Astros Pay Alex Bregman Now To Avoid Paying Him Later
Coming on the heels of Mike Trout’s humongous contract extension, news broke that Alex Bregman and the Astros had agreed to an extension of their own worth $100 million, with Mark Berman first to report the deal. While the Trout contract is the biggest of all time, the Bregman deal is not without intrigue. Bregman, who was still a full year away from arbitration, is the first star-level player to sign a pre-arb contract extension in nearly five years. The last player at or above Bregman’s level of production to sign a contract like this was Trout, who signed his six-year, $144.5 million contract back in 2014.
Since 2014, the number of contract extensions buying out free agent years has decreased. When Luis Severino signed his deal earlier this offseason, Jeff Sullivan ran the numbers on the quantity of extensions by offseason, providing this graph.
In the five years leading up to the 2014 season, there were about 25 or so extensions per season, and in the five years since, the numbers have dropped in half. Since Severino signed, we have had Jose Leclerc, and now Alex Bregman, but those extension figures aren’t going up a ton this year. It isn’t just that the number of extensions have gone down; the quality of players signing those extensions has declined as well. We saw Trout’s big deal ahead of the 2014 season; the year before, Buster Posey, who was Super-2 arbitration eligible, signed an even bigger contract covering more seasons. It was Andrew McCutchen the year before Posey. Matt Carpenter and Jason Kipnis, who were several years older than Bregman but also coming off very good years, signed six-year deals with options guaranteeing themselves around $50 million each.
We haven’t seen these types of extensions as much in the past five years. Two years ago, Dave Cameron wondered if the early extensions for stars were a dying breed.
Since the end of the World Series, eight players in the “0-3” service time bucket — meaning pre-arbitration players and Super-Two guys, all of whom are at least four years from free agency — have signed long-term extensions with their current teams. Piscotty rounded out the group, which also includes Rougned Odor, Jose Ramirez, Roberto Perez, Tim Anderson, Kevin Kiermaier, Ender Inciarte, and Odubel Herrera.
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You Aren't a FanGraphs MemberIt looks like you aren't yet a FanGraphs Member (or aren't logged in). We aren't mad, just disappointed. We get it. You want to read this article. But before we let you get back to it, we'd like to point out a few of the good reasons why you should become a Member. 1. Ad Free viewing! We won't bug you with this ad, or any other. 2. Unlimited articles! Non-Members only get to read 10 free articles a month. Members never get cut off. 3. Dark mode and Classic mode! 4. Custom player page dashboards! Choose the player cards you want, in the order you want them. 5. One-click data exports! Export our projections and leaderboards for your personal projects. 6. Remove the photos on the home page! (Honestly, this doesn't sound so great to us, but some people wanted it, and we like to give our Members what they want.) 7. Even more Steamer projections! We have handedness, percentile, and context neutral projections available for Members only. 8. Get FanGraphs Walk-Off, a customized year end review! Find out exactly how you used FanGraphs this year, and how that compares to other Members. Don't be a victim of FOMO. 9. A weekly mailbag column, exclusively for Members. 10. Help support FanGraphs and our entire staff! Our Members provide us with critical resources to improve the site and deliver new features! We hope you'll consider a Membership today, for yourself or as a gift! And we realize this has been an awfully long sales pitch, so we've also removed all the other ads in this article. We didn't want to overdo it. In case you didn't read all that, here's the short version. Membership includes:✓Ad-free browsing✓Unlimited FanGraphs & RotoGraphs articles✓Historical & platoon projections✓Leaderboard & player-page stat heatmaps✓One-click data exports✓Customizable player-page dashboards✓Dark & Classic site modes✓Weekly Members-only mailbag✓FanGraphs Walk-Off, your year in review✓Optional homepage photo removal✓Gift articles to non-Members✓Full postseason coverageThis group is a mix of players with a decent amount of risk (Odor, Anderson, Herrera), guys who weren’t going to get paid for their skills in arbitration anyway (Kiermaier, Inciarte, Perez), and perceived lower-upside types who have performed well but aren’t seen as future stars (Piscotty, Ramirez). Kiermaier is the only one who could currently be seen as a legitimate franchise player, and he’s a defense-first guy who has had injury problems, so his market value might not be a great match for his overall value.
Jose Ramirez has become a star, but he wasn’t one when he signed his deal guaranteeing him only around $25 million. The year before the article, the early extensions were limited to Kolten Wong and Gregory Polanco, while back in 2015, Juan Lagares, Adam Eaton, and pre-stardom Christian Yelich signed long-term deals. Last year, Felipe Vazquez, Paul DeJong, Scott Kingery, and Ketel Marte meant another star-less extension season, and so far this year, Jorge Polanco, Max Kepler, Whit Merrifield, Leclerc, and Brandon Lowe are signing early extensions.
The Alex Bregman deal not only keeps his current salary the same and helps the Astros for competitive balance tax purposes this season, but it provides Bregman a $10 million signing bonus to get him more money now, then covers three years of arbitration from 2020 through 2022 plus two free agent years in 2023 and 2024. The star-level early extension might not be extinct, but $100 million is a high price to pay to lock up just two free agent seasons.
Bregman’s rise to stardom has been rather sudden. He was taken with the No. 2 overall pick in 2015 and had just a few hundred minor league plate appearances before appearing on prospect lists, with Keith Law ranking him the highest at 19th. A power surge in the first half of 2016 caused Law to make him the top prospect in the minors by midseason, while our own Eric Longenhagen gave him a 65 future value at the time, making him one of the five best prospects in baseball. There’s not much time to build up hype for a prospect who hits the majors 13 months after his debut, but Bregman was immediately above-average and had another very good 3.5-WAR season in 2017 as the Astros won the World Series. Last year, he took another step forward with more walks than strikeouts, a near .400 OBP, a 157 wRC+, and 7.5 WAR in a campaign that would see him finish fifth in the MVP voting.
He turns 25 years old at the end of this month and his 5.5 WAR projection is fifth among all position players, trailing only Trout, Mookie Betts, Ramirez, and Francisco Lindor. Bregman is a star and one of the very best players in the game, but it is still unusual for the Astros to commit so much money for two free agent seasons. If we look at Betts’ first-year arbitration salary from a year ago at $10.5 million as a comp, unless Bregman wins MVP, he’s probably looking at somewhere in the neighborhood of $40 million for three years of arbitration. If Bregman were to win MVP in the next couple seasons, that figure could escalate to as high as $60 million or $70 million from 2020 through 2022. That means Houston is paying $25 million to $30 million per season for those free agent years, which won’t even begin until four years from now.
Bregman probably wasn’t desperate for money before this deal, having received $6 million to sign with the Astros a little over three years ago. Houston needed to come up with a guarantee that would change his life, and they did. Bregman is giving away one less year of free agency than Trout did in the deal he signed five years ago, but he now won’t be a free agent until after he turns 30, which could significantly reduce his long-term earnings. Houston is making a large bet on Bregman, but they no longer have to worry about missing any of the young star’s prime seasons. They won’t have to decide after Bregman’s age-28 season whether to offer him a 10-year contract and have pushed that decision down the road. The Astros aren’t just paying $100 million, including $60 million for two free agent seasons, they are paying that guarantee so as not to pay another $200 million for a potential Bregman decline in his 30s. The guaranteed cost is large, but they are locking in a star for his prime without taking on the risk of his decline.
Craig Edwards can be found on twitter @craigjedwards.
Are you trying to suggest that Brandon Lowe isn’t a star-level player?
I get this is sarcasm, but I am taking the over on 3 WAR moving forward.
Waiting for your list of 10 “random” players from 5-10 years ago who earned less in arb than Bregman’s contract.
Waiting for the day you start trying to find evidence rather than whip stuff out of your ass, knowing that it will never come.
I know we aren’t supposed to feel bad for millionaires, but Jose Ramirez has the new Salvador Perez contract. $43 million (max) for 5 years, and then he’s a free agent at 32 when no one is paying 30-year-olds.
Josh Donaldson shows that if you perform you’ll get a couple of 20 mil payouts
Maybe signing him through age 30 is the whole point.
Houston doesn’t play in Yankees/Dodgers territory so sooner or later their competitive Window will narrow or even close. By then they may not want to pay a not quite young star during a rebuild.
Why is Houston’s spending low? They have no competition and play in the 4th largest city in the US. Is there anywhere I can learn more about market sizes vs population?
It’s not low anymore, just under the luxury tax cap. In fact, they structured this deal to preserve space under the cap for midseason acquisitions. The deal keeps his 2019 contract in place at only $10m.
The Astros look to be in what I refer to as the upper middle class of baseball teams by revenue, which are teams with healthy revenue but pretty far below the level of the top few teams. It’s a sizable market, but “4th-largest city” isn’t a very good metric because it depends on the vagaries of city limits.
By Census combined statistical area (sort of “extended metro area”), Houston ranks as 9th in the country. https://en.wikipedia.org/wiki/Combined_statistical_area
The last available Forbes revenue estimates are from April 2018, and therefore based on the Astros’ 2017 World Series season, and those estimates put the Astros at #6 in team revenue. There’s about a 25% revenue gap below #5, however (the Giants). https://www.forbes.com/mlb-valuations/list/#header:revenue_sortreverse:true
The Astros’ payroll definitely bottomed out at really low levels during the 100+ loss years of the Luhnow complete teardown/rebuild, but it was back up to #7 last season (per Cot’s) and Cot’s also has the 2019 estimate luxury tax payroll at #7. https://legacy.baseballprospectus.com/compensation/cots/al-west/houston-astros/ and https://docs.google.com/spreadsheets/d/e/2PACX-1vRiCClxiYjkOyzMZaMCgPITvq4pmb0TFlmau1-O-ffwp1qEhm66q7Y-ZoeEF_uR_PAo1JZ8_yCSUqaW/pubhtml
Luhnow didn’t really tear the club down. If you go back and look at the roster he acquired, there was not really any MLB talent to keep/trade away. Luhnow gets too much criticism for the rebuild/”tank” when it really started in 2010 under Ed Wade.
Luhnow gets flack from the national media, anywhere else he is praised for making a contender from nothing
Is 26 million (20% above league average) low?
I think there are multiple ways you can look at this deal. One is the way Craig looks at it here; it’s a lot of money, and they didn’t have to pay him that much money so soon. But if you think he’s on pace for a Josh Donaldson-like arb process, you’re looking at about $50M just for that alone. If he performs, he’s going to be outrageously expensive.
And then–this gets a little note at the end of the article, but I think it deserves much more than that–those free agent years, because they would have been part of an 7-9 year contract, would have been enormously expensive; we’re talking about something like the Arenado deal in today’s money. This literally buys out all of his years before he hits the decline, which (a) undercuts his leverage in free agency, since teams don’t like paying for years over 30 the same way they do for under-30 years and (b) they can let him walk if they don’t want to pay anything for his decline years.
From the Astros’ perspective, the only way they’re going to lose this is if Bregman gets hurt enough that it changes his career. This looks lopsided, but it pretty well underscores that teams should generally pursue extensions with their younger stars, because on the average, they come out ahead. For Bregman, it’s a tougher call, but it pretty much ensures he’s going to be fabulously wealthy short of some MC Hammer-level fiscal habits, and guards against that possible injury.
how do you compare Bregman to Chapman? This has got to be the comp Chapman uses in any extension talks. Maybe one day the A’s will pony up
Not that favorably? Bregman’s done it for a year longer, provides more of his value with the bat (which is what gets paid in arbitration), and is a year younger despite having an extra year of service time. A Chapman extension now would be for substantially less money.
I mostly agree with the sample size part of this argument. Last year Chapman had basically a better offensive season than Machado(Machado has 141 once) or Arenado has ever had, as well as a better defensive season than either have ever had. So I think we reasonably can say that his peak is higher than both Arenado, and Machado being he already put up a far superior season than either of them has ever had, counting for games played (playing through an injury as well). Machado has one year that was better than Chapmans (6.5 to 6.6) but it came in 100 more at bats. A lot of people (myself included) think he is the best defensive player in the game, and scouts have written that he is not only that, he is the best defensive player ever.
The projections are down on his bat, but if you watched the adjustments he made last last year in basically his first full season, I think it is silly to expect much regression. If I had to name one guy who hits 8 WAR this season who is not Trout or Betts, he would be my guess.
Love you Craig but $40m for Bregman in arb isn’t close. I have the median at about $55m based on performance to date and service time. I have A1 pegged at $12m; service time in the same ballpark as Betts, performance over pre-arb seasons will likely match up well (WAR likely lower that’s not what gets paid) and salaries have increased in the last 2 years.
I believe the list of $12m A1 players consists of the following: Kris Bryant.
Mookie Bett’s A1 salary was $10.5m, so you’re saying someone who is like Mookie Betts will blow Mookie Betts’ figure out of the water.
And before some fucking retard wallows along saying it’s years ago, Mookie Bett’s A1 was 2018.
Betts was off the back of a low batting average which will have dinged him a bit in arb. I also think that inflation of about 12.5% two years later is about right. Coincidentally 40% (an approximate reverse engineering of A1) of $30m (Machado) is $12m.
“[Team signing player to extension] Pay [player signing extension] More Now to Avoid Paying Him More Later” is the default scenario. How is this deal any different?