28 replies to this topic

[SoxScout]

29 $10,000,000
30 $10,000,000
31 $11,000,000* ... $11M Team Option, $500k Buyout

Link ... According to several league sources, the Red Sox have already decided it would be in their best interest to begin discussions this winter about a possible long-term contract extension with veteran second baseman Dustin Pedroia.

A league source indicated a potential extension for Pedroia isn't something the Red Sox are focused on right now because of all the other aspects they must address first. But talks with Pedroia are on the horizon, as the sides will make time for discussion at some point this offseason, sources said.

What do you think we are looking at minimum, 4/$60M? Seems unnecessary with 3 years left to go, no?

[StuckOnYouk]

Yeah, I have no idea why you want to bother with this right now, this should be like the 100th thing you consider this offseason.

[DeJesus Built My Hotrod]

Yeah, I have no idea why you want to bother with this right now, this should be like the 100th thing you consider this offseason.

Perhaps they are concerned that the team isn't viewed favorably by players around the league given what has transpired over the past couple of seasons. By locking up Pedroia long-term, it may give free agents some comfort/certainty about who they will be playing along-side if they sign with Boston.

That said, paying for his early 30s now seems risky if only because his style of play suggests that injuries might be more of a factor as he ages.

[Sausage in Section 17]

That said, paying for his early 30s now seems risky if only because his style of play suggests that injuries might be more of a factor as he ages.

Totally agree. Guys like him, Nomar, and Nixon are starting to form a stereotype for me. I love their balls out, max effort style, but they burn out instead of fading away.

[JakeRae]

29 $10,000,000
30 $10,000,000
31 $11,000,000* ... $11M Team Option, $500k Buyout



What do you think we are looking at minimum, 4/$60M? Seems unnecessary with 3 years left to go, no?

I think that is way too low. A serious extension offer right now would look more like 3/$60M for 2016-2018 with a year or two of team options at that same $20M value. So, 6/$91M total going forward plus the options. The argument for doing this is that if Pedroia keeps up his current performance, or close to it, he is going to be looking at 5/$100M at a minimum when he hits free agency. The extension now would mean signing him through his mid-30's instead of later being faced with the choice of losing your franchise player and a future HOFer while he is still in his prime (albeit, the tail end of it) or overpaying for his late 30's. Pedroia is good enough that he should be able to hold a fair bit of value into his mid-30's even if he starts declining right now.

There is also likely some non-baseball value to locking up Pedroia through the entirety of his career, or close to it. There is also value in transferring AAV from the future to the present based on the likelihood that, by 2016, the Red Sox are once again up against the CBT threshold. There is certainly risk in extending him, but there are real benefits. Keep in mind, the 3-years I am talking about guaranteeing aren't his age 35-37 seasons, they are his age 32-34 years, with options for 35 and 36.

[MikeM]

I honestly can't see a shred of tangible upside here in extending a soon-to-be 30 year old three years out from free agency. Even if it is Dustin Pedroia.

Too much can potentially happen between now and then. Next winter maybe.

[wutang112878]

This makes zero sense whatsoever. Putting the age thing aside, the team has him under control for another 3 years. Other than young players who havent hit free agency yet, I honestly cant think of a single team that has extended a player who was under the control of the team for another 3 years, or even 2 years.

This sounds like PR spin to keep the Sox in the headlines, float a rumor to show the Sox care about their players and make the fans think they are doing something, has the Drs greasy handprints all over it.

Perhaps they are concerned that the team isn't viewed favorably by players around the league given what has transpired over the past couple of seasons. By locking up Pedroia long-term, it may give free agents some comfort/certainty about who they will be playing along-side if they sign with Boston.

This would seem logical to me if Dustin was going into the last year of his deal, but with 2 or 3 with the option years to go, I dont see that adding security to a guy coming here. Sure it would be nice to say, look you get to play with Dustin for 5 years, but any FA who is concerned about who he is going to be playing with should be smart enough to realize Dustin might be a very different player in 5 years.

Also, they have to consider the down-side of doing this as well. So say this helps them with this security issue, do other players on the team who are underpaid and have multi years left on their deals start coming to the team looking for an extension after a good season? Like say Clay or Lester?

[JKelley34]

This makes zero sense whatsoever. Putting the age thing aside, the team has him under control for another 3 years. Other than young players who havent hit free agency yet, I honestly cant think of a single team that has extended a player who was under the control of the team for another 3 years, or even 2 years.

Hi.

[Snodgrass'Muff]

This is 100% about PR. If they do this they can turn to the fan base and say "See? We are making every effort to shore up the roster for the long term!" and the average fan will buy into it. Most people aren't going to look at the potential AAV impact on the luxury tax in 2016 or WAR trends in comparable players in their mid thirties. They'll think "Pedroia's really good. I'm glad they locked him up."

[Savin Hillbilly]

This makes zero sense whatsoever. Putting the age thing aside, the team has him under control for another 3 years.

Right, but they are three severely underpaid years, and Pedroia is in that between-the-cracks situation where he could miss the big payday entirely. He might be thinking of what happened to Youk, and asking the Sox to provide some concrete assurance that it won't happen to him.

I think JakeRae is being overly optimistic (from Pedey's POV) here. I think it's highly unlikely that any team will sign a 32-year-old second baseman to a 5/100 kind of contract, even if he's fully healthy and has been performing up to standard in the meantime. Pedroia knows that, and what he's probably saying to the team is something like, "look, you gambled and won big with the current contract. I'm happy to stay here for the rest of my career, but I want at least a few years' worth of the kind of salary my performance has earned."

The big worry, obviously, is accelerated decline due to accumulated wear and tear or a catastrophic injury. You could hedge against that somewhat by structuring the extension with a couple of big guaranteed years at the front end and some smaller vesting-option years at the back end.

[Rudy Pemberton]

I think this is all posturing and designed to get some positive PR- similar to the rumors that the Sox are investigating all kinds of big moves. Ultimately, they'll end up doing very little, with the idea that they have tons of flexibility to do something in the future. Re-signing Pedroia when he has three years left makes zero sense.

[maufman]

According to the model Tango made a few years ago, a player who signs 2 years before free agency typically takes a 50% discount to the value he'd get if he was a free agent when he signed the contract. Tango says that discount rises to 75% for someone with 3 or more years left before free agency, but I'm ignoring that here -- partly because I question whether he has enough data to make that conclusion, and partly because whatever data he has consists mostly of guys who are just becoming arb-eligible and haven't set themselves up for life yet, as Pedroia has.

WAG on my part, but I'm guessing a 4-5 win player entering his age 31 season who doesn't have any red flags would command something like 6/130 on the free market, if not more. Applying a 50% discount, that's about $33mm for the 3-year extension we're spitballing about. If the Sox went to 3/39 and threw in a NTC, that would be an acceptable overpay, imo. (I doubt Pedroia would take it, unless he really wants to finish his career here and accordingly places a high value on the NTC.)

Obviously, a multi-year extension for $20mm per year is crazy talk at this point.

Edit: If the Sox extended Pedroia now, would his contract be re-amortized? Maybe that's the benefit for the Sox (besides the PR) -- getting some of that AAV to hit the books in 2013 and 2014, when they're likely to have room below the tax threshold.

Edited by maufman, 16 November 2012 - 09:39 AM.

[IpswichSox]

Pedroia knows that, and what he's probably saying to the team is something like, "look, you gambled and won big with the current contract. I'm happy to stay here for the rest of my career, but I want at least a few years' worth of the kind of salary my performance has earned."

Maybe, but the FO could come back and say the team took on risk paying him above pre-arb and arb money when Pedroia could have been injured or ineffective or hit by a bus during those earlier years. Pedroia had a fristhand view of the other way to handle this with Papelbon, who took the risk of going year to year and waiting for FA. Instead, Pedroia chose to lock in financial certainty for himself and his family (and likely generations of Pedroias if handled properly -- his current contract is for >$40 million in salary, and there's presumably more with endorsements, apperances etc). It would be a little tough to come back now and say, "Hey, I'd like some of that money I left on the table."

It's tough to see the team re-opening this up when they didn't need to.

[Savin Hillbilly]

It would be a little tough to come back now and say, "Hey, I'd like some of that money I left on the table."

Fair enough, but this is kind of an extreme case. The Sox have gotten such massive surplus value for what they've paid him so far that they could extend him now through, say, 2019, for an AAV in the $15M range, and be in zero danger of not coming out ahead over his career.

Admittedly, extending him now would be an illogical move in pure business terms, and therefore obviously and explicitly not a pure business move....although maufman's point about possibly restructuring the current contract to move some of the big $ into the next couple of years is intriguing.

[Corsi]

Perhaps the Sox see an opportunity to sign a guy at a discount beause he's a) three years away from free agency and b) coming off a sub-par season?

[wutang112878]

Right, but they are three severely underpaid years, and Pedroia is in that between-the-cracks situation where he could miss the big payday entirely. He might be thinking of what happened to Youk, and asking the Sox to provide some concrete assurance that it won't happen to him.

Exactly, this line of logic is kind of my point, that if they address this with Pedey it opens up this can of worms for other guys. Say Lester goes out and has a great Ace like year next year, and then [doubt he would do it but just to illustrate the point] starts throwing a fit about the club exercising his option for 2014 and says he wants his contract addressed because they were willing to do so with Pedey when he was so far away from free agency.

If players want to, they can make this case without having thiss hypothetical Pedey extension and just claim they want a long-term deal now. I just think this opens up a can of worms and its really not necessary.

[bakahump]

Seems like it would make more sense to work with Pedey and Rip up the current contract and renegotiate it to someting like

22 this year 22 next year then 18/16/16/14/12

Total of 122 but we have 31 committed anyway....basically making it a 4 year 15 per extension.

Or something there abouts. Basically we do what NFL teams when they have "extra Cap" room.....which is basically the postion we are in this year. IOW lock up your core players when cap space is available.

Pedey may jump because it basically a 12/12/7 raise from his current contract with 60 million added on the last 4 years.

Edited by bakahump, 16 November 2012 - 11:28 AM.

[glennhoffmania]

According to the model Tango made a few years ago, a player who signs 2 years before free agency typically takes a 50% discount to the value he'd get if he was a free agent when he signed the contract. Tango says that discount rises to 75% for someone with 3 or more years left before free agency, but I'm ignoring that here -- partly because I question whether he has enough data to make that conclusion, and partly because whatever data he has consists mostly of guys who are just becoming arb-eligible and haven't set themselves up for life yet, as Pedroia has.

I think that the bolded is key and shouldn't be minimized. There's a huge difference between extending a guy 2 or 3 years away from FA who's going year to year and extending the same guy who is already guaranteed to make over $40m. To me that throws the whole 50% discount thing out the window. There obviously would have to be some sort of discount involved but if I'm Pedroia there's no way I'd sign an extension that was well below market right now.

[sachilles]

Wondering if this has anything to do with the signing big contracts to outsiders long term. Lets say you develop in the RS system, perform well and sign a favorable contract, the team then signs outside free agents to longer term higher annual value contracts. That has to cause some tension in the clubhouse. Is this a case of the team trying show they value a clubhouse leader/loyalty?

[trekfan55]

Wondering if this has anything to do with the signing big contracts to outsiders long term. Lets say you develop in the RS system, perform well and sign a favorable contract, the team then signs outside free agents to longer term higher annual value contracts. That has to cause some tension in the clubhouse. Is this a case of the team trying show they value a clubhouse leader/loyalty?

This is a good point, but that is the way MLB works. The team gets 3 years of full control, plus 3 years of arb. and then the player becomes an FA and can test the market. If a player like Pedroia wants to make a fuss about the Sox hiring a free agent for bigger bucks he should complain to the Union, not in the clubhouse. It was the Union who wanted a "limited market" of free agents to deal with.

At the end of the day, the Sox may want to make sure that Pedroia will be with the team "forever" and also do a positive PR move. I am not sure that negotiating a new deal this early is a good idea regardless of how much I like Pedroia. Baseball works differently than the NFL, you don't see players holding out for bigger contracts in baseball because the team is stuck paying them regardless of what may happen. I would like, however, that he be extended some time before his contract ends, but now is not the time.

[Rovin Romine]

Edit: If the Sox extended Pedroia now, would his contract be re-amortized? Maybe that's the benefit for the Sox (besides the PR) -- getting some of that AAV to hit the books in 2013 and 2014, when they're likely to have room below the tax threshold.

I was wondering about this also. Could they renegotiate the existing contract to "front end" some money to 2013, plus tack on a reasonable extension (perhaps consisting of option/buyout years)?

[glennhoffmania]

I was wondering about this also. Could they renegotiate the existing contract to "front end" some money to 2013, plus tack on a reasonable extension (perhaps consisting of option/buyout years)?

I think you're talking about two separate issues. Mauf is talking about spreading the luxury tax hit over a longer period of time. You're talking about cash flow. I don't think cash flow is an issue for this front office so if you couldn't re-amortize the deal front loading it only gives them a marginal benefit.

[maufman]

I was wondering about this also. Could they renegotiate the existing contract to "front end" some money to 2013, plus tack on a reasonable extension (perhaps consisting of option/buyout years)?

You can't "front-end" the agreement -- unlike the NFL and NBA, MLB uses AAV rather than cash flow to determine the annual luxury tax impact of contracts.

But, if you signed Pedroia to a 3/45 extension before Opening Day, I suspect you would lump that together with the two years remaining on his current year (disregarding the option) and amortize it as 5/65 -- which would shift a portion of the luxury tax hit from 2015 and beyond into 2013-14, where the tax is unlikely to come into play. If the Sox figure they'll pay the tax in two of the three years from 2015-17 (iirc, you get hosed if you're over the threshold three straight years, so they'll presumably get under once), then the tax savings would shave a couple million off the club's actual cost over the life of the contract. It's not a reason to do the deal in itself, but it moves the needle a little bit.

Also, it's worth mentioning that Pedroia has "only" earned $20mm for his career to date. Figure he pays nearly half of that in taxes and union dues, lives like a pro ballplayer, takes care of family members, and invests a couple million -- it's gone. I'm not suggesting you should cry for Pedroia by any means, but I could certainly understand if the opportunity to triple the guaranteed money he has coming his way (from $20mm to $60mm or so) and to pocket a $10mm signing bonus was enough to entice him to give up a theoretical payday after his age 31 season.

Edit: I think I'm right about the $12-15mm AAV on an extension, but I think the Sox have to go four or five years to get it done. Suppose Pedroia would extend for 5/60 -- do you do that?

Edited by maufman, 16 November 2012 - 07:31 PM.

[Rough Carrigan]

Thanks for the Ryan Howard picture, JKelley. I just heard about this and nearly did a spit take. What?! Why?! Why does Ben want to pull a Ruben Amaro? I know it's repeating past mistakes to ever count Dustin Pedroia out in any way but he seems like exactly the kind of player who's unlikely to age well. He plays on the Pete Rose edge of insanity at all times. That's how he succeeds. Where's the other way to succeed for him? Sorry but I think this is dumb.

Edited by Rough Carrigan, 16 November 2012 - 09:12 PM.

[Rudy Pemberton]

Well, Pete Rose aged pretty well....

[Jordu]

Well, Pete Rose aged pretty well....

Well said. What worries me about a mid-30s Pedroia is his swing -- he relies so much on eye-hand. When that starts to slow even a little, I fear his offensive production may decline quickly.

Of course, Willie McGee hit .300 when he was 38...

[Rough Carrigan]

Well, Pete Rose aged pretty well....

I set that one up on a tee, didn't I?
But Pete Rose hit singles with a sort of swatting swing out of a crouch. Pete Rose might never have taken a swing in his life like Pedroia takes 10 times a night, the bat traveling an arc that might go as low as his shoe tops and over his head. Having Pete Rose intensity is great. It seriously is. But needing it and insane hand eye coordination, even by the standards of MLB players, to succeed is a tough formula that doesn't seem resilient to aging.

Edited by Rough Carrigan, 17 November 2012 - 12:02 AM.

[Rough Carrigan]

Well said. What worries me about a mid-30s Pedroia is his swing -- he relies so much on eye-hand. When that starts to slow even a little, I fear his offensive production may decline quickly.

Of course, Willie McGee hit .300 when he was 38...

I remember watching Willie McGee in St. Louis and wondering where the first half of his swing was. He seems very far from a guy with a Pedroia type swing.

Edited by Rough Carrigan, 17 November 2012 - 12:01 AM.

[redsoxstiff]

'although maufman's point about possibly restructuring the current contract to move some of the big $ into the next couple of years is intriguing.'

Do it...

There is a worry that other players on many teams might feel they deserve it [precedent for another day]...Pedey does ...Do it...