The cost of young talent continues to rise

"The Florida Marlins and shortstop Hanley Ramírez agreed on a contract extension for six years and $70 million, according to a source who spoke with ESPNdeportes.com.

Ramirez would have been eligible for arbitration after this season and would likely have earned a significant pay raise."

And to think, only two years ago Sizemore signed a fairly similar extension for $23.5 million, though I confess I'm not sure how the arbitration years align between the two contracts.

6 days ago macasson Comment 8 comments 0 recs |

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Yea, but the Indians:

1) committed to Sizemore after his first full year. He had only 778 ABs at the Major League level when he signed his contract. In comparison, Ramirez has 1411-nearly double-ABs as of yesterday. Go back before the start of this year, and he still had nearly 1300 ABs in the show.

2) Ramirez potentially gave up 3 years of free agency. Sizemore gave up, at most, two.

Still, you’re spot on. The Indians will be paying Sizemore significantly less during both his arbitration (which started THIS year) and during his years of purchased free agency than the Marlins in the case of Ramirez.

When you look at it this way, saving $20M over a few seasons by signing a player to one of these long-term deals allows a team to offset the risk of any other long-term deal it signed, who, even upon underperforming, may still be paid lower than market value for what they are doing.

by xrickx on May 10, 2008 1:26 PM EDT reply reply 0 recs

Oh, and to answer your questions:

Sizemore will make $13.2M during what would have been his arbitration years (2008-2010), and the Indians control his first two years of free agency for a total of $16M.

Ramirez would have been arbitration eligible starting next year (2009-2011). It’s conceivable, with another big year, that he’d make $8M in his first year of arbitration. Miguel Cabrera made $7.4M in his first year coming off years of .339/.430/.568 (Service Year 3) and .323/.385/.561 (Service Year 2). Compare that to Hanley’s .332/.386/.562 (Service Year 2), which is damn near identical to Cabrera’s Service Year 2, and Ramirez’ fast start this year, and he’s in line to make goofy numbers, like $8, $13, and $18M in arbitration over the next three years if he keeps up his pace.

by xrickx on May 10, 2008 1:37 PM EDT up reply reply 0 recs

thanks for doing all the legwork on this one, xrickx. we could probably add in the longorian and tulowitski contracts as additional data points. (did i spell either of those names correctly?)

when do we reach the point where these long-term deals cease to be clearly club friendly?

by macasson on May 10, 2008 1:54 PM EDT up reply reply 0 recs

The key difference between this contract and Sizemore’s is that Ramirez is just a few months from reaching arbitration, while Sizemore was a full two years away. In other words, if Sizemore doesn’t make it through two full seasons healthy, he doesn’t even get $1 million. Ramirez would have made a million in arbitration next year even if he’d gotten injured tomorrow. That jacks up the risk assumed by the team by doing the deal, and the risk to the player by not doing it.

Ramirez is off to a huge start already, batting .336 and on pace for 37 home runs - this is a 24-year-old shortstop we’re talking about here, so this really is A-Rod territory or at least Tejada - more valuable than Sizemore. He likely would have made $5 million and possibly $8 million this coming offseason. In contrast, had Sizemore not done his deal in March 2006, he was looking at a cool $380,000 or so for the 2007 season, no matter how well he played.

I got into this a bit in the original Contracts & Salaries series, how Coco Crisp was making more money than Sizemore and Bay, just because of when his deal ended up getting done.

by Jay on May 10, 2008 3:41 PM EDT up reply reply 0 recs

so, who do you think the marlins will trade him to this offseason during their anual garage sale?

by Brick. on May 10, 2008 1:42 PM EDT reply reply 0 recs

yeah, i had the same thought. the ever-optimistic buster olney, in his insider blog, implies that this move is a sign that the marlins are changing their ways:

Ramirez is the foundation piece - the Hall of Fame talent - it will build around.

really? does anyone think that ramirez will be with the marlins in 4 years, much less the full duration of the contract?

by macasson on May 10, 2008 1:58 PM EDT up reply reply 0 recs

I don’t see why he won’t remain a Marlin. This is what they should have done with Cabrera. I’m in complete agreement with Olney this. I can see them trading parting with Uggla for prospects as a last gasp in cost-cutting, and launching from there.

by jhon on May 10, 2008 2:17 PM EDT up reply reply 0 recs

except the ‘launch’ has already begun. Their lineup is damn-good.

The Disabled List just called ... it was trying to unload Joe Borowski. I offered a bagel but balked at giving up a ham sandwich. It wanted to keep Westbrook.

by westbrook on May 11, 2008 12:34 PM EDT up reply reply 0 recs