A few episodes of the Sox Machine Podcast ago, Jim Callis retold the story of the White Sox signing Chris Sale after selecting him 13th overall in the 2007 draft. At the time, Sale’s signability was doubted by some because he wanted a major-league contract. Before Major League Baseball implemented hard slot values and draft pools, Jerry Reinsdorf’s White Sox were not a team that splurged on draft picks or caved to hard-line negotiations from amateurs.
Somehow, the pairing developed into an astounding success. Callis described the workaround that Rick Hahn came up with.
When they drafted Sale, Rick Hahn and Doug Laumann I think basically told Sale’s party like, “Look, we know you want a major-league contract. Jerry’s not going to go for that, and we can’t pay you over slot.” And back then it was these BS slots that MLB came up with that didn’t even reflect market value. And they were like, “We cannot pay you more than slot, but — if you sign quickly, we’re in the wild card race, and you pitch well, we will give you every opportunity to pitch in the big leagues for us this year.” And they did.
This came to mind a few days later, when the San Diego Padres and Fernando Tatis Jr. reached a record-breaking 14-year, $340 million contract. It’s a staggering amount of money for somebody who wouldn’t have reached free agency until after the 2024 season, and it’s sent writers in all different directions trying to grasp the ramifications.
At The Athletic, Ken Rosenthal took a pocket-watching approach, wondering whether the Padres’ aggressive contracts will catch up to them, pointing to a history of not-astronomical attendance, modest TV-deal increases, and the specter of the Dodgers.
(Baseball America’s Kyle Glaser noted that the Padres have doled out record contracts in five of the last seven winters. The earliest of them was James Shields, whose $75 million is greater than any commitment the White Sox have ever made.)
San Diego chairman Peter Seidler shot down those concerns, which the San Diego Union-Tribune’s Bryce Miller worked into a column.
The Padres are positioned to see a gargantuan spike in merchandise sales, as well as large advances in advertising and sponsorship opportunities. When fans return, ticket sales are likely to obliterate franchise records. Stir in parking, concessions and everything else that generates income, too.
In so many ways, it’s Business 101: Instead of diminishing your product, invest in it. Instead of being paralyzed in the short term, strengthen long term.
Meanwhile, ESPN’s Bradford Doolittle and David Schoenfeld tried to figure out what it will mean for other extension candidates, starting with Juan Soto and Cody Bellinger.
The White Sox don’t have any of those extension candidates. Usually it’s because they’re short on the kind of talent that’s entertaining fans of other teams. In this case, they don’t have any such guys because they already locked them up.
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The White Sox would never hand out that kind of contract to a player in Tatis’ position, and that’s not necessarily knee-jerk, anti-Reinsdorf bile. It’s very possible that Seidler provided a cautionary tale even among executives who are comfortable with the concept of a nine-figure market-rate deal. Nobody has ever done this before, at least to such a lucrative extent.
At FanGraphs, Dan Szymborski sliced the deal into two parts: the rest of his original team control period (four years, $60 million), followed by a 10 years and $290 million of new money afterward. A 10-year, $290 million contract would be a bargain for a 26-year-old Tatis on the open market after 2024 season assuming he remains healthy and dynamic. It doesn’t exactly feel like a discount at this time, just due to all the injury issues a ballplayer could encounter over a four-year period. If Tatis navigates his original team-control period with the way Francisco Lindor and Mookie Betts wended their way through their first six years, $290 million might look canny. If he has Troy Tulowitzki’s issues, it’s a much more difficult path.
The White Sox-specific problem is that they seldom seem to entertain any nine-figure contract, with Zack Wheeler being the only guy we know who spurned the White Sox for a lesser offer elsewhere. The White Sox might say they went similar lengths with Manny Machado and Masahiro Tanaka, but those pursuits were designed to finish in second, and they accomplished their goal.
With this in mind, let’s go back to what Callis was saying about Hahn managing around Reinsdorf.
Extensions used to be relatively easy to arrange. The White Sox got Gavin Floyd, Chris Sale, Jose Quintana, Adam Eaton and Tim Anderson on no-brainer deals, with John Danks the only notable case of going year-to-year and profiting handsomely at the end of it.
The success rate of these extenesions showed players they sold themselves too cheap. Consequently, the prices rose, whether by demanding more earlier, or waiting until closer to free agency to reap the benefits from steep arbitration trajectories.
The White Sox took a different tack, maybe out of necessity. If Hahn didn’t like his chances of getting Reinsdorf to pony up for a nine-figure extension, and if there’s a certain law of conservation saying risk can only be shifted, not destroyed, then Hahn could only go in one direction to make it take a shape everybody would agree to.
Enter the extensions to Eloy Jiménez and Luis Robert before they played a single game. Both deals shattered records for players with no MLB experience. Jiménez locked in $43 million over six years, with a chance to make $78 million over eight. Robert then topped it by getting six years for $50 million guaranteed, and a chance to earn $90 million over eight.
Those deals look team-friendly for the White Sox now, but thanks to MLB’s salary structure for rookies, Jiménez and Robert did fairly well for themselves. Look no further than a deal signed in between that surfaced in the news on Sunday for nefarious reasons.
- March 2019: Eloy Jiménez signs for six years, $43 million
- Nov. 2019: Evan White signs for six years, $24 million
- Jan. 2020: Luis Robert signs for six years, $50 million
The one in the middle is the Seattle Mariners first baseman, whose contract also includes three club options (not two) that maximize the value at $58 million (not $80-90 million). The relative paltriness of White’s contract arose when Mariners team president Kevin Mather shot his mouth off in all directions during a Zoom appearance at a Seattle-area Rotary Club that made its way to YouTube and surfaced on Sunday.
Lookout Landing posted a transcript. There are ugly (and apparently incorrect) comments about the English proficiency of foreign-born players, as well as digs at those who occupy the neighborhood surrounding the ballpark. But perhaps the most damaging comments to his club’s interests involved service time. Here’s the part about White’s deal:
So we took the risk in the early years, and he took the risk that he’s a superstar in the later years of his contract and he’s probably underpaid. He took a lot of heat for signing that deal, the union really pushed back and said, don’t do it. But I like Evan White, he’s a nice young man, and he made the comment, he said, “I have $23 million guaranteed. That changes a person’s life. I’m signing the deal. And if I’m good and they pick up my options, I’ll have $55 million guaranteed. That changes my family’s, my grandkids’ lives.” I like the young man. We will offer more long term deals.
And there’s a certain pitcher that I won’t mention, who was in the bullpen at T-Mobile Park during our summer camp. And this was reported by one of the coaches. The players were sitting around talking about Evan White and, you know, he made a mistake signing this long term deal and delta. And this particular pitcher, who is going to be here in 2022, he said, “If somebody offers me $23 million guaranteed, find me a pen as fast as you can, I’m signing.” So we’re going to do that, our ownership is committed, we’re eager to sign these players up [and] we’re willing to take that risk. Some we’ll win on, some we’ll lose on, but we’re going to try to get three or four more players signed on these long term deals over the next two years.
It’d be one thing if White signed a deal that went against the MLBPA’s preferences. But what compounds the Mather blather are the comments he made about top prospect Jarred Kelenic, who Mather says was unwilling to commit to such an extension, and thus will suffer the consequences.
On the minor league side, Jarred Kelenic, we’ve been talking about him for a year and a half now. He’ll be in left field in April. He’s a 21-year-old player who, um, is quite confident. We offered him a long-term deal, six-year deal for substantial money with options to go farther. After pondering it for several days and talking to the union, he’s turned us down and in his words, he’s going to bet on himself. He thinks after six years, he’ll be such a star player that the 7th, 8th, 9th year options will be under value. He might be right, he might be right, we offered and he turned us down.
Perhaps Kelenic wouldn’t even accept a Robert-grade contract, but the context throughout the transcript — the satisfaction in White’s union-upsetting deal, James Paxton signing for lower than his original demands, getting rid of Hisashi Iwakuma’s translator — suggests a leverage-laden nickel-and-diming. And if Kelenic doesn’t want to accept it, the Mariners aren’t going to carry him on the Opening Day roster.
This is a damning admission, so much so that the Mather issued a statement tailored to diminish liability …
… and resigned minutes ago. The Mariners as an organization still haven’t responded, to get an idea of the scale of the crisis. Then again, Mather and the Mariners are no strangers to crossing the line and paying a price. In 2018, the team settled with women who accused Mather and two other executives of inappropriate workplace conduct.
(Update: The Mariners released a statement shortly after Mather’s resignation.)
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Boil down the service-time manipulation cases to the basic elements, and there isn’t much separating the Mariners with Kelenic and the White Sox with Jiménez and Robert (and we can rope in Nick Madrigal, too). Two players didn’t get promoted to Chicago until they signed long-term extensions delaying their free agencies by two years, and Madrigal didn’t get called up until the White Sox could get the seventh year of team control. That much is the same thing.
That said, what separates them separates them by a lot. Stylistically, Hahn’s a verbal teetotaler because one poorly chosen statement wreaks havoc on his system, but that alone doesn’t make him worthy of emulation. A better distinction is that Robert and Jiménez still stand alone in terms of contract value for pre-MLB extensions. He’s still on track to save his boss a ton of money, but the White Sox’s top prospects were able to get him to accept some risk, and there appeared to be a number that suited both parties.
It’s not perfect, but it’s not nothing, and it’s something that satisfies the two sides and the fans. Perhaps the more encouraging sign is that the White Sox might be done with it. We’re seeing the Sox groom Garrett Crochet at the MLB level, clear the path to DH for Andrew Vaughn despite no traditional high-minors experience, and give Michael Kopech a chance to reacclimate to competition in some form with the White Sox. I thought these savvy extensions would free up the White Sox to splurge on big-ticket solutions in free agency, but if Reinsdorf doesn’t want to go any richer than Yasmani Grandal and Dallas Keuchel, Hahn might be using the flexibility to solve positions on the other side of the service-time scale.
Does that explain why the White Sox needed to pare down their roster and not even try for three years? Not really. Does it offer hope that the White Sox can retain a Tatis-like star when it’s time for him to get paid for good? Not yet. Paul Konerko had to win a World Series and possess a fraction of the athleticism to stay within the White Sox’s limits for the remainder of his career, and even then he had to reject more lucrative offers elsewhere. Let’s see if they can meet Lucas Giolito’s number and go from there.
The hope is that the White Sox have consecutive postseason runs in them to finally unlock the team’s long-latent drawing power. Should this rebuild not click to that extent, Hahn will have to find yet another way to work around ownership. If there’s any credence to the notion that constraints inspire creativity, then Hahn should be Baseball Da Vinci by then.
(Photo by Cody Glenn/Icon Sportswire)
Fair-minded comparative analysis that I hope those who cover 27 other MLB organizations use as a model.
FWIW, the Mariners did issue a statement a few minutes after Mather’s resignation went public.
It’s amazing they worked a ‘ ‘thank you’ to the racist predator on his way out the door. M’s fans, I’m sure, have no doubt this FO will hire the right successor. What a f$$kin joke.
It feels bad to commend teams–especially when that team is the Padres–for doing what ought to be the bare minimum and common sense: trying to win, giving superstar contracts to superstars. But I guess we should take our Ws where we can get them when the bar’s so low that even Sox fans were arguing with Josh about how bad the last 2 years of Tatis’ deal might be.
Mather’s cautionary tale goes a long way to explaining how shaky the foundation beneath MLB operations is if his unguarded remarks are that much of a threat to it. Or if Rick’s “I’m being as candid as I can be” schtick is needed to prop it up.
The sad thing about the situation is that as the 108 crew documented, the extensions pushed about $10m of spending into 2021. Now, Jerry would probably want us to conclude that the players getting exploited less than they could’ve was genuinely risky and prohibitively expensive for completing the roster.
But our takeaway should be that owners as wealthy as him running teams as valuable as the Sox shouldn’t let $10m stand between them and a championship nor should they have to kludge together solutions to service-time problems.
“Sure, the Padres could have a perennial All-Star, Hall-of-Fame player who becomes a franchise icon like Tony Gwynn for the next dozen years, but think about how much he’ll be paid in his age 34-35 seasons!”
Yes, the hand-wringing over the final 2-3 years of a big contract continues to confound me.
Other than very unlikely scenarios (i.e. Tatis runs into some career-altering or -ending injury), the floor of this contract is basically, like Jim pointed out, Troy Tulowitski. A talented, but oft-injured SS. Still, in his 13 seasons, Tulo still accrued 44 WAR and was a 5 time All-Star. That’s a heck of a floor.
There is no way the Padres gave him that contract without also investing in some form of insurance in event of catastrophe to minimize the overall financial risk.
Mather was forced to resign for probably the least offensive part of his diatribe because it was the most damaging to ownership’s interests.
Baseball has a major ownership issue that may end up being its downfall. The majority of teams don’t spend money to compete and put its best team on the field. Off the top of my head, I can count maybe 6 teams that attempted to improve (LAD, Sox, Toronto, SD) or to maintain their rosters (Minnesota, Atlanta) this offseason. A main issue is the owners run these teams like businesses, trying to max out profits, including manipulating service time. I’m not saying they should lose money, but investing some of the revenues back into their teams would help make MLB more competitive and interesting to the casual fan. You can see the issue in the declining fan base and interest in the sport.
Reinsdorf is actually not the worst of the lot, but he has perfected the notion that he will spend when fans come out. He then pockets millions of guaranteed revenue and throws it on his pile knowing full well he won’t spend big money on high end talent. The last 3 seasons have tested my patience and I’ve begun to question why I religiously follow a sport where billionaires can’t get along with millionaires for the greater good of all involved.
Owners have spent the past several decades vilifying players as if free agency and mega-contracts are what’s ruining the game. I’m pretty much past blaming the players for just about anything in a sport that is rapidly losing fans because the old guard insists on shitting on their own stars and rewarding mediocrity while making their product as inaccessible as possible.
I’d like to see some sort of small percentage of fan ownership put in place, or regulations on how much profit owners can suck out of a franchise (maybe relative to success so there is an incentive to spend).
In soccer there is an understanding that the team belongs to the fans. It is more tenuous at some clubs than others, but there is an accountability there as a result. I don’t think there is a similar understanding here, but it would help.
Soccer teams that suck also get relegated. There’s actual financial incentive to compete beyond butts in the seats, which in baseball isn’t even an incentive.
A main problem is there isn’t one way to run a business but sports team owners gravitate towards the most exploitative and predatory.
Sports is a business and owners are (usually) smart businessmen who aren’t in it to lose money. Most good businesses make money by producing a quality product that people will pay for.
But there are a ton of reasons why sports owners should have some responsibility to try to compete. There are too many owners like Reinsdorf sitting on a sweet stadium deal with a cheap lease (or had the public actually pitch in) and should feel obligated to us fans who footed the bill.
Sports teams aren’t businesses though. They are investments. The money made on franchises comes from the increase in value from purchase to sale and the ability to leverage that value for other endeavors.
My point entirely. They run the teams like businesses, which is apparently counter-intuitive to spending money on their product. I mean, could you imagine being a fan of Pittsburgh? They literally trade every decent player and show no interest in competing. Sad
Yet even with their fan base obliterated and virtually no success to speak of for the last thirty years the franchise value has skyrocketed.
There’s money to be made in saddling a business with debt, pocketing the rents, stripping it for parts, and leaving the husk for the next vulture that comes along.
And sports leagues select for ideology because they have a veto over who buys. So the extractive model’s prevalence isn’t just an accident, it’s by design.
They also have a (legal, global) monopoly. I’m guessing ownership practices would be a lot different if Real Madrid was poaching underpaid stars.
I’d imagine there has been some estimates on Tatis’ marketing draw, and how that will help allay the cost of his contract. Do we know how much the White Sox stand to have lost on that front as well?
They’ve probably left hundreds of millions of dollars on the table in revenue and team value in absolute terms but are probably more profitable in relative terms because of how cost-cutting improved their margins.
Are they though?
I see this as Hahn finding no other options but use his cheap prospects (ready or not) to fill up rosters spots he can’t fill on the free agency without avoiding the Keppingers, Navarros, and LaRoches. It is perhaps a “forget dumpster diving, let’s try this other strategy” that involves Reinsdorf to keep his money, and Hahn a fresh and unused excuse to wash face.
I think one thing we may also be overlooking is that Reinsdorf is probably not going to own the team in six years, which means Hahn and Williams will probably be gone as well, so it’s no skin off their backs if they don’t extend control of players now.
Jim M, somewhere between the Tatis,Jr trade and the decision to keep Bruce Howard over Denny McLain-1963, there’s got to be a story on “the ones that got away” over the years?
Future stars that Sox had in their organization, but chose to go in different direction.
Tommy John immediately comes to mind.
Hard to say Tommy John was one of the ones that got away, since they got an MVP (Dick Allen) in return.
Bobby Bonilla, Sammy Sosa
I was thinking more in the category of those who, though originally property of them, never played in majors for W Sox but went on to all-star+ caliber careers elsewhere. There’s a handful of them out there, I think.
The non- White Sox poster boy is Roberto Clemente who was originally signed by Dodgers, but left unprotected the same year and was drafted by Pitts.
Under Kenny Williams a running narrative was that he traded prospects away to get veterans attempting to compete every year, but despite generally underwhelming results none of the prospects lost really made fans regret it. That in and of itself would not have been so problematic were the team also not notoriously horrible at getting any value out of the draft for their own roster; they were just TERRIBLE at drafting.
giolito will be an interesting litmus test. his socioeconomic background is the much different than that of robert and jimenez. he likely isn’t going to (or need to) concede much. perhaps part of the reason why the sox hired katz- a play on the alonso gambit.
i’m hoping he signs a long and lucrative extension. he’s awesome. exactly what we want in a player- talented, hard-working, thoughtful, conscientious and really damn good. sadly, reinsdorf prefers loyal and cheap to those other attributes so i’m prepared to be disappointed.
When Giolito’s dad was on the 108Fest livestream, I asked him about whether it was true that Lucas signed with the Nationals 30 seconds before the deadline for draft picks.
His dad said it was 20 seconds.
On the other hand, it feels like he conceded quite a bit by not taking the team to arbitration. I thought he’d be due at least another million, if not two.