Transaction Retrospection: Helton & Tulowitzki Deals

Todd Helton recently announced that he will retire after the 2013 season, providing an opportunity to reflect on his excellent career. Helton will spend his entire big-league tenure with one team, a rarity in this era, and that's due at least in part to the gigantic $142MM extension he signed in 2001.

Helton has had a textbook career path. He reached the Majors at age 23, improved through his first three seasons, and peaked from ages 26 through 30, then began a long, gradual decline phase, playing less and less effectively as his power, and then his ability to hit for average, deserted him. His career has also been typical in that he was dramatically underpaid for many of his best years and overpaid for many of his worst ones. Helton produced 8.3 wins above replacement as a 26-year-old in 2000, when he made $1.3MM. He produced between 5.5 and 7.1 WAR in all of the next four seasons, then never topped 4.4 WAR again.

Helton's massive contract did not kick in until 2003, which means that the Rockies paid $142MM and only got two seasons above 4.4 WAR. For the life of the contract, the Rockies received 30 WAR over nine years. That's not a terrible total, but it's not a good one either, given that a win on the free-agent market in, say, 2005 was worth much less than the $5-6MM it's worth now. Fangraphs' dollar values suggest that Helton was worth $105MM over the life of the contract, about $37MM less than he was paid. (Helton would have been arbitration-eligible in 2003, also, which means he also might have made a hair less in that season, one of his best in the entire contract, than the $10.6MM the extension paid him.)

The deal also made Helton one of MLB's highest-paid players even though the Rockies have never really been a high-payroll team, and there were several years in which Helton's contract made up about a quarter of the Rockies' Opening Day payroll. The Rockies made the playoffs twice and had three winning seasons over the life of the contract.

None of that is Helton's fault. He was an outstanding player in his prime and a pretty good one in his 30s, and the Rockies just happened to pay too heavily for him. It was a little surprising, then, that as they watched Helton's decline years unfold, they signed shortstop Troy Tulowitzki to another bank-busting contract.

Tulowitzki's contract was, in a way, even more remarkable than Helton's, in that the Rockies committed to it in late 2010 even though they already had Tulowitzki under control through 2014, after which he would be 30 years old. The Rockies effectively committed $119MM in new money to cover the 2015 through 2020 seasons, ending right around Tulowitzki's 36th birthday. From 2015 through 2019, Tulowitzki will make $20MM per year. For much of that time, they'll also have Carlos Gonzalez's backloaded $80MM contract to contend with. Gonzalez agreed to his deal, which essentially bought out four pre-free-agency seasons at $27MM and three free-agent years for $53MM, five weeks after Tulowitzki got his.

Tulowitzki's performance since he signed the contract has revealed both its potential upside and its potential downside. If he continues to play as he has in 2013, when he has produced 5.5 WAR, the contract will be a bargain. But as he ages, it will be difficult to sustain that level of performance, particularly if he suffers more injuries like the groin strain that caused him to miss much of the 2012 season.

So why did the Rockies sign Tulowitzki to such an enormous extension? "It was the right thing to do," Rockies GM Dan O'Dowd said at the time. "We believe in character, team and integrity."

The extension reportedly grew out of a broader conversation between Tulowitzki and O'Dowd. "The maturity of understanding the continuity and stability of things and what he's trying to become as a man led me to say to our owner, 'I think maybe we should explore this right now,'" O'Dowd said. The Rockies evidently believe that character, maturity and other intangibles are very valuable. Many teams talk about the importance of character, but there's ample reason to believe it when the Rockies are doing the talking.

Of course, keeping a star player in a market surely has financial value in merchandise sales and fan loyalty. That kind of value is difficult to measure for us outsiders, but the Rockies surely have some idea what kind of loyalty value the Helton extension has provided, and how keeping Tulowitzki around for several more years might benefit them beyond just his performance on the field. Regardless, it's difficult to imagine how those sorts of tough-to-measure benefits might compensate for the $37MM the Rockies appear to have overpaid Helton for his performance from 2003 through 2011, and the Rockies' performance as a team over that period hasn't helped answer those questions.

Tulowitzki is a different player, obviously, and his extension may turn out well. In fact, it's less risky than Helton's was. The $20MM annual salaries for 2015 through 2019 are high, but they aren't that high when one accounts for salary inflation. If a win is worth $5-6MM now, it could easily be worth $6-7MM in, say, 2018, which means that Tulowitzki would only need to provide about 3 WAR annually to make the deal a decent one for the Rockies. (It's hard to say for sure how new TV deals will continue to affect the salary landscape, but the Rockies' expires in 2014.) There's also the fact that Tulowitzki plays good defense, or at least he does now — his ability to field at a premium position should prevent the contract from being a complete debacle.

Of course, that assumes he stays healthy. Tulowitzki missed significant chunks of the 2008, 2010 and 2012 seasons with injuries, and players tend not to get healthier as they get older. Sports Illustrated's Joe Lemire points out the parallels between Tulowitzki and Nomar Garciaparra, who suffered from a number of injuries and never put up a star-caliber season after age 29. As Lemire also points out, though, Derek Jeter also had an enormous contract that carried him through his mid-30s, and he played very well until almost the very end of it.

Unless the Rockies substantially raise their payroll in the coming years, the Tulowitzki extension does represent a risk. Tulowitzki's injuries could continue to be a problem as he enters his 30s, a decade that is generally unkind to ballplayers anyway. Unlike Helton's contract, though, Tulowitzki's deal won't make him one of the sport's highest-paid players, and Tulowitzki won't have to perform at quite as high a level as Helton would have to justify the contract.

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