Evaluating Tulowitzki’s Extension

Troy Tulowitzki's first extension with the Rockies, a six-year, $31MM deal signed three years ago, set a precedent at the time as the largest deal ever for a player with less than two years of Major League service time.  Tulowitzki had one full big league season under his belt, but the Rockies guaranteed $17.25MM for his three arbitration years and $10MM for a far-off free agent season, with a club option at $15MM for an additional free agent year.  Even with Tulo's lack of service time, the risk in total dollars was minimal.

With the Rockies' first bet on Tulowitzki looking prescient, a few months ago they made another wager about four times the size by guaranteeing their shortstop's 2014 option year (plus an extra million bucks) and adding $118MM for the 2015-20 seasons.  The popular question was, why now?  Tulowitzki was already under team control through '14.  Wouldn't the safe move be to wait at least a few more years?

Tulo

The answer is that the Rockies likely feared that the price to retain Tulowitzki for his age 30-35 seasons would increase drastically with each additional MVP-caliber season.  With the new money totaling $119MM over six years, that's $19.83MM per year.  The cost of Tulowitzki's age 30-35 seasons falls between the salaries of newly-signed free agent outfielders Jayson Werth and Carl Crawford, but they're poor comparables.  Premium all-around up-the-middle players almost never reach free agency, with only Alex Rodriguez, Carlos Beltran, Torii Hunter, and Miguel Tejada coming to mind in recent years.  With such a tiny sample of similar free agents, not to mention economic uncertainty, I can't use a formula to predict what Tulowitzki might have gotten as a free agent in 2015. 

Still, it's easy to look at the player Tulowitzki is now and imagine him getting a $200MM+ contract on the open market in four years, given inflation and the rarity of elite shortstops.  Since 2000, only Tulowitzki, A-Rod, Brian McCann, Grady Sizemore, Hanley Ramirez, and Joe Mauer posted a pair of 130 OPS+ seasons at age 25 or younger while playing up the middle.  Take the sample back to the 90s and we add Mike Piazza, Ken Griffey Jr., and Nomar Garciaparra

This is where I start to worry about the Rockies' gamble.  Sizemore, Griffey, Nomar – in their mid-20s it sure looked like they'd still be premium players at age 30-35.  Fans might have responded positively to Tulo-style extensions, unable to imagine worst case scenarios.  But Griffey and Nomar saw that slice of their careers destroyed by injuries, and Sizemore currently has something to prove at age 28.  Tulowitzki has already missed significant time with a broken wrist and a quad tear in his young career, but he came back strong in both cases.

To their credit, the Rockies built in slight protection by dropping Tulowitzki's base salary down to $14MM in 2020, his final guaranteed season.  Performance decline isn't the main concern – even as just a good player, Tulo's contract won't look bad in his early 30s.  The greater worry is that injuries will take over at that stage, perhaps due to the extra wear and tear of playing an up-the-middle position.


24 Responses to Evaluating Tulowitzki’s Extension Leave a Reply

  1. stl_cards16 4 years ago

    2020 is a loooong way off. I hope this works out for the Rox, I really like Tulo. Just seemed a little premature, with 4 years left on his prior contract.

    • The_Silver_Stacker 4 years ago

      They probably thought that giving him an extension would be cheaper now than down the road especially if he has a few more huge years. It’s risky, but all contracts have some risk involved.

    • top_prospect_aw 4 years ago

      Absolutely. In this day in age with injuries, Tommy Johns for position players, the Rockies are risking a lot to save just a little. An injury to Tulo, a mental breakdown, or simply lack of success could set the Rockies back many years to come. Hate to make the Todd Helton mistake again…

    • Do I sense some jealousy from a Cards fan who wishes his team had locked up their franchise player before his free agent season? I do hope you can keep Pujols- he’s important for baseball in the midwest.

  2. start_wearing_purple 4 years ago

    Well it’s certainly an unorthodox move. But I think the contract is less about the player and more about sending up a flare to the rest of the league that they won’t be a farm system to the league and about motivating their own players by showing them the potential carrot. It’s a good team with a good core and they seem to be making Tulo their de-facto future “Captain.”

    So yes, I’m passing the buck and saying this is a deal where we need to wait and see if it’s good.

    • A better signal to the league would be winning a division pennant. It’s something the Rockies have never done, and the Tulowitzki and Gonzalez extensions don’t make the team better in the short run. If anything, it weakens their purchasing power.

      The Rockies have a lot of talent, but they’ve won two wild cards in 17 chances. This move looks rather like putting the cart before the horse.

      • bleedrockiepurple 4 years ago

        Yeah 2 wild cards in 17 chances but those 2 playoff appearances have come in the past 4 years. The Rockies were laughed at for years and years before 2007, times have changed in Denver and their best chance of winning a championship let alone a NL West title in the next few years is with Tulo and Cargo in the middle of that lineup.

        • On the other hand, if Tulowitzki and Gonzalez are all they can afford, then building an offense around them could prove difficult with they have $210 million invested in those two alone. With rumors of an extension for Jimenez forthcoming as well, they might be looking at similar depth problems to other teams around the middle of the pack in payroll that have gone from perennial contenders to perennial also-rans. There was no reason to extend them both, least of all Gonzalez before he has gone to arbitration and has one full season in the majors. This move isn’t about competing now, it’s about competing 10 years from now, when they haven’t yet proven that they can be counted on to break .500 on the road, much less win a championship.

          • bleedrockiepurple 4 years ago

            Yeah i’ll agree, the Rockies were not good out on the road and this needs to change if their going to compete for the NL West crown in 2011. But every team plays far better at home, look at every team in the league and the Rockies are even more so inflated because their home park is Coors. Again that doesn’t take away from the fact they simply have to play better on the road. These deals were for competing now AND like you said for the next 10 years. This team doesn’t want to run into another Matt Holliday situation where extension talks turned sour real quick between the Rox and Scott Boras (Cargo’s agent as well), so they took a new approach to a similar situation.

            There is a lot of risk that comes with the 2 deals for Cargo and Tulo, some feel the risk outweighs the rewards while others don’t and each to their own view imo. I think everyone around baseball is so shocked by these deals because we haven’t really seen this before out of any other team, this situation is very unique and people are quick to judge. There is a lot factors that play into these deals and only time will tell if it was the right move or the wrong. I’ll tell you one thing though, if in 10 years the Rockies still haven’t won a WS title then it will be looked at as a complete failure regardless of the self accomplishments of these individuals simply because like you stated, there wasn’t enough talent surrounding these guys. This will be very intriguing to watch for years to come.

  3. NomarGarciaparra 4 years ago

    This was such a huge risk. The best comparison given there was Nomar…and it’s true. In his mid-20s with the Red Sox, I would’ve been happy to see him get a 10 year contract to stay with the Sox for his career. He was the face of the Red Sox, just as Tulo is the face of the Rox. Turns out, the Red Sox got the best of Nomar.

    If Tulo turns out anything like Nomar, the Rox will have long seasons down the road.

  4. NWDC 4 years ago

    This was a terrible move. They had almost nothing to gain (save a few million dollars/yr in 2015-2020) and a TON to lose. No reason to extend this early.

  5. I think it is important to think about this article with an eye to the ever inflating size of contracts. I think MLBTR just did an article on salary changes over 10 period years. If anything even remotely similar happens, this deal starts to look like really good in 5-6 years.

    • NWDC 4 years ago

      But the key word there is IF. You’re paying now for an “IF” that is 5-6 years away — maybe. That’s a terrible deal and you need a better risk/return ratio than the Rockies got here.

  6. davengmusic 4 years ago

    I think it’s worth the risk to lock up a SS of his calibur. Maybe he’s the next Cal Ripken Jr. Maybe he’s the next Nomar. Either way, guys like this don’t come around very often. Plus, by the time he starts getting $20M a year, inflation might make that peanuts (relatively).

  7. iheartyourfart 4 years ago

    its weird, but it makes sense. I think the idea of re-signing him now is smart because of timing in a weird way. Troy is in his mid 20s and might not have yet even reached his ceiling. If you wait until he’s in his later 20s or maybe 30 you’d still have to sign him long term. Now his contract would come off the books at age 35. With that in mind you’re much less likely to be overpaying for his last couple seasons – something that’s all but guaranteed when you sign a guy for $x00million through age 38 or something.

  8. Redhawk 4 years ago

    For those saying this is a “bad deal” need to understand, that teams like the Rockies have to compete against big money teams for players when free agency hits. If you develop players you can’t have them ALL walk at 5 years.

    The Big money teams have money to gamble and to over pay….a 8 year deal for Pujols is big risk too…but when the Angels pay it, no one will say “it’s a risk”, cause the Angels, have money to lose.

    This is about keeping a core of players and leaders….and players that sell tickets…and Tulo is all that for the Rox, and I’m happy to see the “Ceap-forts” turn into the “Spend-forts”

    • kishi 4 years ago

      But that also means that the Rockies don’t have big money to gamble with and overpay- which they quite possibly might have done here with this extension….

    • The extension didn’t need to happen now, though. Tulowitzki is nowhere near free agency yet. They’re just compounding their risk.

      • Redhawk 4 years ago

        higher Risk..yes…but also higher potential payoff. If Tulo plays anywhere close to how he’s done so far, he’ll be worth FAR more than what he signed for, and would be FAR too expensive for the Rockies to ever sign at market value.

        again….this is a team doing more with less (money).

        • I’d argue that the potential savings aren’t worth the risk. 10 years is a long time, especially for a large player at a high-impact position.

  9. Sox1265 4 years ago

    Albert 2 Rockies

  10. I am Urban Legend 4 years ago

    The proper way to go about it is to extend a guy til age 33-35…
    if he plays SS or C 31-33…

    after that point, that free-agent rarely gets a 7 year contract for 20 plus mil

    the contract pays Tulo to age 35..or about 2 years past the max age he should’ve been extended to…

    the last year he is paid 14 mil..

    by the year 2020 ( if we are still here )…that will be chump change.

    so he is paid a premium rate til age 34…

    the deal is not as bad as it seems.

  11. roxfan10 4 years ago

    Average to above average? Really?

    His road OPS last year (.862) would have still led all MLB shortstops, blackcourt. In fact, his road OPS put him in the top 20 of all position players in MLB last year.

    And anecdotely, I seem to remember his bat playing pretty well away from Coors Field when he hit 5 bombs on the road in the space of two weeks last September. I don’t know… I think he can hit.

  12. notsureifsrs 4 years ago

    OPS doesn’t tell you about the quality of a hitter with much precision. tulowitski’s career wOBA outside of coors field is .342. at home it’s just under .400

    having said that, there are only 4 shortstops who have averaged a wOBA higher than .342 over the past three seasons. and it’s not as if tulowitzki is leaving coors anytime soon

    having said that, this is still an enormously risky contract and a mistake imo for denver

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