Friday, May 16, 2008

Continuing the Contract Trend

The rising trend is for organizations to lock up their young stars well before they reach free agency. It continued this week as both Ryan Braun, from Milwaukee, and Scott Kazmir, from Tampa Bay, inked contract extensions.

Ryan Braun’s is a record setting deal – 8 years and $45 million. It’s the largest contract in club history and sets a new high for players with less than a year of Major League service time. I was shocked to see 8 years, but if you’re to buy out any of his free agent years, it’s got to be more than 6. So it buys out 2 years of free agency and keeps Braun’s average salary to $5.625 million. For someone who won the NL Rookie of the year last year with 34 HR in only 113 games and could possibly be considered one of the best hitters in the league following this season, it’s a great deal for Milwaukee. It’s a good deal for Braun, too, as he’ll be making millions of dollars several years before he would have been able to, and he got a no-trade clause in the deal (full no-trade for the first 4 years and limited no-trade after that). Milwaukee gets cost certainty and cost reduction in the long run. Braun gets a big raise now and has control over his future.

Scott Kazmir signed a 3 year extension worth $28.5 million. The deal includes a team option for a fourth year worth another $11 million. In the past, Kazmir has been hesitant to sign long-term with Tampa Bay because he didn’t like the direction of the team. That shouldn’t be a problem anymore as the Rays are currently in first place in the AL East and Kazmir is only the most recent of many young stars being locked up by the Rays.

So how do these deals affect Baltimore?

Well, the Kazmir signing is obvious. Now we know for sure that “Kid K” will be striking out Orioles on a regular basis for the next 3 or 4 years. The Rays are on top of the AL East right now and by locking up all their stars, they’re looking to make this an extended run. That starts with good pitching. They’ve just locked up Scott Kazmir and in January they signed James Shields to a 4 year deal with 3 one year options. That gives them a lefty-righty combination at the top of their rotation that will be tough to beat. If the Rays are added to the Red Sox and Yankees as “Beasts of the East”, it only makes the O’s rebuilding effort more difficult.

The impact of Ryan Braun’s deal on the Orioles is more indirect. Every time there is a record setting deal, it raises the price for other deals that have yet to be struck and the Orioles have their own young star that they would like to sign long-term - right fielder Nick Markakis. The O’s tried to reach an agreement with him over the off-season, but failed to do so. They should be kicking themselves, because now you can bet it will cost more. Markakis won’t challenge Braun’s record deal. He just isn’t on the same level as Braun as a hitter, but Markakis is closer to arbitration and that will close the gap a little.

EDIT: I feel like I need to go back and clarify what I said about Markakis' possible future contract. When I said that Markakis won't challenge Braun's record deal, that's only partly true. Markakis won't set any records, but he'll most certainly get a contract that pays more per year. That's the power of arbitration, and being close to free agency. Markakis will be eligible for arbitration after this season, so he's only 3 years away from free agency. Whether his deal is worth more than Ryan Braun's $45 million deal depends on how many years of free agency the Orioles want to buy out. If the Orioles want to buy out more than 1 season of free agency, Markakis' deal will be worth more. A good benchmark for a Markakis deal would be the one given to Blue Jay's right fielder, Alex Rios, who signed a 6 year-$64 million deal. Rios is a few years older, but as far as experience and talent, they are very similar.

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