Examining Salvador Perez’s Extension
The sixth-youngest player to appear in an MLB game in 2011 signed a multiyear deal yesterday. 21-year-old Salvador Perez is now the youngest player in the sport with a long-term contract (not counting amateur signing bonuses). The Royals made a historic investment by guaranteeing $7MM to someone with just a handful of games in the Major leagues. But if Perez turns into an MLB regular behind the plate, there’s an excellent chance this deal will save the club money long-term.
Let’s set aside the year-to-year breakdown of the five-year deal and determine how the sides are valuing Perez’s first two seasons of arbitration eligibility. He’ll earn $7MM for his first five MLB seasons — essentially the league minimum for three years plus a total of $5.5MM for two arb years.
How much do catchers have to produce to earn $5.5MM for their first two seasons of arbitration eligibility? To give you an idea, John Buck, Carlos Ruiz, Rod Barajas, Mike Napoli and Yadier Molina earned $4.5-6MM for that chunk of their careers. If Perez produces like those catchers, adding value on offense while playing capable defense on a regular basis, he and the Royals will basically have broken even through five years.
If Perez breaks out and produces like Joe Mauer, Brian McCann or Geovany Soto, the Royals will save money, even for the guaranteed portion of the deal. If he struggles to produce or stay healthy, the deal will cost the Royals more through 2016 than going year to year would have.
The contract includes three team options which were presumably essential for the Royals. They can retain him for $3.75MM in 2017 and lock up two free agent years for a total of $11MM in 2018-19. In other words, the Royals will have the chance to lock Perez’s prime age 27-29 seasons up at a well-below-market rate.
He obtained significant security just 39 games into his MLB career, and there's no guarantee he'll establish himself as the long-term solution behind the plate, but $7MM isn’t the kind of commitment that sets a franchise back significantly. Like Perez himself, this deal offers a whole lot of upside.
Royals To Extend Salvador Perez
The Royals announced that they signed catcher Salvador Perez to a five-year contract that includes three club options. Perez will earn a guaranteed $7MM over the course of the five-year contract, Bob Dutton of the Kansas City Star reports (Twitter links). The Morgan Advisory Group client could earn as much as $26.75MM if he maxes out his incentives and the Royals pick up all three options. Dutton has the yearly breakdown (Twitter links).
The deal buys out Perez's three pre-arbitration seasons and two of his seasons of arbitration eligibility. The Royals have options for his final season of arbitration eligibility and for his first two free agent seasons.
Perez debuted with the Royals last year, appearing in 39 games. The 21-year-old posted a .331/.361/.473 line in 158 plate appearances, adding 13 extra base hits. Before getting called up to Kansas City, Perez posted a .290/.331/.437 line in the upper minors and prevented 46% of stolen base attempts against him.
Perez joins Matt Moore and Evan Longoria, who also signed extensions before notching their first full year of MLB service time. The two Rays players also signed deals that include three club options. There's not much recent precedent for extensions involving pre-arbitration eligible catchers, as MLBTR's Extension Tracker shows.
GM Dayton Moore locked Joakim Soria up before the closer had two years of service time in a similarly motivated extension. The Royals obtained three club options on that deal as well.