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Although the extension has not yet been finalized – it could take another week or two – the prognostication has already started on whether the reported seven year, $60 million (plus an option year at the end) deal is a steal for the Cubs, a fair price, or an overpayment. For me, I’m going to wait until we see the particulars before digging in my heels too aggressively.

Until then, Dave Cameron at FanGraphs has an interesting take on the reported deal, comparing Castro to other young stars who’ve signed extensions that covered a portion of their arbitration years. Specifically, FanGraphs focused on other players who had reached Super Two status, and would thus qualify for four years of arbitration, rather than the usual three.

By looking at each player’s pro-rated WAR (how much WAR they would have accumulated in the average season before the extension), we can compare each to Castro’s reported deal, and get a sense of whether it falls in line, or is an outlier in either direction. From Dave Cameron at FanGraphs:

The entire article is well worth a read, but the salient points about the chart:

Among those who did sign away free agent years, though, it is interesting that there’s a nearly perfect linear increase in terms of years and dollars with each each extension. Cano got 4/30, Gonzalez got 5/40, Bruce got 6/50, and Castro has got 7/60 – in each case, the guaranteed dollar amount went up by $10 million for each additional year added on. And, note the relationship between length of deal and age – including the team options, the contracts for Bruce, Cano, and Castro all end after their age 30 season despite the fact that they signed them at different ages. Bruce and Cano were coming off better seasons than what Castro has posted this year, but he had youth on his side, which is why (along with inflation, anyway) he got more guaranteed money than either one.

The other notable takeaway from these contracts? You probably don’t want your best young players qualifying for Super-Two status. For comparison, both Justin Upton and Andrew McCutchen also signed long term extension for $51 million over six guaranteed years with a little over two years of service time under their belts when they signed the deal, and both were coming off substantially better seasons than what Castro has put up this year. Castro got more guaranteed money than either one despite being an inferior player because of that extra year of arbitration eligibility.

Had Castro been called up a couple of months later in 2010, he would have been looking at another year of near-minimum salary, and would have been negotiating from a significantly reduced amount of leverage. If you look at the deals signed by the like of Alexei Ramirez and Dustin Pedroia, you’ll notice that Castro’s Super-Two status probably got him an extra $10 to $20 million over the life of the deal.

A few thoughts.

(1.) The dynamics for extensions seem to have changed considerably since the announcement of the new CBA, with teams allocating more resources to the big league payroll, and to ensure that they keep their own young talent. I think comparing this extension to those that came before the CBA is, well, it’s not quite an apples/oranges thing, but it’s close. For the Cubs to have inked a deal that is largely in line with similar players from as far back as three, four years ago seems like a nice get.

(2.) Starlin Castro is a shortstop – who’s become an above average defensive shortstop this year – whose bat projects to get almost as good as a number of the compared hitters, including those in the article who were not Super Twos. Yes, the Cubs are absolutely paying for the projection rather than the production, but again, we’re talking about a good defensive shortstop with a possibly big bat. Those guys are always going to get a premium because there are extraordinarily few of them.

(3.) FanGraphs is absolutely right that the Super Two status is a killer to the tune of as much as $10 million over the course of Castro’s four arbitration years (and perhaps even more, when considering the full life of the deal). Former Cubs GM Jim Hendry gets a lot of grief for calling up Castro when he did in 2010, rather than waiting another month or two and staving off Super Two status. Some of that criticism is fair, but let’s not lose historical perspective: in early May 2010, when Castro was called up, the Chicago Cubs were but five games out in the NL Central (just two games under .500), a race they were expected to compete in. They had serious issues in the middle infield, and Castro was raking in the minors. The call-up was not only not panned at the time, it was mostly lauded. And the Cubs waited long enough to ensure he didn’t reach free agency a year early, so at least there was that.

  • JR

    IDK, it seems to be a pretty fair deal for Starlin and the Cubs. The Cubs are paying more the next couple yrs (when they will have a low payroll) and saving on the end (when their payroll will be much higher). I don’t think it’s a great deal, but just ok. I do think Castro will be much better next year with a normal offseason too.

  • willis

    I’m good with this. You lock up a young, very good SS for 7 years, at what will be a discounted price. And worst case, these kind of numbers will be attractive later on to a buyer if he becomes a trade chip.

    I like the agressive thinking on this. Lock up a guy you can use as a building block both offensively and defensively.

    • Wilbur

      Agreed, feels about right when laid next to the others and all the upside potential.

      Plus, this is the way Theo wants to build. If he doesn’t extend Castro who is he going to extend?

  • Mick

    What would have Castro roughly earned in arbitration if we didn’t lock him up? He was scheduled for arbitration still for 2013-2017 and is currently making $567,000.

    • BD

      If you go year to year, and then sign him for 3 years post-arb, I think he easily clears $70M if not more. Based on that estimate, they would be saving a minimum of $10M.

  • Curt

    I thought we were doing things the new way, this feels familiar to the old ways, paying for perceived value instead of actual value, I’ve said this before he has those mental lapses, and yet is going to be handsome rewarded for it, will Castro ever become a #3 or #5 hitter this is a lot of money for a number 2 hitter , just sayin why not wait one more yr see if his offense warrants this kind of deal.

    • dob2812

      So that he can be paid more? We know how position players tend to age and we know that most guys capable of doing what Castro’s done at the major league level at his age tend to be really, really, really good. You make this bet. It’s a really good one.

    • JR

      I hear ya. It’s definitely a calculated risk. Maybe the Cubs think he will be much better next year and they’re saving by doing the deal now.

      • Mick

        That’s what I’m trying to figure out. How much would Castro make in his final 2 years of arbitration? Castro could potentially make more going to arbitration in 2016 and 2017 than he’ll make in this contract extension and then you add in what would have been Castro’s free agency starting 2018 at the age of 27!?! He would have been in line for a $100+ million long-term deal. Instead we get him all the way through his prime at a discounted price and potentially saved millions in the final two years of arbitration.

        • JR

          Agreed, I also think the Cubs want to pay him more the next couple of years with a really low payroll, and save when they will have a much higher payroll 5 years from now.

          • BD

            It would be nice to see a steady or even decreasing per year number, as opposed to the escalating numbers that are usually seen in long contracts.

            • JR

              That’s a good idea. I wonder if that has been done before in a case like Castro’s. It would be awesome if they could really front load the deal and pay him peanuts when the Cubs are good..

            • Sandberg

              $15-$25 million per year for the next 2 years, then $2-$6 million per year after. That would be genius.

            • hansman1982

              no, this would not be good as it would cost the Cubs money. Granted you might get a smaller overall $ deal but when you have a smart front office and an owner like Ricketts you want to backload deals as much as you can. Any dollars spent next year cost much more than dollars spent in 2019.

              • Sandberg

                Normally I’d agree, but currently the Cubs have around $40 million in 2013 payroll obligations. Obviously that can change, but assuming the Cubs end up around $90 million in 2013 payroll, the contracts have to come from somewhere. It might as well open up some payroll breathing room in 2015-2016 when they’ll be competing.

                • CF

                  Don’t ignore that this is entirely dependent on how much of a discount Castro will give to receive the money up front. If it’s not much, then a backloaded contract, with Ricketts/Cubs getting investment income on the money they don’t have to pay now, is still a better deal for the Cubs.

                  • hansman1982

                    Yup. Only makes sense if Castro takes a $7-10M decrease in contract (which he won’t).

                    I also read Rickett’s comments of not pocketing money from the team as saying:

                    “I give Theo a budget of $XYZ amount each year regardless of how much they spent last year. If he needs more than that, he can ask. If he spends less than that, he gets to roll it over.”

                    • Scotti

                      I R E A L L Y don’t think there’s going to be any “rolling over.” That money would go back into the team by purchasing another McDonalds or building Kerry Wood’s Sushi Bar & Grill in Mesa or buying into a local hotel group or some such. Even servicing the (rather large) debt = “Not pocketing the money.” Rolling it over is a fantasy, IMHO.

                  • Sandberg

                    While certainly true, you still have to properly manage your team payroll. Taken individually, you would backload a contract every time, but looking after the overall picture, you don’t want all contract deals growing together. A wise team will have big contracts coming off of the books while others are ballooning.

                    Contracts getting bigger together causes you to have less financial flexibility when you need it the most (see 2010/2011 Chicago Cubs), and can also result in paying luxury tax which can eliminate any savings you’d gain from backloading.

                    The Cubs have to add a significant amount of payroll in the offseason. It would be a PR nightmare for them to have a payroll even as low as $75 million. They have to add payroll somewhere, but how many free agents are they going to sign? Certainly nobody to a huge deal. It makes sense if they have to spend the money anyway, they should allow it to help them out later.

                • hansman1982

                  Just because they have lower payroll next year doesn’t mean you just spend it to spend it.

                  If the Cubs were to pay Castro $1 next year instead of $10M they could (and they have the FO/Ownership group combo to do it) invest the other portion of the money, collect the gain and shell out that $10M in 2017.

                  Assuming a 5% ROI per annum they would gain somewhere around $2M from the interest and your payroll limit in 2017 would be effectively untouched if you stopped doing this.

    • DocPeterWimsey

      Castro is not being handsomely rewarded for mental lapses. He’s being handsomely rewarded for being a run-creating batter at a skill position. (Cub fans count 100 runs against the Cubs for every one that Castro’s lapses actually cost the Cubs.) Moreover, the pay is not and never should be for where a guy bats in the order: it’s his production relative to other guys at his position that determines his value. Even if Castro produces at his current levels (with the assumed increase in slugging as he gets stronger: he’s only 22), then he’ll be creating a lot more runs than most of the other SS’s the NL. That’s worth $$$.

    • koyiehillsucks

      He is being rewarded for being a 2 time all star.. the mental lapses argument is just dumb, most guys his age are still stuck in the minors and he has cut down on the errors quite a bit from last year and will continue improving in that area.

  • dob2812

    Well, look, you don’t go into these things hoping to screw your star player. The Cubs want him to be happy. These are the prime years we’re talking about. The Cubs will (mostly) pay him like he’s a two-three win player which, barring utter disaster, he should be. They then get all the upside beyond that. That’s a lot of upside (if, like me, you think he’s more like a five win player from ages 24-29 or thereabouts) and it’s worth many, many tens of millions of dollars.

    I like it, it’s the way to go and I hope something similar happens with Rizzo in a couple of years (and with many more besides).

  • bbmoney

    6 yrs and 70 million for the prime years of a SS who is currently an above average offensive player and projects to be (and has been 2 of 3 years) an above average offensive player (far above average if you’re just talking comparative to other SS instead of compared to all palyers), seems like a pretty darn good deal.

    There’s always a chance players don’t live up to their contract, but I like the Cubs chances on this one.

    • bbmoney

      Should read “currently an above average *defensive* player”

      My bad.

    • hansman1982

      That’s a league average offensive player at a position that, outside of the pitcher, is the weakest offensive position.

      Even if this season is his norm offensively, he is a stud SS.

  • http://obstructedview.net Aisle 424

    (1.) The dynamics for extensions seem to have changed considerably since the announcement of the new CBA, with teams allocating more resources to the big league payroll, and to ensure that they keep their own young talent. I think comparing this extension to those that came before the CBA is, well, it’s not quite an apples/oranges thing, but it’s close. For the Cubs to have inked a deal that is largely in line with similar players from as far back as three, four years ago seems like a nice get.

    This. Well said.

  • Joy

    I think it’s too much money. I think he will stumble quite a bit in the next few years and turn into a pretty good player but not the “star” everyone thinks he will be . Can they put something in there that prohibits him from eating sunflower seeds on the field or while batting?

    • dob2812

      Reasons for thinking this? Genuine question – why do you think he’ll stumble?

  • http://twitter.com/cubsfantroy @cubsfantroy

    At least it isn’t a $20 million a year contract. I don’t mind the contract and it could turn out to be a steal.

  • Gabriel

    According to FanGraphs Castro is projected to have played at a $14MM level this year, which is probably his worst offensive season (best defensive, but his D will only get better and better). This contract pays him an AAV of about $8.6MM, so regardless of what other Super-2′s got in their deals the Cubs are getting a HUGE value out of this deal.

    I’m sooooo good with these numbers for Starlin – it will look like nothing by the time the deals done.

    • http://bleachernation ferris

      i totally agree

  • willis

    At the end of the day, it’s peanuts for this organization if they get him at this price. If he turns out to be good and not great, so what? You’re paying him less than 10 million a year, and in this market, for a very productive player, that’s pretty solid.

    The chances of him being great and not good are much better IMO. So it’s worth it to go ahead, extend, and make him a fixture in this organization.

  • JB88

    I’m more than fine with this deal and a part of me wonders if the years and dollars aren’t also an intentional marketing tool. Sort of part of the Cubs’ way. IOW, you perform for us, we’ll take care of you.

    I think that this FO thinks on so many different planes that it wouldn’t surprise me if signing Castro to this deal isn’t meant to send notice to the industry about how the Cubs intend to do business.

  • Fastball

    This is a no brainer for Theo. Your getting him for a very long time at less than probably what the market would bear for him. God knows what annual salaries will be 7 years from now. They won’t be less. The kid is still growing into what he is going to be. He is a player committed to the Cubs. You don’t find that very often on any team. I don’t even have to think about this deal. Get it done so we can move on to major concerns like where in the heck we are going to find some pitching.

  • http://bleachernation ferris

    also it allows baez to be moved to 2b/3b now,no confusion who the future s.s. will be i like this move alot,we need to move sori and marmol asap……..then all big contract will be gona an we can look at f/a in 2013/2014 an have already a much improved system,dont forget were gonna get a top 4 pick after this yr as well.

  • JB88

    I do not agree. The transition to 3B shouldn’t present a huge challenge when it happens, but you don’t move a potential big league SS at this stage when you have zero clue what might happen to Castro over the next few years.

    • MoneyBoy

      ferris, I get the idea for moving Baez but I agree with JB88. There’s no need nor no rush, IMO, to do it now. If, at this time next year, he’s getting a taste of AA ball to prep him for 2014, perfect. If he shows he can play at that level, it makes sense to consider the timing of the switch. SS (as Castro’s extension shows) is valued as a premium position.

      The jury is still out on Vitters but he is with the ML club for the rest of this year. I would suggest this F.O. is way ahead of all of us. Getting Castro’s deal done now is pretty much proof positive.

      Thanks, Brett, for the great writing and a fab link!

  • MichaelD

    Am I remembering right that the CBA changed the Super-2 rules, so that the likely date moved? In that case if Hendry had tried to game the system, the Cubs might have had Castro for a month less and still had him qualify as a Super-2.

    • http://www.bleachernation.com Brett

      You are correct – slightly more players are included (top 22% in service time, rather than top 17%), so the Cubs would have had to hold him down well into June, probably late June.

  • Curt

    totally disagree with u doc yr telling me that Castro should be getting paid the same as a true clean up or run producer and I most definitely think the lapses matter bc to be getting paid this kind of money you should be setting an example nor being one

    • Drew7

      “yr telling me that Castro should be getting paid the same as a true clean up or run producer”

      You are looking at this wrong. Whatever production Castro gives you is going to come from a premium defensive, weak offensive position. Above-average defense and offense from him means that, in most of your games, your SS will out-perform the other SS.

      “I most definitely think the lapses matter bc to be getting paid this kind of money you should be setting an example nor being one”

      Why? If he saves runs with his glove and creates them with his bat, at a premium position, it doesn’t matter. Why should it?

    • JB88

      This is absolutely simple economics. Castro is a rare commodity at a premium position. You have to pay more for hitting SS than you do for 1B, for example, because there are less players that can do what Castro can do than there are players who can do what Rizzo can do, for example.

      This is pure supply and demand economics. Small supply, large demand = high price tag.

      • DocPeterWimsey

        This is the very heart of the WAR concept that eludes so many people. It’s also why we have AAAA players: i.e., guys who can hit as well as the average MLBer, but who can only play positions where the average hitter is much better than MLB average.

        Teams win or lose based on net runs: you score more than your opponent and you win; consistently outscore the opponents and you can win 3 times in 5 games. That’s about 100 victories and a ticket to post-season. Castro is going to make a much bigger positive contribution to the Cubs run differential than is the average SS. Relative to a 1BMan, he’s worth as much as a 1BMan who generates just as big a run differential.

      • DocPeterWimsey

        I’ll add that this is one of the few areas where fantasy baseball and real baseball overlap. The smart fantasy baseball player focuses first on getting good hitters in the middle infield, CF and Catcher; then 3B, then the corners. Those guys do more to increase your point totals relative to your competitors than the Fielders or Brauns who put up gaudy raw numbers, but not better relative numbers than the best hitting SS’s, CFers, etc.

  • http://bleachernation.com RicoSanto

    I asume the 16 mill option for the 8th year is nt included in the original 7,Will probably go some thing like this……4,6,8,9,10,11,12 This = 60 Mill. Still a real bargain in the early years.
    I saw Baez this year and I know he is young but no way he compares to Casro defensively.He hesitated on 2 balls up the middle.And does not have a gun for an arm. If you heard Theo’s talk Sunday. He said castro has mde tremendous strides this year and is staying at SS.

  • die hard

    Castro has the physique to transform into a 25 HR/yr player if taught how to use it….Wonder if his Agent can include better coaching as part of deal?…Watch somebody offer three better than average young players for him and to avoid the huge contract the Cubs will do it. Then he will get decent coaching elsewhere and be the power hitter he can and should be and will justify even bigger contracts.

    • Carew

      oh my gosh quit bashin the coaches. Its been ONE year, and they do not have a lot to work with anyway!

    • Tommy

      You are one unhappy, chronic complainer. I swear you never have a positive thing to say about anyone or anything. I wanna party with you cowboy. Not.

      • Daniel

        Should change his name to “cry hard”

        Hurrbadurr

  • DCF

    I think the extension is definitely on the verge of overpaying. If you try to estimate his salary in the arb years and what he’d make on the open market afterwards it doesn’t seem to be so much more than $60 million. Even if it’s $70 million, I feel that’s not enough of a discount, given that long term contracts are a significant risk for a team.

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