Some franchises have had tremendous success locking up star players to team-friendly extensions early on in their careers. The deals are an integral part of the current Rays teams, and they figured prominently into John Hart’s model for the 1990s Indians.
But not all early-career extensions are team friendly, even if they first seem shrewd. Teams couldn’t make Mo Vaughn-sized mistakes on players with one or two years of service time if they tried to, but the moves can and do backfire on a more modest scale.
MLBTR's Extension Tracker lists all the extensions signed by players with less than two years of service time since 2009. I’ve compared these contracts to how the players' earnings might look if they had gone year to year instead of signing long-term (click on the team names for MLBTR posts for each extension):
Ubaldo Jimenez, Rockies – Even though Jimenez is coming off of an up-and-down 2011 season, his deal is a team-friendly one. If he hadn't signed, Jimenez would have been arbitration eligible for the first time following the 2010 season. The combination of his sparkling platform season and strong career numbers would have set Jimenez up for a potentially record-setting 2011 salary of $4.4MM or more followed by a raise for the 2012 season. Instead, he earned $2.8MM last year and will earn just $4.2MM in 2012. There's no denying Jimenez struggled last year, but this extension saved his teams money.
Denard Span, Twins – Before signing his deal, Span had a career OPS of .811 in 1087 plate appearances. Since the contract, he has a .682 OPS in 1016 plate appearances. I estimate he'd be in line for a salary in the $2-2.5MM range if he had gone to arbitration as a first-time eligible player this offseason. Instead, he'll earn $3MM in 2012 with generous raises on the way for 2013-14.
Brett Anderson, Athletics – Anderson (pictured) would have been arbitration eligible for the first time this offseason if he hadn't signed his extension. The lefty missed the second half of the 2011 season after undergoing Tommy John surgery and will earn $3.25MM in 2012. If he hadn't signed an extension, his salary would have been lower, likely in the $2-3MM range. This deal could pay off later, since the A's have a club option for one of Anderson's free agent seasons.
Ricky Romero, Blue Jays – Romero would have been arbitration eligible this offseason and his numbers would likely have placed his 2012 salary in the $4MM range if he hadn’t signed an extension. Romero will earn $5MM in 2012, so the Blue Jays’ savings will start in 2013 or 2014, when the left-hander earns $7.5MM per year. The deal couldn't be going much better for either side at this point.
Wade Davis, Rays – Davis wouldn't yet be arbitration eligible even if he hadn't signed his contract last offseason. So far the Rays' investment looks fair, but unspectacular. Davis pitched 184 solid innings last year and would be well on his way to a 2013 salary in the $3MM range. Instead, he'll earn $2.8MM next year.
Extensions are about risk management for both the player and the team. It’s understandable for players like Evan Longoria to seek guaranteed money early in their careers, just as it’s understandable for teams to cap costs on players who seem headed for certain stardom. Some deals work out considerably better than others, though, and the lesson here is that early-career extensions are far from a sure thing for teams.
Photo courtesy Icon SMI.