The Alcides Escobar Extension: Indispensable Notes
You can try to dispense of these notes on the Alcides Escobar extension, but you won’t be able to: as the title of this post suggests, they’re indispensable.
Regarding Alcides Escobar, The Extension He Signed
The 25-year-old shortstop Escobar and the Royals agreed Thursday to a four-year, $10.5 million extension that includes a pair of club options that could bring the overall value of the contract to $21.75 million. Per the Associated Press, “Escobar will make $1 million this season and $3 million each of the next three seasons. The options are for $5.25 million in 2016 and $6.5 million in 2017 with $500,000 buyouts each year.”
Regarding the Extension, What It Means in Terms of Market Value
Below is a table that examines Escobar’s deal relative to expected market value. $M/Win is projected market value (in millions of dollars) per win, $M/Yr is how much (in millions of dollars) Escobar is actually getting paid, ArbYr represents the arbitration years Escobar would have been in before signing the contract, MarkVal is what percentage of market value an arb-eligible player generally receives relative to market value, and MarkWAR is the projected WAR implied by a player’s salary.
| Year | $M/Win | $M/Yr | ArbYr | MarkVal | MarkWAR |
|---|---|---|---|---|---|
| 2012 | $5.00 | $1.00 | Pre | LgMin | 0.0 |
| 2013 | $5.25 | $3.00 | 1 | 40% | 1.4 |
| 2014 | $5.51 | $3.00 | 2 | 60% | 0.9 |
| 2015 | $5.79 | $3.00 | 3 | 80% | 0.6 |
| 2016 | $6.08 | $5.25 | FA | 100% | 0.9 |
| 2017 | $6.38 | $6.50 | FA | 100% | 1.0 |
| Total | $21.75 | 4.9 |
Regarding Escobar, His Likely Value, 2012-17
There seems to be little question that Escobar will be worth at least five wins between now and the end of the 2017 season. In 2010, he was pretty miserable offensively (63 wRC+), and still managed to post a 0.9 WAR in 552 plate appearances. Last year, with a larger boost from UZR (+10.2), Escobar recorded a 2.2 WAR in 598 plate appearances.
Escobar’s ceiling is limited by his lack of power, and it seems unlikely that he’ll ever become even an average offensive player. The FANS projection has him putting up only -7.6 weighted runs relative to average in 554 plate appearances in 2012 — this, relative to much lower figures of -21.8 and -16.5 in 2010 and ’11, respectively. Something closer to -15 runs is probably more reasonable.
Defensively, he receives excellent ratings both from the Fans Scouting Report (+15 in 2011) and UZR (+5.9 UZR/150 in 2840.2 career innings at short). Putting those numbers together, it’s reasonable to project Escobar for something like 1.0-2.0 wins per season over the duration of his contract, meaning the Royals are getting anywhere from one to six wins for “free” with this deal — relative to what they’d have to pay a free agent, that is.
Regarding What This Means for the Royals, If Anything
Escobar is the second pre-arb player the Royals have signed to an extension in the last month, having agreed with catcher Salvador Perez to a five-year, $7 million deal at the end of February. The team has also taken a similar strategy with DH Billy Butler and reliever Joakim Soria — and, given the amount of young talent the team currently has in Alex Gordon and Eric Hosmer and Mike Moustakas, it’s likely that they’ll attempt to lock up a couple more players in the near future.
On that note, Royals GM Dayton Moore recently told MLB.com’s Dick Kaegel the following:
[Owners] Dan and David Glass are determined to keep as many of these young players together as we can, knowing full well that it has to fit within our salary structure and our payroll going forward… It’s going to get a little sticky for us, it’s going to get a little hairy as we get into 2014-15-16.
Nor is Moore mistaken: it could, indeed, get sticky and hairy for the Royals.
Carson Cistulli has published a book of aphorisms called Spirited Ejaculations of a New Enthusiast.
In 2010 he was worth 0.9 WAR, not 2012.
Indeed. I have made the relevant edits. Thank you.
The FA year club options are ridiculous. I don’t get why any player would agree to those unless the team insists on them as part of the pre-FA contract. I know players want financial security, but the club options aren’t even guarenteed money.
Well that’s exactly it. The club insists on having club option as a part of the deal.
Remember when they had the greatest farm system evar and then all of their pitching prospects busted out.
True they had the ‘greatest farm system in the history of baseball’… Last year. This farm system graduated Hosmer, Moustakas, Perez and Giavotella as well as pitchers Duffy, Crow, Teaford, Coleman, Collins and Holland to the big leagues in 2011. True that the other starters have progressed a little slower but it’s hardly fair to say they busted out. Very likely that Montgomery will advance to the big club in 2012 and probably shortly thereafter Dwyer, Odorizzi and Lamb.
Really happy the Royals are locking up strong up the middle defenders in their 20’s and saving some big money on the back end. For the life of me, I don’t know why more teams don’t sign young guys early. I know there’s risk involved since in some cases (Perez/Moore), millions are being given to guys with very small track records, but for 10-15 million, teams can completely strike out on half of those types of signing and still potentially gain excess value.
Yeah, if only we had locked up Tony Pena.
“Escobar for something like 1.0-2.0 wins per season over the duration of his contract, meaning the Royals are getting anywhere from one to six wins for “free” with this deal — relative to what they’d have to pay a free agent, that is”
Doesn’t this sentence infer a Free Agent=Replacement Level Player? Because players that are free agents are good enough to stay in the league until free agency, and some are entering their “prime” years, this doesn’t make sense to me. Interested reader, not sabermatrician, please no snark in response.
Snark on the internet, Clark? Ridiculous!
With regard to your question (if I’m understanding it correctly), the idea is that, were the Royals to sign a free-agent shortstop, they’d be paying full market value. Now, with Escobar, they’re likely to pay only something like 50-90% of market value for the sort of production they’ll be getting at shortstop. That’s what I meant by “free” wins.
Is that a thing that makes sense?
You can’t compare what they gave Escobar to a FA signing because the Royals already had him under team control through 2015 and wouldn’t have had to pay the full market price for his services even without the extension.
Seems like the more relevant question is whether the Royals got a discount on what Escobar could’ve reasonobly expected to receive in arbitration.
Yes, makes sense. Thanks.
The way to think about this contract is that, in return for the arb years, the Royals pre-purchased two option years of his free agency at about 1 WAR/year.
Why does MarkWAR vary so much in years 2013-2015 when Escobar’s salary is $3M for each of those years?
inflation
I understand why inflation would make $M/Win vary (and have an effect on MarkWAR). But to calculate MarkWAR for ’13-’15, wouldn’t it be 3/5.25, 3/5.51, 3/5.79 respectively? Which would be 0.6, 0.5, 0.5 instead of 1.4, 0.9, 0.6.
Apologies if I’m missing something obvious.
So, speaking generally, an arb-eligible player makes about 40% of his market value in his first year of arbitration. He gets about 60% in his second year, and about 80% in his third.
That’s why Escobar actually appears to be taking a pay cut of sorts. Were he to go through arb like normal, he’d probably be receiving raises between 2013 and 2014, and then again between 2014 and 2015. Because his salary is actually remaining flat, it’s almost as if he’s taking a pay cut.
Of course, because it’s part of an extension, the year-to-year specifics are moot.
S’that make sense?
Sorry, I should’ve seen that. Makes perfect sense now. Thank you for the explanation.
It’s good to see a non-empire team lock up yet another young player for little money. This is looking to be the wave of the future. Now, will the empires strike back?
The Empire teams strike back like this:
1). Escobar develops into an above average player
2). The Royals are still awful
3). The Empire teams see a good cheap player on a bad team and offers up what is usually a bunch of overhyped prospects for this player.
4). The Royals sign one of these prospects to a team friendly extension.
5). This player does not develop into a decent player
6). The Royals are stuck with a bad player.
I’m not sure this deal makes much sense to me. Yes it isn’t very much money, but I’m not sure they had to guarantee the money now. This deal really just gives them cost certainty–and being tied to a player that is (at best) not very good offensively. Couldn’t they have waited a year to do this deal?
Escobar doesn’t have the skills to get big money in arbitration, so it looks to me like the $10.5 million guarantee is more or less what they would have paid over the next 4 years. It’s nice to have the 2 club options, but those are only valuable if A)Escobar takes a nice step forward offensively; or B)the Royals are unable to develop another option at SS that can hit over the next 4 years.
I guess I just don’t see Escobar as a starter on a team that contends consistently, so I don’t understand giving up the option to cut him loose with no strings attached. And given his skill set, if the Royals want to cut him loose because his offense turns into Tony Pena Jr., or they develop a better option, he’ll have marginal, at best, trade value. Three years from now, he looks like a potential nontender candidate.
Wouldn’t the Royals front office people’s time be better spent trying to work something out with a guy that has a better than average chance to be an impact player?
He’s a Juan Pierre type; he doesn’t really hold much base value offensively but will see big production increases with the normal BAbip fluctuations speedy players witness. You get one of those fluctuations next season, and his Arbitration values start to get really big really fast. (as happened nearly 10 years ago with Pierre, which resulted in a 3rd year Arbitration number of 5.75 and a 5/44 contract when he hit the FA market)
It unlikely the Royals would have ever spent less then 9 over his next 3 anyway, while his defensive value alone to a team with such young pitching is easily worth that. Considering his speed-influenced offensive production stands a good chance of bumping those numbers quite high, why not secure yourself at under-cost with an asset that will help boost your other assets?
The Royals will be able to provide offense at other positions. Escobar will provide plus defense and passable (with possible plus fluctuation) offense at one of the most important positions for their young pitching at Below Cost (to Cost at absolute worst.)
Win-Win/Push-Win-Win/Push outcome for KC with almost zero risk
Juan Pierre actually made quite a bit more contact than Escobar. He also consistently posted Babips in excess of .300, meaning when he put the ball in play he was doing so fairly effectively. Escobar’s Babip over his career are .285–he makes a lot of weak contact. He could get better, but a young Juan Pierre was a far superior offensive player to Escobar. Hell, right now Juan Pierre is a far superior offensive player because he has never had a season where he got on base at worse than .325. Escobar has not come within 35 points of that mark in his two seasons. There is minimal risk of Escobar putting up a Juan Pierre type season without significant skills growth. So again, I ask, why tie up $10 million on a guy who would be lucky to turn in to Jack Wilson?
The options have value as long as he is a >1 WAR player in four years. If he is just a UI, its break even. If he’s a starter, the options are no more than 50 percent of his value in FA.
That assumes that the market properly values the 1 WAR. If all the value comes from defense, and he has negative offensive value, the market will not value that 1 WAR at 5 million unless the market changes in the next 4 years.