The Anatomy of a Pre Free Agent Contract

We get so carried away during the offseason Hot Stove talk about where the free agents of the year are going to land and how much money they will get, that sometimes we forget about those deals made by clubs to their players, locking them up long-term before they reach that status. And many times those deals are misunderstood. Misunderstood because many in the public try to compare them to the deals made when a player reaches free agency, the time when maximum dollars have to be paid, because the leverage in the situation has now tipped over to the player's side. But that's not the case with a contract prior to free agency, and especially prior to being arbitration eligible. That's not the case at all.

Free agency starts when a player reaches 6 years of Major League Service Time. Major League Service time is calculated as the number of days in a season when the player is considered on the major league roster, including time spent on the disabled list. If a player has 172 days of service time in a year, it is considered a full year. The arbitration clock begins for all players when they reach 3 years of Major League Service Time, plus the top 1/6 of players, with the most MLST, who have reached 2 years of Major League Service Time. But enough for definitions (there are caveats in the Super Two category, also, but we won't get into that).

Let's take one example of a pre-free agency contract. Let's look at the recent six year deal given to Justin Upton of the Arizona Diamondbacks.

Justin Upton is a 2.060 MLST player, therefore in the last year of his pre-arbitration time. Next season, 2011, he would be arbitration eligible. So when Arizona recently signed him to a 6 year contract for $51.5 million, they were buying out one year of pre-arbitration, three years of arbitration eligible service, and two years of free agency.

How did that break down?
2010 - $1.25 million signing bonus; $500,000 salary.
2011 - $4.25 million.
2012 - $6.75 million.
2013 - $9.75 million.
2014 - $14.25 million.
2015 - $14.50 million.

Now, what Arizona is really doing, is taking a large gamble. Upton has a lot of ability, but has yet to max that ability out. His 2009 season was great, and at only 22 years of age, batting 0.300 with 26 HR and 86 RBI. However, it was his first very good season. There are a ton of baseball players in the history of the game who've had one very good season, but never continued to progress in the way this contract suggests.

But did Arizona overpay? Should they have waited another year or two to extend him that far out?

The answer is yes.

Justin Upton deserved a multi-year deal, in our opinion, using the baseballevaluation decision model SPRO salary projection, but only one that bought out a couple years of arbitration, not extending into the free agency period yet.

SPRO
2010 - $459,000
2011 - $2.096 million
2012 - $2.892 million

But aren't the SPRO numbers too low?

Perhaps. We are not projecting his stats forward, but going on what he has already done. With a 2009 PEVA of slightly over 9 at 9.035, Upton has not yet broken into the top echelon of players. Yes, he has that potential. And 2010 might be the year that potential is realized. Just hasn't been yet. And we hope it does, not only for the sake of those fans of the Arizona Diamondbacks, but for the pocketbook of those who extended him that far in the future. Remember, for Upton to warrant the free agent numbers they extended him to, he has to become not only a perennial All-Star, but a veritable superstar in the game. That might happen, but we still think, from a contract standpoint, that it was pushed too far and too soon. Only time will tell how it all works out.