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If you did not believe the Miami Marlins were going to fail to sign Giancarlo Stanton to a long-term extension after the team reached agreement on a one-year deal to avoid arbitration this year, then this may be the final death knell for you. Freddie Freeman and the Atlanta Braves reached an agreement to a mammoth eight-year, $135 million contract extension that should keep him a Brave for five free agent seasons after his arbitration time runs out. This contract is enormous for the Braves, who have committed themselves to a first baseman in a world where few elite ones exist. But as Juan C. Rodriguez of the Sun-Sentinel points out, it also has implications on the Marlins' pursuit of Stanton.
That deal offers a foreboding barometer for what it will take to keep Stanton in a Marlins' uniform long-term. Freeman is an excellent comp for Stanton in terms of both age and service time. Both players just completed their age-23 seasons. Freeman has three years, 33 days of big league time compared to Stanton's three years, 118 days.
Both were arbitration-eligible for the first time. Whereas the Braves pursed a multi-year deal with Freeman, the Marlins have only indicated a desire to build around Stanton. They have not yet initiated substantive talks on a long-term contract. The two sides avoided arbitration with a one-year, $6.5 million deal.
The similarities between Stanton and Freeman are scary indeed. Both are young and had the same amount of service time. Both were arbitration eligible this year. And both stood to make a good chunk of money in arbitration had Freeman not signed an extension. The two sides differed by $1 million, as the Braves had him valued at $4.75 million and Freeman submitted a $5.75 million figure. That is close to in-line with the MLB Trade Rumors projections posted before the season by Matt Swartz, which had Freeman earning $4.9 million in his first arbitration season. As you will recall, Stanton was expected to earn $4.8 million by that same system.
Let's presume Freeman earned the midway mark between his and the team's posted figures. He would have earned $5.25 million, and let's round that to an even $5.5 million since Stanton earned much more than the projection. If you figure he will pick up $9.5 million in 2015 and $14 million in 2016, that leaves Freeman earning $29 million through three arbitration seasons. That gives him five free agent seasons for $106 million, or $21.2 million per year.
Take a step back and look at those numbers, and compare that to what I said a few months ago about the timing of a potential Stanton extension.
Such a contract would be worth six years and $69 million, essentially the same contract Hanley Ramirez got from the Marlins in 2008. It is a reasonable contract, but it is most certainly the Marlins' last chance to offer the deal. Next year, you can expect Stanton to want five or six free agent years at closer to a market value of $17 million a season or more. After a projected five-win campaign at age 24 in 2014, Stanton could expect to command $20 million a year on the open market easily given the contracts players like Matt Holliday have signed in the past. A signing after his first arbitration year may require an eight-year contract worth $130 million, with perhaps no discount on the free agent years.
Look at that last bolded figure. That is exactly what Freeman received in his extension, except a year earlier than expected and with similar credentials. Stanton, in fact, has been better over his first three-plus seasons, posting more Wins Above Replacement (13.5 fWAR versus Freeman's 7.1) in just under 100 more plate appearances. Stanton is the injury risk, while Freeman is the "can he repeat" risk, given that his 2013 season was a breakout campaign compared to 2011 and 2012. Freeman has more to prove and only has the advantage of the best recent season, and yet he came out with a contract with two more years of expected control and an average annual value that does not come out to be as team-friendly as previous extensions have been.
And while Miami continuously claims that its finances are in the toilet, the Braves are not exactly flush with cash either. The Braves were only 18th in payroll last season at just about $90 million, and the club has no real advantages over the Marlins in terms of anything other than attendance. Like Miami, Atlanta is stuck in an awful television deal that expires in 2027. And while the Braves are expected to earn more revenue from their 2017 move to a new stadium in Cobb County, Miami already has their claim on new stadium revenue at Marlins Park. The Fish do face issues in locating their park in the center of Miami-Dade and alienating a part of their fan base in Broward and Palm Beach Counties, but the Braves have the same issue with their northern suburb fans having to travel to south Atlanta to Turner Field. In fact, the reasoning behind the Cobb County move is precisely this problem.
So Atlanta has no inherent financial edge on Miami like a Dodgers-style TV contract, but they still paid through the nose to retain Freeman. In doing so, they set a new precedent in a new world of contract extensions. Teams might not be able to get away with shorter contracts for their established star talents, like the ones Andrew McCutchen and Justin Upton signed some time ago. Star talents may be able to earn their free agency-style contracts at earlier and earlier times, as Freeman and Buster Posey found out. With the prices of free agent seasons on these contract extensions growing (along with free agent prices in general, thanks to the economic boon in baseball), the Marlins are getting priced out of even this market.
Giancarlo Stanton knows that, in three years' time, he can earn a lucrative contract in free agency if he does not lock himself up to Miami. With the cheaper option now increasingly coming off the table, the cash-strapped Fish have seemingly no hope to retain one of their best players for the long haul. In about four months' time, get ready for the trade talks to start up.
