Extension season soldiers on. The Braves announced on Thursday afternoon that the club and second baseman Ozzie Albies agreed to a seven-year contract extension worth $35 million. The deal includes club options for 2026 and ’27 as well. Per Joel Sherman of the New York Post, each option is worth $7 million with a $4 million buyout. Albies wouldn’t have become eligible for arbitration until after the 2020 season and for free agency until after the 2023 season.
Albies, 22, was an All-Star last season, batting .261/.305/.452 with 24 home runs, 72 RBI, 105 runs scored, and 14 stolen bases in 684 plate appearances. Baseball Reference valued him at 3.8 Wins Above Replacement. An average player is around 2.0 WAR, so Albies was nearly twice as valuable as an average player. The only full-time second basemen who posted more WAR than Albies last year were José Altuve, Jed Lowrie, and Scooter Gennett.
This is a stunning extension, and not in a good way. As we have mentioned with many of the extensions signed recently, one cannot blame individual players for making what they feel is the decision that best suits them and their families. As an industry trend, though, extensions like Albies’ are concerning. $/WAR is a lackluster stat for many reasons, but it’s not terrible as a very general reference point. A win is broadly valued at about $9 million, meaning Albies produced enough last year enough to provide more value than his brand new contract extension. Even if the layman consensus for $/WAR is off, Albies would have to basically disappear via UFO abduction to fail to provide equal or better value on his extension.
ESPN’s Jeff Passan spoke to “executives, players, analytics people, development side and scouts,” and all are panning the Albies extension as the worst ever for a player.
Earlier this month, outfielder Ronald Acuña Jr. signed an eight-year, $100 million contract with the Braves. Craig called it a “bargain,” and I couldn’t agree more. “But Bill,” some of you will say, “One hundred million dollars is life-changing money.” It sure is, and Acuña isn’t wrong for taking it. In fact, it’s a no-doubt decision for an individual. There is a non-zero chance he suffers a career-altering injury or just simply stops being a star-caliber player. I am, however, looking at this in the grand scheme of things. Acuña is, on average, worth far more than $100 million over the next eight years. Imagine Acuña is healthy and productive through the 2024 season and ventures into free agency. What might he get, as one of baseball’s most productive and recognizable stars? Might he match or exceed Bryce Harper’s 13 years and $330 million? Or Mike Trout’s 12 years and $426.5 million? By agreeing to his extension, Acuña almost certainly cost himself hundreds of millions of dollars.
These contract extensions are canaries in the coal mine, forboding a serious labor problem in Major League Baseball. Young players, seeing the likes of Craig Kimbrel and Dallas Keuchel struggle to find work, have no interest in venturing into free agency. So, teams offer them up-front financial security that represents a drop in the bucket, as each team is valued at $1 billion or more. For teams, they spend a little in the short-term to save a lot in the long-term. And it only takes hitting on one player to make all of these contract extensions worth it. Team owners, thanks largely to their recent reliance on analytics departments, have figured out the game well ahead of the players and their agents. How ahead of the game are team reps? Per Ken Rosenthal of The Athletic last week:
Free agency is a mess because of MLB ownership’s self-imposed austerity measures. Many teams have used the competitive balance tax (also known as the “luxury tax”) as a soft cap to limit their own spending. Attaching draft pick compensation to players who were given a qualifying offer hurt free agency. Front offices deciding, seemingly simultaneously, to stop spending on free agents in their 30’s stagnated the market. Then, because of the stagnated market they created, the owners get to collectively save billions of dollars in the coming years by nudging their young players into signing extensions well before their primes, before they have established leverage with which to negotiate. Free agency is then further stagnated because these players will be reaching it at 29 and 30, rather than 26. And let’s not forget that the players’ agents -- particularly those with smaller agencies -- also see the same diminishing future prospects and want to rush for the guaranteed money.
In these young stars and potential stars signing away their arbitration-eligible seasons, they will fail to help set higher and higher bars at each step of the arbitration process. For example, Nolan Arenado laveraged a $26 million salary this season in his final year of arbitration eligibility before signing an extension of his own. That $26 million may remain the bar, adjusting for inflation, since fewer and fewer players of his caliber will go through the arbitration process. This, too, saves more money for team owners in the long run -- an up-front gamble these billionaires are more than happy to make.
That Acuña, Albies, David Bote, Eloy Jiménez, et. al. felt the need to secure their futures shows a lack of confidence in both the current market for their labor and for the MLB Players Association to secure it in the future. It would be one thing if a few players here and there were signing extensions, but 29 extensions have been signed since January 21. The MLBPA needs to do a much better job of communicating with its players and establishing solidarity. Union members should be better equipped to handle tantalizing offers from management for the good of the group. Make no mistake: “extension season” is bad for the game and is a harbinger of how negotiations for the next collective bargaining agreement will go. It appears the side of the union has a lot of catching up to do.