This is a very interesting process that the Rays have now done with two of their future star players:Longoria and now Matt Moore. Basically, the Rays are buying out the remaining 5 years of Moore's service time after only 17 days of major league service. Sounds crazy, right? It might be, or it might just become the next market inefficiency for Theo/Jed to take advantage of. Follow me after the break for the numbers.
Looking at a similar situation with the same team, Evan Longoria received a 6 year 17.5 million dollar contract for 17.5 million to cover arbitration years, an unbelievable bargain. They can also exercise options through 2016 for an additional 27 million dollars, making his the most team friendly contract in baseball
The deal for Matt Moore is for $14 million over 5 years, which comes out to an average of 2.8 million per year. The deal also includes three club options, which (with incentives) can increase the value of the contract up to $40 million over 8 years. The average cost of his 3 FA years, assuming all 3 are picked up, will cost an average of 8.6 million dollars per year. The Rays are looking at a minimum risk of $14 million guaranteed vs. the ability to have a potential superstar locked up through his first 3 years of free agency for an average cost at 8.6 million dollars. This seems like a no-brainer to me.
Looking at a similar situation with the Rays: in 2008, Evan Longoria received a 6 year, $17.5 million contract for 6 arbitration years - an average cost of $2.9 million. The contract contains an identical club option for the first 3 years of FA. The total value of his contract has the ability to reach $44 million, assuming all 3 options are picked up. This means the Rays are capable of locking up one of the premier 3B in the game for the first 3 years of his FA for an AAV of $8.83 million.
To put these deals into perspective, consider these other contracts. In August 2006, David Wright was about to become arbitration eligible for the 1st time. The Mets, seeing the future star they had, decided to lock him up long term to the following contract: 6 years, $55 million. The contract was structured as follows: 2007: $1m, 2008: $5m, 2009: $7.5m, 2010: $10m, 2011: $14m, 2012: $15m. The contract also includes an option for 2013 at $16m. Assuming the option is picked up, and assuming a $450k salary for his first 2 years, the Mets will end up payingWright a total of $69.5 million for 8 years of service - a 158% increase over Longoria's agreement over 8 years.
As a pitcher, there is no perfect comparison, because we simply don't know what Moore is capable of becoming. Let's assume, for fun, he is a top ace as many expect him to be. Looking at Tim Lincecum's arbitration to date, following 3 club controlled years between 400k and 650k, Lincecum received a first year arb payment of $9m, a second year arb payment of $14m, and is on pace for a generous increase again in 2012. Considering through 5 years the Giants have already invested $24.6 million, and will invest at least another $15m in 2012 bringing the total to $39.6 million over 6 years. This would be a 283% increase over what Moore will receive through his arb years, not even considering that Moore will cost less than $9m through THREE more years of FA should the Rays find it worthwhile.
Even assuming Moore never becomes an ace, and just a very solid pitcher, we'll use Garza as an example. Garza was a super 2, and received around 800k in compensation for his first 2 years, followed by a 3rd year at $3.4 million, a 4th year at $6 million, and a 5th year at an assumed 8-9 million, the Rays and Cubs have already invested a combined $18.7 million for 5 years of Garza, a 34% increase over what Moore is scheduled to make, without even factoring in FA options.
What if locking up players early at a 40-280% decrease over their potential earnings is the next inefficiency? The Rays are doing this out of necessity, they absolutely need to lock these guys up early for affordable agreements and this is a huge risk for them - if Moore's arm falls off tomorrow, they are in trouble, $3 million a year is a lot to them for no return. The Cubs, however, could shrug off that $3 million with absolutely no second thoughts. I think that the possible return on a player of Moore's or Longoria's caliber (of which the Cubs obviously have none) far outweighs the potential risk.
I realize this is a very long post, but it's something that I've seen the Rays do twice now, that may very well yield them the two most team friendly contracts in baseball. How does BCB feel about this and whether or not the Cubs should take advantage of this as the next "moneyball" move?