The most important numbers involved in any free agent scenario are, obviously, the final deal terms. But the offers made by other clubs are not only interesting but also potentially tell us something about the market — both at the time of the signing and even moving forward.
We heard plenty of discussion today about how much cash was dangled in front of two of this year’s three biggest free agent pieces: Jason Heyward and Zack Greinke. Heyward reportedly agreed with the Cubs for eight years and $184MM, with a contract provision allowing him two separate opportunities to opt out of the deal and re-enter the market. Meanwhile, after exercising just such a clause to jump back into the free agent waters, Greinke inked a mind-blowing six-year, $206.5MM deal with the Diamondbacks (which included some very significant deferrals).
Before entering those arrangements, both players considered multiple other arrangements. For Heyward, the elusive $200MM barrier was reportedly met or exceeded by both the Nationals and the Cardinals. (Per Derrick Goold of the St. Louis Post-Dispatch — here and here — and Ken Rosenthal of FOX Sports, on Twitter.) And at least one other team, possibly the Angels, also beat Chicago’s total guarantee with its bid. (That’s per Jeff Passan of Yahoo Sports, Twitter links; see here for the Halos’ late interest.)
Notably, though, we’ve not been told how many years Washington and St. Louis covered in their offers, and Bob Nightengale of USA Today tweets that it seems neither met the $23MM AAV that Heyward will reportedly receive. And as Keith Law of ESPN.com stresses on Twitter, it’s even more important to bear in mind that the opt-out opportunities carry significant value and that Heyward will owe less in state taxes in Illinois than he would have in the other locales.
While acknowledging the opt-out value, Passan notes that it’s nevertheless “uncommon” for a player to turn down a greater overall guarantee, and that’s largely true in the abstract. But it’s important to remember, too, that Heyward’s unique market placement — he hasn’t even reached the halfway point between 26 and 27 years of age — makes his situation quite a bit different from that of most free agents.
For one thing, Heyward’s age arguably increases the worth of those bail-out clauses even further, since he’ll gain the right to re-enter the market in advance of his age-29 season. That’s still early for a free agent, and might give Heyward a chance not only to step up his AAV (if his performance increases and/or salary inflation continues) but also to tack on more years down the line. Greinke pulled exactly that trick despite turning 32 before signing his new deal, and the upside for Heyward is even greater.
Also, gaining two opt-out points will allow Heyward to assess his market timing while keeping the future guarantee in his back pocket. That not only adds to the value going to him in this deal but also increases the uncertainty and risk for the Cubs.
It’s worth noting, too, that even if Heyward does play out the full eight years in Chicago, he’ll stand to hit the market again before he turns 35. That’s exactly the point in his career that Ben Zobrist finds himself as he joins the Cubs on a four-year, $56MM contract. There’s good reason to believe that Heyward will be plenty capable of continuing to earn money on the open market at the end of his deal, which makes it much easier (and arguably wise) to forego another year (or two) of commitment for a relatively marginal bump in the overall guarantee — all at the cost of annual earning power.
Simply put, without knowing whether the other bidders were willing to include similar opt-out terms, and without knowing the length of their proposals, it’s impossible to compare the offers. From my perspective, though, the deal that Heyward ultimately agreed to is a better contract for him than the straight ten-year, $200MM deal that we at MLBTR thought Heyward could command (see here and here).
As for Greinke, the veteran righty said today in his introductory press conference that he was literally minutes away from signing with some unknown other club before Arizona swept in. ESPN’s Molly Knight tweeted that the Giants were actually the runners up, making Greinke a six-year, $195MM offer.
But San Francisco’s president of baseball operations Brian Sabean has said publicly that the club was not comfortable promising Greinke a sixth year. And both Alex Pavlovic of CSN Bay Area (Twitter link) and John Shea of the San Francisco Chronicle (also on Twitter) strongly disputed the notion that the Giants had come anywhere near the D-Backs’ offer.
The Dodgers, too, are said to have balked at going to six years on Greinke, as MLB.com’s Mark Saxon was among those to note recently (Twitter link). It remains unclear how high the Los Angeles offer was, and whether it or another team was the one that nearly struck a deal with Greinke.
Looking at all of those reported offers, it seems clear that there are several clubs that have the capacity and willingness to spend much more money this winter than they have so far. That’s not to say that all will actually put that cash right back into free agency. But the potential is there, and it’s also notable that an unexpected team (the Diamondbacks) put so much cash onto the market.
All said, there’s plenty left to be spent. And that makes sense: more than half of MLBTR’s top fifty free agents — including six of the top ten — remain unsigned at present.
Out of curiosity, why would you include Knight’s 6yr 195 mil offer when there are three other sources unanimously saying no (Pavlovic, Shea, and Schulman) when on top of that Bill Shakin believes that is was LA that was second in the running for Greinke
Well, it was reported and she hasn’t backed down. Obviously, I was careful to make clear that report was called into question, but I’m really in no position to judge so I noted both sides.
Also, I’m not sure Shaikin was looking to report anything when he said “presumably … “
Is Keith Law insane? Higher taxes in Missouri than Illinois, the tax capital of the country???!!!
Highest rate — Missouri: 6%; Illinois 3.8%
Well every other tax is astronomically higher. I live in IL. He’s better not plan on buying a house here. Property taxes are insane, gas tax, everything else.
I suppose if Jason Heyward aka Hank Aaron wants max salary then he’s all lined up for that. StL has to figure out how to replace 15 HR and 60 RBI and plus defense for less than $23 mil per.
Jason Heyward is an elite player in every facet of the game except power. Alex Gordon doesn’t have the same scrutiny/hate – why?
Do you understand that players can be very good without hitting tons of homers or having a high batting average?
.293 BA, .797 OPS, 23 SB, 33 doubles, 4 triples, gold glove defense.. sounds like your grapes have gone sour, haetor. Good luck with Alex Gordon, if the Cardinals can even manage signing him.
Great write-up, Jeff.
Thanks!
Heyward is only 13 years old? Impressive.
Serious coin for the youngster, eh? Fixed.
Imagine once he is finished with puberty…jk
I’m pretty sure all these players own homes in Florida to evade the tax % of the state they play in, so Law’s point is possibly not even valid.
I can’t assess Law’s point fully, as there are lots of layers of factors here, but owning a home in FL wouldn’t shield a player from all income tax liability in the state in which they are employed.
this is incorrect, they pay taxes where they play for the games they play in that state, and they pay taxes in the states they play in on road trips. they file like 20-25 tax returns. look up the jock tax. quite interesting.
Actually, players have to pay taxes in the cities/states they play—and earn their money—in. Most of the tax money a player pays goes toward the city/state his home team plays in, but he most also pay taxes for the games they play on the road. At $23M per year, Heyward will earn about $141K per game…if he plays 9 games in California, he’ll have to pay CA taxes on about $1.2M in earnings. And he (and all players) have to do that everywhere they play. Makes their tax returns probably a thousand pages long, but Uncle Sam always gets his money.
If I had to predict today, I really don’t think he’ll opt out in 2018. The free agents possibly coming off the books are insane (Harper, Machado, Price, Kershaw, McCutcheon, etc.). Some of those guys will resign but dang. Heyward would go from being the most coveted position player this year, to possibly the 4th or 5th in line in 2018. Even so, he’ll still demand north of $30MM AAV.
As for the Cards, replacing his defense will be tough but his bat shouldn’t be. Gordon (although older) seems like a great fit. Kenta Maeda would be ideal. Don’t lose a draft pick that way.
Your prediction contradicts itself and Gordon will cost you a draft pick
If Heyward produces at or slightly below where he has the last few years and his defense doesn’t regress (at 29 it shouldn’t; at 32 or so it could start to) he’ll opt out and get paid more. Even if the AAV doesn’t increase at that point he will be able to tack on a couple more years on the back end for his age 35-37 seasons.
Great deal for the Cubs…unless he gets hurt.
MLB being the massive entity that it is, one would think they would create a way to base its HQ in whatever state has the lowest tax and filter all player salaries through that, not the individual state they play in. Why don’t they do this? State and country taxes are wildly different and most NTC’s are based on this, wouldnt it make sense to level the playing field?
That link in the story about that track the top 50 free agents is taking me to a login page. I’m already logged in to leave comments and when I type in my username and PW again it says “you don’t have permission to access that page”? Is that a bug? I’d really like to see the list and see who’s left!