If the Miami Marlins and Giancarlo Stanton do indeed agree on the supposed record 13-year, $325 million contract that has been rumored over the past day, this represents the largest contract in the history of American professional sports. Of course, baseball contracts do not come impinged by salary caps or artificial maxes like those in basketball and other American sports, but the mere fact that Stanton is being rumored to sign the biggest contract the game has ever seen has caught plenty of eyes.
And Stanton would be well-deserving of this type of contract.
In the past, we discussed what a Stanton extension may look like, and it did appear to be a similar contract structure.
What kind of contract would that look like? [Joey Votto] signed a deal that paid him $22.5 million a year annually in a time when he was a similarly-skilled five-plus win MVP candidate and when the win rate was closer to $4.5 million per win. Now that we're talking at least a 33 percent raise from that rate, you might have to pay Stanton at least $28 million per year for that kind of deal. That means that the Marlins would sign a 12-year, $310 million contract.
Our proposal for a contract was very close to the supposed offer Miami is making. The Marlins are committing $15 million more and getting one extra season at the tail end for Stanton, which overall seems like a fair trade given Stanton's likely talents by that point of his career. The above offer gives Stanton $28 million per free agent year. Miami's offer on the table signs for one more season and offers $26.8 million per year, which is closer to my initial tally of $24.7 million when I suggested a 13-year, $302 million extension I proposed earlier this year.
It seems absurd to the average fan that a player like Stanton, who is really good but has never won any awards and is playing for a middling team like the Marlins, would be worthy of such a deal. But with the way that contract extension prices are climbing. it is no surprise that free agent prices would climb to extremes. Freddie Freeman signed for $20.6 million per year in free agency as a first-year arbitration-eligible player. Stanton is not only clearly a better player than Freeman, but he is signing later into his arbitration schedule. if you try to judge it based on Freeman's contract, considering Stanton has been about 1.5 times better than Freeman through his entire career in similar playing time, then Stanton should be slated to earn $31.5 million per season through five free agent seasons.
That number seems preposterous, but already a good number of players are making that kind of cash. Mike Trout signed before arbitration even began and is slated to earn $33.25 million in each of his three free agent seasons. Clayton Kershaw is the best pitcher in baseball, and he's slated to earn $32 million a year for six free agent seasons. And that does not count the numerous huge contracts other elite, older hitters like Miguel Cabrera are getting. While Stanton may not be as good as Trout or Cabrera, he is projected to be a top-10 producer in 2015. If that's the case, we are talking about the impending free agent salary of at least a top-20 overall player at age 25. Very rarely do players even reach free agency at the time Stanton is slated to get there.
Photo by Marc Serota, Getty Images
In fact, there is only one very similar situation that I can recall. Remember that Cabrera himself was two years away from free agency before signing an extension with the Detroit Tigers. Both Cabrera and Stanton are of very similar value through their first four and a half seasons.
Combine the fact that Stanton is hitting in a harder environment now than Cabrera had in the early 2000's with the naturally better defensive capabilities Stanton has and you can see why the two players are so similar. And the hype behind Stanton is just as big as it was behind Cabrera when discussions about a second year arbitration salary. Eventually, Cabrera was traded to the Tigers and signed an eight-year extension worth $152.3 million, but it paid $21 million annually for six free agent years.
At the time, the price of a win was around $4 million or $4.5 million per win in 2010, Cabrera's first slated free agent year. Now, the price of a win is closer to $6 million, and if you believe FanGraphs, it might be even higher than that. But even at $6 million per win, if Stanton and Cabrera were of equal caliber, then Stanton would be expected to be paid $28 million a year for his first six free agent seasons, which would be the equivalent of an eight-year, $198 million extension.
It seems safe to say that Stanton's likely true value is somewhere in between what we surmised based on Freeman's extension and Cabrera's contract years ago. But the point is that both roads lead eventually lead to a price range that hits $300 million or more over 13 years. Stanton is earning only $2 million more per season more than Robinson Cano, but he would earning it at an age four years younger when he hits that first free agent season. He's earning only $3 million more per year than Prince Fielder got from the Tigers at a similar age. Nowadays, it is getting more and more expensive to buy wins from the free agent market, and Stanton is so close to the market that most contract extensions at this point in time earn that kind of salary.
The raw number sounds absurd, but only because no one has yet to sign such a contract. The truth of the matter is that $325 million may just be the price to pay for a star heading into the prime of his career. And Miami seems more than willing to pay that price right now.