Sunday, December 5, 2010
Werth's Big Contract Resets the Market Place
As I mentioned yesterday, Scott Boras is the type of agent who recommends that his top-tier clients wait until late in the offseason before deciding on where to sign. That is, of course, unless some crazy team comes out of nowhere, and throws bags of money in his client's direction. In the case of Jayson Werth that's exactly what happened.
MLB.com's Todd Zoleski reports the Washington Nationals have signed right fielder Jayson Werth to a 7 year $126M contract. Just the other day, Scott Boras confidant, Jon Heyman, predicted Werth would likely see a contract similar to the 4 year $66M deal Jason Bay received last year from. To see him, instead, receive a contract similar to Matt Holliday's 7 years $120M deal with the Cardinals is pretty shocking.
The Washington Nationals free agent splash is one that will likely have huge implications on the rest of the free agent market. Buster Olney tweeted that it "has the impact of an 8.0 earthquake," and compared it to the shockwaves felt after the Dodgers signed a Kevin Brown to a 7 year $105M contract in 1998. Some might consider this statement to be a bit of an exaggeration, but I don't.
Werth does a lot of things very well: hits for power and average, gets on base at a high rate, runs the bases well, and plays excellent defense at a corner outfield spot. While I don't think giving Werth an average annual salary of $18M per season is excessive (I have him pegged as being worth $15-16M per season over the next five years), it's still ill advised. This is especially true when you're paying that kind of money out over seven years to a player who will be 38 years old when the contract expires. The Nationals, still 2-3 years away from being contenders, probably shouldn't have signed Werth. It would've been a lot smarter for them to save up their money, and focus on developing their farm system. That said, if they had to sign him, they probably should have signed him to a five year deal rather than a seven year deal. Then again, if the Nationals hadn't been so willing to overpay for Werth's services, we wouldn't be having this discussion right now.
So how does this affect the rest of the free agent market? It completely resets it. Everything we thought we knew can get thrown out the window. If Werth can get 7 years $126M, then Crawford probably won't be willing to take the 6 years $112M contract I suggested he was worth in October. Instead, he'll probably get a deal closer to 8 years $160-170M. This narrows down Crawford's suitors to the big guns: the Yankees, Red Sox, and Angels.
Cliff Lee's price probably went up as well. If Werth can get a 7 year deal at 31 years old, why can't Lee get the same at 32? Lee is after all, the premier pitcher on the free agent market. With Lee, we're now looking at C.C. Sabathia money--7 years $161M. Keep in mind that Sabathia received his contract when he was 27 years old. The Rangers aren't going to commit to Lee for that long, so this all but guarantees he signs with the Yankees.
What about Adrian Beltre? Well, initially I had him pegged at 4/$56M or 5/$64M. Now, we might be seriously looking at him getting a deal closer to 5/$80M, which was unthinkable when the offseason started. The Angels and Orioles are among the teams interested. If the Orioles don't land Mark Reynolds in a trade, I expect them to go hard after Beltre. Like the Nationals, the O's might need to overpay in order to acquire a premier free agent. That said, the Angels had the most unproductive third base situation in baseball in 2010, and are desperate to upgrade. If they don't sign their primary target (Crawford), we might see the Angels overpay Beltre in order to avoid coming up empty handed. Beltre has a home in Los Angeles, which makes Anaheim an ideal destination for both parties.
As you can see, this contract has wide reaching implications. It essentially sets the tone for the free agent market for years to come, and kick starts the next period of salary inflation. The scary part is that this contract will probably be topped at least three more times over the next few months when Cliff Lee, Carl Crawford, and Adrian Gonzalez sign their megadeals.