Franco? Rays? MLB? Why EVERYBODY wins with new megadeal

Sports

We have just a few weeks of exciting hot stove action while the cold reality of a likely work stoppage lurks. We’ve seen a few years of smaller labor skirmishes that have undercut joyful moments with financial truths. (It’s his big league debut! Ugh, but they manipulated his service time?)

But this week, finally, we have reached an oasis.

Wander Franco‘s new 12-year, $182 million extension with the Rays is the rare win-win-win-win for the fans, the player, the team and the league: Human-explosion-of-joy Franco is generationally wealthy, the Rays keep their franchise player through age 32, and the league sees a young star continuing to play for its best-run franchise (at a time when it could really use a morale boost). Let’s dive in to how each of these three contingencies sees this precedent-setting deal:

Wander Franco
For more casual baseball fans, the way a young player is paid by his team — if drastically simplified, and with the caveat that these rules might change this winter with a new collective bargaining agreement — goes like this: basically just the league minimum ($570,500 for the 2021 season) for the first three years of his big league career, then three years of arbitration in which the player gets escalating percentages of his actual market value (in a convoluted process you shouldn’t care about). He gets to be a free agent after six-plus seasons (it’s often six full seasons and a small part of a seventh). Franco, who’s 20, just had that small part in 2021, so without this extension, he would have six full seasons in which he would get paid less than he’s worth, then would hit free agency for his age-27 season.

That happens to be the same situation Carlos Correa is in right now: a 27-year-old who should get around $300 million in free agency. When you break down Correa’s year-by-year salary, this is what it looks like:

2015: $507,000
2016: $516,700
2017: $535,000
2018: $1,000,000
2019: $5,000,000
2020: $8,000,000
2021: $11,700,000

Correa made $27 million in his first six years while earning the Astros 25.1 WAR over the same period. A few other recent comps — Mookie Betts, who made $59.7 million and earned 40.1 WAR, and Manny Machado, who made $34.1 million for 30.2 WAR — followed similar trajectories before they hit their own big paydays in free agency.

Franco has even more polish than these three did when they got to the big leagues. It’s unfair to assume he’ll perform at these levels, but the Rays are now clearly expecting something like this, so let’s play out the year-to-year scenario.

Inflation applies to baseball salaries (which is why the MLBPA would love for every elite player to avoid an extension and keep setting higher arbitration precedents), so if Franco posts 30 WAR over his controlled years (he’s already posted 2.5 WAR and Steamer projections peg him for 5.1 WAR next year), he could expect $40 million or so over those six years. Again, not guaranteed — one major injury could move him in the 20s, or eclipsing Mike Trout means he’d bust all of Betts’ records — but a weighted average expectation should probably start with a 4. Hitting free agency in that scenario would probably land somewhere around 10-12 years, $400 million (hell, maybe $500 million?) if we wanted to just toss out a number that would get him into his late 30s and represent most of his earning power.

With this extension, Franco is guaranteed 11 years and $182 million with a $25 million club option and a series of escalators that max out at 12 years, $223 million. If we continue assuming Franco will hit something close to expectations, that 12th-year option will get picked up and he’ll hit many of those escalators, so let’s call it $220 million over 12 years, to use round numbers. He’d be hitting free agency for his age-33 season. This winter, 32-year-old Freddie Freeman should get roughly $150 million. With inflation, it isn’t wild to assume there’s $200 million more for Franco after this deal, as long as he is pumping out 5-plus-win seasons.

We don’t yet know the exact structure of Franco’s extension, but I think it would be reasonable to assume both sides did similar math. Let’s say the first six years of the deal are for $45 million — more than $10 million more than Correa or Machado made in their first six — and the five free-agency years after that are $137 million, or $27.4 million per year. Machado’s free-agency deal in 2019 earns him an annual salary of $30 million, so in return for all the certainty this deal offers, it’s not even like Franco is giving up tons of upside on the back end.

Yes, if Franco were to take on all kinds of risk and bet on himself by going year-to-year, and if things went really well, he could reasonably make over $500 million by his late 30s. Assuming the same level of production over those same years but using this extension as the starting point … you still get well clear of $400 million. Based on our admittedly fuzzy numbers and best-case scenarios, he really didn’t leave that much money on the table, and all he really lost was the chance to sign the biggest contract in baseball history in six years. That might sound like a lot, but he’s still likely to make 80% as much money with way less risk. Remember: Franco has had only one real payday, signing for $3.825 million in 2017. It would take three more years before he’d make that much cumulatively in the big leagues.

The Rays
This one is easy. Franco will be playing for the Rays (in whatever city) for his best years. The only numbers in the deal that don’t fit in the Rays’ (self-imposed) current bargain-level pay structure come in 2027 or 2028, when hopefully their revenue situation, in whatever way, will be markedly improved. Brandon Lowe is the only other Rays player with a guaranteed deal beyond 2022, though the club is so deep in young talent that it can afford to be picky and see how this wave of talent shakes out before locking up others.

Young Rays fans can confidently buy a Franco jersey and name him as their favorite player for a decade to come. The marketing department can slap him on everything it creates — and the buzz around Franco makes the rest of the team more marketable, too. The fans can finally believe their team can afford to keep its best young players; if Franco just left six years from now, they would rightfully be asking some tough questions.

MLB
If you wanted to contort yourself to find a negative here, 29 other teams won’t be able to acquire Wander Franco in an open-bidding process six years from now — but I would argue that this stability in non-revenue behemoths is a long-run net positive for the whole league. The next smaller-revenue club with a super prospect might have a slightly better chance to keep him there for a long time. Tampa is a fruitful breeding ground for executives and indisputably the best-run organization in the game, so the Rays should be in the playoffs a lot over the next dozen years, which means many more moments for Franco on the national stage.

On the more cynical end of things, I wonder if the last owners meetings included a discussion where the league updated the owners on labor talks, then added, “Hey, if any of you guys wanted to hand out a giant extension, before Dec. 1 would be a great time.” It isn’t a front-burner issue at the moment, but the small payrolls in Oakland, Pittsburgh, Tampa Bay, Miami, Baltimore and Cleveland have been targets for those in the union looking to update the economic model of the game. If on Dec. 2, half of those teams were running minuscule payrolls and/or fire sales after doing nothing since the World Series, it would become more of a talking point. Handing out backloaded extensions to young players doesn’t solve the problems created by currently woeful competitive incentives, but under the current rules of the CBA, clubs want to spend more of their payroll on young players, and extending Wander Franco is the best way to do that.

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