Did Los Angeles Dodgers outfielder Yasiel Puig make a good choice when he chose to keep his guaranteed money rather than opt in to the arbitration process?
When Yasiel Puig was signed by the Los Angeles Dodgers in 2012 after defecting from Cuba, he agreed to a seven-year, $42 million guaranteed contract. The contract included a $12 million signing bonus. It looked like a terrific deal for the Dodgers when Puig came up as a 23-year-old in 2013 and tore up the league. He had two hits in his first major league game and 16 hits in his first eight. He had 15 multi-hit games in his first month and was hitting .440/.466/.743 after his first 28 games. During this stretch, he had a .513 Batting Average on Balls in Play.
Through his first 65 career games, Puig hit .364/.425/.576 with 47 runs scored and 11 homers in 280 plate appearances. He slowed down a bit over the rest of the season, but finished his rookie year with a .319/.391/.534 batting line. He was worth 4.9 WAR in 104 games (according to Baseball-Reference) and finished second in the Rookie of the Year voting.
The 2014 season was more of the same, if not quite at the same level. Puig hit .296/.382/.480 and was worth 5.3 WAR. He made the all-star team for the first time and got some down ballot MVP consideration. On the free agent market, one WAR is estimated to cost between seven and eight million dollars, so Puig’s 10 WAR over his first two seasons had already provided the Dodgers with surplus value.
Puig hasn’t been the same player since. He’s hit a combined .260/.323/.425 in 183 games over the last two years and has seen his value plummet. This off-season, Puig had the option of continuing with his guaranteed contract or opting in to the arbitration process. His guaranteed contract will pay him $6.5 million this year and $7.5 million next year. In 2019, he will be eligible for his first year of arbitration, then will become a free agent before the 2020 season.
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His other option would be to forego the guaranteed $14 million over the next two years and enter arbitration for the first time. This option would likely have paid him around $7 million this year and would make his 2018 contract dependent on how well he performed. If he had a good year, his contract would go up in his second year of arbitration. A bad year could lead to being non-tendered by the Dodgers, meaning he would miss out on the $7.5 million that he’s guaranteed to make in 2018.
Puig chose to continue with the guaranteed contract. He took the safe play. No matter how well he plays next year, he’s guaranteed $14 million over the next two years. White Sox first baseman Jose Abreu had a similar decision to make. His options were outlined here at MLB Trade Rumors. It’s a good explanation of the factors involved. Abreu gave up the guaranteed money and chose to opt in to the arbitration process, which is the opposite of what Puig chose to do. Did Puig make the right move?
For starters, it’s uncommon for players to see their salaries drop when they go to arbitration. As mentioned above, Puig will likely earn around $7 million this year through arbitration if his salary is kept at a similar level as last year. Even if his salary drops, it wouldn’t be by much. If he has a good year, it would go up next year through arbitration, but would the overall value equal the $14 million he’s guaranteed to make? It’s likely close enough that it’s not a bad move for Puig to take the guaranteed money, especially considering how he’s played the last two years. It’s definitely the prudent move.
On the other hand, if you’re a Dodgers fan who would like to see Puig get back to being the player he was in his first two years, you’d like to see him show some confidence. You might hope he would forego the guaranteed money with the idea that he’d have a great year and would make more in 2018. Taking the guaranteed money doesn’t show much confidence that he will go out and have a great year. He’s not exactly betting on himself.
Puig is projected by Steamer to hit .284/.351/.480 in 575 plate appearances and be worth 3.2 WAR (Fangraphs) in 2017. On the open market, a season like that would be worth over $20 million. Considering how Puig has hit over the last two years (.260/.323/.425), that looks like an optimistic projection. It should be noted, though, that Puig hit quite well after he returned from being exiled to the minor leagues for all of August last season. He came back to the big leagues in September and hit .281/.338/.561 in his final 23 games. That would be a Yasiel Puig that the Dodgers and their fans would love to see.