Wander Franco Lands A Monster Deal
How good was phenom Wander Franco’s rookie season in 2021? So good that it actually compelled the Tampa Bay Rays to spend money. Just before Turkey Day, the team and Franco came to an agreement on a massive deal that could reach 12 years and $223 million.
Shortstop Wander Franco and the Tampa Bay Rays are in agreement on a 12-year contract that guarantees him around $185 million, sources tell ESPN. The deal is worth a maximum of $223 million. It is done, pending small details. The 20-year-old is going to be a Ray for a long time.
— Jeff Passan (@JeffPassan) November 23, 2021
Since this is baseball, this isn’t one of those NFL deals in which someone lands a comma-laden top number but, when you read the finer details, it turns out that a huge chunk of that money is a roster bonus due in four years that will never be paid off. Eleven years and $182 million of Franco’s deal is guaranteed, with the bulk of the rest coming from a $25 million club option for 2033 and a little more in incentives that kick in for finishing the top five in the AL MVP voting starting in 2028.
This deal is the new all-time record for a player with less than a full year of service time; the previous no. 1 was Ronald Acuña Jr.‘s extension worth up to $100 million, an agreement that this one essentially laps. Fernando Tatis Jr.’s contract is a larger one at 14 years and $340 million, but he was also a player who had cleared two years of service time when he signed on the dotted line, giving him more financial leverage over the Padres.
Franco finished “only” third in AL Rookie of the Year voting, but this was largely due to the fact that voters give a heavy penalty to a great player with less playing time, something I have direct experience with. The winner, his teammate Randy Arozarena, bested him in WAR, 3.3 to 2.5, but he needed twice as many games to get that far above replacement level. There was little question Franco was ready, as he hit .313/.372/.583 in 40 games for Triple-A Durham. These weren’t flash Albuquerque or Las Vegas numbers either; ZiPS translated that performance as a .281/.328/.473 line, not all that different from the actual .288/.347/.463 line he put up for Tampa Bay.
In case it already wasn’t clear after years of him being the consensus best prospect in baseball, the ZiPS projection for Franco is also that of a young star.
| Year | BA | OBP | SLG | AB | R | H | 2B | 3B | HR | RBI | BB | SB | OPS+ | DR | WAR |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | .282 | .333 | .464 | 500 | 78 | 141 | 28 | 9 | 15 | 67 | 38 | 8 | 120 | 4 | 3.9 |
| 2023 | .289 | .345 | .497 | 481 | 79 | 139 | 29 | 10 | 17 | 70 | 40 | 9 | 132 | 4 | 4.6 |
| 2024 | .292 | .351 | .510 | 486 | 82 | 142 | 30 | 11 | 18 | 73 | 43 | 8 | 137 | 4 | 5.0 |
| 2025 | .292 | .353 | .523 | 486 | 84 | 142 | 30 | 11 | 20 | 76 | 45 | 8 | 140 | 4 | 5.2 |
| 2026 | .291 | .356 | .532 | 481 | 84 | 140 | 29 | 12 | 21 | 77 | 48 | 8 | 144 | 5 | 5.5 |
| 2027 | .291 | .358 | .533 | 478 | 85 | 139 | 29 | 12 | 21 | 78 | 49 | 8 | 145 | 5 | 5.5 |
| 2028 | .287 | .356 | .531 | 463 | 82 | 133 | 28 | 11 | 21 | 75 | 49 | 7 | 144 | 4 | 5.2 |
| 2029 | .287 | .357 | .530 | 449 | 80 | 129 | 27 | 11 | 20 | 73 | 48 | 7 | 144 | 3 | 5.0 |
| 2030 | .286 | .354 | .532 | 434 | 76 | 124 | 25 | 11 | 20 | 71 | 45 | 6 | 143 | 2 | 4.7 |
| 2031 | .281 | .348 | .520 | 417 | 71 | 117 | 23 | 10 | 19 | 66 | 42 | 6 | 138 | 1 | 4.1 |
| 2032 | .274 | .337 | .497 | 398 | 65 | 109 | 21 | 10 | 16 | 60 | 38 | 5 | 129 | 0 | 3.3 |
| 2033 | .273 | .336 | .479 | 363 | 58 | 99 | 19 | 7 | 14 | 52 | 34 | 4 | 124 | -1 | 2.7 |
Obviously, the potential exists for him to hit higher numbers in his peak seasons; bottom-line projections are 50th-percentile projections and will naturally be much less volatile than what actually happens. But when I ran the 2022 projections for all the likely subjects, thanks to Acuña’s ACL injury, the only player that ZiPS projects to accumulate more WAR than Franco over the rest of their respective careers is Juan Soto.
The big question out there: is the contract fair to both parties? After all, one can make the argument that Franco may have earned much more by simply playing his way through baseball’s salary process and hitting free agency after the 2027 season.
To that question, I’m in the “yes” camp. The Rays have a great deal of financial leverage with Franco two seasons away from his first arbitration year, assuming that he would achieve Super Two status after the 2023 season at two years, 104 days of service time. But by the same token, I don’t expect the Rays to pay him as if he were a free agent, either. What I personally like to see is a contract that reflects the risks that both parties take in a long-term deal without being grossly weighted in one direction or the other. Call it actuarial fetishism, but a contract like Ozzie Albies‘ seven-year, $35 million contract offends me as an analyst in a way that this deal does not.
I’m not sure why I haven’t built this into the standard ZiPS model (I probably will after this ZiPS season is over), but I constructed a small simulation for how much Franco could make going year-to-year and then signing a mega-deal relative to what he will actually get. In the 50th-percentile projection, with near-minimum salaries in 2022 and ’23, arbitration projections, and free-agent contract projections, ZiPS estimates $297 million over the next 12 years. This is well above the $223 million he can max out at, but that’s not the whole story, either. The upside isn’t tremendously high, with the 90th-percentile projection going up to $360 million. Franco could figure out how to pitch like Jacob deGrom this offseason, and he’ll still get relatively paltry sums of money for the next few years; arbitration awards don’t scale up linearly for superstars. And the downside is significant. His 10th-percentile result ends up with him making less than $20 million over his career, and in 35% of the simulations, he falls short of $182 million. By comparison, at the time of their signings, Acuña falls short of his guaranteed deal only 17% of the time, and Albies does worse only 9% of the time. Another natural comparison is when the Rays signed Evan Longoria a week into his major league career to a contract worth a guaranteed $17.5 million over six years; ZiPS only had him doing worse than that contract in 11% of the simulations.
The future is a very uncertain thing, as demonstrated by the very weak 2021 seasons from Cody Bellinger and Gleyber Torres. Those young stars would probably be better off right now if they had signed $150 million contracts after their rookie campaigns. Since every Mets fan is born with a genetic catalog of tales of sadness and loss, ask someone in Queens their feelings about Gregg Jefferies, who put up an OPS over 1.000 as a 19-year-old for Double-A Tidewater and a .961 OPS in his first cup of coffee before settling into a respectable, but disappointing, 20-WAR career.
No matter what happens with Franco, he’s basically a fifth of the way to becoming a billionaire before the taxman gets involved. The Rays leveraged their position — as you expect people to do in salary negotiations — but not in a grotesque way. If I were an agent and Franco were my client, I’d raise no fuss about him taking this deal. He’s one of baseball’s bright young stars, one MLB would be wise to market around, and now he can afford an entourage worthy of his abilities. Thumbs up all around from me.
Dan Szymborski is a senior writer for FanGraphs and the developer of the ZiPS projection system. He was a writer for ESPN.com from 2010-2018, a regular guest on a number of radio shows and podcasts, and a voting BBWAA member. He also maintains a terrible Twitter account at @DSzymborski.
Those triples projections are pretty nuts. Ten consecutive seasons of projected double digits.
The career total of 125 looks like it’s about 50th since 1901, and in the top 30 since 1920. Would be the most since Jose Reyes got 131. Crazy to see those numbers in the current game.
Seems like a reasonable deal for both sides. If the Rays stay true to form and Wander becomes a superstar, they can still trade him for a huge return with 3 or 4 years left on this deal, and he’s a Ray for a long time between now and then.
Hell, even if Wander doesn’t improve one bit and just stays a good player and not a superstar, that contract will be plenty moveable for good stuff down the line. If he’s a superstar, it will probably get them everything and the kitchen sink.
They will trade him, but I suspect they’ll trade him somewhere within the year 4/5 of the deal. I haven’t seen a breakdown on the contract, but I’m quite sure it will pay him very low the next few years, moderate in the middle years, and very high in the final five years. Once he hits the moderate pay zone, the Rays will look to move him so they don’t have to pay him and they can score a significant return in prospects.
Yearly contract breakdown here will definitely be more informative than most. I see they announced the deal is official today, but there was no schedule attached to the press release.
Good analysis, but I still think Wander Franco is leaving a ton of money on the table. He’s more highly touted than Gleyber or Bellinger and neither one of them had the combination of pedigree/youth/performance when they first came up to the big leagues. Franco’s only played 70 games and he’s probably already a top 25 player. If he hit those projections, he would’ve made something like 5/12/17/25 in his four arb years for about ~60M. Then he likely gets over 300M in FA. Even if he misses those projections a bit and settles in as a 4ish win player, he still likely gets 30M-40M in arbitration and would easily clear 200M as a 26 year old free agent.
This isn’t agent malpractice like the Albies or Acuna deals, but it’s still a bad deal imo. Even if Franco is just an averageish player (not likely) for four years and turns in 4-5 win seasons before FA, he’s going to get 200M easily considering his pedigree and youth. Also what’s bad about this deal is that Soto might be the first 400M player and Franco probably could’ve been the second. It’s really tough to say what the market would command for an elite player who is a FA at the age of 26. I’m glad he got paid though and I’m glad he didn’t get taken advantage of like Albies or Acuna.
if you can guarantee 90% health through the deal, then yeah its not great…but i haven’t heard of that possibility so I think its a pretty great deal for both parties
He’s a position player with no injury history. He’ll most likely be fine. And even if he isn’t, it’s not like it’s really hurting Corey Seager’s market, is it?
No injury history? He’s 20.
Well yeah, players can get injured at 20 and younger.
We don’t know if that’s true until Seager signs somewhere. And even if he hits the median crowdsource (7/196), he’s still sitting around $230M in career earnings through age 34 — which is two more years than what Franco’s locked up for.
Franco only gets one career, and it’s hard to criticize a “lapped the previous record” deal. This is still an enormous amount of money.
Seager is getting way more than $196m
I don’t think it’s a lock. A lot of the big contenders/spenders have good left side options already (Dodgers, Red Sox); desperately need pitching (Mets, Angels); could prioritize paying someone who’s been with the team (Yanks/Judge, Braves/Freeman); and so on.
It’s fun to project sending one of the premium shorstops to a team coming out of a rebuild (Tigers, Twins, Mariners, Cubs, etc.), but considering all of those teams could easily wait a year to make a splash, it makes sense for them to be patient with this batch of FAs to see if prices come down.
Of course, it could go the other way. I just don’t think it’s close to certain.
I still think 7/$200M is the most likely outcome for Seager, but I also admit that the pitching market has been about 20% higher than I predicted. So it isn’t crazy to think he gets to 8/$240M.
Although that’s the pitching market and not the hitting market. Everyone needs pitching.
The problem with the Mets is that they don’t actually appear to grasp that they need lots of pitching. They just paid $20m to downgrade at 3B, where Eduardo Escobar projects to 1.9 fWAR in 2022 when the Mets got 2.9 fWAR in 2021 from their hydra-headed platoon at 3B.
It really is an amazing team, albeit not in the way fans would like. Can a Baez signing be far behind?
This is as wrong as I’ve been about any baseball prediction. This FA market is bananas.
while Seager has an injury history, its mostly small stuff. if Franco tries to play out his team control and blows up his knee then he’s not sniffing 200m. this is guaranteed 182m, it would be crazy to pass it up
He’s had TJ surgery.
I know he’s a position player – but that is not a small injury, especially for a SS or possible 3B.
They’re not small stuff, but TJS for a position player, and a broken bone due to being hit be a pitch are not indicative of future injuries.
Seager’s is small stuff? LOL.
And can you name a young position player whose career was suddenly ruined due to injury? An ACL is not going to ruin a player’s career.
tony conigliaro
Grady Sizemore. Awww, I just gave myself a sad
Grady Sizemore, in the recent past?
The value of this contract is roughly in the middle of his 90th and 10th percentiles. Both sides chose certainty over gambling on the outcome, and arrived at a fair deal.
I keep hearing $400 million-plus in relation to Soto, but that seems a little off for a 6-win LFer. If he’s reaching FA at 26, would you really pay that player $400m (let alone the plus) on a 10-year deal? We can figure wins might be more expensive, salary inflation might continue, and he might actually improve at the plate (a terrifying thought for a pitcher), but he might also be -15 or -20 in the field by then. Seems distinctly high when Machado, a SS-3B, was getting 300m pre-Covid (plus the opt-out after 2023) and no one that I recall claimed he was getting taken.
I agree that as far as pre-arb extensions go this is a good outcome for Wander. My only qualm is I would rather see a guy in Wander’s position lock in his generational wealth over a term that allows him to hit FA while still in his 20s.
An 8 year deal brings down that total guarantee pretty significantly but he’d also still have cleared $100M with greater overall earnings potential as an FA heading into his age 29 season (while accepting greater risk).
That said, I think the CBA uncertainty was also a significant factor here and makes the deal potentially even more favorable for Franco than Dan identifies above.
A potential age-based free agency model (one of several potential ideas tbf) would almost certainly hurt Wander’s earnings potential as any age threshold (29.5 was proposed by ownership, but even 27.5 would push Wander’s FA back a year) would likely lock Wander into arb (or whatever new compensation system they come up with for pre-FA players) for longer with the Rays.
Of course it would also depend on how an age-based system is implemented and what the compensation system prior to FA is. I could see the MLB and union agreeing that any player not yet in arbitration when the new CBA is signed would be governed under the new system while those players who are already in arbitration are grandfathered under the old system so that the league and union have time to transition to the new model. But there are other ways to do it that would impact the benefit to a player in Wander’s position.
I agree with your analysis of how an age-based free agency system would affect Wander, but I would be absolutely stunned if MLBPA agreed to it in any form. It’s the very young free agents and potential free agents (e.g. Harper, Machado, Tatis, Acuna, now Wander) that end up setting the contractual high water marks and I can’t see the union agreeing to a system that takes that out of play.
I more just wanted to call out how big a role the CBA uncertainty could have played and used the age-based FA model as an example of how. The unknown alone creates both risk and doubt and there are other iterations that could impact a player like Wander’s future financials both positively and negatively.
Heck, owners may have floated age-based FA to instill this exact kind of doubt in players like Wander and push them towards contracts now for added certainty on their end, who really knows at this point. And I’d have still preferred a deal that lets Wander become an FA in his 20s.
That said, I wouldn’t be totally stunned even if it is unlikely. It just comes down to what the union wants to prioritize this go round. The continued focus on setting new benchmarks benefits such a small portion of overall union membership (albeit this portion has the most staying power) that I am surprised the majority of players continue to buy into the model.
The idea that new benchmarks help the group at large isn’t based in reality though. Superstars continue to get a larger portion of revenue increases at the expense of the most marginal players. And it’s all made possible by the availability of low cost, pre-arb players.
Now there’s an argument to be made that the game’s upper crust deserve a greater relative percentage of revenue but individual star players in baseball are also less relatively valuable to their team than stars in any of the other major sports.
TBR has very little incentive to buy out 2 pre-arb and 3 arb years to let him walk in his 20’s. Don’t think this deal would have gotten done without the Rays getting these terms. If Franco has a career ending injury in the next couple years the Rays are F’d due to their financial restrictions, so they needed more than just a few FA years to be worth not paying him peanuts for 2 more years.
Sure, but it’s all about the money the Rays pay over a shorter contract length.
Say Wander agreed to $70 M over those 8 years that averagejoe15 suggested as a contract length, instead of the > $100M averagejoe15 predicted for that length. Or even $60M. The Rays would have to seriously consider locking in that kind of discount for the early part of Franco’s prime. Mr. Franco would still guarantee living like a king for the rest of his life, while giving himself an opportunity to potentially sign a, what, maybe $400M or $500M contract in free agency that encompassed the back part of his prime if he comes in at the 75% projection mark? I’d want that potential upside if I were Franco.
The more money they guarantee him, the more they are in the hook for in case of catastrophic injury so not sure that logic really holds up.
The contract is also going to be back loaded so they are still going to pay him relative peanuts for several years. Let’s be honest there’s little chance Wander is still a Ray by the time the real salaries start.
TBR getting cost certainty for arb years + even 1 or two extra years of control at what will likely be a discounted rate is still incredibly valuable as a trade asset which is where this is headed regardless.
The Rays will have insurance on Franco and his contract.
Maybe? It seems like most teams are plenty rich enough to self insure if they choose to, and that costs less on average as long as you can absorb the downside outcomes.
Self-insuring only works if you have a pool. That’s something the Yankees or Dodgers can do, in theory. Not the Rays.
“A career-ending injury” is to the Rays benefit, very loosely speaking, compared to an injury or injuries that leave Franco on the field but playing badly. At least if his career is over some form of insurance is likely to protect the team, whereas if they must suffer a 1-win player whose contract they can’t unload, that’s the sweet (sour?) spot that puts them on the hook for a half dozen $24m seasons for which they’re getting very little return.
Yeah exactly. I really like those deals where guys give up like 3 free agent years in an extension. They get the guarantee of being very rich but can still cash in on another deal. Team gets a few extra below market value years of control without having to pay them as they decline. I would have thought we would see more of these but teams seem reluctant to take any real risks with 8 year deals unless they’re sure things and those players are so good that they’re comfortable waiting I guess.
Signing an extremely long contract shortly before a new CBA seems extremely risky. And the Rays, presumably, have a lot better idea about what the new terms might end up being than the players do (although this should not ideally be the case it likely is).
There’s a strong chance he leads the league in K% next year — such an interesting hitter profile
I just spent a few minutes trying to working out (and sorting the leader board for 2021 batting) how you could think he would strike out the most in MLB…
And now I’ve realised you meant the lowest K%. Which makes a lot more sense.
Zips really likes triples!
I agree that this is a fair deal for both parties, in a way that the Acuna deal wasn’t (and certainly not the Albies deal but the Albies isn’t the same caliber of player, and also it’s an extreme outlier). Many of these contract extensions for guys with a bunch of years of team control remaining is that they tend to be win-win. This is related to something that Dan talks about in the article–the Rays probably save money on the deal, but Franco avoids any catastrophic or even mediocre outcome where he makes less than $180M in his career. This is important because teams are in a much better position to absorb situations where they “lose” than the player does. The team has a bunch of teams they can offer extensions to, where some of them might not pan out but the others will make up for it. The player only gets one career, so him losing even one time is something he can absorb with other deals.
The only thing that bothers me about this deal is that there’s a non-zero chance the Rays respond to this contract extension by trading every player who hits arbitration forever, meaning that Wander Franco will only get to play with Brandon Lowe and a rotating cast of guys in their first three years for his entire career. They already lean heavily in this direction anyway, so it might have happened one way or the other. But if their budget stays the same I’m going to be pretty sad on Franco’s behalf.
I haven’t seen a breakdown of how the deal pays, but if it roughly mirrors pre-arb/arb/FA years in the payouts, the budgetary impact should be manageable. I also think it’s likely that the Rays view the backend of the deal as a likely trade asset rather than something they’ll pay out.
This right here is my thinking too.
Rays figure we pay him $17m a yr (avg 11-yr 185) and we get a guy that should be a star player to build around, and he wont leave the team unless we trade him for assets that at this price should bring a worthy haul back from any other team.
Wander gets paid real money for the next 5 yrs instead of whatever arbitration decides and doesn’t have to worry about 2 injury plagued seasons making him a question mark when he’s a free agent at what 27-28 yrs old?
Good smart contract for all. Based on the current MLB prospect situation.
It’s not really accurate to lump the Acuña and Albies deals together. Acuña’s deal was really in the ballpark of what would be expected given the current CBA. I mean, it set a record at the time. Albies deal was positively stunning to the point that I really wondered how the Braves even made an initial offer that low. Like, how did they even think he’d maybe say yes to that; and then he did!
Well, Albies completely misunderstood it and thinks he had a player option, which he doesn’t. That’s how.
Really? This is my first time hearing this.
There was a quote somewhere after he signed the deal where he said if the contract isn’t good he can just tear it up and get a new one.
I’d like a link to this quote if you don’t mind.
Here’s the quote and the link:
“I mean, I see it this way. If I left dollars on the table, I’m going to play hard to get it in four or five years, seven years,” Albies said. “If I left it on the table, it’s good that now I know I can get it then, coming back.”
https://www.usatoday.com/story/sports/mlb/2019/04/11/ozzie-albies-braves-agree-to-35m-7-year-contract/39332783/
Albies doesn’t seem to understand what happened. It’s hard to feel sorry for a guy headed for $35-45m, but how could his agent have let this happened? A combination of ineptitude and the agent being desperate for her cut?
Pretty much my read. It’s a bit light, but also provides massive security. It isn’t Acuna (garden variety bad) or Albies (atrociously, almost criminally BAD).
Good deal now-Great deal 5 years down the road if/when they trade him and retool…deal will seem like such a bargain and bring back a ton….maybe they get lucky and win one in those years he’s there
What is remarkable to me about those projections is the AB total is relatively low (despite essentially average walk rates, so this isn’t like Soto). I know that is baking in some injury risk, but IF he stays health and is up around 550-600 AB at bats, even without an increase in the rate stats, that will be nuts. On a per AB basis, does Wander manage to top Soto?
If I’m Franco, I’m concerned with the length more than the total amount. Becoming a free agent at 30 would be far more preferable than 32. For that reason a 10-year deal seems more of what I would have targeted
1) FL has no state income tax (I know that’s not everything, but it isn’t nothing, either) 2) I want my 10th-percentile result to be worth $20 million
My 10th percentile result is being stark raving mad, vainly attempting to educate passersby on the street about how stochastic processes are neither deterministic nor totally random. Which is to say, probably not worth $20 much less $20 million.
sadtrombone, I’ve read many of your comments. I think that’s closer to your 30th percentile…
I’m kidding, I’m kidding. 😜
At the 30th percentile, I only scream at people on the sidewalks on weekends and I have gainful employment during the week.
Of all the flavors people can choose, he chose SALTy
i generally agree that it is a solid deal, if a little bit light, but what surprises me is the lack of attention on the fact that the rays seemed to be squeaking this in before the new CBA. I imagine a massive focus of the CBA will be adjusting how increasingly young superstars/producers get paid, and if something player friendly emerges, I could foresee arbitration rules changing drastically. Players don’t want to wait til they’re on the wrong side of 30 for their “big contract”, and wander just passed up his opportunity to see how that changes. even if the change is less impactful than we think, I’m pretty certain it won’t get LESS fair for young players on rookie contracts.
So even if this is a generally good deal for both sides under this CBA, I am not sure that we will be saying the same thing when the new one emerges. Rays stay scheming, everyone should know this by now
Sharpest comment in the thread. They know Franco’s comp. can only go up via the new CBA. This deal should only be judged after the new CBA is done.
I love it. The Rays have their guy and he gets PAID.
In addition to all of your points about managing downside mentioned in the article, it’s worth noting that the $296M would be heavily backloaded, whereas the deal is presumably spread evenly. It would be helpful to see an NPV comparison between the two but given our current inflation environment you have to think that’s a meaningful factor.
Why would we assume it’s spread evenly? Pre-FA extensions are often not paid out evenly
A signing bonus is often a part of these kinds of contracts.
I’m expecting the first three years to be maybe $1M, then essentially arb-level salaries, then the big-dollar seasons, just like pretty much every other contract.
Acuña’s deal does not top out at $100 million. It guarantees $100 million and tops out at $124 million. So this deal does not quite lap it.
In addition, Acuña gets to free agency two years earlier assuming both players’ options are picked up. If Acuña is who we think he should be at that time, he will be able to sell those two years for an ungodly amount of money.
This doesn’t change the overall binary choice, to me. Franco’s deal to me is objectively better for the player. But to not include the other side of the ledger, what the player gives up, in a comparison, makes it an incomplete comparison.
Assuming all team options are picked up, (most likely)
Acuña gets $124M for his 21-30 year old season.
Franco gets ~$207M for his 21-32 year old seasons.
How much would Acuña’s 31-32 year old seasons be worth in 2029-30?
$60M/2 years as a relatively conservative guesstimate isn’t unreasonable,
in which case their contracts would only differ by ~$20M total.
Overall, $100M guaranteed and $185M guaranteed is definitely not the same thing,
but the difference between the contracts is not as big as I instinctively thought.
Exactly!
You can’t hand-wave away everything about the difference, but the deals are at least in the same ballpark, while the Albies deal is across town in the city dump.
I’m hoping he’s a foundational player and stays for the duration winning multiple MVP. Rays need an iconic all-time great in their history like Tom Seaver, Ken Griffey Jr, Tony Gwynn or Mike Trout.
So far it’s…Ben Zobrist? I guess Longoria.
I don’t see it happening. More likely he’s traded around year 5 of the deal when he’ll start getting more expensive, yet will still bring back an excellent package of prospects. The Rays are not changing.
These kinds of contacts come with heavy insurance. The premiums are part of the team’s annual costs so they end up paying more than tbe player gets, pre-tax.
For example, in 2015 Rosethal reported that David Wright’s contract insurance covered 75% of his salary, kicking in after he missed 60 days. The premium wouldn’t be cheap on a $17M average salary.
I don’t think they come with anything. My impression is that every contract is insured or not privately by the team at their sole discretion, and that every insurance policy is uniquely tailored to the player and contract.
I would honestly love some more detail on what that process, and those policies, look like.
That would be absolutely fascinating to get insight on, especially since it’s basically projecting injury risk.
Exactly.
Dings and sprains they can endure but losing a star for most of a year or longer can really hurt. Especially if tbey have to trade for a replacement.
The team chooses, yes.
And what team chooses to eat $100M+?
Instead, they (quietly) choose insurance because paying a few million each year is better than eating the full contract.
I haven’t seen any reporting on contract insurance except for the Mets and David Wright.
It’s hard for me to believe most teams carry it, because I can’t build a business case for it. Insurance is a losing proposition on average, and you only carry it if you can’t absorb the downside loss (or if it’s required by regulation). What risk is a baseball team insuring? The cash outlay is known because it’s in the contract, regardless of Franco’s production. If Franco suffers some kind of catastrophic injury (loses both hands in a tragic pool-cleaning accident at his new mansion?)they can play a replacement level shortstop and be bad for awhile, and the additional cash out is negligible.
If I were an owner, it would be a tough sell.
The teams are insuring production. If a player can’t play, they get money to pay someone who can.
And most businesses carry a ton of insurance. From property insurances, to key person insurance and business interuption insurance, businesses like insurance becuase it makes cash flow predictable. It’s only a losing proposition if you don’t care about consistent cash flow, which is the life blood of most businesses.
Prince Fielder’s contract was insured. I tried to post a link, but FG rejected it. All the big contracts are insured.
The Mets also had insurance on Cespedes..
I wonder if the Mets (Wilpon ownership) had to carry it to meet debt covenants.
I am so ready to enjoy the Wander Years. Good for him and the team.
It annoys me
You were hoping they trade him.in two years?
Good insight
As a former marketing actuary, I concur with your form of actuarial fetishism. Some transactions look so wildly one-sided that you can only hope that that very one-sidedness keeps the deal from having any impact on market expectations..
Remember that the injury risk is now transferred from Franco to the Rays and he will be playing on Astroturf for the Rays for all his home games until the Rays work out the situation at the Trop.
Wonder where he gets ranked on the trade value rankings now. Still high right?
Also, like, time to borrow buy die, mr Franco. You now have what every banker wants: a guaranteed revenue stream. If he’s smart he could own the Rays by the end of the contract.
If he invests in TESLA or SPACEX, maybe.
Still high, but he will remain high for much longer. If he does anything commensurate with his expected production over the next ~4 years and the money continues on a similar trajectory, then the AAV will probably look pretty darn reasonable
Per the consensus here, this really does seem like a win-win for everyone.
Unless I’m mistaken, in some ways, this deals makes more sense for TB than for some other teams. This is because in the event of a catastrophic injury, there are some rich teams that would be losing more than the poorer teams due to the impact on the salary cap. Presumably, any team would insure the contract against injury, so the loss there would be relatively small, but if you’re a team trying to steer clear of the cap, then at least according to current rules, you’re stuck with an average of ~20 mil per year. Not a problem for the Rays 🙂
Obviously, this is all subject to possible changes to the CBA.
CBA changes aren’t likely to make the deal worse for tbe Rays.
Changes to the cap, service time, arbitration, minimum salary, etc. won’t make Franco less valuable. They might make him more valuable under tbe deal, tbough.
Ostensibly his agent has some sense of this info
I thought the ZiPS career projection for Gleyber Torres a couple seasons back was too positive, while here I think it’s a tad negative on Franco. I certainly can’t and don’t question any 20-year-old for taking a guaranteed $185MM, but I also believe that when his career is complete, we’ll see that he cost himself perhaps upwards of a half-a-billion dollars by selling out his entire 20s, and then not becoming a free agent until he’s 33. He’ll still get paid at 33, but teams will give much less money and a shorter contract for an aging middle infielder, and/or a former middle infielder.
Once again, not questioning him signing the deal, but if he reaches peak, he cost himself a significant sum.
If he properly invests most of the money he will still have half a billion in his 30s.
* Tidewater was AAA for the Mets & Gregg Jefferies. Jackson was AA.