Cubs Get A Steal With Anthony Rizzo Again

A little over a year ago, Jed Hoyer acquired Anthony Rizzo for the third time; he was an Assistant GM with Boston when the Red Sox drafted Rizzo in 2007, he was the Padres GM when they acquired Rizzo from the Red Sox in the Adrian Gonzalez deal in 2010, and then he was the GM of the Cubs when they acquired him from San Diego for Andrew Cashner in 2012. In all three cases, it looks like Hoyer came out on the winning end of the deal, as Rizzo was clearly worth a sixth round pick, is more valuable than Gonzalez by himself at this point, and is certainly a bigger building block for the Cubs future than Cashner would be.

The well traveled youngster can go buy a house now, though, as his days of getting shipped from one city to the next are likely over. Ken Rosenthal first reported that the Cubs signed Rizzo to a seven year, $41 million contract extension that includes a pair of team options, ensuring that Chicago will own his rights through his age-29 season and could retain him through his age-31 season if both options are picked up. And with that deal, it looks like Hoyer and the rest of the Cubs front office is likely to once again come out on the winning end of a deal involving Anthony Rizzo.

Because Rizzo was called up on June 26th of last year — by a complete coincidence I’m sure — he fell four days short of achieving one full year of service time. So, while Rizzo had played almost an entire Major League season, the Cubs still owned his rights for six seasons, including the 2013 season currently underway. By giving him seven guaranteed years and getting two team options, the Cubs bought out four arbitration years and three free agent years for the total price of $68 to $73 million (depending on which incentives he hits) if both options are exercised.

The key there is four arbitration years. The Cubs kept Rizzo in the minors long enough to delay his free agency by a year, but he was a lock to qualify as a Super-Two player after the 2014 season, which meant he would have gone through arbitration a year earlier than most. Because the arbitration system is based on giving escalating raises, the extra trip through arbitration not only would have raised Rizzo’s salary in 2015, it would have also pushed up all of his future arbitration earnings. And that’s why this Rizzo deal looks like a potential steal for the Cubs, especially when compared to the other long term deals that have been signed recently.

The obvious comparisons are the recently completed deals for fellow first baseman Paul Goldschmidt (5/32 with one option, but doesn’t start until 2014) and Allen Craig (5/31 with one option), but there are some real differences here.

Craig, for instance, had already accrued two years of service time, so he was only four years from free agency, and at 28-years-old, the Cardinals already controlled his rights through his age-31 season. The extension bought out one league minimum season, three arbitration years, and then gave them control over his age-32 free agent season and the rights to his age-33 free agent season as well. Even with three trips through arbitration and two free agent years, Craig wasn’t likely to earn drastically more than the $31 million he got from St. Louis in that contract; the Cardinals probably saved something like $10 to $15 million if everything works out, and they took on some extra risk in order to get those savings.

Goldschmidt was also a 1+ service time guy, as Rizzo is, but he was not going to qualify for Super Two status, meaning that the Diamondbacks only bought out three arbitration years rather than four, and while they also guaranteed one free agent year, they got team option, while the Cubs got two with Rizzo.

Essentially, for an extra $10 million guaranteed, the Cubs bought out one more arbitration season, all the subsequent raises that come from being arbitration eligible four times, and got an extra team option for their trouble. That’s not a bad days work, especially considering that of the three first baseman we’re talking about, Rizzo likely has the brightest future. From our depth charts, the ZIPS/Steamer hybrid forecasts for their rest-of-season 2013 performance:

Anthony Rizzo 23 513 0.277 0.346 0.510 0.366 16.8 (1.3) 2.6 2.7
Paul Goldschmidt 25 509 0.272 0.357 0.492 0.364 14.0 0.3 (0.8) 2.2
Allen Craig 28 381 0.290 0.342 0.484 0.355 11.5 (0.6) (1.0) 1.6

If you prorate all those numbers out to 600 plate appearances, Rizzo would be forecast as a +3.2 WAR player, while Goldschmidt would come in at +2.6 and Craig at +2.5. Rizzo is also the youngest of the three, and because of where he is on the growth curve, he’s got the farthest room to grow as well. Rizzo’s power is carrying him at the moment, making up for the fact that he’s a bit too aggressive at the plate, but discipline develops with experience, and Rizzo should be able to add more walks to his profile before his power begins to decline. In his prime, Rizzo should develop into a +4 to +5 win first baseman. In terms of overall value, he projects to be not that different from what Prince Fielder is right now, with his better defense making up for the lower walk rate.

Goldschmidt and Craig are good players, but they’re closer to their ceiling than Rizzo is, and he’s already better than both of them. This isn’t meant to denigrate Goldschmidt or Craig, but neither one comes with his upside. Rizzo is the potential superstar of the trio, and had the Cubs not locked him up, he was probably headed for a monster paycheck in several years. If he develops as expected and stays healthy, he’ll still get one monster payday before he tires, as he’ll be free agent eligible heading into his age-32 season even if the Cubs pick up both of his options, but Chicago did well to make sure that they got his best years at a massive discount.

The Cubs certainly aren’t the first team to lock up a young star to a long term deal, and overall, the prices for most of these deals make them win-wins for everyone. Rizzo is now set for life financially and has safeguarded himself against any future injury problems, and he’s still in line to make plenty of money during his career. With the amount of cash flowing into MLB right now, it makes sense for guys like Rizzo to take advantage and trade some risk for long term security, especially with the declining marginal value of additional dollars.

But, more than most, this deal looks pretty great for the Cubs. Rizzo is exactly the kind of player who would have made a mountain of money by going year-to-year, as Super-Two eligibility would have gotten him large arbitration paydays and he has the skillset that is paid the most in free agency. Had Rizzo not signed this deal, he may very well have been pushing for $30 million per year in a long term deal as a free agent after the 2018 season. Instead, the Cubs will now own his first three free agent years for a $13 million AAV. By 2019-2021, $13 million will probably be a below average salary, and Rizzo is on a path to be a star at that point in his career.

There’s very little downside here for the Cubs. Rizzo basically just has to stay healthy and not regress over the next few years, and at the minimum, the Cubs will save some money in arbitration. If he turns into the franchise first baseman that he looks like right now, the Cubs will be huge winners in the final three years of this deal, potentially saving $50+ million in just those last three years.

Getting Rizzo for Cashner was the real steal, but locking him up at this price isn’t far behind. These are the kinds of moves that will help make the Cubs a formidable foe in the NL Central for the foreseeable future.

Dave is the Managing Editor of FanGraphs.

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Rian Wattmember
9 years ago

Couldn’t agree more. Do you have a guess as to what kind of Win $ value we should be using to evaluate the contract over the next few years? The $6mm seems a little high (he’s already produced 16% of the value of the contract this year, by that metric), but maybe it won’t be by 2021?

Rian Wattmember
9 years ago
Reply to  Dave Cameron

Got it. Still, even at current prices, Rizzo would ‘only’ have to be a ~3.4 WAR player in his age 30 and 31 seasons to be worth the contract in its entirety. That, plus the fact that of course he’ll have +0 value in the first seven years of the contract, makes me think this deal is almost guaranteed to be above break-even for the Cubs.

9 years ago
Reply to  Dave Cameron

$8-$10M? Geez. Does the RSN bubble have THAT much stretch?

9 years ago
Reply to  Brian

What has been the inflation rate of $/WAR over the last 5 years? 10 years?