Tampa Bay Rays fans, and indeed many neutral baseball fans, will be delighted at the news of the Rays signing third baseman Evan Longoria to a contract extension.
The financial terms are very favourable to the Rays and that’s why they were able to make the commitment, giving them the opportunity to keep Longoria with the team until at least 2022. The mighty dollar so often wins the day in sport – as it does in life in general – and we’re conditioned to accepting that the big teams will come along and sweep up the stars of those with less money to spend.
The Rays’ deal with Longoria is a welcome exception to this general, and entirely understandable, trend.
The contract hinged on Longoria’s willingness to take the guaranteed money rather than to play out his career and see how the dice rolled.
Two incidents don’t necessarily make a pattern but there is probably something to the fact that this below-market contract is the second one that Longoria has signed with the team.
The Rays caused something of a stir when they gave their third baseman a contract extension just six games into his Major League career in April 2008. Some traditionalists lamented the fact that Longoria ‘hadn’t earned the contract’, whilst others looked at the contracts other players were signing and thought Longoria was mad to value six years of his career at ‘only’ $17.5m.
Whilst no one would doubt that Longoria has earned his new contract, his sanity might still be questioned when comparing his latest deal to the sums the likes of Prince Fielder and Joey Votto have commanded over the last year.
We all weigh up risk and reward differently, taking stock of different factors and establishing our own comfort level. If the two contracts are a reliable guide, Longoria is the type of person that values certainty over too much risk when it comes to his finances. Some people will always be prepared to gamble to gain more, but most of us will have a threshold beyond which the additional reward no longer makes the added risk worth assuming.
The Rays and Longoria were able to come to an agreement on a financial point that they were both happy with, adding to all of the other factors that lead to two sides wanting to extend an existing contract.
We can look at Longoria’s finances by using the essential Cot’s Baseball Contracts site. I’m going to add in his contract values converted into British pounds at the current rate. What this lacks in terms of accuracy of the real monetary value to Longoria over the lifetime of his contract, it adds in terms of putting the figures into some perspective in the here and now.
By the end of the 2012 season, Longoria had earned at least* $11.5m (£7.2m) via a $3m draft-signing bonus and his Major League salaries since his debut in 2008. His initial contract extension guaranteed him a $6m salary in 2013 plus at least a buy-out sum of $3m on a club option for 2014, so before signing his new contract he was guaranteed to earn at least $20.5m (£12.8m) out of his baseball career.
The Rays then held three club options over the next three years worth a combined $30m. In signing his second contract extension yesterday, Longoria turned those three option years into guaranteed money ($3m of which was already guaranteed via the aforementioned 2014 buy-out), thereby taking his running total up to $47.5m (£29.64m) up to the end of the 2016 season.
Longoria is also now guaranteed $100m over the next six seasons from that point, meaning that by the time he reaches the end of the 2022 season he would have earned at least $147.5m (£92m). There’s no doubt that if his health and form remain strong he could earn significantly more money than that by hitting the free agent market at least once, but he could also earn significantly less.
Longoria will be 35 years old at that the end of the 2022 season. He may have a couple more years of baseball left to play by then; conversely injuries may have brought his playing days to an end several years before.
In signing this new contract Longoria guaranteed himself an additional $127m (£79.2m) regardless of what happens. If disaster strikes tomorrow and he suffers a knee injury (à la Victor Martinez one year ago) that causes him to miss the 2013 season and to perhaps never return to the same level of performance, he and his family will still be set for life.
Longoria clearly doesn’t feel he’s making a mistake in signing the contract and ultimately that’s all that matters. If other people feel that he is making a mistake to leave so much potential money on the table, well, I’m sure I’m far from the only person to feel that it’s a mistake I’d be extremely happy to make.
Good for Longoria, and good for the Rays.
* I’ve put the caveat ‘at least’ as I’m just using the base guaranteed salary values and therefore this doesn’t include any bonuses, nor any money earned through endorsements etc.