Opting Out May Not Be Manny Machado’s Best Move

On the heels of what was arguably the best season of his career — one in which he set career highs in wRC+ (152) and WAR (7.4), helped the Padres to the NLCS for the first time in 24 years, and finished second in the NL MVP voting — Manny Machado has informed the Padres that he intends to exercise the opt-out in his $300 million contract after this season and test free agency again.

Last Friday, at the Padres’ spring training site in Peoria, Arizona, the All-Star third baseman confirmed that in December prior to the Winter Meetings, agent Dan Lozano gave the Padres a February 16 deadline to reach agreement on extending the 10-year, $300 million contract Machado signed in February 2019. According to a report by the San Diego Union-Tribune’s Kevin Acee, the Padres made just one offer after hearing from Lozano; two days before the deadline, they offered to add five years and $21 million per year ($105 million total) to the five years and $150 million that will remain on his deal after this year. The proposed package of 10 years and $255 million wasn’t enough to satisfy Machado, and so with the deadline having passed, he told reporters that now that he’s in camp he wants to focus on the upcoming season rather than on contract negotiations.

It’s not hard to understand Machado’s position. At the time he signed, his contract ranked as second only to Giancarlo Stanton’s 13-year, $325 million deal in total value, though since then, 10 other deals have matched or exceeded it, including that of Machado’s teammate, Fernando Tatis Jr.:

“There’s a lot of money out there,” Machado said on Friday. “The market has changed since I signed five years ago. It has changed enormously. Things change and evolve. And as a player about to exit, that’s pretty good to see.”

The market has particularly changed when it comes to the Padres, who suddenly have the game’s third-highest payroll (about $263 million in actual salaries and $272 million for Competitive Balance Tax purposes according to RosterResource), ahead of the division rival Dodgers and trailing only the Mets and Yankees. Within the last year alone, they’ve done things like sign Joe Musgrove to a five-year, $100 million extension; blow up their farm system in trading for Juan Soto (who will make $23 million in 2023, is under control through ’24, and reportedly turned down a 14-year, $440 million extension prior to being dealt by the Nationals) and Josh Hader (who will make $14.1 million before hitting free agency); signed free agent Xander Bogaerts to an 11-year, $280 million deal; and extended Yu Darvish via a six-year, $108 million contract.

From a performance standpoint, Machado may wish he could test free agency now, because it’s tough to imagine him having more leverage in a year. He’s coming off a season in which he hit .298/.366/.531, setting full-season highs in batting average and wRC+ while coming within one point of matching his high in on-base percentage. By fWAR, he surpassed his previous high of 7.0, set in 2018, though his 6.8 bWAR took a backseat to his 2015 and ’16 totals (7.5 and 7.3, respectively). He capped his season by hitting .271/.327/.583 with four homers in the postseason, and adding some stellar defense as well as the Padres beat the 101-win Mets and the 111-win Dodgers.

Beyond the numbers, which have improved on an annual basis since his tepid 2.2-WAR, 109-wRC+ inaugural season in San Diego, Machado has emerged as a leader for the Padres, and outgrown a reputation for dirty play that may have chilled his free agent market four years ago. Recall that during the 2018 NLCS he was fined for kicking the foot of the Brewers’ Jesús Aguilar, whose teammates also took issue with a few of his slides, and the year before that, he spiked Dustin Pedroia on an aggressive slide that caused a knee injury from which the second baseman never recovered. Machado’s level of effort was also called into question, particularly after he told Ken Rosenthal in a pregame interview for FS1, “I’m not the type of player that’s going to be ‘Johnny Hustle’ and run down the line and slide to first base.”

As far as the timing goes, however, next year’s free agent market looks dreadfully thin beyond Shohei Ohtani. Machado would almost certainly be the best position player available, though Matt Chapman could present a less expensive alternative at the hot corner.

For as strong as Machado’s 2022 was, over the first four years of his deal, he’s fallen a bit short of his ZiPS projections:

Some of that shortfall is due to the pandemic-shortened season; when I prorate Machado’s actual production to the same number of games (the ZiPS projection in Jeff Sullivan’s transaction writeup didn’t have plate appearances, and I’ve nudged Dan Szymborski enough over the past 72 hours not to ask him to exhume that), he comes up about two wins short thus far, 19.1 WAR versus 21.3 projected. Throw out that first year, when Machado may have gotten a late jump on the season because he didn’t sign until after pitchers and catchers had begun reporting, and he comes out ahead on a prorated basis, 17.6 WAR to 15.6 projected WAR. Where he’s tied for 15th in WAR for the 2019-22 span, he’s sixth for 2020-22 behind only Judge, José Ramírez, Turner, Freddie Freeman, and Paul Goldschmidt. That’s more like it.

To evaluate what Machado might be worth on a new deal that starts in 2024, first we have to pencil in a performance for ’23, and in doing so it’s worth bracketing our expectations. The ZiPS percentile projections are useful for this:

I’ve highlighted the 50th percentile projection as well as the 20th- and 80th-percentile ones, which I’ll use to examine a manageable number of scenarios. Looking at this, one can understand how hard it will be for Machado to replicate what he did in 2022. According to Dan, his 159 OPS+ represented an 83rd-percentile outcome for 2022, his age-29 season, but doing so for ’23 will require something slightly above his 90th-percentile projection, which is to say that there’s less than a 10% chance of it happening.

The problem for Machado is that the new deal would start with his age-31 season, a point at which the gravity of the aging curve really starts to weigh a player down. For all of the money that Machado sees flowing in free agency, he may have missed the part where Judge — who was coming off an historic 62-homer season — was the only player entering his age-31 season or older to get even $100 million.

As far as the long-term projections go, consider how modest Machado’s 2024-33 looks like if he meets his 50th percentile projection for ’23:

We’re not off to a great start, because over the 10-year period laid out above, Machado projects to be worth roughly the amount of money he’s currently guaranteed to receive over the next five years. He projects to add just an additional 1.7 WAR over the final five seasons (ages 36-40).

Via his 20th-percentile scenario, Machado doesn’t even project to play in 2033:

By this one, Machado doesn’t even project to produce $100 million in value for the remainder of his career. Indeed, he projects to produce just 0.2 WAR over the 2029-32 window and to hang up his spikes before ’33. But even in a much better scenario, his production over that last half-decade is pretty meager:

That’s just $21 million above the $150 million he’s currently guaranteed. Machado projects to produce just 2.5 WAR over the final five seasons.

All of which is to say that maybe Machado shouldn’t have passed up the Padres’ extension offer, if indeed the terms were as reported, because it’s difficult to look at his next decade and see another $300 million worth of performance. Yes, whether it’s the Padres or another team, somebody may pay a premium for the marquee value of Machado, as the Yankees did for Judge; based on ZiPS, the Yanks are paying $360 million for $311 million worth of projected production. But even if one imagines that somebody is willing to give Machado a similarly large cushion — say, an extra $50 million above and beyond his performance — none of the scenarios above gets him to the $255 million he’d have made by tacking that five-year, $105 million offer onto the remaining five years of his deal. What’s more, that $255 million over 10 years has a lot to do with the trend towards lengthening position player deals so as to minimize the tax implications; a new deal that raises Machado’s AAV to, say, $33 million (past Nolan Arenado and into second among all third basemen behind Anthony Rendon’s $35 million) by paying him $264 million over eight years moves him up in the annual salary pecking order but would also cost the big-spending Padres more in taxes.

Then again, maybe Machado is merely trying to get another couple of seasons in the $30 million neighborhood tacked on. A seven-year, $200 million deal would only be about $34 million above his projected performance in the 80th-percentile scenario, coming in at a Judge-like $10.3 million per projected win.

Beyond the money, one very real problem for Machado if he wants to stay in San Diego is the Padres’ depth. As it is, with the addition of Bogaerts they’re planning on playing Tatis (who missed all of last year due to a wrist injury and a PED suspension) in right field once he returns from his suspension, Ha-Seong Kim (who put up stellar defensive numbers at shortstop in Tatis’ stead) at second, and Jake Cronenworth (who put up good defensive numbers at second base) at first. It’s not hard to envision the reshuffle that could happen if Machado moves on, and the money saved would help them make a run at retaining Soto.

For what it’s worth, both general manager A.J. Preller and owner Peter Seidler indicated on Tuesday that they will attempt to retain Machado, with Seidler calling him “my top priority.” Preller said that Machado is “always a priority for me and for the organization,” and added that the acquisition of Bogaerts wasn’t intended as a potential replacement but “for him to play with Manny.”

There are two bits of good news here for Machado. One is that great players steamroll their projections with some frequency; part of what makes them great is their ability to defy the odds, to hit those 80th or 90th percentile projections and convince us that they’re just as good as ever. The problem is that figuring out which players are going to do that is difficult. For every Machado you’ve got some number of Christian Yeliches and Kris Bryants, All-Stars whose bodies suddenly betray them in their late 20s or early 30s and make their big contracts look terrible. If he does have another big season, he should test the market; the problem is that he’s probably overestimating his odds of doing so.

The second bit of good news is that for whatever Machado is saying in February, he hasn’t officially opted out, just announced his intention to do so. He can change his mind in case he sustains a significant injury or has a down season, or, for that matter, if the Padres come back with an offer that he can’t refuse. Indeed, he should keep the lines of communication open, because the prize behind the next door he opens may not be as impressive as he hopes.