The Toronto Blue Jays and first baseman Vladimir Guerrero Jr. stole all the headlines late last night, with the two sides reportedly agreeing to a mega deal worth $500 million over 14 years, pending a physical.

With all the back and forth between the two sides and the outlook that Guerrero appeared ready to test the free agent market, the Blue Jays and his agents found a way to find some common ground and hammer out a deal that worked for both parties. It’s the second-largest deal in MLB history in terms of guaranteed money, which also makes it the biggest deal in franchise history by default.

With the slugger donning Toronto’s jersey for likely the rest of his career, let’s take a look at some initial takeaways related to the recent extension.

In terms of AAV, Guerrero is set to make $35.714 million a year over 14 years. While there are no reported deferrals, the terms of the contract are not yet known – the deal could be front-loaded, back-loaded, or structured just the AAV across each year. The deal doesn’t kick in until next season, so Guerrero is playing out the rest of the season on the $28.5 million he and the Jays agreed to in his fourth year of arbitration.

The difference between the two values sits at roughly $7.2 million, which is a sum that will rank above the $27 million that Pete Alonso and Freddie Freeman hit against the luxury tax for their teams. Guerrero was always going to best his $28.5 million figure in free agency, especially since the 26-year-old has prime years still ahead of him, and the team has seen what his bat can do when all things are clicking. Playing a position such as first base skews the valuation – it’s a less demanding position compared to the middle infield, for example – but his bat is his calling card at the end of the day and the reason the Jays are willing to shell out big bucks to keep him around.

One potential key part of this extension is the fact that it begins in 2026 versus right now.

The Blue Jays’ current competitive balance tax payroll sits just North of $269 million per Cot’s Contracts, which would surpass the $257 million the club shelled out in 2023. While the Jays are already committed to paying the tax for already passing the $241 million threshold for 2025, they reset themselves last season by trading away the expiring one-year deals, so the percent being taxed sits at a 20% base versus 30% heading into the new year. They also receive a 12% surcharge for exceeding $20 million but staying under $40 million, so right now, the Jays are predicted to pay over $6.6 million in taxes for exceeding the CBT. Should the Jays surpass the $40 million difference, that surcharge rises 42.5%, which is a sizeable jump and makes the total 62.5% on the overage.

Can Rogers Communications afford to pay over the tax? Billion-dollar companies have that luxury, but it’s not our money at the end of the day. While the additional total from Guerrero’s contract would still keep payroll under that threshold ($~276 million, as the AAV kicks in that season against the CBT), it becomes dangerously close to the $40 million difference that can potentially make the Jays’ front office limited at the trade deadline if the team is contending and ownership puts a hard stop on going past $281 million in payroll. This is all napkin math at the end of the day, so the values are approximates (other than what Cot’s provides), but the ideology remains the same: the closer to or over the $40 million overage, the more tax you pay, the more likely ownership is to give you a hard stop.

There’s a lot of ‘what ifs’ and ‘potentially’ factoring in here as the Jays have to be contending and Rogers might be willing to spend whatever it takes, but overall, it’s a hurdle the Jays don’t have to deal with and still have some wiggle room to play with later this season since Guerrero’s deal kicks in next year should the need arise.

One of the biggest question marks heading into this season was the direction of the franchise. Guerrero, Bo Bichette, Chris Bassitt, Kevin Gausman, George Springer, Daulton Varsho, Chad Green, and a host of others are free-agent eligible this winter or next, which is a strong number of core players on the roster. The Blue Jays made quick work in locking down Alejandro Kirk to a five-year deal, and now with Guerrero on board for the next decade plus, the franchise has a leader that they can turn to. From the get-go, Guerrero has been singing the praises of the city and has said that if the Jays can hit his figure number, he is willing to stay for the long term.

When you look across the league, each team has started to lock down budding superstars or internal players to deals that either surpass or come close to the decade mark. Jackson Merrill and the San Diego Padres just locked up a guaranteed nine-year pact after just one season in the big leagues. Kristian Campbell and the Red Sox linked up for eight years to buy out his arbitration years and a couple of free-agent years as well, while Fernando Tatis Jr., Mike Trout, Mookie Betts, Bryce Harper, and numerous others have signed contracts that sit over that ten-year mark.

Having Guerrero around for the next decade plus sets the direction and tone for where this franchise is going in the future and squashes at least some uncertainty that surrounds this organization. Even José Berríos had a player option added into his deal following the 2026 season in the event things turned sour on the extension front for the likes of Guerrero and Bichette, so this deal helps with the direction of which way the team is heading for internal players as well. It now certainly feels like a rebuild will be staved off as the club continues to build around the cornerstone player that is Guerrero Jr, something that also works to their advantage during free agency discussions with interested players. Those now know where the Jays stand in terms of fielding a competitive team and have the player in Guerrero to back the claims.

There are still a few names that are destined for free agency in the near future, another hurdle the front office will have to conquer, but one of the biggest threats is now staying with the Blue Jays.

How many Instagram and X posts have you seen with Guerrero’s image photoshopped onto another team’s jersey? Or betting odds on where he will sign in free agency?

It’s a narrative that would have followed Guerrero and the Blue Jays into every city the team stopped in this year, especially by the local media, and it’s a conversation that was already annoying the Jays’ fan base as the extension deadline in spring training passed and the slugger kept fielding questions about his impending free agency. Not only does that narrative now go and die in the depths of fiery rumour hell, as well as any trade speculation, but it keeps Guerrero in Toronto for the rest of his career.

One of the biggest concerns was Guerrero hitting free agency and signing with any of the other 29 teams in the league, especially if he found a new home in the AL East and had to torment the Blue Jays for the next decade.

Having him hit dingers in a Boston Red Sox uniform or occupying first base for the Yankees would be an ultimate letdown for the Jays fans, especially if he signed for similar money that the Blue Jays were offering during previous discussions before this deal came to fruition. Losing him to a non-division rival is one thing, as the spark plug in the lineup and the driving offense force plays for a team that you may see once that season. Having him come to Toronto multiple times a season and have a greater impact on the Blue Jays’ standings within the division is another.

That is the unpredictability that comes with free agency and one that added another layer if the front office let Guerrero walk for the lowly return of a compensation draft pick. The market could have paid him more than what the Jays are offering or potentially less, but it’s a risk that the Jays were looking to avoid and did so with this new deal.