The Padres announced that they have signed star outfielder Jackson Merrill to a nine-year contract extension that runs through 2034 with a club option for 2035. Reportedly, it guarantees the star $135MM. Merrill was previously slated to reach free agency after 2029, so this extends the club’s window of control by at least five years. The outfielder is represented by KHG Sports Management.
The salary breaks down as follows: $10MM signing bonus, $1MM in 2026, $6MM in ’27, $8MM in ’28, $10MM in ’29, $20MM annually between 2030-34. There are $30MM in plate appearance escalators that can push his salary earnings to $165MM. Each time Merrill gets to 500 plate appearances in a season, he adds $1MM to his future salaries for the 2030-2034 seasons. The deal can max out at $204MM and includes a $30MM club option for a tenth season that can be converted to a player option. The club option becomes a player option with a top five finish in MVP voting, while a top ten finish is also an escalator.
Merrill’s breakout was a stunningly impressive part of the 2024 season. It didn’t completely come out of nowhere, as Merrill was a first-round pick, selected 27th overall in 2021. He was one of the top prospects in baseball during his time in the minors. However, by the end of the 2023 season, his experience was still limited. He was drafted out of high school, meaning he had not played college ball. His minor league track record consisted of just 200 games. None of those were at the Triple-A level and only 46 were at Double-A. He wouldn’t celebrate his 21st birthday until April 19th of 2024.
On top of his youth and inexperience, the Padres were asking him to make a major defensive shift. He had primarily been a shortstop in the minors but the Friars had Ha-Seong Kim and Xander Bogaerts in their middle infield. In center field, Trent Grisham’s bat had fallen off and the Padres sent him to the Yankees as part of the Juan Soto deal. The Padres tried Merrill there in the spring, liked the results and gave him the job.
In spite of his talents, it would have been understandable if there were some growing pains for a guy so young and learning a premium defensive position on the fly. But no such pains were evident, as Merrill flourished. He hit 24 home runs for the Padres last year. His 4% walk rate was low but he also kept his strikeouts down to a 17% clip. His .292/.326/.500 batting line translated to a 130 wRC+, indicating he was 30% better than league average. He stole 16 bases in 19 tries. Defensive Runs Saved considered him to be league average in center, no small feat given the circumstances. Even more impressively, he was credited with 11 Outs Above Average, a mark that put him in the top ten of center fielders last year.
The overall package was very strong. FanGraphs credited him with 5.3 wins above replacement and Baseball Reference 4.4. That would have made him a slam-dunk Rookie of the Year in many seasons, but Merrill was up against Paul Skenes and his incredible debut. Merrill got seven out of 30 first-place votes and finished second to Skenes in National League ROY voting. He also finished ninth in the NL Most Valuable Player vote.
Kim departed via free agency after 2024 and the Padres could have considered moving Merrill back to shortstop this year, though president of baseball operations A.J. Preller quickly shot that down in October. The move to center field had gone so smoothly that they didn’t want to mess with it. The 2025 season could hardly have started better. Merrill has a line of .400/.435/.600 through six games as the Padres are undefeated.
The Padres clearly love Merrill. That’s why they nabbed him with a first-round pick and promoted him so quickly. They also reportedly discussed an extension with him prior to his debut, showing tremendous faith in him before he had even proved himself in the majors.
After that breakout, they probably wished they had got something done ahead of time, as he only increased his earning potential last year. Broadly speaking, extension prices go up as guys get further into their arbitration years and closer to free agency. We can only guess what number it would have taken to get a deal done a year ago. The Padres have had plenty of financial pressures in recent years but Merrill’s price would likely only go up over time, so now is better than later.
In terms of pre-arbitration extensions, Merrill comes in a bit below the top guarantees but on a shorter deal that will still allow him to hit free agency with a lot of earning power. As shown on MLBTR’s Contract Tracker, the top guarantees for pre-arb extensions are for Fernando Tatis Jr., Bobby Witt Jr. and Julio Rodríguez. Tatis got $340MM but on a 14-year deal that essentially bought out his entire career. Witt got a guarantee of $288.8MM on an 11-year pact but he seems likely to opt out after seven years with with $148.8MM banked. Rodríguez got a $210MM guarantee over 12 years but with a complicated club/player option structure that could see him depart after seven seasons.
Merrill’s guarantee comes in a bit below that tier of players but on a shorter deal. The final guaranteed year of this pact will be his age-31 season, meaning he will still have a chance to secure another notable guarantee in the future via free agency. The option could keep him in San Diego another year but he also has a decent shot at converting it to a player option. As mentioned, he already finished ninth in MVP voting in his rookie season, so getting into the top five isn’t far-fetched. He has a decent shot of pushing up his salary earnings via those escalators. He also gets to bank huge money ahead of schedule, as he previously wasn’t slated to qualify for arbitration until after 2026.
For the Padres, they have had a budget crunch in recent years but they love their guys. Over the past five years, this is the sixth extension worth at least $80MM that they have put on the books, the others having gone to Tatis, Manny Machado, Joe Musgrove, Yu Darvish and Jake Cronenworth.
Since this deal starts in 2026, it won’t affect the club’s competitive balance tax number in 2025. The specific annual breakdown hasn’t been publicly reported but early-career extensions often involve gradually escalating salaries. Musgrove’s deal is done after 2027. Nick Pivetta can opt out of his deal after 2026 or 2027. Robert Suarez can opt out of his pact after 2025. Luis Arráez, Dylan Cease and Michael King are each making notable salaries and are slated for free agency after this year. Though the budget has clearly been tight recently, the Friars evidently felt that they had enough wiggle room in the future to make this work.
It still amounts to a large pile of future commitments. Between Merrill, Bogaerts, Tatis and Machado, they have four mega contracts on the books through at least 2033. In recent years, with the collapse of their TV deal, that’s led to some budget crunches. The front office has had to get creative, including trading away Soto. They got huge value from a $1MM investment in Jurickson Profar last year, though that now looks suspect in the wake of his recent PED suspension. This winter, they took similar low-cost fliers on players like Kyle Hart and Jason Heyward, as well as a back-loaded deal for Pivetta.
Perhaps more such maneuverings are in the club’s future, as they seem content to run an imbalanced payroll with heavily-paid stars while they look for upside plays elsewhere. For fans, that means they can look forward to watching the Merrill/Tatis/Machado/Bogaerts core for close to another decade, while the supporting characters might rotate. For Merrill, thanks to his quick ascent to the majors, he was able to put nine figures in the bank while still having a chance to hit the open market in his early 30s.
Robert Murray of Fansided first reported that the two sides were in agreement on a nine-year deal with a $135MM guarantee and $30MM club/player option that could max out at $204MM. Jon Heyman of The New York Post reported that it started in 2026. Dennis Lin of The Athletic reported the presence of the $30MM in plate appearance escalators that could bump the overall salary payout to $165MM. MLBTR’s Darragh McDonald reported the specifics on those escalators. Russell Dorsey of Yahoo reported the $10MM signing bonus, that the club option becomes a player option with a top five finish in MVP voting, and that a top ten finish is also an escalator. Heyman reported the salary breakdown.
Photos courtesy of Orlando Ramirez and Denis Poroy, Imagn Images
Wow, nice move Padres!
Thanx Clip! 9y/$135MM starting in ’26. Super stoked!
A really big win for your organization. Congratulations!
I bet Merrill will be enjoying the San Diego Sunshine for years to come
Aloha Gwynning, nice move by your Padres for a very good player! Happy for Merrill, he can just concentrate on his game without worrying about contract stuff. Mahalo!
Life-changing money and the Padres get a stud!
This is amazing! Both Merrill and Tatis are locked up until 2034.
And the terms, such a good deal. Coming from two parents that are school teachers I imagine helped in Merrill’s mindset in the pros of signing this kind of deal rather than taking a big unnecessary risk and waiting to be a free agent in 5 years. He clearly has a great head on his shoulders.
I’m pumped!!
Xander bogaerts is locked up till 2034 as well!
Seems extremely Team Friendly.
Merrill should fire whoever told him this was a good deal.
It can reach $204 million. At the end of the contract, he’ll be 30 or 31 (depending on the player option), at which point he can sign for another $500 million. It’s a great contract for the Padres, but also for him. And I say that as a Dodgers fan.
Yeah coming from two parents that are school teachers made him great. Or (checks notes) he can flat out hit.
Dogbrain. There. Fixed.
Dogbrain. Heh heh, heh heh.
good get
I’m usually against these very early signings, but he looks like he really can be a superstar. But he’d better get that walk rate up.
why are you against them? I’d say the success rate on them is typically higher than later ones.
Congrats padres
Merrill is the gift that just keeps giving for San Diego. Did real good drafting him….
Absolute robbery for Pads. He’s a superstar already
If he already superstar he’ll be assigned to lane 5 swimming against Leon Spink, Kyle Rote Jr. , Lynn Swann and AJ Foyt.
Agreed, at the $135M base figure, very team friendly contract. However, looking at it from both sides, if Merrill ran the “Soto plan”, he’d have been earning at a lower rate (not major league minimum due to performance and arbitration years, but much lower), and this contract (apparently) moves his annual earnings up to $15M during what would normally be Padres control years anyhow. So, it’s basically an extension of 5 years of control for the Pads. Up front money in the hands of a good investment consultant at age 22, should really grow over nine years.
But again, against the (basically insane) $300M+ contacts that have been floating around, this kid MEANS what he says about being a Padre for life. 9 years means he knows where he’ll be living and working for his early adult years (how many of us could predict that?). He can marry his girlfriend, buy a home, start a family, and calmly go about life.
Plus, based upon Manny’s 5 year opt out, the Padres and Merrill could decide to extend his 9 year contract further in about 5 years, to keep him thru 2039 (even though Manny had an opt out, and Merrill’s does not). It should make a ton sense.
One thing I do like a lot in both Tatis and Merrill’s contracts, is that they didn’t demand opt outs. That tells you how much they are committed to the team, and city, versus the salary market.
It’s my personal subjective view of course, but I’ve been in baseball all my life and seen a lot of emerging greats, and Merrill just seems to have it.
The original, mythical, “5-tool-player”. Who says fairy tales don’t come to life. 🙂
Merrill is insanely talented. Huge win for the Padres and JM.
Well done, Merrill is a hard working, talented young ballplayer and compared with his teammates very likable
Yes sir!!!
Amazing! That’s crazy cheap too.
Is cheap enough to offset the bogaerts contract that runs till 34 as well?
Hey, every bit helps lol
Great decision by the Padres to wait until he proved himself in the majors, congrats!!
I wish the Red Sox had done the same with Rafaela …. oh well.
Guys with the physical tools often eventually become solid major league hitters over time. Loads of examples, you don’t need to reach a conclusion already.
hayzee – Where did I indicate I came to a conclusion?
I merely stated I wish they had waited until he proved to be a good MLB player, just like the Braves did with Acuna and Strider.
Sheesh! LOL!!
Fever: You’re right. There are some players who you just know are talented enough even early on that they’ll be good in the majors. They sometimes don’t need a lot, or in the case of someone like Crochet – who went from college straight to the majors – don’t need a lot of minor league innings to show that they’ll be good major league players.
Fever – you’re right. You explained yourself so poorly that others had to assume the intent of your words. Oops! Your bad!
labia – I wish I hadn’t wasted my time reading your inane attempt at a cheapshot.
Now go ahead and claim the above sentence was a “poor explanation” of God knows what.
But don’t insult everyone else by claiming that also they couldn’t understand the difference between a justified opinion and an “explanation”.
Hayseed, all position player 1st round draft picks have the physical tools and over the last 50 years about 1 in 5 became a “solid” major league hitter. By that I mean higher than 100 OPS+.
As a Red Sox fan I think Rafaela will eventually get there if he learns to take a walk. He still provides the team with good value with his defense but that only goes so far.
@Way
“Guys with the physical tools often eventually become solid major league hitters over time.”
Yep, just like Profar! (oops, I spoke too soon.)
(…and some, apparently, just don’t)
Rafaela will be just fine and will be able to play multiple positions going forward if you want an OF of Anthony, Durran and Abreu. 8 years and $50 million isn’t a bad contract when the league average contract is over $5 million this season.
mike – I totally agree Rafaela is still young enough to eventually put it together.
My concern is this: I really, really like Duran …. and Abreu ….. and Anthony …. and Campbell …. and Mayer.
I don’t want ANY of them demoted/traded/kept in the minors to make room for Rafaela if he continues to perform poorly.
Quite honestly I think if the Red Sox could un-do the Rafaela extension right now, they probably would. And most of Red Sox Nation seems to feel the same way.
Let’s talk again later. Patience is a virtue. And the professionals see a lot more than Johnny at Burger King.
hayzee – Professionals often have their judgement clouded for various reasons. The 300 people analytics department with the Red Sox are not always valuing what they should be, so don’t be so hard on yourself. You can definitely pick up on things that the “professionals” can’t if you have strong observational skills. Remember, most of the Red Sox hired help are average Joes who never even played the game. Many got their job because of social connections.
It’s like that in the real world too. If you know the right person, or are related to the right person, you have lots of job opportunities because of it.
Geez I remember when Eric Gagne was the first to notice Kimbrel was tipping his pitches …. and Eric noticed while watching him pitch on TV!!
I used vectors to figure out why Dwight Gooden’s curve ball was so easy to read.
I’ve attended the Sport Analytics Conference at MIT. Read books like The Physics of Baseball. Books by Tom House, Nolan Ryan, etc.
I’m a mathematician, a fully credentialed actuary, and I played baseball against college players into my forties.
I went to college with one of the best scouts in recent history, the architect of the Giants 3 championship teams.
I have a nephew who was a professional and written about in The Athletic.
I grew up around the corner from the Stottlemyre kids.
Baseball is in my blood and in my brain. But I respect the judgment of those WHO DO IT for a living over the casual fan. Plain and simple.
Can they be wrong? Of course. But less than the average bear. Now stop being unbearable.
Isn’t the biggest fault of being a fan is falling in love with your minor league plyers. History shows most don’t pan out. And often its that guy you don’t hear about that suddenly becomes a star… hopefully not for another team.
hayzee – I don’t see anyone here who claims to know everything about everything …. well, except one person but I muted them months ago ;O)
For those few instances where it’s justified to call out “the professionals”, it’s also an obligation. Many current baseball people DO visit this site, and they value some of the perspectives they read here.
One final thought ….. you know how Baseball Ops is constantly evolving, constantly changing with “newer and better ideas”?
Every time there is a “newer and better” idea implemented, that means it’s been determined by the “current professionals” that the “prior professionals” were wrong.
Think about that …..
I think every contract carries risk including the merrill deal..
Do you think the padres would undo the bogaerts deal given the chance?..rafaela has lots of time to even prove hes better than anthony etc..unlikly but there is time for it..other players already with money committed not so much
Not necessarily. Some information availability is evolving as are methods for evaluating that new or enhanced information. I once worked with the largest private data base in the country. That was 1980. I worked with one of the early hurricane simulation models that starting sprouting after Hurricane Andrew. A lot more sophistication since those times.
Methods evolve because information evolves. I learned programming in 1974, Basic and Fortran. That is of zero value today. But the brain that learned it? Still functional.
hayzee – It’s the use of information that separates the wheat from the chaff.
The “prior professionals” had access to much of the same information. It’s how they viewed it, how they valued it, how they put it to use that differs. Tunnel vision has become a big problem these days.
All too often it’s change for the sake of change.
I too like Durran, Anthony, Wilyer, Mayer and Campbell, but there is a spot for Rafaela. We also have to remember that Durran isn’t young. He’s going to want a big payday at 30, and with his wheels being one of his awesome attributes, I may be hesitant to give it to him. Yes, we have Bleis and the Password on the way but I like Rafaela’s versatility at $6 million a season. He doesn’t have to be an everyday player to earn that salary. A great problem to have is a lot of good youth, and some is better than others!
Fpg, Rafaela has not performed poorly. He has hit poorly. His 2.8 WAR in 2025 was above MLB average. We had another guy that everyone loved that had a similar game in JBJ. I don’t think they get a ring in 2018 without him. If Rafaela gives us 7 more years of exactly the same overall performance his contract will be a steal for the Red Sox.
mike – I agree, if it comes down to eventually DFA’ing Rafaela or keeping him as a bench player I’d prefer to keep him as a bench player. But that’s assuming he can keep his OPS above .600
A trade would be best case scenario if he continues to perform poorly.
So what sort of information explains Error in Judgement? In season he’s Hercules, post season, Bud Harrelson. Is that because some stat nerd is missing some data?
Baseball – That’s kind of an insult to JBJ by comparing Rafaela to him.
JBJ had a 101 OPS+ from 2015-2020, made the All-Star Team, won a Gold Glove, won an ALCS MVP, etc. It wasn’t until Age 31 when his bat disappeared for good.
No comparison to Rafaela’s 78 OPS+
Again he’s still young and can certainly turn things around, time will tell …. but as many professionals have said, don’t be surprised if he gets sent down at some point this season.
hayzee – Not sure which player you mean, if any, but I’ll stay on the subject of Rafaela.
As a trained behavioral specialist I can see the lack of focus, lack of dedication, lack of intelligence, and lack of baseball instincts during games.
Getting picked off 3B because he didn’t pay attention to where he was standing and talking is just one example.
Getting his face bloodied because he didn’t realize three heavy loose gold chains could swing up and hurt him is another example.
I don’t have time to list all the examples, but there is justification for Red Sox Nation’s concern about his future performance.
Maturity is a wonderful thing. Let’s hope he achieves it. I totally get what you’re saying.
hayzee – I totally agree! He’s such a gifted athlete, maturity could definitely turn him into an all-star caliber player.
Some players take a long time to mature, Dugie being one of them.
I guess you wouldn’t have respected Bill James when he first started then.
Fpg, that’s an insult to Rafaela who had a 2.7 WAR and an 82 OPS+ in his first 2 seasons through age 23 while JBJ had a 0.6 WAR and a 52 OPS+ in his first 2 seasons through age 24.
Comparing apples to apples is important.
As many professionals have said, don’t be surprised when he is an All Star and has a 5 WAR at the end of the year.
Lol Fever, chill baby! 2.7 WAR and an average-to-elite defender at five positions as a 23 year old last year. I think worst case we think “meh” looking back at the Rafaela deal.
dirty – WAR always gets inflated just by “playing” certain positions, which is why it’s a highly flawed projection.
Career 78 OPS+ sucks and even if Rafaela was an elite CF’er we could have pulled JBJ out of retirement for a lot less money! LOL!!
Ask Cleveland how they felt about the Straw contract.
Dirty – right. Also Rafaela’s salary right now is 1.25MM. The first time it’s over 10MM is in 2030. That’s 5 years to figure out his bat before the deal looks bad. He’s always had issues with his swing decisions, so let’s see how he does this year after his first full year. I’m not concerned at all about his deal.
Would have been better if they did it before he proved himself. Would have cost less.
The Padres tried to sign him to an extension before he played his first game in the majors. Merrill said no and that he knew what his value was. He also said he was not looking to rip the Padres off.
Why the heck did he agree to such a low amount? Only $15 million per year guaranteed and locked down until he’s 30. He may have cost himself a couple hundred million at least if he thinks he’ll really be that good.
He may also break his leg tomorrow and never be the same. It’s called a compromise and it’s good for both parties.
Uh oh, that’s like saying Garret Crochet arm could fall off any moment. Take that back
Great point. He will probably have to eat a lot of ramen noodles to get by
@Footjoyboi
Someone offering him $15M per year guaranteed, regardless of performance? Why not? Today, he could have a season ending injury or be in a situation like Acuna, constantly injured and still got paid well.
@Foot
its not always about money dude, he loves San Diego.
He likely did “cost” himself a lot of money, but he also just guaranteed himself a lot of money.
Right on both counts!! Take the money and run!!
He has said it before, he loves San Diego. It cements his future there and if he keeps producing he will make more money on top of it.
Jasonb: And there’s always the chance that, if he keeps having years like 2024, the Padres could add extra money to that deal.
Zero chance of that. Teams don’t just pay extra for no reason at all.
Lonniemac: It isn’t for no reason at all. If keeps playing like he did last season, they might give him a raise. Simple as that.
5 dollah raise. And free car wash 2nd Thursday
@Lonniemac
Well, about in 2029, when Merrill has become a super-super-star, with 5 years left on his contract, the Pads might make him a fair offer to extend 5 more years, finish his career in San Diego. Jackson has no guarantee that he’ll be healthy over the next five years (to 2034), and could have a bad “walk year” for whatever reason. If the Padres treat his contract mid-way through as they did Machado’s, it’ll be a win-win for both team and player. I’ll bet that happens, too, though lol, at my age I may not be around to honor that bet.
He agreed to that average because of how little he was set to earn first in pre-arb and then arbitration. He’s many years away from seeing market money; this sacrifices a good chunk of the max pay he would have gotten to guarantee that he gets paid. He now has the baseline pay to spend in the short term if he wants to live larger and/or too invest more heavily to grow his early earnings that much more. There’s a method to the seeming madness.
@Longinus
You’re right, kinda-sorta. He banks the money he makes over his Padre control years at $15M per, versus what he would have made. However, with his skills, he wouldn’t be at the MLB minimum for the next 4-5 years (whatever his dates are). Prime example. I think Soto made $30M (+/-) in his last arbitration year.
It really IS “the hometown discount”. However, we should forget the big start huge numbers, and view this from a 22 year old unmarried kid’s perspective. 1) He can marry his sweetheart, buy a home, start a family, and project to be home half the time as he raises his own kids. 2) Properly invested, he’ll NEVER outlive his money, or want for anything. 3) He’s playing for an organization he feels at home at. No “walk year” trade jitters. 4) He feels it’s a fair contract for the Pads and Pad fans. He sleeps well at night, and doesn’t worry about what people thing about “his money”. 5) He probably retires after a career on the same team. (Maybe not. A “too cheap” contract makes him an easy trade target to use for “restocking the team”, trading a low-$$ contract for 4 or 6 or 8 top prospects, somewhere down the road.)
Foot – Here is the correct answer to your question:
Because it includes the buyout of either 1 or 2 pre-arb years (depending on when the extension begins) and 3 arb years.
How much do you think he would have made those 4-5 years without the extension???
If Merrill continues to play at the 2024 level in 2025 he will most certainly be a super two in arbitration. That would mean they are buying out 1 year of pre-arb in 2026 and 4 years of arbitration.
Using the algorithm from this website that looks something like:
2026 – <$1 million pre-arb
2027 – $2.8 million 1st year arb
2028 – $7.2 million 2nd year arb
2029 – $15.8 million 3rd year arb (based on 4.4 WAR in 2028)
2030 – $19.9 million 4th year arb (based on 4.4 WAR in 2029)
He would have earned something around $46.7 million before becoming a FA in 2031 if he maintained his 2024 level of performance. Based on those pre-arb and arb projections,
Merrill is essentially guaranteed $88-89 million for 4 FA seasons and can increase that by $30 million(??) with PA escalators. $22 million AAV in those FA years that can become as much as $29.5-30 million AAV if he hits all the escalators.
Not seeing where he is being underpaid by much on this deal.
Merrill wouldn’t have been a Super Two he would have been a free agent outright after the 2029 season they didn’t manipulate his service time.
You don’t have a very firm grasp on reality, do you?
Merrill started 2023 in Ft Wayne. He started 2024 in San Diego.
@Pads Fans
I’m in sync with your financial analysis. However, I think those arb figures are low, if Merrill performs anything like his potential. Soto got over $30M in his last arb year. But then again, salary inflation is a thing. Then again and again, the Padres “bought” four extra years of control, at a relatively low $$ risk, and Merrill bought a lifetime of guaranteed income.
I’m not one of those “relative values” folks (i.e. moral values are an absolute “right” vs “wrong”), but the future IS relative. Relative to health for certain, performance, security, future lifestyle (as in fixing it ahead of time). It’s an insurance based contract for both parties, who are both happy, so we Pads fans should just shut-the-(stuff)-up about it. 🙂
Old Salt, those arb figures use the algorithm this site uses to project arb figures every year. They are not 100% on the money, but they are always very close.
What they can’t take into account is salary inflation that far out, so in 4 years he would have gotten more. No doubt about that. I don’t think it would be Soto money even with inflation unless he starts putting up 5 and 6 WAR seasons.
Last season Merrill was at 4.4 WAR and those projections are based on him repeating that level of performance. If he starts putting up Soto kind of performance the Padres got a bargain. We can only hope.
Wife just told me to put down my phone and watch the game,
If you had a firm grasp on reality you’d know that unless he gets sent down at some point in the next 4 and a half years Merrill will make it to 6 years of service time on the last day of the 2029 season which means that is when he would have been a free agent had he not signed an extension and would have been first time arb eligible after the 2026 season were it not for the extension, so, not a Super Two. But because he did sign an extension the discussion is purely academic.
LOL, Well, my wife works early, sleeps early, and we watch most games tape-delayed on the PC, via 60″ screen. I have an app that allows me to bleep past commercials (or other delays), so I can get her games down to just over an hour. However, for you, tell your wife that blogging is a better use of your time than watching commercial reruns.
It my multiverse timeline he played entire season at mlb receiving a full year of service time and would be looking at free agency after 2029 season.
Bad deal for him. Should have just done 6 year extension buying out 2 free agent years. Or got a player opt out that Padres freaking love to give out. This is amazing deal for Padres.
Risk analysis. 135 mil guaranteed verses a couple more years at 1 mil and then a few arb years maybe 25-30 total if he stays elite. Way too many things can go wrong in life and at 21 he just signed a guaranteed contract for generational changing money verses a chance of living with regret if he gets serious injury or declines (think flash in a pan guys).
Also, most likely some of this money comes now on a bonus and increases the “early years” so he get to start living a 15 mil a year lifestyle now verses waiting 5 years.
The more up front it is it works the opposite of deferrals where it’s actually worth more to him today than it looks on paper.
“Way too msny things can go wrong in life at 21” – – – Josh Hamilton has entered the group chat.
Hey Foot,
He probably figures he’s getting over 100 mil and he’s young. He can do exactly what Bregman for the Astros did. Great move for everyone. We hope to have a million or two and now he has 135 and he can earn even more.
He will be alright. Ha
He left some money on the table but gained financial security. I believe this basically buys out 4 free agent years, with an option for a 5th. But keep in mind, next 2 years, he wasn’t going to be making 15 million. And if he plays well, like it said, it can max out higher. But 2 years of this time period would’ve been played otherwise at a much lower salary. Pretty much about a million per. If he maxes out, he did pretty well for himself. And if not? He made a smart move by taking it. Because if he doesn’t max out then he probably played pretty poorly.
Wish Gunnar had his agent and not Boras. Screwed in Baltimore.
The Boras deals don’t work out that often. He gets his clients thinking they are worth more than they are. Plenty of great players take deals that they feel good about and stay with the same team. You don’t hear as much about these kind of contracts. Good for Merrill and the Padres.
Agreed. These deals almost always work out in favor of the teams. With so many young guys doing these deals , for the players who do hit free agency the price will climb. Gunnar Henderson could get 500-600 million easy if he hits free agency.
He’s filthy rich now instead of having to wait 5 more yrs. And he’ll still get a very good contract at 30, I’m betting. Once you get to a certain point, making 300 million or 200 million in your career won’t be that big of a deal. I mean, unless he planned on single handedly eradicating homelessness and then going after our national debt. I highly doubt it though.
@Foot To add to all of the replies about risk/reward, there is also something called ‘the time value of money’. A dollar today is inherently worth more than a dollar tomorrow. That said, you’re right – he may have left some money on the table but that’s okay. The owner takes on the risk.
Yes my god how will he survive. What an idiot.
Also because he’s not a greedy player. He likes the team he plays with, it’s not hard to believe that he would take money that would still change his life without being a financial burden like other players.
Torpedo Bats
Ringworm
Deferred contracts
That’s a different way of saying it’ll be a Dodgers/Yankees world series.
nah i just like buzzwords. no chance the Yankees make the Series this year
OK I’ll play.
Sandworm
Zendaya
Circus
Zach Eflin.
DEI
DOGE
Tesla
Trump
now get the popcorn
Felon
Russia
Showers
Videotape
Sellout
@Dumpster
oh no.
This looks like a good looking idea.
Johnny! I didn’t know you were still alive!
Good signing! Nicely done Pads!
O_O
Spaghetti_O
Bravo, Padres fans!
Pretty good deal for the Pads. Great AAV for a plus-player going through his 20s. Love these deals.
This is braves extending Acuna level of good
Right? I’m absolutely gobsmacked after the Bogaerts deal and Manny/Tatis extensions. I was expecting at least $200M to get him locked up long-term.
He’ll yes! Best news I’ve heard in a while. Absolutely love the kid! Padres got a steal.
Considering his age, upside, and the lofty prices other young stars-in-the-making have signed for, this seems like a steal. Even if he ends up being a bust, this amount of money spread over 9-10 years is unlikely to be the kind of albatross to sink a payroll
Ann, even not going all the way to bust status, if he is a 2.0 WAR player it’s a break even in 2025 dollars. Imagine that will be a bargain for a 2.0 WAR player 8-10 years from now.
As a padres fan, I couldn’t be happier. He is young and fun and he loves San Diego. It’s so easy to root for the kid.
This is only a bad deal for Merrill if he turns into Aaron Judge. He’ll be underpaid.
It’s only a bad deal for the Padres if he’s injured and plays half the games.
That’s about as good as you’re going to get and truly be in both parties best interest, or at least in the realm of that.
Nah, it can morph in to 200 million and he’ll only be 30 when he hits FA again. Heck, by then, they’ll be making 100 million per, lol. Considering that by then he’ll either still be elite, or he was really intelligent to take this deal because he’s not.
I think a lot of this to is his desire to stay with this time and hope win a championship.
If he asked for his full value, which would be substantially more, he would end up with a contract more like Tatis, which would make it very difficult to work around in the future.
The money will still change his life.
The team has a ton of financial flexibility.
And in his Age 31 season he can either resign and get his bag or not.
This just shows his character and that it’s not about getting that massive deal, it’s about playing baseball and winning
Wow this is great and only a day and a half after his bobblehead night.
Braves fan here (presently looking for a paper grocery bag to put over my head); this looks like a great deal for both sides!
I agree with the guys saying nice move by the Padres for a terrific player. To play devil’s advocate, though, it’s fair to wonder sometimes if giving too much money to a.player too soon can limit their motivation? That’s where knowing the person is important, and he seems like a great kid from afar.
Well if that’s the case then this is a great deal, compare this to Tatis’ extension.
This isn’t an albatross contract, we know the kind of player he is, and he’s not greedy trying to make even more money but limiting the teams financial flexibility
@rememberthecoop Yeah, I feel the same way about universal health care. If we’re not hanging early death and medical bankruptcy over their heads, how will we ever get people to work their hardest?
As long as he isn’t a fat lazy dude who thinks he is good 3b but isn’t he should be right. They get even more $ by being good and winning. And probably wants another contract after this.
It definitely looks a lot better than the Machado extension, that’s for sure.
Congrats, Pads Enthusiasts!
Shouldn’t have even been extension. Epic failure giving opt out.
BAR-GAIN
The best I ever had. The best I ever had!
The kid deserved it after last season. Pretty amazing to have the season he had and learn one of the harder positions. Especially being ALMOST straight outta high school. If you’ve watched baseball long enough and pay attention to the counting stats, You can tell reading those numbers he put up that they’re undeveloped numbers. Meaning, he’ll get stronger and smarter, and pump those rookie numbers up (in Mathew McConaughey’s voice). We’ve seen it countless times over the years. He’s just getting started.
Way to go kid and way to go Seidlers!
… and nice comment, @towinagain.
Bravo-Zulu!
Seems super team friendly. 5 extra years of control for only 90-95 million or so is a great deal for SD
Smart move by Padres. Nutting and Pirates need to do the same with Skenes but everyone knows that is not happening.
Skenes may or may not be the exception here but I can only think of long term pitching extensions going awry. Strasburg comes immediately to mind but for some reason I don’t recall teams and young starters engaging in many 10yr extensions.
Hunter Greene recent 6 year extension comes to mind.
Skenes and Nutting should both be willing to do 6 year 120 million.
Skenes is from SoCal and a Dodgers fan. Even if the Pirates try to extend him, doubt he wants to extend his tour any longer than he has to….
Jerry Hairston Jr’s Toupee
You make a good point but think of it this way. If he signs an extension he can put in a no trade clause to many cities. If he just goes through the arbitration process the Pirates may ship him somewhere he doesn’t want to go.
Either way the Pirates won’t keep him for too long because he will become too expensive for their tight budget.
I think the conversation shouldn’t be around a Skenes extension, but instead who he gets traded to.
What a great way to start off the day as a padres fan…Jackson Merrill is going to be one of the best in MLB for a long time
Great move by the Pads. He will not be a Will Meyers.
I was sold on Jackson early last year. There was a game against the Dodgers last year when he was facing Vesia,a lefty,in the ninth inning. He got down early in the count but battled and fouled off some pitches. He ended up roping a liner to left center and put the Pads ahead.
Oop. Jinx
Well deserved.
“Swing away, Merrill”
Well played
All Signs point to this being the comment of the day, Cobb!
All offseason i was thinking padres need to extend this kid he’s gonna be a superstar. Here we are. Details seem complicated but somewhere betw 135-204? For 9 or 10 yrs
SD did the right thing
He already is if 10 MVP votes is a good indication
Top 10 I mean
Seems like a win/win. If only the Orioles had some young stars worthy of extensions. Wait, never mind.
Unfortunately for O’s Gunnar is repped by boras so he’ll never extend
The way Merrill is playing, he could have probably just gone through the next five years and been in line for something above $400 million in free agency.
Nice to see both sides decide they want this relationship to continue. Very pleasant surprise. I certainly did not expect an extension to come this season with how tight the money has been.
Merrill Madness is now Extended Madness. Good on ya kid.
Not everyone has the risk-tolerance of a Juan Soto or a Vladdy. Soto got crap from people he cared about for turning down the Nats’ extension. That kind of personal stuff is hard to swallow.
At 21 with only one year under the belt, I’d take the bag, too. He can still secure a $400M future extension at the current rate of salary inflation. Mike Trout did it.
100%
he could blow out his knee tomorrow and once you get over 100 million who cares?
@Yankees
I would too. By the 51st Lambo, I would imagine the money loses its shine. Just saying Merrill could have pulled a Soto if had wanted to, and probably made more.
Wow, great extension. Good to see the new ownership invest in a franchise guy. The Padres’ window is still gonna be a bit awkward in 5 or so years with the back halves of Machado and Bogaerts, but Tatis + Merrill can do a lot of heavy lifting.
Tatis is a 4 win player since his suspension, and in 5 years he’ll be three years into the post-peak phase of his career. If he’s more than a decent regular at that point it’ll be a pleasant surprise.
You never know with injuries, but if you think Tatis is a 4-win player now or that he would become a decent regular at 31, I’d bet strongly against that. He’s destroying baseball and back to being a terror on the basepaths in 7 games so far this year. He’s easily MVP-caliber if he stays healthy for the next few seasons.
I actually kind of like the next 5-10 years of the Padres future contention windows. We have essentially 3 age-tiers of stars locked up through the early 2030s: 1. Manny/Boegy 2.. Tatis/Merrill 3. Salas/DeVries. Tier 3 will be hitting prime production as tier 1 production falls off the cliff, Tier 2 will bridge them together–learn from the vets now and be the vets that teach young guys later. Then who knows, we may get a year or two in the late 2020s where all 6 of these guys put up a 4+ WAR season at the same time.
I think it’s a lot to put on Salas/De Vries, but yeah, I could see it working out like that. FWIW, I think Machado’s game will age well. I’m more pessimistic about Bogaerts, but we’ll see.
Yeah admittedly, the Bogaerts still being above average in 4 years thing and the kids both becoming stars in their early 20s thing are both relative stretches of which I’m a little skeptical, but it’s far from impossible!
That seems very team friendly., on first viewing.
Great move. Kid is the goods, already 2nd/3rd rounder in fantasy.
I just traded Machado for him in Dynasty (26 Man keepers) this offseason! I’m triple stoked haha
26 in you keep them for 26 years? How’s Bobby Bo working for you at the corners
Nah Theo, you keep a 26 Man roster over the Offseason! Merrill staying on my team for a longgggg timeeeee!
I traded Acuna for Merrill in one of my keeper leagues last season. Everyone said I was an idiot. Who is laughing now?
Acuras are notoriously bad at trade in value. Sure they saw your mileage may vary but I was only able to fetch a utility IF one of the Castros , $500 gift cards and coupons for dry cleaning
@Gwynn
I drafted both Tatis and Merrill somehow lol.
*insert Beavis headbanging meme*
AJ Preller in your fantasy league Gwynning?
Maybe? Dude did trade for Profar last year…
Haha
Having 10s of millions of dollars to spend in San Diego is a pretty great outcome for Merrill. Good for him and the Pads.
“He was drafted out of high school, meaning he had not played college ball.” Writing that is sharp as a bowling ball. Good job, Dagwood!
On a better note, this is a peach of deal, LFGSD!!!
Still scratching my head at multiple mentions of tight budget/financial constraints yet the Pads are running the 8th highest payroll… and still found couch coins to extend Merrill? Been a weird premise the past two Offseasons…
Go Pads!
Not to mention all the empty seats at Petco through the first 7 games. Whatever shall they do, G!?!?! Hahahaha
*mug tap and a smirk*
King Cease still being traded?
People actually read these articles?
obviously a smart risk by the padres if he has the health tool this will be a steal
As always
The question is
Will he be another Stanton ???
Or Ryan Howard
Or Jimi Hendrix
This is a silly good deal for the Padres. Buying the prime years of the player without having to pay for any of the Pujols years is a win.
I’m typically very critical of the Padres front office, but given the circumstances the last 2 years and the teams they have put together a pat on the back is more in order.
I’m sure that Merrill is happy to get “life-changing money” but it’s very possible that he really screwed himself in terms of his earnings ceiling. Kyle Tucker, who is a pretty fair comp, will get something in the range of a half-billion-dollar contract next winter. Now, injuries and regression can happen, especially with the many years before Merrill would have hit free agency, but he’s clearly a stud who could very well win an MVP this decade. Personally, I would have bet on myself or at least waited until this off-season, but maybe the coming labor strife and uncertainty about what the next CBA might look like played a part…
Fair comp lol Tucker has way more power and actually takes pitches
Merrill was an all-star at 21 when Tucker was scuffling against ML pitching in a part-time role. If Merrill went to FA on his current trajectory he would absolutely blow Tucker’s upcoming deal out of the water.
Tucker is a bonafide AS, but Merrill has 11 more HRs and more BBs than Tucker did with same #ABs in his career. So saying Tucker has “way more power” is a bit outrageous. Merrill also excels at a far more difficult defensive position, and hits for a higher average than Tucker.
Bad contract. Didn’t have to take this. Didn’t have to risk injury. There was a happy middle ground.
I posted this up above, but will repeat it here.
If Merrill continues to play at the 2024 level in 2025 he will most certainly be a super two in arbitration. That would mean the Padres are buying out 1 year of pre-arb in 2026 and 4 years of arbitration plus 4 years of FA.
Using the algorithm from this website that looks something like:
2026 – <$1 million pre-arb
2027 – $2.8 million 1st year arb
2028 – $7.2 million 2nd year arb
2029 – $15.8 million 3rd year arb (based on 4.4 WAR in 2028)
2030 – $19.9 million 4th year arb (based on 4.4 WAR in 2029)
He would have earned something around $46.7 million before becoming a FA in 2031 if he maintained his 2024 level of performance. Based on those pre-arb and arb projections,
Merrill is essentially guaranteed $88-89 million for 4 FA seasons and can increase that by $30 million(??) with PA escalators. That is a $22 million AAV in those FA years that can become as much as $29.5-30 million AAV if he hits all the escalators.
Merrill gets certainty, is a FA again at 31, and is not taking much of a discount.
He wouldn’t have been arb eligible in 2030 unless they sent him down at some point between now and then (which would be a pretty easy grievance for the MLBPA).
If it’s all about the money then sure. But by 2026 opening day Kyle Tucker will be on his third team in three years.
Soto is now on his 4th team in 4 years, he got paid sure and clearly that was the most important thing to him. But in the meantime you get ping ponged around because no one wants to lose you for nothing.
There are like 3 guys who have gotten contracts “something in the range of a half a billion dollars” in the history of MLB. Acting like Merrill is a lock for that kind of money is ridiculous.
Post as much you want but he was on pace to be free agent after 2029 and those arb numbers are light.
I appreciate more and more teams like SD and ATL and KC who have young stars to whom they make a solid commitment with long extensions buying out arbitration and free agent years. This is something Toronto refused to do and now they are paying the price for it. If you want the rest of the baseball world to believe you have a young star, then treat them as such. Could it bust? Sure, but this is a case where I would rather see a team try and fail than to not do anything.
It’s nothing new. Been around for 30 years. No idea why you wouldn’t do it.
Yes!
Maybe!
smart move, Friars… and congratulations on getting out of the Profar problem. As a long time Braves fan, I never wanted that guy, as he had been rumored to be a Braves trade target for many years and just wasn’t very good. Suddenly, he becomes a power bat, and now we know why … uggh
And hopefully prospects like Salas and De Vries play their way into that 10 year core group.
Learn Reds , learn !
There is a huge difference in free agency between a 26-27 year old and a 30 year old. He probably cost himself hundreds of millions of millions of dollars. Everyone says it’s life changing money but so isn’t a superstar getting paid in arbitration. Soto made 31 million in his last year of arbitration.
I like Soto, and nothing wrong with getting the bag. But Merrill’s clearly more of a company man. They’ve got completely different values.
You can be a company man and still get what’s coming to you. Even if he waited and wanted to stay in San Diego he would have gotten tons more money down the road.
It wasn’t his priority. I’m not him or his agent, so I can’t say what his motivation/”magic number” was, but clearly, the Padres hit it. I am a bit surprised there’s no NTC for the AAV.
He signed a bad contract. You don’t have to go to free agency. Can sign another extension. Don’t have to use your player option. So nothing to do with loving the team and wanting to be there.
He’s definitely leaving money on the table, but if you watch his presser today, you will see that he 100% wanted to be with the team. The dude just wants to ball.
Smart move to lock him up. Smart move by him to lock in that guaranteed generation wealth.
Not smart for him. He could have done better.
A lot can happen in a few years. A guarantee of that kind of generational wealth should be taken as soon as it’s available.
Agree 100 percent. Just don’t give away that many free agent years. Or get a opt out.
Padres love extending guys that are years away from arb
It has worked out well. Tatis has 6.5 WAR/162 since then.
He sold himself short. Settled for too little . He’s worth a lot more. He will be rich for life and his family too but had he gone to arbitration in future years and then free agency in 2029, he would’ve made at least $75 million more over the 10 years.
I posted this up above, but will repeat it here.
If Merrill continues to play at the 2024 level in 2025 he will most certainly be a super two in arbitration. That would mean the Padres are buying out 1 year of pre-arb in 2026 and 4 years of arbitration plus 4 years of FA.
Using the algorithm from this website that looks something like:
2026 – <$1 million pre-arb
2027 – $2.8 million 1st year arb
2028 – $7.2 million 2nd year arb
2029 – $15.8 million 3rd year arb (based on 4.4 WAR in 2028)
2030 – $19.9 million 4th year arb (based on 4.4 WAR in 2029)
He would have earned something around $46.7 million before becoming a FA in 2031 if he maintained his 2024 level of performance. Based on those pre-arb and arb projections,
Merrill is essentially guaranteed $88-89 million for 4 FA seasons and can increase that by $30 million(??) with PA escalators. That is a $22 million AAV in those FA years that can become as much as $29.5-30 million AAV if he hits all the escalators.
Merrill gets certainty, is a FA again at 31, and is not taking much of a discount.
Merrill was previously slated to reach free agency after 2029, so this extends the club’s window of control over Merrill by at least five years.
Good for him. Now the Cubs need to do the same with PCA. Maybe not the same money but at least 8-9 years. Between 88-100 mil.
PCA has not shown he can hit well yet, so maybe something like what the Red Sox signed Rafaela to. In the 8/55-60 range?
Doesn’t necessarily have to be this year or next. Just extend him before he 26. He’s 23 now
Have the Cubs ever locked up a player long term in his second year? This is not a good comparison, but all I can come up with is David Bote.
Couldn’t hit in A ball. Rakes next year in majors.
When has this ever happened before in MLB history? Seriously, name one instance.
Very suspicious
I know you’re just funposting (he hit league-average in AA at 20), but this is the difference between scouting and scouting the stat line.
Scouting the stat line. Is that like watching the Rockettes at Radio City and carefully counting the total number of tassels on boots
League average at AA is terrible for a top prospect. A .760 OPS in A ball is worse than terrible
Yeah he’s gonna absolutely suck at AAA at that rate. Don’t send him there. He’ll be in over his head
Kinda the point here, dawg. Lmk if you need more help understanding
Speaking of dawg, ruh roh. Hope he doesn’t turn out like Gordon Beckham.
You’re neglecting age. A high-school senior moving from complex to AA in a year’s time while posting above-average offense at SS is impressive for most offensive profiles, but especially so for a tall, young high-contact/low-K hitter who will have room to grow into his frame and add power as he ages. Merrill’s calling card has always been an advanced hit tool, and the Padres were correct in hindsight to challenge him with MLB assignment last year.
High A at 20 is the standard trajectory now. He didn’t hit there. End of story
Lol he finished his age-20 season at AA hitting league-average. You can’t even troll correctly, brother.
Ruh roh. Both first round picks drafted in top 10. Ops 800+ their freshman years in the show. What can go wrong?
One moment you’re top dawg, rookie of the year. 5 years later you’re being swapped for Yency Almonte. 5 years after that, out of baseball. Tho to be fair, things can be worse than being partnered up with the Georgia Bulldog tri-delt homecoming queen and have a running gig as a color analyst on Sox road games where you get to hone your homespun awkward sense of humor
League average isn’t good for a top prospect. Try to follow along
He hits at every 3 levels. Kinda the way I bombed out in 9th grade but was a junior Astro physicist at MIT. At this rate he’ll succeed throughout MLB, but struggle in the super league at Jupiter in 2038
Where you been? Haven’t seen you around these parts in a while, Gbaby
G just got released, so cherish this timed visit while you can, Cobb!
Setting the over/under until he holds out to renegotiate at 4.5 years.
Howd that holdout work for Gary “If I ain’t startin I ain’t departin” Templeton?
Played a round of golf with Temps, by chance. San Luis Rey Downs (before they closed) asked me if I’d pair up with somebody and I said no probs. Get to Tee 1 and it’s Templeton. Super nice guy, very quiet and humble. And I’ll take the over, Duran!
If he holds out then they slap franchise tag on him
Garry Templeton is indeed a very quiet individual by nature, Jackson Merrill could be a Top 3 MLB shortstop, and I have always favored “slapping” on a franchise tag or tariff instead of using a tamer word such as “applying” because that s stings.
He’s set up nicely for an extension at age 31.
Darragh, the Padres keep spending money. They have increased payroll by the 2nd highest amount this offseason and have a payroll over $260 million right now. They dipped under the CBT for a single season in 2024 after 3 years over it to reset the penalties and immediately went right back over it in 2025 with the 5th largest payroll in baseball that is just under the 3rd CBT threshold at $269 million
At what point are you going to realize that they have never had a payroll crunch?
How much of that payroll increase was to players not on the team in 2024?
That really has no bearing. If you have an actual budget crunch you trade away players to cut payroll, you don’t increase payroll.
To directly answer your question, of the $41.3 million increase in CBT salaries, $28.2 million are for players that were not on the roster at the end of 2024. Of the $55.2 million increase in actual salaries, $38.7 million are for players that were not on the opening day roster in 2024.
Ha ha. And on and on and on he goes. At what point are you going to realise this website is not about you and your emotional insecurities ?
Because they’re 4 from the bottom in media market size, baseball writers and pundits (and I include MLBTR writers as they get their info from those sources) will insist that the Padres can’t possibly maintain a top 10 payroll. And many keep insisting they are on the verge of a fire sale every year. The dogma will continue. Most are not aware they are top 3 in attendance in MLB.
With the alternative theory being that a select group of Padre fans are just vocal, hypersensitive little b&tches with no fortitude.
Name names, fopp. We’re all listening.
“There are $30MM in plate appearance escalators…”
“Each time Merrill gets to 500 plate appearances in a season, he adds $1MM to his future salaries for the 2030-2034 seasons.”
Darragh, that seems like its just $5 million in escalators the way you explained it.
Great Move for the Padres and for Jackson Merrill!
Merrill left some cash on the table.
But, he smartly, took out an advance on future earnings to secure his financial future.
Merrill loves San Diego and the team
Merrill is the “real deal”.
Last night at Petco Park, I joined with over 37,700 Padres fans to watch team sparkplug Merrill pick up where he left off last year and and the Padres win hitting a home run to right center field.
Merrill also helps the Padres team stay playoffs competitive long term.
Padres beat AL playoff team Guardians 7-0 to run their opening season record to 6-0 the best start of a Padres season in team history.
It was the coldest baseball game I have watched in person since I watched the Giants play at the infamous Candlestick Park on the Bay.
(Cold and windy just like Candlestick).
Next up, the Padres should try to extend RHSP Michael King.
Here’s a whacky take….Some day these guys are going to ask for a lump sum portion payable in gold each yr to account for USD devaluation.
Let’s say conservatively Merrill gets $165M of this deal @ 10% paid in gold, thats 5,322 oz of gold @ $3100 current spot. The team would need to hedge their risk each year, but use current spot to gauge potential.
Exactly 5 yrs ago today, on 4/2/2019, Acuna signed 8 yrs/$100M. Gold closed at $1,290 on 4/2/19. If Acuna had negotiated for 10% of salary in gold paid 4/1 of each yr he’d have received…
4/1/20 = spot $1769…$370K*10%/$1769 = 20.92 oz
4/1/21 = spot $1708…$5M*10%/$1708 = 292.74 oz
4/1/22 = spot $1937…$15M*10%/$1937 = 774.39 oz
4/1/23 = spot $1969…$17M*10%/$1969 = 863.38 oz
4/1/24 = spot $2249…$17M*10%/$2249 = 755.89 oz
4/1/25 = spot $3120…$17M*10%/$3120 = 544.87 oz
In 6 yrs thats 3,252.19 oz of gold…Acuna’s 10% of earnings directed to gold in this example was $7.14M USD….at the current spot price of gold that 3,252 oz = $10.15M USD…a 42% return on the $7.14M.
If there are teams that think gold is just a pet rock (like most US investors), this is how players could protect purchasing power and truly solve NPV/time value of money without accepting deferred money.
You can also use gold and silver to protect your own purchasing power, not just rich people…
Interesting post!
Gold is not liquid enough. There are many ways to hedge your purchasing power that doesn’t involve hoarding a precious metal that’s notoriously illiquid. I’m sure these guys have more than enough money to get help diversifying their net worth.
Gold is plenty liquid, especially if it’s a once a yr settlement, but the contracts could still be structured as quarterly settlements to spread the risk and reduce any potential liquidity crunch. USD is arguably too liquid which is why the value of a dollar is diminishing so rapidly.
2024 miner production + recycled gold was roughly 5,000 metric tons, meeting global demand. Central banks purchased over 1000 tons of gold in 2024, for the 3rd straight yr. Why would central banks buy gold if it was an illiquid asset? Why would Basel III list gold and USD as the only tier 1 reserve assets if it was illiquid?
The price appreciation of gold has nothing to do with supply/liquidity constraints, and has to do with the destruction of currency valuation. Gold is value, everything else is credit.
Well, heck, I’ll bite.
Why not a combination, Cryto, Gold, Cash, baseball cards?
Fact is, once a deal is struck in USD, payment can be received (or converted) into whatever form preferred by the parties. That information doesn’t need to be made public, nor will the fact that Machado, for example, negotiated his 2024 extension in USD impact his AAV in future years, if his contract specifies “gold”. Obviously, the value of gold 5-10 years in the future is speculative, while the value of USD the day of the contract, is a known value. So, I expect contracts to continue to be negotiated and agreed to in USD terms for the indefinite future. Pegging it to a gold standard or crypto, or anything else, won’t work in MLB’s salary monitoring universe.
@OldSat – Fair points, but my thought isn’t a peg to gold nor is it about extracting more money out of the team. The 42% return on the Acuna example isn’t meant as a comment about the player getting more money, it speaks to the fact that the USD depreciated by 42% against gold in that 6 yr period and the player would be protected against that devaluation. Gold reserves/backs the USD, meaning it is the fundamental item of value not the USD itself. Gold is money, everything else is credit.
Gold AND USD value in 5-10 yrs is speculative. In 1972, 1985, 2000, 2008, or any random year no one saw 30% of all USD M2 being created from Feb 2020 to April 2022. That 26 month period of time negatively impacted the value of a dollar based on its scarcity changing. Price theory doesn’t just apply to product supply/demand, it applies to currency values too. In the Acuna example, notice how the the 42% return on his 10% hypothetical gold directly coincides with the timing of USD money supply increasing drastically?
By the club settling 10% of earnings in gold it would shift some of the monetary risk to the club just like deferred money already does. Yes, I can convert my earned USD currency to gold at any time, but then I carry any fees, sourcing risk, and slippage. By saying 10% of earnings and not a peg to a specific amount of oz’s, it provides the same certainty to the club as the full cash salary as they still know the future salary figures and can hedge the 10% dollar amount in gold futures.
I realize I’m sharing a very nuanced thought that likely never see’s the light of day, but it’s interesting to speculate since deferrals and NPV are suddenly the hot button topic of MLB contracts. If the time value of money is truly the concern, then gold could protect both sides without having to add 0’s to contracts due to deferrals.
MLB rookie cards have the highest ROI of any investment I have seen that is legal. Take a small portion of their salary in 100-lots of all the rookie cards for that season. It will out-perform the S&P 500. Every year since 1979 they have done so.
I’m so fucking hard right now.
Congrats to Jackson and the Padres! We need to extend Preller,Great move from a Real leader. Thankful to have 2 outfielders for the long term (Tat and Jax)
A+++++
This seems like a great team friendly investment for Padres. Best contract they have given out since contracts started costing real $
Hopefully, he won’t ride dirt bikes¹, get into knife fights² or sleep with false accusers³
¹ Fernando Ringworm Jr.
² Tommy Pham
³ Fernando Ringworm Jr/Mike Clevinger and Trevor Bauer all slept with Lindsey Hill.
Merrill was already under team control through 2030. 1 more pre-arb season in 2026 and 4 arbitration eligible seasons from 2026-2030. This is a 9-year deal. He will be under team control for an extra 4 seasons plus an option year.
Nope. He was under control through 2029. He received a full year of service in 2024. They would have to send him down at some point between now and the end of the 2028 season for him to be controlled for 2029 (can’t send him down in 2029 because in that case he has 5 years of service time and can refuse an optional assignment in favor of free agency).
Gee, now who else on this thread has claimed that Merrill was under team control through 2030 before the Padres extended him? 😉
Good for him. He’s a stud
Nicely done by Mr. Preller. I feels a little cheap, like maybe Merrill gave up one too many FA years, or maybe the option year, but you have to give to get.
There are far worse things in life than living in SD with $135 large sitting in your pocket.