Thursday, December 9, 2010

Contract Reach Back No More

Well, that title is an odd one, I realize, and it hasn't really gone completely away, but if the trends seen in the early free agent contracts are any true indication, the days of the full reach back four years to find a good year to justify a high contract are on the downside. Now what do we mean and what are we talking about? We mean. Very few contracts are now being given out to players who were good four years ago, but haven't done much in the last three, at high "former glory" dollars. And this trend, that only existed for about five years up to last years, is now returning to a last three year look.

Now, there's still some of the "he used to be good and might be again" dollars thrown into these contracts. But it is significantly diminished. And it should be. SPRO projections currently include the look back provision, even though we disagreed with it when it came into play about the year 2005. And if trends continue, when the mid off-season adjustments are made, it will be diminished.

And who are we thinking proves this point. Look at the contract of J.J. Putz. In some past years, he would still be rewarded as if the Seattle days of 2006 and 2007 were the basis for his contract, i.e. being payed as if he were a dominant closer, but while the 2 year $10,000,000 contract recently signed throws some respect toward those years, it is predominantly being based on his good 2010 campaign and poorer two season before. It's even more noticeable with a pitcher like Aaron Harang. Using the former logic of reaching back to a year like he had in 2007 when he was a dominant force, his recent contract acknowledges that he has that possibility, but is not paying him at a rate that thinks he'll probably get there. With the SPRO RAVE lookback, he'd be worth north of $9 million per year; without it, you're looking at $2.4 million. The Padres are paying him $4 million, more than his recent years say he deserves, but not nearly what past glory has in the reach back days of contracts would compute.

Now maybe this will change back again as more contracts become signed for 2011, but we just wanted to note the trend we're seeing today, and applaud it. Finally, general managers and the economy have come together to ask the question; if he hasn't been very good for the last three years, let's make him prove he can get back to the former level again, instead of paying him as if he will.

Of course, that doesn't explain the $10,000,000 contract given to Carlos Pena, now does it?