In The Lab: Gaming Out a Jeremy Pena Contract
· Yahoo Sports
This exercise gives me the opportunity to play one of my favorite games. I get to pretend that I am Scott Boras. Of course, I am not going to go full Boras. Boras has a penchant for taking numbers and reaching ridiculous conclusions. For instance, when he was negotiating the Carlos Beltran contract in Houston, he produced numbers that made it look like Beltran was as good as Willie Mays. I have limits to what I am willing to do with numbers.
However, we start our exercise with similarity scores. Essentially, we are looking for players most similar to Jeremy Pena over the last five seasons. We do that for a couple of reasons. First, it obviously gives us our best basis for comparison. However, even more importantly it gives us names of similar players we do not have an emotional connection to. That allows us to view our own player in a more realistic light to see if making a long-term commitment is even in our best interest.
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You have been reading my index pieces over the last week and there is one more coming down the pike, but those of you that have stuck through it can see it work for something more practical. We are looking at BWAR and FWAR over the last five years for the ten shortstops that are already getting paid. We will total those together and identify the two players right above and below Pena on the list.
BWARFWARIndexJeremy Pena22.217.940.1Bobby Witt Jr.28.733.662.3Francisco Lindor25.927.953.8Mookie Betts28.725.053.7Corey Seager25.521.647.1Dansby Swanson22.422.444.8Trea Turner16.821.638.4Xander Bogearts15.418.433.8Willy Adames15.817.233.0Carlos Correa13.214.227.4Trevor Story8.46.915.3We obviously put Pena on top, but every other player is in order of what they produced. So, the four players in the middle are the players we will compare Pena with. That means that Dansby Swanson and Trea Turner are the two most comparable players to Jeremy Pena over the last five seasons. Naturally, fans will feel a certain kind of way when they see those two names and that is why we do similarity scores. We love Jeremy Pena. We don’t necessarily feel the same way about Turner or Swanson.
It’s at this point that I remind you that I am cosplaying Scott Boras. My methodology isn’t going to exactly be fair or make complete sense. I’d probably look at all of these guys and get an industry standard. I’m not about to play fair. I start by looking at these four guys and the contracts that they signed. We start with those contracts as the first step.
SignedYearsTotalAAVCorey Seager20221032532.50Dansby Swanson2023717725.29Trea Turner20231130027.27Xander Bogearts20231128025.45Total——39108227.74Well, that seems reasonable enough. The average deal went for ten seasons and a shade under 28 million dollars a season. So, we can begin there right? Not so fast my friend. There is a hidden cost of doing business we have to account for. Salaries go up over time. Costs go up over time. My guy has a family to feed and you know the cost of milk, eggs, meat, insurance, and other expenses just continues to rise. My guy needs to be compensated for that (let’s suspend disbelief that anyone making 28 million a season is struggling. Remember, I am playing the role of Scott Boras.)
Over the last 20 years, the average annual inflation rate has been 2.5 percent. So, we will adjust the contracts above for inflation to see what we get. I will apply a multiplier to each based on the amount of time since they signed their deal. Since Seager signed before the 2022 season, his multplier will be 1.125. The others signed prior to the 2023 season so their multiplier will be 1.10. Let’s see what their contracts would look like prior to the 2027 season.
YearsTotalAAVCorey Seager1036636.60Dansby Swanson719527.86Trea Turner1133030.00Xander Bogearts1130828.00Total39119930.74These contracts are a lot closer to what Boras will ask for when it comes to Jeremy Pena. This is where we add in a layer on the Houston side of things. Obviously, we know Jim Crane is reluctant to sign a ten year contract, so that is likely a non-starter. However, we also have to consider the age that the player was when the deal was signed. A ten year contract signed at age 27 is a lot different than one signed at age 30. So, keep in mind the age season that these players played at for the opening of the contract and compare that where Jeremy Pena would be.
Age at contractAge at endCorey Seager2838Dansby Swanson2936Trea Turner3041Xander Bogaerts3041Jeremy Pena29——-Hey, as luck would have I represent two of these players. I represent both Corey Seager and Xander Bogaerts and these contracts were great for both the team and the player (keep in mind I’m Scott Boras here). They get them cost controlled on the average of their age 40 season. They get security throughout that time. When they retire and go to Cooperstown they will be wearing that team’s hat. It’s a win win for everyone.
As Pena’s agent I am going to sell you hard on the fact that this guy should be signed through his age 38 season ast least. At 30 million a season that would be a smooth nine years and 270 million dollars. That is a significant investment, but you have to remember that the inflation point works both ways. Overall payrolls and the tax threshold will also bump up roughly at the rate of inflation. So, a 30 million dollar contract doesn’t take up nearly the same percentage of payroll in 2035 as it does in 2026. The tax threshold might be as high as 300 million by that time if current rules hold. So, a 30 million contract in 2035 would be equivalent to 24.4 million today. Do you think Pena is worth 24,4 million dollars?
How this plays out
There is always a give and take in negotiations and this is where things get dicey. It would be a minor miracle if Jim Crane agreed to an eight or nine year contract. No competent agent would simply accept the same 30 AAV and fewer seasons. Boras is not going to blindly accept five years and 150 million dollars and call it a day. You will pay extra for the benefit of going fewer seasons. The reasoning is simple. The odds of my client getting 30 million AAV at age 34 or 35 is almost next to nothing. So, I need more on the front end to make up for what he will lose on the back end.
What that looks like is the art of negotiation. If I am the Astros I might try to get out of there for five years and 160 million. If I am Scott Boras I might try to get out of there for five years and 175 million. I’d also try to get them to go six or seven years in lieu of the eight or nine. I’d offer a sliding scale of 35 million per season at five years, 34 million for six years, and 33 million for seven. That’s likely what these negotiations are destined to look like.
Randy Flores and Jim Crane need to decide if that is a workable contract. If you think he will be a four win player for the next several seasons then the contract likely is worth that much. If you think he will decline quickly then he isn’t. However, you also have to honest and work from that position. If you just aren’t comfortable dolling out those kinds of contracts then you have to admit that at the outset. Depending on your perspective, that is a perfectly defensible position. What isn’t defensible is adhering to that, but somehow holding out hope that you can sweet talk a premium player into a short-term contract. Boras is going to get his client his bag one way or another. If you don’t want to give it to him then you have to deal him this offseason. You can probably get a Tucker level deal from someone out there. If you are willing to pay him then you need to pay him. It’s really that simple.