Evaluating the Miami Marlins' Long-Term Contracts

Feb 24, 2012; Jupiter FL, USA; Miami Marlins president of baseball operations Larry Beinfest looks on during spring training at Roger Dean Stadium. Mandatory Credit: Steve Mitchell-US PRESSWIRE

Earlier today, we discussed how the Miami Marlins may benefit from using the money saved in the Hanley Ramirez trade and turning it into wins on the free agent market. Of course, supplementing your team with free agents usually means doling out long-term contracts; one need not look further than the 2012 shopping spree the Marlins went on in acquiring Jose Reyes, Mark Buehrle, and Heath Bell as an example, as those players were signed for a combined 13 player-seasons and were given $198 million in guaranteed money.

This discussion on long-term deals is interesting because, as mentioned in the Juan C. Rodriguez article quoting Marlins president David Samson discussing the Ramirez trade, the Marlins have not gotten their way with regards to multi-year deals and extensions since the 2006 era began. Prior to that era, the Marlins rarely doled out multi-year extensions because, as Samson puts it, they were "not in a position" to do such a thing. Yet, they got better results in those early 2000's than they have as of late.

"We’ve always said long-term contracts are very difficult," Samsons said. "When we were not in a position to sign long-term contracts we seem to have better results, which is a very interesting concept. We were forced into not doing things that ended up helping our team. When we had some flexibility to sign them…I can go to any team and look at long-term contracts that aren’t working out. There’s certainly a lesson to be learned there. It’s not that you can’t do long-term contracts, you just have to be right. The teams who win get it right."

Prior to that paragraph, the Sun-Sentinel's Rodriguez notes that the Marlins "have not made wise investments" in the latter years with these extensions. But is that a fair accusation? Can the Marlins be blamed for not foreseeing certain issues when they signed these deals? I do not necessarily think so, and it is worth evaluating these deals through the lens at the time of the signing instead of looking through hindsight as Rodriguez certainly did when he made that comment. Did the Marlins make smart moves?

Hanley Ramirez

Deal: Six years, $72 million
Years Bought Out: Three arbitration seasons, three free agent seasons

This deal was signed in the middle of 2008, and at that time, there was almost no chance the Marlins would regret signing this contract. Ramirez was scheduled to make just $5 million in his first arbitration year and $7 million in his second season. Compare that to Dan Uggla, who made $5.35 million in his first arbitration season in 2009 and $7.8 million in 2010. If he made that much playing a weaker position and being a worse hitter than Ramirez, than Ramirez's arbitration seasons would have staggering in price.

No, the Marlins saved significant money and did what they could not do with Miguel Cabrera all those years ago: sign him to an extension before he reached arbitration. The money in arbitration was going to be an absolute steal, as evidenced by the fact that Cabrera, coming off of seasons that were almost as strong as Ramirez's, signed a $7.4 million deal for his first arbitration season in 2007. Ramirez's deals would have at least matched or eclipsed Cabrera's arbitration dealings, so the Fish already saved significant money during those years.

It was hard to imagine, coming off of an almost six-win season in 2007, that Ramirez would fall so far by age 28 in his free agent years that those salaries would be an overpay. This isn't the Marlins making a "mistake" so much as it is the Fish getting the worst-case scenario for any long-term deal. The Marlins got a discount on those free agent seasons for just this problem, this risk of collapse of Ramirez, and unfortunately for them, it actually happened (possibly).

Josh Johnson

Deal: Four years, $39 million
Years Bought Out: Two arbitration seasons, two free agent seasons

Similar to the Hanley Ramirez trade, the Josh Johnson deal was a success in the sense that the Marlins got a very big discount for a player coming off of a successful Tommy John surgery and dominant 2009 season. In 2009, Johnson was one of the five best pitchers in the National League, and the Marlins signed him to a deal similar to that of Zack Greinke's following his successful 2008 return season. Like Greinke, Johnson had a breakout first year of his contract, and the deal looked like it was going to continue to be a steal for the Fish. But the 2011 injury that kept Johnson out for much of the season has brought this contract into some question.

Again, much like the Ramirez deal, this was a correct move by the Marlins, as all teams generally sign their elite pitchers to exensions that buy out free agent years. Johnson's injury risk was taken into account, which is why his deal was not a lengthier or more valuable contract like the ones later signed by pitchers such as Jered Weaver or Felix Hernandez. Johnson and Greinke both came with risks (Johnson his injuries, Greinke his issues with social anxiety), so their deals were a little less valuable as a result. All in all, it was a smart play by the Fish.

John Buck

Deal: Three years, $18 million
Years Bought Out: Three free agent seasons

This deal was met with great scrutiny, but we often forget just how low the barrier is for being a major league catcher. The Marlins paid Buck $6 million a season, which seemed high given what they have done in the past. The run environment was such that this contract essentially expected Buck to be a 1.5-win player for three seasons. This did not seem unreasonable given his 2010 season with the Toronto Blue Jays, even if that year was clearly a fluke. If Buck hit back around a bit below league average, as he had the past three seasons, he would be worth his contract.

The problem was that the Marlins spent too much money relative to what they could have done. There were a few other catcher options of similar quality to Buck, though none were as offensively skilled as Buck. Those catchers signed for backup money while Buck was the only free agent catcher to sign a more legitimate, market-priced contract.

Of course, now the contract looks like an albatross and the team is at risk for having a player who may never be good again because of the huge fall that he has taken. But at the time, this was a loss only due to opportunity cost.

Ricky Nolasco

Deal: Three years, $26.5 million
Years Bought Out: Two arbitration seasons, one free agent season

This was the riskiest contract the Marlins signed among their in-team extensions. At the time of the move, I praised the deal, crediting the team with recognizing Nolasco's hidden peripheral skills. The Fish clearly remembered 2008 and the second half of 2009. They also were certain that they were going to keep Nolasco through his arbitration seasons, so buying out one free agent year held little risk for the team. Still, the team signed Nolasco in the hopes that he would finally match his peripherals after the disappointments of 2009 and 2010. Remember, from 2009 to 2011, Nolasco posted a 3.57 FIP to go along with his 4.76 ERA; he was never as bad as his ERA suggested.

Unfortunately, in 2012, he took a backwards approach and matched his peripherals to his bad ERA. It seems the Fish in 2011 attempted to fix his approach in order to yield fewer home runs and, in the process, eliminated his strikeouts. The result is that Nolasco lost what made him promising and gained nothing in return. Banking on Nolasco's ERA to rebound and match peripherals was the team's biggest extension gamble, and it failed badly. Still, it was not an unreasonable contract given his arbitration salaries, as Nolasco made almost $4 million in his second of four arbitration years.

The Free Agent Contracts

We've long since discussed these deals, but it is worth remembering that, at the time of these contracts, both Reyes's and Buehrle's deals looked fair as far as free agent contracts are concerned. Only Heath Bell's infamous three-year contract was a poor move from the start.

Overall

If you look back on these seven long-term deals the Marlins signed since 2006, only three could really be considered "losses" at the time of the signing. The Marlins did a good job with Ramirez, Johnson, Reyes, Buerhle, and it could be argued with Nolasco as well. Their poor signings were really Buck (who had a chance to meet his contract demands at least) and Bell. The fact that Ramirez suffered a steep decline in production or that Johnson's health kept him out for much of season is not the Marlins' fault, as they accounted for that risk in the contract savings. The problem is that those things actually happened, along with the complete decline of Ricky Nolasco.

Yes, as Samson said, the best teams do well on their long-term deals, while the worst teams end up with the albatrosses. But the Marlins rarely signed unreasonable contracts, but more of their worst-case scenarios actually happened. The team should not shy away from signing these sorts of deals, however, because for the most part, they have done a decent job.

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