Why six-year rookie contracts are a good idea

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Why six-year rookie contracts are a good idea

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The most important moves of the MLB off-season were as follows: Mike Trout for $430 million, Manny Machado for $300 million, Bryce Harper for $330 million, and Brandon Lowe for $24  million.

The Tampa Bay Rays recently reached an extension with top prospect Brandon Lowe for six years and $24 million. This may seem like a lot of money for someone who’s only played 43 games in the MLB. Instead it should be thought of as buying out arbitration years.

To explain Lowe’s contract, the arbitration process must be explained first. In between a player’s service time of three to six years, the player goes to arbitration every February unless a contract is agreed upon between the team and respective player. During arbitration, both the player and the team pick a salary they think is suitable, and go before an arbitration panel to plead their case while the panel decides which number is more reasonable. This process can be messy, and things are said that might deeply offend the player or drive them away. In the past, Dellin Betances of the Yankees and Marcus Stroman of the Blue Jays have both been victims of this.

One of the reasons for Brandon Lowe’s extension is to buy-out these arbirtration years.

Since he will be under contract during his arbitration eligibility, both Lowe and the Rays are able to avoid the process completely.

Tampa Bay is in a low-risk high-reward situation with extending the 24-year-old prospect. If Lowe becomes a high level player as expected, he will only be making around $4 million a year for the duration of his contract. $4 million is low- even for a slightly above average player. Two arbitration players making about $4 million in 2019 would be Maikel Franco, and Travis D’Arnaud. Neither of those players are above average in the slightest, and Brandon Lowe is projected to be better than both.

If Lowe turns out to be a bust (while it doesn’t seem like he will be) his salary won’t hinder the franchise. The 2017 world champion Astros gave Jon Singleton a similar contract in 2014, and now no one knows his name. While Scott Kingery still has plenty of time to bounce back, he looked horrible in the first year of his 6-year extension, which was signed prior to last season.

The White Sox are also trying to ink their top prospect Eloy Jimenez to a similar deal, as other teams should. Buying out a player’s arbitration is a good idea. This puts less pressure on a prospect to perform as a little guaranteed money can allow them to relax.

Major League Baseball will hopefully be seeing more of these contracts in the future, as it should. Buying out a prospect’s arbitration years is a good money move for the team, while giving financial security to the players who want it.

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