just not crazy about low OBP guys. I think some perspective is needed on him, since his 102 OPS+ pretty much shows that his 'breakout ' year is just kind of an average player year. But I do appreciate the value he brings to us as a super utility player.