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November 26, 2012

Transaction Analysis

Rays Go Longer On Longo

by R.J. Anderson

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TAMPA BAY RAYS
Team Audit | Player Cards | Depth Chart

Re-signed 3B-R Evan Longoria to a six-year contract extension worth $100 million, beginning in 2017, with a club option for the 2023 season. [11/26]

The best story about Longoria’s first extension involves Eric Hinske. Legend has it that Hinske, who signed his own team-friendly extension early in his career, advised Longoria not to “pass up the chance to make your first fortune.” Word has yet to arise on whether Andrew Friedman flew Hinske, now a free agent, into town to talk to Longoria about making his second fortune. At any rate, Longoria has agreed to trade earning potential in exchange for security.

There is a considerable amount of risk involved anytime a team signs a player for another decade. Attrition and injuries happen to the best of them. Longoria knows this as well as anyone. He missed more than three months last season thanks to a bum hamstring. Just last week Longoria underwent a minor surgery on that hamstring. In the past, the man called “El Pingo” by locals has made two other trips to the disabled list: once in 2011 because of an oblique strain, and another time in 2008 because of a fractured ulna bone in his right wrist. Factor in offseason surgery last year, to correct his Morton’s neuroma, and Longoria and the team doctor are on a first-name basis.

But as the Rays know about Longoria’s health, they know about his off-the-field endeavors too, and they know what he brings to the club. When healthy, Longoria is one of the best players in the league. His hands are his best asset—at the plate and in the field—and his hands still work just fine. The Rays couldn’t bring themselves to pass up the chance to lock down Longoria, potentially through his age-37 season, at a reduced rate compared to other extensions-on-top-of-extensions: Ryan Braun signed for five years and $105 million in 2011; Longoria’s former collegiate teammate Troy Tulowitzki signed a 10-year, $160 million pact months earlier. Longoria’s deal is cheaper than both—in fact, he will not make more than $12 million in a season until 2017 at the earliest.

By going longer on Longoria, the Rays are betting on their ability to increase their revenue streams. The new league-wide cash windfall helps. So will a new local television deal, as their current one expires in the coming years. Then there’s the stadium issue, which at some point between now and the end of Longoria’s deal should be resolved. 

R.J. Anderson is an author of Baseball Prospectus. 
Click here to see R.J.'s other articles. You can contact R.J. by clicking here

Related Content:  Tampa Bay Rays,  Evan Longoria

11 comments have been left for this article. (Click to hide comments)

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Richard Bergstrom

Maybe Longoria can now buy the Rays a new stadium.

Nov 26, 2012 10:18 AM
rating: 4
 
brokeslowly

I would have waited to extend him until I saw a year of good hamstring health. The guy was out for months with the strain last year, and now he's having another "minor procedure" on it? Seems quite risky to me, especially for a cash-poor team. He might be greeting fans at the stadium entrance in the 2020's.

Nov 26, 2012 11:00 AM
rating: 0
 
danteswitness

On the other hand, his medicals are certainly in the team's hands, so they must believe that it is a minor procedure and not a "minor" procedure.

Nov 26, 2012 12:10 PM
rating: 0
 
Richard Bergstrom

"Longoria’s deal is cheaper than both—in fact, he will not make more than $12 million in a season until 2017 at the earliest."

In other words, he won't be paid $12 million per year until he's 31.

In other words, his prime years are locked up at well below market rates.

In other words, he could completely sit out a year from ow until he's 31 and still be a bargain... and he'd still be a bargain after that too.

Nov 26, 2012 12:35 PM
rating: 0
 
jonathanaustin

Backloading a deal does not make a player a bargain in his initial years.

I still think this is a good contract, but the fact that the initial years are cheap isn't that big of a deal (yes there is some benefit due to time-value to back-loading deals, but its fairly small).

Nov 26, 2012 13:57 PM
rating: 0
 
Richard Bergstrom

I compare it to Aramis Ramirez's contract with the Brewers since they have similar injury histories but similar above average production when they are in the lineup.. except Longoria provides more value (especially on defense), is cheaper, and is younger.

Nov 26, 2012 15:57 PM
rating: 0
 
Matt Commins

I prefer contracts to be front loaded during a player's prime years; if it's backloaded and the player declines, the contract becomes unmoveable (i.e. Alfonzo Soriano); either way, I like the deal for the Rays and Longoria; if you're a Rays you have to love this

Nov 26, 2012 20:35 PM
rating: 0
 
Richard Bergstrom

Few contracts are frontloaded. Agents and teams prefer backloaded contracts for a few reasons. Teams like having the initial financial flexibility and backloading it is a little less expensive when inflation is taken into account. Players past their prime are more likely to be traded but the past-prime salaries make it a little harder to do so.

Nov 27, 2012 07:24 AM
rating: 0
 
Arm Side Run

And what makes you think he signs this extension if he has a full, healthy, Evan Longoria year? He was definitely going to cost more, and potentially a lot more

Nov 26, 2012 17:44 PM
rating: 1
 
LordD99

Hmmm, interesting move. The initial contract with Longoria was brilliant. Not quite sure about this one. Longoria has played in the exact same number of games as A-Rod since 2010. This is not a good comparison for a mid-20s player since A-Rod turns 38-years-old half way through and has been quite injury prone since his hip surgery in 2009. A-Rod would play 160 games a year a Longoria's age. If Longoria is having these problems staying healthy now, what's going to happen over the course of this decade-long contract?

On the positve side, the AAV for the ten-year deal is roughly a little under $14M. That's still a bargain rate even if he plays 120 games a year.

Nov 26, 2012 12:37 PM
rating: 0
 
Behemoth

Then again, smart teams try not to do their extensions after a player has just had his best season ever. Yes, there are risks, but the discount that the Rays got over what they would have paid if Longoria had played 160 games of All Star 3B is huge, and the risks are not much higher.

Nov 27, 2012 03:46 AM
rating: 1
 
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