Hidden Vigorish

Detailed Analysis of The Pittsburgh Pirates

Pirates Ink Marte to Contract Extension, Now for the Hard Part

The Pirates locked up OF Starling Marte this week to a 6 year, $31 million contract extension that also includes two option years. This entails all of Marte’s pre-arbitration and arbitration seasons, as well as three of his free agent years. This deal is certainly a coup for GM Neal Huntington. There is nothing to not like about this contract. It gives the Pirates control of the dynamic young outfielder thru the 2021 season at quite a discount. Just how much of a discount? According to Dan Szymborski of Baseball Think Factory and the creator of the ZiPS projection system, the discount is pretty steep.

It is true that Marte’s greatest skills, speed and defense, are a bit undervalued in the arbitration system. But even if you trim his arbitration valuations by 20% from the ZiPS projections, this deal still represents nearly a $10 million discount for the Pirates. And that is before we even begin to look at the potential surplus values of the option years. This was a great deal for the Pirates. It was also a good deal for Starling Marte. This was a poor kid from the Dominican Republic that was given a small signing bonus as an amateur free agent signing. His career earnings to date are under $1 million. Now he has the kind of financial security that sets him up for the rest of his life.
 
Huntington even deserves credit for the structure of this contract. He bought himself some extra payroll flexibility in future seasons by using some of the available cash hoard from his unspent payroll budget this winter to include a $2 million signing bonus into Marte’s contract. That kind of front loading keeps the salary in later years lower. In year 6 of the contract Marte will be making just $10 million. But let’s not pat Neal Huntington on the back too hard. This is how most MLB baseball teams operate in this era. Locking up young talent very early is not an option for small market teams. This is a necessity. This should be considered BAU (business as usual). As great as this deal is for the Pirates, it was low-hanging fruit. Huntington got a 3-0 cookie right down the middle of the plate and he hit it out of the park. Future contract negotiations with extension candidates will not be so easy. Will Huntington be able to convince Pedro Alvarez or Gerrit Cole to sign a similar extension with the Pirates? Probably not. Those players are represented by agent Scott Boras and he is almost never willing to postpone free agency. For players that Huntington can’t lock up long term will he be able to make the hard decision to hold them or trade them at just the right time? Will Huntington be able to move an asset from a contender and get the kind of returns necessary to keep the machine running without missing a beat? Trading a star player during a rebuilding period is a completely different animal than dealing a star from a team with legitimate playoff aspirations. It has become in vogue for bloggers to insist the small market Pirates need to replicate the Tampa Ray model of baseball operations. Personally, I don’t agree with that. The Pirates can’t be the St. Louis Cardinals, but they don’t have to be exactly like the Rays either. Why can’t they blaze their own trail somewhere in between? Regardless, at some point in the future Neal Huntington is going to have to deal a player simply because he can’t be signed and he has too much value and can fetch too much of a return, much like the Rays did when they dealt James Shields to the Royals for Wil Myers. Can Huntington make that sort of deal? Your guess is as good as mine, but this much I know. That will be significantly harder to do than signing Starling Marte to a contract extension.
 

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