Buyer Beware: The Danger Of The $100M Contract
This winter, second baseman Robinson Cano will likely join the elite club of MLB’ers to earn a contract exceeding $100 million. Cano has deserved the contract that he will receive–a career line of .309/.355/.504, with the ability to hit 30 home runs and drive in 120+ RBIs is definitely worthy of such recognition. Tack on two Gold Glove awards and an MVP trophy, and it’s clear why Cano is this year’s top free agent.
He obviously deserves the paycheck that he will get from whichever team antes up the most money, but a GM that wants to make that kind of investment in one player needs to know what he’s getting into. In my opinion, devoting that much money to Cano over what will likely be upwards of five or six years is too great of a risk to undertake.
First of all, Cano has already set his price at an MLB record $300M. There’s 0% of him actually getting that figure (unless Angles’ owner Arte Moreno finds $300M beneath his couch cushions and wants another mammoth contract to add to Pujols and Hamilton), so we can forget about that. However, Cano will likely command a contract well over $150M over a long period of time, likely exceeding $20M annually. Moral of this story: he won’t just be a $100M guy, I estimate Cano will join Alex Rodriguez, Albert Pujols, Joey Votto, and Prince Fielder in the $200M club. That’s a large chunk of change to tie up in one person.
Second, Cano is 31 years old already. He is in his prime right now, and will likely regress to the mean within a few years. As he ages, his bat will get less effective, his glove less golden, and the $20M+ he will bring in annually will be a glaring figure on his new team’s budget.
Third, contracts of that size are dangerous. Only nine of the 30+ players to sign a $100M+ contract have won a championship under their large contract. Some are too early to judge (Dustin Pedroia’s extension that he signed this season, Cole Hamels’ extension that begin in 2013, just to name a few), but others have been complete flops.
Here are some examples:
1) Mike Hampton: Signed with Colorado for 8 yrs, $121M for 2001-2008.
This had trainwreck written all over it. At the time, Hampton’s contract was the largest ever for a pitcher… and his new home was Coors Field. Hampton lasted only two seasons in Colorado before being shipped to Florida and then Atlanta. In Colorado, Hampton went 21-28 with a 5.75 ERA, and had more walks (91) than strikeouts (74) in 2002. He did well with Atlanta for two years, but injuries and poor performance hurt him until his retirement in 2010.
2) Vernon Wells: Signed with Toronto for 7 yrs, $126M for 2008-2014.
After a few good years in Toronto leading up to this contract, Wells has pretty much laid an egg in the last six seasons. Since signing this massive contract, Wells has hit over .273 once, topped 30 home runs once, and has failed to reach the 100 RBI plateau at all. On top of all this, Wells has been traded twice, and still has a year left of earning $21M. You can call him the most expensive bench player in baseball.
3) Barry Zito: Signed with San Francisco for 7 yrs, $126M for 2007-2013.
Just one year before Wells re-upped with Toronto, Barry Zito went from Oakland to San Francisco, bringing with him a record of 102-63, a lifetime ERA of 3.55, and a Cy Young Award. How did he fare? As a Giant, Zito posted a 63-80 record, an ERA of 4.62, and was demoted to the bullpen on more than one occasion. Zito supporters may say that he atoned for his sins with his performance in the 2012 playoffs, but it’s hard to make up for playing that poorly with that contract.
Other notable flops include: Ken Griffey Jr.’s 9-year, $116.5M contract with the Reds in 2000, Alfonso Soriano’s 8-year, 136M contract with the Cubs in 2007, and at least so far, Albert Pujols’ 10-year, 240M contract with the Angles in 2012.
While it’s sad to see a player fail to live up to his massive contract, the organization is always hit worst. The contract is written with a championship in mind (as most are)–this superstar player will be the anchor to our team’s title hopes. Ideally, minor league players live up to their potential, and lesser-earning guys out-perform their own contracts, and a championship team is put in place.
However, that doesn’t always work out. The star player gets hurt, and suddenly millions of dollars are sitting on the Disabled List. Prospects don’t pan out, and teams struggle to build a winner around their most expensive player. To make matters worse, the team now can’t sign any mid-range to high-range free agents because of the star player’s exorbitant salary. All of this because a team decided to tie up a large sum of money in one player.
A perfect example of this is in Chicago with Alfonso Soriano. His 7-year, $136M contract was supposed to fill a glaring offensive hole in the Cubs’ lineup, and finally get the team back to the playoffs. To be fair, the Cubs did make the playoffs in 2007–Soriano’s first year with the team–but since then, the Cubs have been riddled with underperformance and an inability to win. Soriano’s production dipped dramatically in the middle years of his contract, and Cubs fans soon began playing the waiting game to get Soriano’s contract off of the team’s books (luckily for them, the Yankees picked it up this season).
It’s honestly a crapshoot when you’re dealing with contracts of this size. Some may end up well, like Albert Pujols’ 7-year, $100M deal with the Cardinals in 2004, others may not. Instead of taking the massive risk on just one superstar player (I really can’t emphasize that one player part enough), invest in two or three good players that can fill a hole and solidify other parts of the team. Add a guy for the back of the bullpen, a quality 3rd or 4th starter, and a reliable second baseman rather than blowing $200M on a guy like Cano.
All too often, GMs and owners feel that their team is just one big piece away from a championship run, so they dole out bloated contracts to a player for a few years of service. In the case of Cano, he’ll go to a good team looking to boost both their offensive and defensive production immediately in the hopes of reaching a World Series. Owners beware: with the track record of $100M+ contracts, and with Cano on the wrong side of 30, this future contract could get ugly very quickly.