Details Behind the CarGo Deal

For those of you who follow Troy Renck of the Denver Post on Twitter, you know that he's the "go to" guy regarding all things Carlos Gonzalez.  Today, he reported the details behind Gonzalez's massive seven year $80M contract extension with the Rockies. 

"I have previously posted the signing bonus of $3 million, his $1 million salary for the upcoming season and an assignment bonus ($1 million) when traded. Here are the remaining numbers as reported by Diario Panorama’s Augusto Cardenas from Gonzalez’s hometown of Maracaibo, Venezuela.

The breakdown: $1 million in 2011, $5 million in ’12; $7.5 million in ’13, $10.5 million in ’14, $16 million in ’15; $17 million in ’16 and $20 million in ’17."

As I've discussed in previous articles, Gonzalez's seven year contract will cover his final pre-arbitration year, all three arbitration seasons, and the first three seasons of free agency.  Unless there's an opt out clause we don't know about, Gonzalez will not become a free agent until just before his age-32 season in 2018.  Still, it's not like he won't be well compensated for being bought out of his first three seasons of free agency.  Between 2015 and 2017, Gonzalez will make a very healthy $53M.  The sick part is that it's possible he ends up being slightly underpaid by the time 2015 rolls around.  That said, it's way too early to speculate on things like contract inflation and the average cost of a win five to seven years down the road--especially in this economic climate.

Still, this is a pretty good deal for both sides.  CarGo gets security he desires without having to forego a huge pay day.  The Rockies get the comfort of knowing they have two of their core players locked up through 2017.   All-in-all, it's a pretty good day in the Mile High City.

Gonzalez Traveling to Denver to Complete Extension

Do you remember that unconfirmed report regarding Carlos Gonzalez's 7 year $80M contract I was telling you about?  Well, we just got confirmation.  Well, sort of. 

According to Troy Renck of the Denver Post, a deal is in place, and Gonzalez is traveling to Denver for a physical.  (Note:  For those curious about who CargoMedia5 is, Renck confirmed that it's his official publicist out of Venezuela.)  Gonzalez is not eligible for arbitration until after the 2012 season, so as I mentioned before, this deal would cover his last "reserve clause" season, all three of his arbitration seasons, and his first three years of free agency.  Once signed, the Rockies would have both Tulowitski and Gonzalez, their two best position players, locked up through 2017.

In 2010, Gonzalez, 25, put together an MVP quality season hitting .336/.376/.598 triple slash (.406 wOBA) while mashing 34 home runs, driving in 117 runs, and providing 6.0 wins above the replacement level. 

Unconfirmed Report: Gonzalez, Rockies Agree to Extension

It's still unconfirmed, but there are reports that the Rockies have agreed in principle on a seven year contract extension worth $78-80M with 25 year old outfielder Carlos Gonzalez. 

Rumors began flying out of Venezuela late yesterday when sources close to Gonzalez indicated that he was working on visa arrangements that would allow him to travel to Denver for an "emergency meeting."  While multiple Venezuelan reporters have dismissed the report as false, the rumor remains.  Tom Harding of mlb.com was stonewalled for a confirmation by the Rockies front office.  Still, he was able to confirm that an offer has been on the table for several weeks.

I have to admit that I'm a bit skeptical--primarily due to the fact Gonzalez's agent is Scott Boras.  Very rarely does Boras agree to a contract that would buy out his client's arbitration seasons, plus a couple of free agent years.  I can't help but think that it might be smarter for Gonzalez to go year-to-year, and take his chances via the arbitration process.  In doing so, he would become a free agent two season earlier (at age 30 versus age 32), which should allow him to net a much bigger pay day.

On the Rockies end, I'm a bit confused.  I've already covered this in detail in another post, so I'll try to keep this brief.  First of all, Gonzalez won't be eligible for arbitration until after the 2011 season.  It seems foolish to give up one of their three "reserve clause" seasons where they can set his salary at or near the league minimum without player recourse.  Secondly, Gonzalez is far from a sure thing at this point.  To date, his 6.3% career walk rate is far below the league average; his 2010 BABIP (.384) is unsustainable; and the quality of his defense is debatable.  It would be in the Rockies best interest to hold off for another season, while take a little bit of extra time to evaluate the talent they have in front of them.  If he shows improvement in his plate discipline and defense, they should strike quickly to sign him to an extension.  If he doesn't, it's probably best to let him go year-to-year, and allow him to leave via free agency after 2014.

Rockies Propose Another $100M Contract

The baseball world has gone mad!  For two years, teams were acting like paupers.  Now, they're flush with cash.  Where is all of this money coming from? 

So far this winter, four players (soon to be five) have received contracts exceeding $100M in total value--Troy Tulowitski, Adrian Gonzalez, Jayson Werth, Carl Crawford, and soon to be Cliff Lee.  Now, the Rockies want to add another to the mix--Carlos Gonzalez.  Carlos Gonzalez?  Is this the same player that has only two years of service time?  Is this the same player that's not eligible for salary arbitration until 2012?  Apparently so.

The Rockies are willing to give Carlos Gonzalez an unprecedented contract for a player with barely two big-league seasons on his resume.

They would be open to a six- to seven-year deal, the length of which would guarantee Gonzalez in the neighborhood of $100 million, according to owner Dick Monfort.

"I am hopeful, yes, that we can get something done," Monfort told The Denver Post in an exclusive interview Wednesday.

I'm speechless.  First of all, why are the Rockies trying to sign Gonzalez to an extension right now?  Don't the know they can sign him for the league minimum for 2011, and he has no recourse?  Secondly, the Rockies would be buying out all three of his arbitration years.  During these three seasons, he'd probably make $20-30M at most.   Just for fun, let's take the median at $25M.*  Assuming a 7 year $100M extension, this means the Rockies would theoretically be comfortable paying him $75M for years five, six, and seven of the deal.  Sounds pretty crazy.  Right?  Well, this is precisely what the Rockies are proposing.  Some might call this reckless, but I don't want to go that far.  I don't want to be lumped in with the Mike Lupicas of the world.  Let's just call the contract proposal anti-Evan Longorian.

* Let's say the Rockies give him a contract of $500K for 2011.  Through the arbitration process he gets $4.5M in 2012, $8M in 2013, and $12M in 2014.  In our theoretical scenario, he'd earn $25M over the course of his next four pre-free agent seasons. 

As for Gonzalez's performance, I think he has a ton of potential.  That said, he has a long way to go before he's a complete player.  For one, he's averse to taking a walk.  His career walk rate is 6.3%, which is below the league average of 8-9%.  While his below average walk rate may not have mattered much last year (due to his .336 batting average propping up his .376 OBP), it will matter at some point in the future.  For example, his 2010 batting average was propped up by an unsustainable .384 batting average on balls in play (BABIP).  Next year, when his BABIP regresses back to his expected rate (around .330), he'll see a corresponding regression in his batting average and OBP.  As a result, Gonzalez will be less effective at the plate until he learns how to take more pitches, draw more walks, and avoid outs.

Another area where Gonzalez needs to improve is his defense.  Yes, he won a Gold Glove, and made some spectacular looking catches in the field.  Based on the advanced metrics though, those spectacular catches were the exception to the rule.  Not the rule.  Gonzalez was by no means a poor defender in 2010, just a slightly below average defender.  UZR had him valued at -3.8 runs; Total Zone had him at -2; and Defensive Runs Saved had him at -2.  Part of this was possibly due to the manner in which the Rockies shuffled him from position to position within the outfield.*  I'd like to see how he performs playing a full season or two at a corner outfield position before making a decision on his defensive abilities. 

*He started 51 games in left, 55 games in center, and 34 games in right. 

The Rockies need to take a step back, and think this out carefully.  I understand their thought process.  They're afraid if they don't act quickly, the Werth and Crawford contracts will help price them out of the Gonzalez market much like they were priced out of the Matt Holliday market a couple of years ago.  I understand, but it doesn't make any sense to panic.  Yes, Scott Boras is Gonzalez's agent.  Yes, he's going to make them pay through the nose, especially if he ends up being a consistent 5-6 WAR player over the next few years.  That said, Gonzalez under their control for the next four seasons at a rather reasonable salary (at least in relation to his projected output).  This inherently lowers the bargaining power of Gonzalez/Boras.  Why tip your hand by saying you're willing to overpay?  Plus, contracts that buy up arbitration years are supposed to be designed to be team friendly.   The contract the Rockies are proposing is anything but team friendly.  The money saved on Gonzalez now could be used to fill other holes on the diamond--like signing Adrian Beltre to play third base.)