So far in 2014, the Colorado Rockies have had to flip starting pitchers on and off their disabled list, rotate outfielders in and out of their lineup (and roster) and fully stock the multiple bars in the new rooftop section. However, there’s a decision the Rockies will have to make at some point and waiting too long might force their hand.
Nope, sorry, as nice as the dinner discussion with Bryan Kilpatrick over at the Purple Row was, I don’t thinkthe Colorado Rockies can wait.
We must be careful because there is “The Monster At The End Of This Book”.
That monster means the front office needs to decide immediately whether to give Nolan Arenado a contract extension or start grooming his replacement. Yes, the Rockies should be scared.
There has been a growing trend in recent years to sign young, talented players to long-term contracts. The most recent example occurred on April 14th when 25 year-old Jedd Gyorko of the San Diego Padres signed a five year extension worth $35 million with a team option for a sixth year at an additional $13 million. Some, like FanGraph’s Dave Cameron in an article on FoxSports question the wisdom of that decision, noting that Gyorko, while a good player, is not a star. Personally, I can see both sides regarding Gyorko and agree he isn’t a star. On that note, Arenado is not a star, yet either. The question then becomes, is Arenado a potential star?
Look at the chart below, which lists all players in the AL and NL who played third base in 2013 in order of descending WAR (Wins Above Replacement). To reiterate, 1 WAR means a player is worth 1 win over a replacement-level AAA player.
There are a few takeaways from this list. First, Nolan Arenado is 8th among major league third basemen in terms of WAR. Most of that is due to his defense where, according to Baseball Reference, he was worth 0.6 WAR based on offense and 3.6 WAR based on defense. Yep, that doesn’t add up to 3.7 WAR because that would double-count the positional adjustment to WAR for third basemen. Just keep in mind that, as poor as his stats look on offense, renado is already above replacement level on offense, even if you adjust for Coors Field. Second, note that Arenado is the second youngest player in the top 10 third basemen behind Manny Machado. Consider though that, after Machado, the next youngest player in the top 10 is aged 27 (or 25 if you want to count Kyle Seager). At age 22, most players are coming out of college and debuting at AA ball while Arenado has held his own at the major league level with the bat.
On the subject of age, take a gander at what Arenado did in the minors.
Arenado, when he was first drafted, was considered a bat-first prospect with weak glove skills in the mold of Todd Helton. In the minors, looking at the numbers out of context, he did “ok”. However, if you look at the “AgeDif” column, he was anywhere from 2.6 to 4.9(!) years younger than the average hitter at each level. Meanwhile, in 2011, the “weak glove” Arenado had developed to the point where he won the California League Defensive Player of the Year award. Meanwhile he also appeared in the All-Star futures game in 2011 and 2012. Of course, he didn’t appear in the Futures game in 2013 because he was busy winning a Gold Glove with the Rockies.
So defensively, he’s been better than advertised to the point where he may be considered elite. But what about his offense? While Todd Heltons are few and far between, Helton’s OPS was significantly higher than Arenado’s but that is partially mitigated that Helton didn’t become a major league regular until he was 24. Meanwhile, while Helton never hit more than 16 home runs in the minors, Arenado did hit 20 in AA ball and maintained a decent batting average.
An additional factor is that Arenado credits his hard work in improving his defense and according to Thomas Harding of MLB.com, has publicly stated he wants to learn how to be an impact bat. Considering his bat, when drafted, was supposed to be his best tool, coupled with the idea that he can learn and improve and is so young compared to other major leaguers, highly suggest his bat will improve as he gains experience and his body matures. In other words, he has a high chance of becoming a star and he has quite a few years to figure out how to do so.
But let’s talk about worst case for a second. Let’s say his bat stagnates ala Starlin Castro (not that Arenado has a reputation for losing track of how many outs there are in the game or otherwise being mentally checked out). Let’s say he remains a 3 win player based solely on his defense. The dollar cost per win, depending on whether a player is under control or a free agent, can vary from $5 million to $7 million depending on if you use Lewie Pollis’s, Matt Swartz or David Cameron’s calculations from FanGraphs. (Note: Check the comments for a great discussion). Let’s use $5 million for simplicity sake. Does that mean Arenado, based solely on his defense, was worth $15 million last year? In a vacuum, eh, probably not. But when you put it in context that he was the 8th best third baseman in the league at a young age, he wasn’t worth $0 million either.
Let’s just make things even simpler and return to the aforementioned Gyorko who generated 2.2 WAR in 2013. That earned him a contract worth, on average, $7 million a year and bought out all of his arbitration years as well as his first, and with the $13 million option, his second year of free agency. In other words, though he less valuable WAR-wise than Arenado and is older than Arenado by two years, the Padres think over the next five years, he will be worth at least $35 million and they think paying Gyorko $13 million for his second year of free agency, when he is 31, is a good deal. Also, based on his 2013 WAR, the Padres think buying a win at around $3.2 million a year is also a good deal. If the metrics suggest a win is worth $5 million, the Padres are getting that good deal.
But maybe the Padres are just crazy? In the offseason, the Braves signed all-glove 23-year old Andrelton Simmons to a 7 year, $55 million extension. Granted, it was a heck of a glove, leading to a WAR of 6.9. Thus, the Braves think buying a win at around $1 million a year is probably a heck of a deal.
Let’s set a floor of Simmons and a ceiling of Gyorko as the “market rate” for a win when signing young players to long contracts. If the Rockies are shrewd like the Braves, they would value those 3.8 wins at around $1 million per win and would be happy to sign Arenado for around $4 million a year. If the Rockies are “extravagant” like the Padres, who still think they got a good deal, then they would spend $12.16 million (3.8 WAR * $3.2 million) and be as “happy” as the Padres who still think they are getting a good deal even if they are paying more per WAR than the Braves. If we want to talk precedent, Troy Tulowitzki signed a six year, $31 million contract based on his 6 WAR season in 2007 at age 22 and Carlos Gonzalez signed a seven year, $80.5 million contract based on his 5.9 WAR season in 2010 when he was 24. In both Rockies instances, they were able to secure a contract paying less than $2 million per WAR. Based on those precedents, the Rockies would feel happy signing Arenado at somewhere between $1 million and $2 million per WAR. Or, in other words, between $3.8 million and $7.6 per year.
Now, thanks for sticking with me through a lot of fuzzy math where I basically say that the way the market values young players, Arenado would be a good deal for the Rockies if they spend less than $12.16 million a year and based on precedent, would act if they could sign him for less than $7.6 million per year. All of that explanation was a long way of showing how the market views young players even if they are not stars.
Unfortunately, that’s where “The Monster At The End Of This Book” appears.
No, the “monster” is not Arenado’s agent Scott Boras. (Gotcha!) I give credit to a guy who tries to maximize money for his clients.
The monster is the situation that is barrelling down on the Colorado Rockies.
The situation is that Arenado is a valuable, young third baseman right now, he has the potential to become a star, Scott Boras knows it and justifiably will try to make things more expensive for the Rockies. Boras will look at Gyorko’s $35 milion contract and demand something better. I don’t blame him since every other agent in the league would do the same thing.
Let’s say, right now, Boras wants a $45 million contract for 5 years from the Rockies for Arenado. At $9 million per year and assuming Arenado maintains 3.8 WAR per year that would still be paying only $2.4 million per WAR. High for the Rockies, but still good value compared to the $5 million per WAR that the metrics suggest. I’d still do it. Yes, I would sign Nolan Arenado at $9 million per year, buying out at least one year and preferably two years of free agency into 2019. In that second year of free agency he’d be only 28 and in the midst of his prime.
If the Rockies sign Arenado before his hitting improves, then if Arenado’s bat improves he becomes that star player and that extra value is gravy already bought and paid for. Even if his bat doesn’t improve, they still get good value on his contract. Worse case, they have prior experience moving/dumping third basemen who can’t hit like Garrett Atkins and Ian Stewart. True, those two had less expensive contracts but they were also much older when they were offloaded. If they had to move Arenado, he’d net a prospect or two in return just because he would still be only 27 or so near the end of his contract.
However, if Arenado’s hitting improves, as earlier suggested, so will Boras’s asking price for a long term contract. If the Rockies reject Boras’s increased asking price, they will still be forced to pay more during Arenado’s arbitration years of 2015 and 2016. With one Gold Glove already under his belt and more potential awards to follow, it’s quite likely the Rockies will pay at least $9 million during one of those years of arbitration. If the aforementioned Manny Machado signs a contract, that will also drive up Arenado’s price.T hen, of course, once Arenado hits free agency in 2017 (and with the lack of young free agent talent on the market because every other gosh-da-darn team is locking up their young players), Boras will have Arenado leave the Rockies to test the market.
Surprised? Do you think in 2017 that the Rockies would offer Arenado $12.18 million or whatever per year in a futile attempt to outbid the Yankees for a Gold Glove third baseman who just turned 26? Especially if Arenado learned how to hit? The Yankees or some other team would pay at least $15 million per year for a young Gold Glove third baseman that could hit. If the Rockies had bought out the first two years of free agency, that $45 million Boras asked for would look like a great deal.
There’s also the slight chance that locking him up may make him agreeable to a hometown discount during his post-prime years. At least, it keeps the door open where, if he leaves for another team, it’d be virtually slammed shut.
Thus, the Colorado Rockies need to extend Nolan Arenado, buying out some years of free agency before he becomes expensive. Now, before he has a summer hot streak that drives up his value. Now, before Manny Machado or any other young player signs a multiyear contract to further drive up his price. If they do not, they need to be prepared to soak up the cost of his arbitration years and they might as well start grooming a replacement because the Rockies will need a new third baseman in 2017. The problem is, as the Rockies know, it’s hard to find a good, young third baseman even if there isn’t “The Monster At The End Of This Book”.