Eugenio Suarez and the Free-Agent Market
Eugenio Suarez is young, and, last year, he was very good. He wasn’t about to leave the Reds any time soon, but now a separation could be even further away. See, Suarez was looking at three more years of team control, but now he and the club have agreed to a seven-year contract with an eighth-year club option. The breakdown is as follows, and what isn’t shown is Suarez’s $2-million signing bonus.
- 2018: $2.25 million
- 2019: $7 million
- 2020: $9.25 million
- 2021: $10.5 million
- 2022: $11 million
- 2023: $11 million
- 2024: $11 million
- 2025: $15-million club option ($2-million buyout)
Suarez’s first free-agent year would’ve been 2021. He’s signed away four of them, and maybe a fifth, and the total guarantee works out to $66 million. There are no other bonuses or escalators included, and Suarez also hasn’t received a no-trade clause. We’ve seen a lot of increasingly complicated contracts. This one’s simple. The Reds are locking up a good player for a while, and that player is now guaranteed life-changing money that will afford his family great comfort.
Everyone right now is saying the right things. The mood is typically pleasant when a contract is announced. The Reds say they’re thrilled to keep a building block. They see Suarez as someone who can lead them out of the rebuild and into contention. And Suarez says he’s ecstatic to commit to Cincinnati, where he’s come to excel. I can’t imagine being upset about sixty-six million dollars. It’s very, very easy to see how this is a triumphant moment for Suarez as a player. It’s also easy to see how Suarez might’ve been undervalued. The timing here probably isn’t a coincidence.
Suarez is 26 years old. He just worked hard to turn himself into an above-average defensive third baseman. More than that, this is a guy who, in 2015, walked in just 4.3% of his plate appearances. Last season his walk rate was more than three times higher. Suarez has already shown tremendous growth, in just about every aspect, and it’s important to remember Suarez was part of a package the Tigers sent the Reds in exchange for one year of a very diminished Alfredo Simon. Suarez was never considered a top prospect. The story is actually even better than that. I’ll excerpt from Chris Kraul, in April of 2011.
The doggedness of some Venezuelan scouts was shown with Suarez’s signing two years ago. Tigers scout Alejandro Rodriguez found him playing in a youth league in the remote mining town of Ciudad Piar, which has never produced a Major League player.
Although Suarez was somewhat slight of build at 145 pounds on his 6-foot frame, scout Rodriguez was attracted by his fire on the field and offered him a $12,000 bonus to sign a minor league contract. That’s far less than the $89,000 average that Venezuelan prospects received that year, but Suarez jumped at it.
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Suarez signed for a tiny bonus, out of a town with no track record. Within a decade, he performed as one of the 50 or so best players in baseball. Now he’s guaranteed two-thirds of $100 million, which is just impossible money. Even though Suarez had lost in arbitration, he knew he was about to get $3.75 million. Suarez was going to have his first-ever seven-figure contract. Now he’s signed his first-ever eight-figure contract. Suarez first made it when he signed with the Tigers. Next, he made it when he got up to the majors. Then, he made it when he broke out in 2017. And now we have this. Suarez has reached a height few of us can imagine, and few of us have his own personal background. This is a victory, and Suarez should have few regrets.
But this is also where a certain imbalance comes into play. Players are concerned about every million. And, for a baseball player, and especially a baseball player who doesn’t come from money, the first million is more important than the next. The first ten million is more important than the next. Give a player $10 million and he won’t be able to even imagine how he could spend it all. Players, however, are paid by organizations, and organizations don’t view things the same way. Organizations are steered by billionaires, who can afford to take a longer-term view. None of them are desperate for money in the short-term, which helps them make money in the long-term. To get to the point more quickly: Suarez won’t be sad about $66 million, but this already appears team-friendly. This could’ve been done for more, if it had to be done at all.
The benefit for the Reds is that, as a lower-budget operation, they need team-friendly terms in order to compete. And obviously, the Reds are assuming some risk, since Suarez could ruin his career tomorrow. There’s a reason why extensions like this get signed in the first place. Interests end up sufficiently aligned. But I can’t help but look at this deal and think about what we’ve seen with free agency.
Suarez has a little over three years of service. He’s headed into his age-26 season. A year ago, headed into his own age-26 season, Wil Myers had a little over three years of service. He signed a six-year extension with the Padres, worth $83 million. Both the Myers and the Suarez deals have an option at the end. Myers was coming off a year in which he was worth 3.9 WAR, with a wRC+ of 116. Suarez is coming off a year in which he was worth 4.1 WAR, with a wRC+ of 117.
Extensions of this length aren’t common with players with Suarez’s amount of service. Headed into his age-27 season, in 2015, Kyle Seager had a little over three years of service. He signed a seven-year extension with the Mariners, worth $100 million. That also came with an option. Seager was coming off a year in which he was worth 5.4 WAR, with a wRC+ of 127. It’s true that Seager had a better record then than Suarez has now. But Seager and Suarez are somewhat similar, in that they’ve been career overachievers, and while Seager looked a little better than Suarez does now, Suarez is coming off a breakout. And it’s been three years. You’d expect to see some inflation. Suarez is still getting just two-thirds of the Seager deal.
Recently, I’ve observed a recurring question in my Friday chats. The question asks, will this year’s poor free-agent market lead to more players signing long-term extensions? I don’t think Suarez signed because of the free-agent market, but I do think the free-agent market is a relevant variable. In that, I think free agency is now scarier than it’s been. No matter how you feel about the market — whether it’s just rational now, or whether it’s evidence of collusion and intentional wage-suppression — players have noticed, and agents have noticed. None of them are thrilled. Even if free agency is simply now less stupid, it’s also less pleasant. It’s no kind of paradise; it’s looking for work, with employers who want to pay as little as possible. Free agency isn’t as much of a draw.
If free agency is less appealing, then bypassing free agency becomes more appealing. Being a free agent might just come with too much uncertainty. And while I don’t think that’ll deter the true stars — guys like Bryce Harper or Manny Machado — someone like Suarez isn’t on that level. For his career, Suarez has been worth 2.3 WAR per 600 plate appearances. He projects at 2.6. Before, Suarez would’ve been able to look ahead to being a free agent in his late 20s. But Suarez was also going to hit the market before the expiration of the current CBA. Now Suarez won’t hit the market until he’s well into his 30s. At that point, he’ll likely be winding down, anyway. Suarez is getting his money now, instead of betting on himself and anticipating a future bidding war.
It seems silly that Suarez has sold four free-agent years for about $11 million apiece. And then there’s the club option. There’s the lack of a no-trade clause. How much is $11 million really going to be in baseball in 2024? But Suarez just saw Mike Moustakas get $6.5 million. He saw Logan Morrison get $6.5 million. He saw Neil Walker get $4 million. Even though baseball will change over time, you couldn’t blame Suarez if he didn’t feel like getting involved in that. In this way, the free-agent market doesn’t affect only free agents. It affects the very idea of free agency, which can affect decisions by players who aren’t free agents yet.
We’ll see if this happens more often. I imagine a number of teams are attempting to engage. This is a happy day for the Cincinnati Reds, and this is also a happy day for Eugenio Suarez. Suarez right now probably doesn’t much care if he could’ve signed for more than he did. I’m guessing $66 million will prove to be more than enough. But what we’ve seen has looked like a shift away from free agency. The solution to that would be shifting more money toward young players. Those same young players might now be more inclined to sign for too little, out of fear of the free-agent market itself. No one’s going to want to be the next Moustakas. And the ripples from that are widespread.
Jeff made Lookout Landing a thing, but he does not still write there about the Mariners. He does write here, sometimes about the Mariners, but usually not.
I can’t help but wonder how the specific 3B market helped Suarez into this decision, too. Given the squeeze put on Todd Frazier and Moustakas this year and the pending free agencies of Machado and Donaldson (and Arenado/Rendon a year later), I think knowing he’d already found a fit mattered as much as anything. Also, with Nick Senzel over his shoulder potentially prompting another position switch – one that could dent his value with yet another learning curve – that made his decision that much easier.
I think the Senzel part is slightly underrated here. Sure Senzel might be trying another position now, but lets just say you are Suarez and you are at camp everyday with Senzel and you realize he is better. That could factor also.
Senzel’s better? Not the point. He’s cheaper.
partially true, but both guys can play 2b and ss in a pinch, and with shifting you can squint and see it.
not as drastic as most 3b battles
Senzel has looked like he has shortstop range this spring. Super small sample, obviously, but the skill is there. That’s where he should be playing at AAA to start the year and they should know more this summer.
If Senzel can play short at the same level as say, Carlos Correa, he’s going to be an insanely valuable player. He is going to rake.
How does this compare with the circumstances when the first Longoria contract was signed? They’re superficially very similar.
Longoria signed his first extension before ever appearing in the majors. So, totally different circumstances.
Let’s not forget that Longoria, still on a decent contract relative to his production and WAR was just dealt for Arroyo and a bag of donuts. Or just a bag of donuts depending on your view of Arroyo.
The Giants taking on that contract isn’t donuts. They’ll be pretty stale in a couple of year.
Great move by Suarez, I’d say. He knows he’s already reached his peak, and that his peak definitely won’t outlast his contract. The system may change, as Jeff says, but not until after the next CA. Suarez won’t be around much after that, and there’s no turning back the clock – this is life if you’re a 26-year-old with more than 3 years of team control remaining. Good move by the Reds, too – no team can pay $11 M for each spot on the diamond (not yet, anyway), but Suarez seems like he will be worth one of the top salaries on the team. They appear set at both corners for the next 3-5 years.
If by “each position on the diamond” you’re talking about starters – 8 position players and 5 pitchers – then $11 for each spot would be a payroll of about $150M. I think that there are many teams that could pay that.
Yes, I’m leaving out the bullpen and bench players, but MLB teams are awash in cash right now.
Regardless, I agree with your point that this makes sense for both Suarez and for the Reds. But teams have so much money now that contracts that would have seemed ludicrous 10 or 20 years ago are really just average when you factor in the huge jump in revenues over that time period.
Jeff,
Great piece.
Suarez’s prime positional FA competition in 2021 was Jake Lamb, and Suarez could have expected to be the better all-around player by then, if not already.
The Reds needed Suarez locked up, to have a decent side starting perhaps in 2020 with Winker, Senzel and an aging Votto, much more than Suarez needed to commit his future now to them.
Also, for all of the schadenfreude shown recently towards Scott Boras, much of it reasonable, it’s unlikely Boras would have a 3B client (like Kris Bryant) sign such a team-friendly deal so early. Hard to believe Boris isn’t making a round of calls to his clients, using the Suarez deal as an example of why they still need him.
Let’s be realistic. Suarez had a really nice year but he’s no Kris Bryant. The strategies that work well for a guy like KB can’t necessarily be applied to lower tier players like Suarez.
Clearly Kris Bryant is a better player, but I wonder how much his changes to being a more contact oriented hitter are going to hurt him.
He put up a 146 wRC+ last year after dropping his K rate, so I imagine he’ll be ok.
It seems silly that Suarez has sold four free-agent years for about $11 million apiece.
Even before considering what happened to this year’s FA class, 4/$44M for a guy like Suarez seems pretty decent. I guess it depends on whether you think 2017 represents a new level of performance for him, or whether he was just an OK player having a really good year. I’m kind of skeptical that he’s really a 4 WAR player going forward, so I would say he did pretty well for himself.
Agreed; plus this would be an age 30-31 Suarez hitting FA presumably having started to decline from his current 2.6 WAR projection. Say he’s a ~1.5-2.0 WAR player at that point….nobody like that got 4 years this offseason and we’ve all been applauding Jay Bruce’s agent for getting him 3 years guaranteed. If the market is getting more rational multi-year pacts for past peak mediocrity will be even rarer still in 2021.
I’d have done what he did if these were my two options, either this or gamble big on free agency in a few years. But I wish players had more options available with better expected value.
I know I keep saying this and I think I got downvoted last time, but I wish Boras and Lloyds could put something together to offer players a “life changing money even if your career craters, as long as you don’t retire” insurance for players who don’t extend. More money than the team guarantee, but less than winning the free agent bet, tuned so that the money guys do come out well. Just not as well as the teams do now.
Hell, Tony Clark and Lloyds.
I also wonder why the MLBPA isn’t more active in putting together this kind of scheme — I’m not sure what to call it, a mutual pension fund or something like that. Players have enough money that they could do a lot of good for each other *and* enhance their shared bargaining position a ton by removing any remaining actual material need from the equation.
The MLBPA should also point out that baseball fans have a LOT more in common with players than the owners who constantly skim money from taxpayers to line their own pockets.
Wouldn’t MLBPA need to charge 1,000 players $25k in dues per year to create a $25M/yr fund for, what, 10 players/year to opt for the arbitration/FA path rather than take a long-term deal from a club?
Maximizing MLBPA’s share of revenues in this case may not redound to 99% of players’ benefits.
On the other hand, surplus is created so when those 10 players hit FA, they pay MLBPA back with interest and this money could be remitted to the 990 other players.
Would have to work out the numbers so the “insurance” is worth it for those 10 players.
Tony Clark would invest the money in pagers and stock in Friendster. It’s shocking how poorly the MLBPA has fared in recent CBA negotiations – which makes me sad, because I always want players to get more money and owners to get less money. The players aren’t the ones extorting free stadia from cities.
Give money to the players, not billionaires who lie to cities and threaten to move teams away if they don’t get money. Financial insolvency may have been a risk in the 1970s, but that’s a thing of the past.
A couple years of the league minimum is already more than what most people start off their adulthood with, and certainly enough to pay for several college educations and buy a business. Players like Suarez extend for $66 mil not because they will starve and die without that much money, but because that’s what they find to be acceptable value for their exceptional talents after extensive arm’s length negotiations through able agents.
And Astro’s pen an extension a couple hours later. Two is not a trend, but….
There is one added factor to consider in Suarez’ decision to accept this “lowball” deal: Venezuela.
The term “life changing” gets bandied about pretty easily these days but, $68M, including the bonus, not only changes his life, but that of his entire extended family, possibly even a good chunk of that small town.
The union rep might Tsk, Tsk, but Suarez has seen too much to pass on this deal.
Peace Of Mind Has Value, Too.
Hopefully he’ll get a Capable and Honest moneymanager.
Edit: the Altuve deal is a different story–he’s an established superstar and he got what looks something like fair market value. But the situation back home might also factor in.
This is an excellent point. Venezuela is currently falling apart. Food is short, the money is essentially worthless, the oil industry – the backbone of its economy – has been mismanaged to near collapse. Suarez just got enough money to save everyone he cares about. If you could guarantee me that I would make, say, triple the money if I waited for free agency but several people I cared might die because I did not have the money to rescue them, I would take the less money and the peace of mind.
Good point. I’d be interested in seeing a study of contracts given to players from lower-cost countries (e.g. the Dominican, Venezuela) to see if those players are receiving less money than is warranted by their performance. I wouldn’t be surprised if that’s the case, since “life changing” money is different for those players than it is for most American-born players.
This is a very smart deal for the team. But I certainly can’t fault a player who didn’t get a big bonus to bank, is a little bit of a late bloomer, and has locked in generational money, regardless of his performance or his health. Sometimes, you don’t need the last buck. We’ve all seen even the most talented players either go South or have serious injuries that wreck their productive years. Make it a win win, and if he left a potential $30M on the table, $66M isn’t bad.
I agree with your point, but I don’t know if it’s fair to call Suarez a “late bloomer.” Most players don’t have that much success in their age-25 season.
“Organizations are steered by billionaires”
Roughly two-thirds of MLB teams are NOT owned/steered by billionaires. Please find a different misleading statement to try to make fabulously wealthy baseball players look poor.
“There are 11 MLB teams owned or which have a managing partner as a billionaire.” – https://www.forbes.com/sites/kurtbadenhausen/2017/03/20/the-worlds-20-richest-sports-team-owners-2017/#1e31f5ca2446
This is an interesting point, which I hadn’t really considered. Not all MLB owners are billionaires. Some of them are only worth hundreds of millions, which is a relative pittance compared to a billion dollars.
Either way, of course, everyone involved is far wealthier than I. The reason why I have always sided with the players is that the players, no matter what my quarrel with them, have never threatened to move a team if they don’t get hundreds of millions of dollars from taxpayers in the form of a new stadium.
Owners are the ones who threaten to move (wildly profitable) teams if they don’t get a taxpayer-funded stadium. Players aren’t doing that. And while players are rich compared to the average fan, they certainly aren’t “threaten an entire city” rich.
These are my opinions, of course – but I can’t think of a reason (except envy) that would lead someone to like MLB owners more than the players. I don’t watch baseball to see how the Wilpons will make money, I watch baseball to see Manny Machado throw out dudes from foul territory.
After reading through the comments, I don’t think this is going to be controversial: This is a good deal for both sides. Suarez might have gotten more had he not signed the extension, I think there is a better than 50/50 chance that he would have. But in the less-than-50% scenario where he wouldn’t, he would earn so much less than taking the bird in hand is the right deal.
On the flip side, there’s a better than 50/50 chance that the deal will turn well for the Reds, but on the chance that it fails spectacularly the team (as an entity with a lot of money) is better positioned to absorb the possibility that he turns into a pumpkin. This is sort of what Jeff was referring to with the team being able to take a longer-term view. The team is better positioned to “spread bets” across many different players, whereas the player only gets one bet. So for the team, if you extend enough players this way, you generally come out ahead even if you lose one of them.
This is why teams should always try to lock up guys like Suarez, and why it makes sense for a lot of players to sign it.
In fairness, I should also disclose that I have an semi-irrational love of Eugenio Suarez. I jokingly refer to him as a future MVP here and there, but he is walking so much more and while his ISO went up a little bit his BABIP stayed just about the same, so he’s not getting by with more cheapies. I think he’s likely to settle in at a 3+ WAR player and the Reds are going to be very happy with him.
Hot damn, this is why I like FG – players have much lower variance because they only get 1 career! It’s possible for a deal to make sense for both parties even if the numbers at face value seem to favor one side over the other.
Suarez probably made the wrong move if he could have played his career out 100 times – but of course, he doesn’t get to do that; he gets ONE career and that’s it. It’s hard to see locking in $65M right now as anything but a good move.
This is exactly what I was going for. If there are a 100 other parallel dimensions that diverge exactly from this moment (or a simulation run 100 times) then Suarez probably beats this contract number in, say, 70 of them. But he probably doesn’t beat it by much, and I would guess that in about 15 of the cases where he doesn’t beat it, he’s gets way less money than this contract.
That the Reds were not only willing to do this with a Senzel coming, but, reportedly, do so after turning down overtures from the New York teams for trades, says they believe Suarez hasn’t peaked. Also, they did this when they wouldn’t do it with several other players (Cozart, Frazier, Leake), even when all three of those dudes said they wanted to stay long term as well.
Point is, the Reds see Suarez as more than just a 2.5 win guy moving forward. And as a Reds fan, I hope they’re right.
What if players salaries actually decrease in coming years? This years FA market dropped market price 20%. Maybe next year will see the same. Arb salaries will drop in response next year. A dozen players this year will likely be forced to retire earlier than they would have 5 years ago. The new tax laws will reduce team revenues from luxury seats. Attendance has been flat for a decade. RSN’s are realing from cord cutters that can not afford to pay. The next recession is just around the corner. MLB teams seem coordinated like they have not been in 30 years. MLBPA is the weakest and most divided it has ever been
Players probably need to listen more carefully to these extension offers
Between his last two seasons, he went from 8th in the NL in strikeouts to 8th in walks. That’s quite a turnaround. I I have to wonder if Joey Votto has been any help.
Many players have credited Votto for things like this. Zack Cozart is another.
I bet that if he wants to, Votto gets a shot at being a hitting coach when he’s all done. The guy is a hitting genius.
I could read hundreds of interviews with him about hitting. Same with Chili Davis.
Wil Myers: $2 million signing bonus
Kyle Seager: $436K signing bonus
Eugenio Suarez: $12K signing bonus
Hardly surprising that he would take less money. And I think we’re seriously underselling the risk of a 1-year breakout; Seager didn’t look “a little” better than Suarez, he had twice as large a sample size of All-Star level production.
Yeah. Comparison to Seager is far from fair.
Their previous three season performance in WAR right before extension.
Seager: 3.6, 4.0, 5.4
Suarez: 0.6(398PA), 1.7, 4.1
the point about this years fa market leading to more long term deals is perhaps the most damning evidence of collusion of all.
2-3 months of bad press from niche baseball publications during the off season is a small price to pay for poking the air out of the fa market and scaring players into signing team friendly deals before they reach fa
There’s no feasible way to see this as evidence of collusion: it’s entirely orthogonal to anything the other 29 owners/FOs might do.
That said, if “team friendly” (for want of a better phrase) extensions like this become the new norm, I can certainly see a feedback loop. There’s even less pressure to sign a FA when you can extend your young stars at an efficient price, and players are presumably (as this article argues) more likely to sign such an extension, the less projectable a bonanza as a FA gets.
Owners are finally wising up. The owners need to strike while they hold they hold all the leverage. Next year is even going to be worse for the MLB middle class.