MLB: Braves, Rays show extensions are new key to success

Following the agreement of the new Collective Bargaining Agreement , spending this offseason was at an all-time high. Teams like the New York Mets, New York Yankees and the San Diego Padres went above and beyond with their spending, while teams like the Los Angeles Dodgers saved up, likely so they could throw $500 million at Shohei Ohtani next year.

Here are the major contracts handed out this offseason per Spotrac:

Justin Verlander: 2 years, $87 million ($43.5 million AAV)

Aaron Judge: 9 years, $360 million ($40 million AAV)

Jacob deGrom: 5 years, $185 million ($37 million AAV)

Carlos Correa: 6 years, $200 million ($33 million AAV)

Rafael Devers: 10 years, $313 million ($31 million AAV)

Trea Turner: 11 years, $300 million ($27 million AAV)

Carlos Rodon: 6 years, $162 million ($27 million AAV)

Xander Bogaerts: 11 years, $280 million ($25 million AAV)

Dansby Swanson: 7 years, $177 million ($25 million AAV)

As you can see, the big market teams brought out their checkbooks. The money shelled out to free agents begs the question, how can teams that are not willing to spend big on free agents compete?

Braves, Rays showing a different kind of MLB success model

The Tampa Bay Rays and Atlanta Braves may have just discovered the answer to that question. In the past two years, the Braves and Rays have handed out the following extensions:

Braves:

Matt Olson: 8 years, $168 million ($21 million AAV)

Austin Riley: 10 years, $212 million ($21 million AAV)

Michael Harris: 8 years, $72 million ($9 million AAV)

Spencer Strider: 6 years, $75 million ($12.5 million AAV)

Sean Murphy: 6 years, $73 million ($12 million AAV)

Rays:

Wander Franco: 11 years, $182 million ($16.5 million AAV)

Jeffrey Springs: 4 years, $31 million ($7.75 million AAV)

Yandy Diaz: 3 years, $24 million ($8 million AAV)

Teams that wish to be successful, but do not want to spend $300 million on a player take note. It’s simple, do not let your players hit the open market. Do you notice the difference in average annual value (AAV) between the extensions and the free agent deals?

If Austin Riley hit free agency, he’d earn at least 10 years and $300 million. Wander Franco would probably earn more. Spencer Strider and Michael Harris would be able to buy $12 million toilets if they hit free agency. I am sure you are curious what the catch is. Why are these players signing for so little when they can wait until free agency and earn double?

In the case of the young players who were still either in arbitration or pre-arbitration (Franco, Riley, Harris, Strider, etc.), they will earn far more than they would in their pre-arbitration and arbitration years with these extensions. It puts money into their pockets sooner rather than later.

It makes sense for the teams as well. If not for the extension, Wander Franco would be well out of the Rays’ price range come free agency. He would likely be gone the second his arbitration eligible years expired. With this deal, they guarantee him on their roster for 11 years at a price they can afford on a yearly basis.

We are seeing a true win-win scenario happening between teams and their young, pre-arbitration players. In the case of the veteran deals (Olson, Diaz, Springs), those players would be nowhere near that price if a bidding war was happening on the open market. Diaz had a 143 OPS+ last year. Springs had a 2.46 ERA last year. Their services would be highly valued on the open market.

It also takes the pressure off of those players to perform in their eventual contract years. They can take their life-changing money and focus on playing baseball.

The Mets have a history-making payroll of $329 million this year at the time of writing this. Atlanta’s payroll currently sits at roughly $180 million. I completely expect the Braves to contend with the Mets for the NL East title this year, and many years in the future while not raising their payroll one penny.

The New York Yankees have a $258 million payroll this year, and the Rays currently sit at $52 million. I fully expect the Rays to remain competitive with the Yankees this year in the AL East.

Extending your star players to avoid letting them hit free agency is a growing trend and, with the most recent offseason spending, I expect that trend to grow exponentially. Just remember, Alex Anthopoulos and Peter Bendix were among the trailblazers.