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Jose Reyes Contract Heavily Backloaded

The details of the six-year, $106 million pact between the Marlins and shortstop Jose Reyes have finally been made public, and the results may raise some eyebrows. Here is Joel Sherman with the breakdown:

Reyes deal is 10m, 10m, 16m, 22M 22M 22m and 22m opt or 4M buyout
Dec 07 via Twitter for BlackBerry®FavoriteRetweetReply

Contracts are often backloaded, and rightfully so. As weird as it may seem initially for a team to pay more for the years that are more likely to be less valuable, such a move is often made in contract signings everywhere. But when the Marlins do something like this and at this drastic a rate, you know people are gong to speculate on the underlying reasons behind the move.

There are a number of ways one could interpret this sort of backloaded contract. One was the way that Sherman himself mentioned, that the Marlins were doing this as a virtual no-trade clause. Why would any team acquire Reyes at three years and $70 million when the Marlins have already used up the most valuable seasons of Reyes's deal? The Fish would be hard-pressed to find a trade partner unless Reyes continues to perform well, and even then they would likely get very little from the deal.

Of course, the most logical reasoning is that the Marlins were thinking about inflation. Money in the future is obviously less valuable than money in the present, and the Marlins may simply be leveraging this fact. The team won't pay Reyes close to the average annual value (AAV) of the deal until 2014, and perhaps by then inflation will have dropped the value of the future $22 million years to a lot less. In this configuration, Reyes stands to take less money (depending on future inflation) than if he had taken a simple AAV per year deal. Now, inflation is not likely to increase at the rate the Marlins are backloading the deal, so it isn't as if they are saving a huge amount this way. If inflation goes up three percent a year in the next few seasons, that 2015 value of $22 million would really equate to about $20 million, meaning the club would have paid $55 million in today's money when they would have paid $68 million in current dollars had they structured a non-backloaded deal by the end of 2015.

The Fish also mentioned that they had structured their deal with Reyes in order to fit another free agent into the payroll. In this configuration, the Marlins will have an extra $15 million over the next three years to utilize for the building of the team's core before the rest of the club's contractual obligations are through in 2014; remember, only Reyes is currently scheduled to be under contract (not including team-controlled players) in 2015 barring Heath Bell hitting his vesting option.

Unfortunately, there is always the consideration of insidious reasons for anything the Marlins try and do. In this case, the hidden fear of Marlins fans is that the Reyes long-term deal is backloaded for the same reason that Carlos Delgado's Marlins deal was backloaded. Remember that Delgado only earned $4 million in his first and only season with the Marlins under his four year, $52 million free agent deal. The Fish, who were unable to obtain a stadium deal at the time, structured the deal presumably to relieve the contractual burden in case the team was unable to secure the stadium and keep payroll up long-term. As a result, while the Marlins did make a free agent signing, their contribution was minimal, as they straddled the Mets with the remaining $48 million over three years.

Perhaps the Marlins are thinking of the same thing with Reyes? After 2014, the Marlins will be cleared of almost all commitments from their books other than Reyes. If the club could pull off a deal in the face of floundering attendance or poor return on investment, the Marlins would once again be able to come out clean, getting the best value and even lower than average prices while pawning off the remaining seasons to another team, allowing them to start anew with another core or trim payroll as so many seem to expect.

The problem with that is finding a trade partner. It was easy to do in the case of Delgado, as the deal was not outlandish and he was coming off an extremely successful offensive campaign. I imagine it will be much more difficult with a then-32-year-old Reyes, hence the theory that the backloading was initially a pseudo-no-trade clause. I believe this is the case, and that ultimately the Marlins would be unable to manage to pull off the same heist they did with Delgado. Unless Reyes continues to succeed mightily through his age-31 season, it would seem extremely difficult for the Fish to utilize that same plan. The Delgado move remains a mostly isolated incident.