With trade rumors surrounding Colorado Rockies shortstop Troy Tulowitzki (rumors which seem to lack much foundation, but rumors nonetheless), I thought you might be interested to know that 2014 marks the true beginning of the first contract an MLB player ever signed that carried into 2020.
Technically, Tulowitzki is in the midst of a 10-year deal signed on the last day of November, 2010. In practice, though, the extension begins next season, because when Tulowitzki signed that deal, the Rockies already had him under control for $26 million over three years. In fact, they had an option that would also have covered 2014, and brought the total value of Tulowitzki’s standing contract to $37 million. Since he was only guaranteed $26 million and three years, though, that’s what I’m looking at here.
The new deal the two sides reached actually reduced Tulowitzki’s earnings over those three seasons, by $250,000. From 2014 forward, the Rockies can possess Tulowitzki either for seven years and $134 million, or eight and $145 million.
I mention all of this because the moment when an extension like this truly begins is a better time at which to evaluate it, as a decision, than the moment it’s signed, and it’s certainly a better time than the moment at which it ends. In effect, the Rockies committed to roughly $19 million per year for Tulowitzki, from ages 29-35. They did it three years before they had to, so Tulowitzki knowingly left potential money on the table in order to divest himself of the risk of playing his way to free agency.
What kind of contract would we be talking about if Tulowitzki had gotten to free agency? It would be huge; we know that. Because I think it will come to be the standard starting point for young (under 30) free agents with elite bats, I’ll suggest that the Prince Fielder deal (nine years, $214 million) is a good estimate.
If that’s Tulowitzki’s market value, more or less, then he gave away $4 million per year and two years in order to set himself up for life at 26. The Rockies got a 20 percent discount on Tulowitzki by locking up his late prime and early decline years three years ahead of time.
Should they have done that? I’m not sure. Tulowitzki already had a significant injury history at that point, including persistent problems with his quadriceps and groin. A groin injury would shelve him for the majority (and then some) of 2012, and it’s hard to look at his track record and not fault the Rockies for having foreseen it. They didn’t pay him any more during that season than they would have under the old contract, but the injury would have dampened his market value, had that still been relevant.
The key question, I guess, is whether the contract extension makes Tulowitzki more or less valuable at this moment. Did the Rockies maximize the value of their asset by signing that deal when they did? My answer is no. I think the contract, while not by any means an albatross, looks pretty neutral right now. I think the Rockies could have signed Tulowitzki to a contract not unlike this one this winter, if that had been their choice. I also think, since the trade rumors are out there, that Tulowitzki would actually have more value in trade as a one-year, $15-million investment, with the option for the acquiring team to work out its own extension.
Teams sign their stars to long-term deals long before the critical decision point these days. That can lead to great bargains, and even the uninspired deals tend to look good after the fact, because of the rapid salary inflation that seems to be the trend in baseball today. Those deals are risks, though, and giving away future flexibility before it demands to be done can backfire. Tulowitzki’s deal is no nightmare, but the discount the Rockies got didn’t help them build a winner in the short term, and doesn’t seem to have changed their plan for the long term. They’re locked into a player with the kind of injury history that scares you, especially given his position, and neither trading nor keeping his contract is as easy or appealing an option as the options Colorado could have had, if they had left well enough alone. The first contract extension a player signs before free agency is nearly always a good deal for the team. The second one is nearly always better for the player.Next post: Jon Heyman is an Idiot, Or: Why Hitting Prospects and Pitching Prospects Aren’t the Same
Previous post: David Price and the Chicago Cubs