First Pitch: The Other Side of Team Friendly Extensions

The Pittsburgh Pirates have signed two outfielders to extensions in the last year. It was exactly one year ago today that the Pirates extended Jose Tabata to a six year, $15 M deal with three option years that could bring the deal to nine years and $37.25 M. Coincidentally, Tabata will join the club in St. Louis today, according to Kristy Robinson. Over the off-season, the Pirates extended Andrew McCutchen to a six year, $51.5 M deal with two option years that could bring the total to seven years and $65 M.

At the time of each signing, both deals looked great for the Pirates. The McCutchen deal was a team friendly deal just because they got McCutchen under contract, buying out control of three free agent years. So far McCutchen has lived up to his deal, and has made it look like one of the biggest values in the game.

Tabata’s deal was seen as extremely team friendly. Worst case scenario, the Pirates are only on the hook for $15 M over six years (which was actually five years and two months, since his deal included the 2011 season). That’s not a lot of money for a team to spend over that span of time. The worst case scenario is that Tabata becomes an expensive bench option. The best case scenario was that Tabata took his game to the next level, made his option years a no brainer, and looked like a massive bargain at nine years and $37.25 M total.

Just based on his results this year, it’s looking more likely that we’ll see the worst case scenario. Tabata struggled in Pittsburgh earlier in the season. And while he is hitting for average in Triple-A, he’s not hitting for much power and not making good contact. He’s still young, so there’s a chance he could turn things around. But he’s not doing that right now, and if this continues, he’ll become that expensive bench player in a few years.

When the Pirates talk about extensions, they always talk about “sharing the risk”. When fans talk about extensions, they tend to elevate the value that a player will receive, thinking more in terms of free agent dollars, rather than the dollars under a team controlled deal. Prior to McCutchen’s deal, you could easily find fans who were suggesting signing McCutchen for more than $60 M over a six year span. And that would make sense if there was no risk involved. But as we see with Tabata, there is risk.

When Tabata signed his deal, he wasn’t exactly tearing it up in the majors. He only had a .711 OPS in 2011. He had gone through some hot streaks where he put up strong numbers, and showed some potential. Plus, the price was extremely low. So there was definitely risk at the time.

It’s hard to think about it now, but there was also risk with McCutchen. He had three years with an OPS in the .820 range. He slumped in the second half of 2011. I think people might have dreamed that he would eventually improve at the plate as he neared his prime. But I don’t think many were expecting him to become the MVP front runner this year.

In either case, the Pirates took a risk. With McCutchen, that risk has paid off very well. With Tabata, the risk isn’t paying off. And because the risk was shared in each deal, the Pirates get a massive value with McCutchen, and minimize the potential losses with Tabata. On the flip side of that, McCutchen probably left money on the table by signing one year before his breakout season. But Tabata probably got a lot more money than he would have received if there was an extension this year (and he probably wouldn’t have received an extension this year).

That’s how these deals should work. If a player works out, he should get a good amount of money, and the team should get a big value. If the player doesn’t work out, the team shouldn’t go broke with his salary, and the player should have enough for a comfortable lifestyle. There should be a balance where both sides win, and neither side takes a huge financial hit if their end of the deal doesn’t work out as well.

Links and Notes

**The Pirates lost 5-4 to the Cardinals.

**Pirates Notebook: Rotation Could be Shuffling Again; Marte and Mercer Injury Notes.

**Should Pirates Promote Chris Leroux to be the Long Man?

**Jose Tabata to Join Club in St. Louis.

**Tabata is Hitting For Average, But Not Hitting the Ball Well.

**Prospect Watch: Lambo Homers Twice; Glasnow Goes Four No-Hit Innings Again.

**Irwin Strikes Out 8 In His Indians’ Debut; 3 Hits For Hague.

**Minor Moves: Polanco to the DL, Lambo Activated From DL.

**Minor League Schedule: 8/19/12.

**Today’s Starter: Exploring the Arsenal – Jaime Garcia.

  • ‘Sharing the risk”
    That is probably the reason that the Pirates should never cross swords with Scott Boros again.

  • Tim, I think you are minimizing the external issues with Tabata. When he was demoted he was outproducing his competition in Presley and had a .356 obp over his last month in the bigs, right in line with his career numbers. OPS isn’t really they appropriate stat to measure a leadoff hitters effectiveness. Talent wise, even when off his game, he was the Pirates best option at leadoff. The issue has always been effort and commitment. Those are fixable things, particularly at 22.

    • Oops 23 year old season, unless you’re a birther and suspect otherwise ;-).

    • ‘Sharing the risk”
      That is probably the reason that the Pirates should never cross swords with Scott Boros again.

    • As a fan I really don’t want to be held hostage to a player who decides on a whim every day whether he wants to play or not or pouts if he perceives a slight to his manhood or whatever. You say it is fixable,I have my doubts,it my lay dormant for a while but sooner or later just when you really need him he will let you down. I want a player with character not a character

  • Tim, I think you are minimizing the external issues with Tabata. When he was demoted he was outproducing his competition in Presley and had a .356 obp over his last month in the bigs, right in line with his career numbers. OPS isn’t really they appropriate stat to measure a leadoff hitters effectiveness. Talent wise, even when off his game, he was the Pirates best option at leadoff. The issue has always been effort and commitment. Those are fixable things, particularly at 22.

    • Oops 23 year old season, unless you’re a birther and suspect otherwise ;-).

    • As a fan I really don’t want to be held hostage to a player who decides on a whim every day whether he wants to play or not or pouts if he perceives a slight to his manhood or whatever. You say it is fixable,I have my doubts,it my lay dormant for a while but sooner or later just when you really need him he will let you down. I want a player with character not a character

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