Why a Donaldson Extension May Not Be As Expensive as You’d Think

Following up on my last post looking at how the aging curve impacts production, and the history of high-dollar long-term contracts signed by hitters in their 30’s, I’m asking (and hopefully somewhat answering) the question of what that information, in the context of other factors, means to Josh Donaldson and the Toronto Blue Jays as they do business this winter.

One of the major points that a player’s agent will hammer on when trying to score a mega-deal is length of contract. Typically five years is the bare minimum for “superstar” deals and some can go as long as ten, That can of course be good or bad depending on whether you’re buying the 10 years the Angels bought with Pujols, or the 10 that the Marlins bought with Stanton, or something in between. While the term matters to the agent and player, WHICH years you are buying are crucial to the team.

Of the previous high-dollar multi-year deals given to premium hitters, very few were signed going into the player’s age 32 or 33 season. In fact, of the 18 hitters who have signed a contract worth $150 million or more, there are only two. Albert Pujols was going into his age 32 season when he signed with the Angels, Miguel Cabrera signed an extension with Detroit before 2016, his age 33 season. The former is a dumpster fire deal at this point, and the latter had a lost season in 2017, which ended with him disclosing that he was suffering with two herniated discs in his back. Even when you try to avoid the late 30s, things can take an unintended direction before age 35 (witness Troy Tulowitski for example). So it’s this conflicting set of interests that are the key to any negotiation of such a deal.

If the Blue Jays want to pay for more productive years and not decline years they would obviously be well served (in this case) for the age 32 season to be the first year of the deal, rather than age 33.  That means that if you determine you want Donaldson   extended you press HARD to nail it down THIS winter. A relatively front-loaded deal that pays Donaldson for premium production in the first three years gives them flexibility to pay less in the decline years, and to negotiate for a five, maybe six year commitment instead of seven or more. It goes without saying you should expect more value from 32-36 than from 33-37.

But what of Donaldson? Will he understand the reality of these factors related to his age and assume that other potential suitors will operate from the same set of assumptions? Or would he hold out for the possibility that someone will get stupid, as the Angels did (albeit to be fair, they were working in less well-charted waters at the time) and try to maximize the total dollars? And to what extent can they meet in the middle? To wit, if Donaldson’s agent presumes to sell his his age 33-39 seasons (seven years) and the Blue Jays would prefer to buy 32-36 — will offering some form of a seventh year persuade the player? Would it be something the Jays are willing to do?

Based on this information, and again stating the caveat that the front office always knows more relevant information than us, I would expect Toronto to make every effort to sign him to a five to six year deal . Or, if they conclude that Donaldson will hold out for a longer term, pivot and either ride out 2018 or seek a trade before next season à la Jose Bautista. The least sensible outcome for the team is to know full well that not only will JD want to test the market, but that he’s very committed to a minimum of seven seasons, and then keep him for next year and watch him walk.

The terms are harder to project. Pujols began his contracts in his age 32 season and that deal argues strongly against the idea that $25 million per or more in the out years is a good value. Chris Davis signed before last season to a deal that pays him $23 million annually in the out years and any decent agent is probably going to cite it as comparable. Indeed, apart from Cabrera, every deal for a hitter of at least five years has an AAV of $25 million or less with the exception of Cabrera.

If we assume that Donaldson would bite on a five year deal at all, and that he is rightly not going to settle for less than Davis averages annually, a fair proposition might be something that’s going to average $25 mil or a little more (to compensate for the shorter length). That gives you something like 23-27-27-25-24 if you are looking at five years. If they are committed to six, then maybe that AAV slides a bit and he gets $18 million in the last year. As you consider this question remember to the process of baseball inflation. A $24 million salary in 2022 is not the same burden on your payroll as it would have been in 2012. Also remember that the first year of this proposition is no more than $2-3 million higher, if that, than a one year arbitration driven salary would be. If the Jays need to jack the AAV to make things work, it would be simple enough to ballon the third year of this deal to $30-$32 million (at age 34) to blow up the total value of the deal in a year in which the Blue Jays will be shedding a lot of payroll.

So, contrary to the widely discussed notion that it might take $200 million over seven or eight years to keep Donaldson, I’d argue that $130 million over five years or $150 million over six years is something that’s very reasonable for both sides.

Finally, one last consideration to file under the, why would Donaldson take this deal?” heading. There are five players in the 2018 free agent class at present who will clearly make as much or more than what I’ve discussed for Donaldson, and three who’ll try very hard to break the $40 million per season mark.  Among the teams we might reasonably think of as able to sign a free agent for $25 million or more on average, in the context of the players already on the books in the coming years, and rule out the teams with young up-coming stars at the position (Devers in Boston), established young studs (Bryant in Chicago), recently signed commitments (Turner for the Dodgers) you end up with a short list of competitors for a high dollar 3B and most of them will be fighting over Manny Machado. Will Donaldson see the value in taking a fair deal that’s on the table, rather than risk being the one left standing when the other mega-deals have been signed and, therefore, have less agency in where he signs? It’s a legitimate consideration.

And for those of you thinking , “but what about Guerrero?” Signing JD takes the pressure off Vlad; they Jays would have less need to rush him. When spring 2020 gets here, you can decide at that point whether to move JD off the position, or (more likely) where to shift Guerrero to. It’s not inconceivable to play him in RF from 2020 to 2023 and then bring him back to the infield thereafter if you think he’s able. After all, if he’s not able at 25 then he wasn’t your long term answer at 3B anyway. These things work themselves out.

Bottom line: Sign Donaldson? Definitely, if you can do so without committing to anything beyond age 37. But if  Donaldson’s camp holds out this winter for a deal of seven years or more, call up the Cardinals and have a talk. Proceed, but with caution.

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