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Photo Credit: © Butch Dill-USA TODAY Sports

The gamble of signing prospects to long-term contracts

The Blue Jays might just be trend setters. The Phillies could, yet again, be taking a page out of the Jays book. That shouldn’t be a surprise considering the rich history between the clubs.

It’s easy to point to Joe Carter vs Mitch Williams, re-living one of the brightest points in Jays’ history. In a pinch, you could walk from one spring training facility to the other, as the Jays play in Dunedin and the Phillies play in Clearwater, though it’s not recommended in the Florida heat. Fans of both clubs were blessed by the presence of the legendary Roy Halladay. And there have been about 15 transactions between the two organizations in the past 10 years. Whether we want to acknowledge it or not, Toronto and Philly have a solid working rapport.

The Scott Kingery deal is the latest example of the Blue Jays influencing the Phillies. Critics will continue to point to the Jon Singleton deal — $50 million for a player who never lived up to his hype — but, Lourdes Gurriel Jr might be a better comparison.

Gurriel was an international free agent who had very limited career earnings compared to Kingery’s $1.26 million signing bonus as a second round pick in 2015. It can be assumed the motivation for Gurriel was to ensure as much financial stability as possible by signing a long-term deal.

Gurriel could have signed a shorter deal and earned more in the second contract, but that would have been a huge risk. Does anyone actually think Singleton regrets signing for potentially less than what he could have earned if he performed to expectations?

Feb 23, 2017; Dunedin, FL, USA; Toronto Blue Jays infielder Lourdes Gurriel (13) stretches during the spring training workout at Bobby Mattix Training Center. Mandatory Credit: Jonathan Dyer-USA TODAY Sports

Questions remain to why Kingery is signing this deal as he could be leaving money on the table if he performs as expected. The risk just does not make sense for some. Kingery, Singleton and Gurriel all practiced risk aversion. If we want to bring Donaldson into this, he is the antithesis of a risk averse player.

The Jays may have just recognized how risk averse Gurriel was and by signing him through his age 29 season they were able to, theoretically, overpay now to underpay for his most productive seasons. If Gurriel’s MLB numbers turn out anything like his brother’s than the Jays will be applauded for their foresight. If Gurriel turns out to be the next Singleton than the Jays will be the brunt of a joke, just like the Astros but at half the price – not to mention it’s tough to laugh at the World Series Champions.

The Jays may just be as risk averse as Kingery and Gurriel. They should be applauded for the Gurriel deal, regardless of how he turns out, and the Phillies may have just given a standing ovation by signing Kingery to a long-term deal that is so incredibly similar.

Parallels exists between the players and their deals (source):

  1. Total values ($22 & $23 Million, respectively)
  2. Age at start of contract (age 23 season)
  3. Positional flexibility (apparently everywhere but on the mound or behind the plate)

These contracts are so damn similar. The first three seasons are almost identical, raising questions to if Gurriel was the comparable being used in negotiations. Considering the relationship between the Phillies and Jays, this is a fairly reasonable and logical leap.

Need more…

Remove the option years as they are not guaranteed – team options with no qualifier (correct me if I’m wrong). Gurriel at $22 over seven years and Kingery at $23 over six years results in the Jays paying $690,000 less per annum than the Phillies. At that pay rate, the advantage may go to the Phillies considering how Gurriel has performed in the minors to date and that Kingery will contribute right away. Throw in Kingery’s $1 million buyout and that per annum jumps to $857,000 – still not much of a difference. The comparison changes when including the seventh year and its $13 million as Kingery’s salary jumps to $5.14 million (not including any buyout) compared to Gurriel’s $3.1 million.

Neither player has proved anything at the MLB level, yet. At this point, is Kingery worth $2 million more per annum than Gurriel? The general consensus is the Phillies fleeced Kingery. If that is the case, what do we call what the Jays did to Gurriel?

Mar 26, 2018; Montreal, Quebec, CAN; Toronto Blue Jays third baseman Vladimir Guerrero Jr. gives a press conference before the game against the St. Louis Cardinals at Olympic Stadium. Guerrero Jr. is the son of former Montreal Expos player Vladimir Guerrero. Mandatory Credit: Eric Bolte-USA TODAY Sports

Moving forward we should be expecting more long-term signings of young players – especially by the Jays. The idea of signing Vlad Jr to this type of deal should make every Jays fan giddy in anticipation, though lets temper our expectations as what motivation would Vlad Jr have – he did sign a $3.9 million signing bonus. Bo Bichette’s $1.1 million signing bonus may put him in the Jays’ sweet spot.

The most logical candidate may be Anthony Alford as his arb years coincide with his 26, 27 and 28 seasons. Depending on how Ryan Borucki performs in Buffalo, he too may be a logical target. The fact that Borucki was a 15th round pick only benefits the Jays as, unlike most high end prospects, he does not have that signing bonus cushion to fall back on.

It all comes down to risk aversion and knowing how players weigh risk. The way that Atkins and Shapiro have been running the Jays tells me they may just have something up their sleeve. The rest of baseball is watching, so let’s see what they do next…

Now it’s your turn, let’s hear what you think (tip of the hat to those sharing and making us consider different perspectives – no need to mention names).

  • Player to Be Named Later

    That’s pretty fascinating – thanks.

    Gurriel is one of the most intriguing prospects in the system – precisely because the Jays clearly think he’s going to have an impact at the major league level. (Or, at least, they _thought_ that when they tendered him that contract!) 2017 was downright shitty. But he did hit in the Arizona Fall League… Really hoping for a bounce back in 2018. His ability to play around the diamond gives him a chance to be a Marwin/Zobrist type, which all teams seem to be looking for these days. Fingers crossed.

    • Blue Ox

      Fingers crossed indeed….

      I’d say the expectations post signing were a little much for both Lourdes and Yuli. Take a look at Yuli’s BB/K first half to second half and it’s pretty clear he adjusted and became more comfortable – the same benefit should be given to Lourdes and his minor league numbers. We are talking about a 23 year old who made a pretty big leap in league competitiveness and overall comfort considering the Gurriels are, essentially, legends in Cuba. I think your Marwin/Zobrist comp is fair once Lourdes gets comfortable.

      At his price tag, what type of production would you expect or be happy with? If he comes in as a 7-8-9 hitter are you cool with his salary? 6 or below and I’ll have to personally send Atkins and Shapiro an “I’m Sorry” card for cursing their names when AA left. Already looking for that card now…

  • Flash McLennan

    As much as it’s tempting to view everything from a Blue Jays orientation, Kingery’s situation looks a lot more like Longoria’s. Gurriel being a free agent signing, as opposed to the pre-MLB extension of a draftee, is a big difference.

    • Blue Ox

      Longoria contract is a great comp. There are other comps though.

      The difference, to me, is that Longoria’s contract was signed 10 years ago and, at the time, was compared to Drew Henson’s contract with the Yankees ($17 over 6 years); Gurriel’s was signed last year. The Ray’s approach to economic modeling has become more pervasive in MLB, which is why I agree with the Longoria comp, however player development has also changed which is why I like the Gurriel comp.

      There are similarities in the structure and term of all the contracts mentioned. The timing, the type of player and the relationship between the Phils and Jays allowed for this leap – and it is a leap for sure.

      You got me thinking here, thanks!

        • Blue Ox

          Flash McLennan….it’s all about engagement! I learn so much from comment sections. I’ve got degrees in this crap but who cares – I get the feeling a few of you do as well and those of you that don’t probably have just as valuable ‘informal’ degrees.

          This is all bout sharing opinions and learning from each other. Mistakes will be made – heck I already screwed the pooch on the Singleton deal. Just think of this as a forum for you to say what you want and let’s talk!

          I’m more looking forward to hearing what you have to say this summer.

  • Magicaleigh

    Why would you compare signing a player that was an IFA to a player that a club controlled regardless of the extension?

    That’s a really weird comparison, considering Gurriel’s price was driven up by other teams being in competition with signing him vs Kingery only being able to compete with what he may or may not make in arb. De Jong and Tim Anderson are better comps considering where they were in terms of service time and the actual amount of the deals. That they both got a slightly larger deal after playing roughly one season in the majors seems like pretty likely comparisons.

    • Blue Ox

      Anderson or De Jong weren’t considered based on their having over 400 plate appearances at the time of signing. They are great comps, but they were proven entities.

      Your point about the IFA vs Club Controlled is bang on. The open market dictated the terms Gurriel could negotiate. IMO, that open market valuation is why Kingery was comfortable negotiating the terms he did. It was known, within a year, what the market would pay for a player of his caliber.

      Curious to your opinion: do you think uncertainty in the FA market is somewhat influencing players into signing these types of deals?

      • Magicaleigh

        The DeJong and Anderson contracts are almost identical to the Kingery contract though. They are all cost controlled middle infielders of the same age that signed for 6 years with options tacked on at the end. The per year numbers are so close its impossible to see those deals as anything other than the basis for the Kingery deal. The minor league numbers are all similar across all three players as well. I believe the 400 plate appearances in mlb mean a lot less than you think it does. 400 plate appearances isn’t really a huge sample size. Sure it helps the evaluation process, but its not really enough room to make a determination on a player in a vacuum.

        I don’t understand why you think the open market valuation for an international free agent matters in this case. I get that the numbers on the surface look similar, but the year over year raises as well as the lack of option years make it actually quite different to the Kingery contract. Gurriel actually would have had a year of free agency bought out for well under the value of the option years had he played a full season in the majors last season.

        I don’t think the FA market has any influence on these deals. Its cost certainty for the teams (the same reason you see players that sign for just their arbitration years even without a discount). Teams and players all know what the outer marker for a contract will be for these players should everything go well, getting that number locked in allows teams to plan into the future and ideally get a discount on prime years, but the discount isn’t necessarily the prime motivation. Cost certainty is super valuable with the way teams are now run.

        For the players that have yet to make more than a million or two, its money that guarantees they never have to worry in their lives again. The attrition rate of middle infielders is actually pretty high, and even all stars fall right off the map for one reason or another.

      • Abogilo

        I absolutely think the FA market influences the decision to sign these contracts. I would nail down the cause though to be the erosion of the middle class of FA contracts rather than calling it uncertainty.

        In the past, someone could avoid signing the safety net deal because there was a good chance they would bottom out as approximately a replacement level player and make 4-5M per year for a few years and still be set for life. Even if they were not almost replacement level, they could ride the prospect hype of their youth to a few reasonable Major League deals in free agency.

        Now they get the Ryan Goins treatment, and have to sign minor league deals.

        Funny how the erosion of the middle class in baseball is happening at the same time as in real society but that is a completely different conversation.

        WHY is the erosion happening? I have some ideas for discussion
        – FOs are more willing to mix and match platoons and defensive arrangements to maximize value from any position so replacement level value can easily be obtained by artificially cheap pre-arb and early-arb guys. Those AAA-MLB taxi squad guys are eating the market for replacement level free agents.

        – Financial parity rules in MLB force FOs to be more cost conscious in all decisions, so there are fewer big spenders, lowering the tide of all free agents (disproportionately felt by middle and low tier free agents who would have been signed just to keep prospect down in the minors).

        – (previously brought up but included for completeness) Parity rules in MLB make it harder and less financially beneficial to build a dynasty.

        • Magicaleigh

          What good arbitration eligible players can get dfa’d and placed on waivers and get through waivers and then get to sign a free agent deal though? That doesn’t happen. They only get to free agency early if they are out and out bad or injured.

          • Abogilo

            If that is a response to the statement:
            “Those AAA-MLB taxi squad guys are eating the market for replacement level free agents.”

            I was not suggesting that clubs are signing arb guys instead of FA. I was suggesting they were using their own tax squads INSTEAD of signing a depth level free agent to a $4-5M deal. I am also suggesting that the new found ability to play to players more well defined strengths with defensive alignments and offensive platoons might make it easier to obtain cheaper replacement level talent doing this than they can via the free agent market resulting in a reduction in the market for depth level free agents dropping (and prices with it).

            I am also suggesting that the drop in this market makes it more of a gamble for a player to bet they will make it to free agency as a star and thus they are more likely to sign cheaper long term deals in their early control years.

          • Blue Ox

            I get why you like DeJong and Anderson but their situation is completely different. Your 400 PA argument is valid – just look at Diaz as an example, however I think he will rebound to somewhere in between. The model here is to value the player before they gain MLB experience as this is where the greatest uncertainty exists and both parties can benefit. Sure, it’s highly likely that one party will benefit moreso than the other, but that is the point. If the player does not live upto expectations the cost is minimal – in the case of Kingery the Phils have club options where the real costs are incurred and his recent position flexibility is why, I think, the Phils value him so much.

            Maybe I just have a soft spot for Lourdes Gurriel Jr. With tempered expectations I think he has alot of value to provide.

        • Blue Ox

          Dude you rock. Get the feeling we’re going to have to delve into some of these topics you’re so into. The FO mix and match with platoons and shifts is becoming HUGE! Maybe I’ll try and whip something together in the upcoming weeks or months – we have the whole summer afterall!

          • Abogilo

            I like the idea of a discussion around what causes these situations, and how best to exploit them (from a team OR player perspective).

            Other than that – lets play a game – where is this all going? Do we expect an extreme stars and scrubs payroll gap in MLB like we see in football?

  • UK Blue Jays

    As has been said, Gurriel and Kingery aren’t really good comparisons. As an IFA, Gurriel is just one of many players who have signed longer contracts without ever playing in MLB.

    Also, you should check the details re: Singleton. I think the guarantee was $10 million over five years, not $10M x 5? There were/are club options as well but still a lot less than $50M.

    When Vlad and Bo are ready, this will be a huge conversation. I think the Blue Jays are comfortable taking their time with Alford and Borucki (who is a pitcher and therefore WAY riskier). You only do this kind of deal with someone you reckon will be a core piece for you (as Kingery is for the Phillies).

    • Blue Ox

      Ooofda – sorta booted the Singleton deal. Thank you for calling me out cause you’re totally right that it’s $10 over 5 (approx) and not $10 x 5. Thankfully it’s not integral and I’d change the piece if I could – actually I’ll own up to this F’up.

      UK Blue Jays – I owe you one!

      Unless Borucki has an unreal start to the season I don’t see them extending him. He works because he fits the model of a player who, most likely, is in the long-term plans for the team but does not have a signing bonus to fall back on. It would make sense for Borucki rather than Vlad to sign the long-term deal based solely on risk aversion.