The price of Young talent

“It doesn’t change anything”.

So said the Arizona Diamondbacks’ centrefielder Chris Young when asked for his thoughts on signing a lucrative multi-year deal this week. The D-Backs locked up their young star for at least the next six years in the sort of move that is rapidly becoming the industry standard. Indeed, no sooner had baseball fans tried to imagine whether $28 million would “change anything” for them, than the Indians were announcing a similar deal with their ace starter Fausto Carmona. Rest assured, life’s good for young ballplayers right now.

Up until recently, many young players had to wait until they became free agents at the end of their sixth Major League season before they could start commanding sizeable contracts. Yet the financial landscape of the Majors has shifted. The free agency market has reached insane levels with average starting pitchers like Carlos Silva able to receive multi-year deals worth $12 million per season. At the same time, and partly as a consequence, General Managers have become unwilling to trade impact players unless they receive offers that knock them off their feet. With top talent so hard to acquire, it is imperative that teams keep hold of their best players for as long as possible.

In the case of Chris Young, Arizona have ‘bought out’ his first year of free agency and hold a club option for a further year taking them to the end of the 2014 season. They therefore now hold his rights for two additional years on top of the standard contract.

This doesn’t come cheap, but the figures are comparable to the wages of Premiership footballers. If the D-Backs pick up that option year, Young will earn £61,000 per week over the next seven years. Carmona’s deal is a bit more complicated (a four-year deal with three club option years), but potentially he will earn a similar sum over the same period.

Teams are keen to secure these type of deals because they provide stability from both a financial point of view and in terms of the relationship between themselves and the player.

Ryan Howard’s situation is a great example of the alternative. Few can doubt that he is an exceptional talent and that he should be earning a sizeable salary, but the Phillies’ attempts to finalize a multi-year deal before he hit arbitration were unsuccessful. Consequently, the two parties had their first round of arbitration hearings this off-season which saw the Phillies losing their case and being ordered to pay Howard $3 million more this year than they had wanted. And the cost wasn’t just financial: arbitration hearings are often an unpleasant experience and the process could prove detrimental in any future attempts to negotiate a long-term deal between the two parties. It’s little wonder that the Brewers are currently trying to agree multi-year deals with Prince Fielder and Ryan Braun before they become eligible for arbitration.

Some would say these deals and the Ryan Howard salary ($10 million for 2008, which is the best part of £100k per week) are bad for baseball. The fact that teams can pay young players significantly less than their value on the free agent market is held as one of the reasons why smaller market teams can compete with the massive payrolls of the Yankees, Red Sox and their ilk. Yet we have to adjust our mindset to take into account exactly how much money even the lowest payroll teams are now raking in. MLB Commissioner Bud Selig is quick to remind us that MLB generated a record $6.075 billion in gross revenue last year. For all of the benefits of new stadiums and massive media coverage, it is the talent and skill of the players that really generates fan interest and therefore generates that revenue. Surely it is only right that they should receive their fair share?

Think of it this way. Under the current system, the Brewers are able to pay Fielder and Braun salaries (£6,538 and £4,442 per week respectively) in 2008 that are significantly lower than what the top players receive in the second-tier of English football (accepting that the young Brewers’ salaries exclude the value of their draft bonuses). To say they are getting Fielder and Braun on the cheap would be a massive understatement.

They may seem fantastic (some would say obscene) sums to you and I, but Young and Carmona deserve the contracts they signed this week because of the revenue that their talent generates. The fact their respective teams were so delighted to announce these deals is conclusive proof of this fact.

Week Two wrap-up

The D-Backs have an eight-game winning streak on the go and their 9-2 record is the best in the Majors. The surprising St Louis Cardinals (9-3) lead the NL Central, although their schedule (recent opponents: the Nationals, Astros and Giants) may have had a lot to do with their hot start. The same can be said for the NL East leading Marlins (7-4). Elsewhere, the Red Sox and Yankees are beating each other, while the Orioles sit atop the AL East. The A’s have won five straight against tough opposition (Toronto and Cleveland) to lead the AL West and the Tigers (2-9) are shockingly the worst team in baseball as the White Sox (6-4) sit first in the AL Central.