One of the frequently discussed items this offseason has been the future of Elvis Andrus with the Texas Rangers. He's one of the best shortstops in the league because of his very strong defense and base running with a better than average offense for a shortstop (wRC+ for SS was 86 in 2012 and 88 in 2011, Elvis posted 95 and 91 respectively). He's also only 24 years old, making his prime years still to come and was ranked 10th best for players under 25 by Keith Law (Insider Only) two weeks ago.
Elvis has two years remaining on his current contract before being eligible for free agency and is at a point in his career where teams often try to extend young players beyond their free agency years to lock them up as part of their core. This article will attempt to show some comparable contracts and situations and will present the issues around extending Elvis.
Contract data on the 93 free agents signed for at least a total value of $10 million since the end of the 2006 season and on the 9 extensions that go beyond when the player would have become a free agent for all shortstops since 2005 has been gathered using tools at MLBTradeRumors.com. Performance data for the players for the three years before each deal, free agency or extension, come from FanGraphs.com.
The first item to consider is how special Elvis is terms of his success as a major leaguer at such a young age. He became an everyday regular at 20 years old and he'll have recently turned 26 years old when his current contract expires. Of the 93 free agent contracts reviewed, only 25 are under the age of 31 and only 14 under the age of 30. At 26 years old, Elvis would be almost a year and a half younger than Prince Fielder, the youngest free agent of the past six years. Below is a table of all free agents under 31 years old when they signed their free agent contract and their performance for the three year period before signing. The columns Bat, Fld, Bsr, Pos and Rep indicate the breakdown of the player's WAR by the Batting, Fielding, Base Running, Positional Adjustment and Replacement Value runs.
Because Elvis has the opportunity to be a free agent at such a young age there are no truly comparable deals in the recent past that reflect how teams value a player at age 26. Generally when a team signs a free agent, they tend to pay for past rather than future performance. Any team that signs Elvis Andrus will be getting the bulk of his prime for the first five to six years of the deal which has tremendous value. From the players that have been signed at even a modest young age, no apparent additional value seems to be present regarding compensation. Elite players have received massive contracts of considerable length, but more modest performance has resulted in compensation in line with their production.
Another minority group that Elvis finds himself in compared to most free agents who sign deals of any significance is that he derives most of his value with his glove and base running. As noted above, Elvis hits a little better than most shortstops but has yet to hit above the mark of 100 for league average in wRC+. Of the same group of 93 free agents only 17 have posted a three year average below 100 leading into free agency. Elvis is 4th from the bottom of this list of players below.
In terms of WAR, Elvis does stand out as compensating very well with his other abilities compared to many members of this group. Only Michael Bourn, currently an unsigned free agent, has produced more value heading into free agency. By average annual value (AAV), Jimmy Rollins stands out as a well compensated free agent without much to offer offensively and his deal provides some insight into the market rate of a shortstop that produces in a similar value with a contract signed 13 months ago and appears again when we review similar extensions.
While all of these players produce solid value because of their overall game, only Bourn has produced at an elite level while still having an offensive deficiency. Bourn makes for an interesting comparable for how the market values elite value without elite offense, but his waters are muddied with his age being 30 and the stigma of the signing team losing a draft pick. Historically teams have not committed significant dollars to these types of players and it will be interesting if Bourn indicates a shift in market value for these skills.
The final sets of comparable data is the recent free agent contracts and extensions given by teams to players who play the same position.
Elvis stacks up very well by WAR against his shortstop peers who have made it to free agency. Most are five or more years older than Elvis would be as a free agent and only Derek Jeter had produced more value in the three years prior than Elvis has in his last three years. Jeter and Jose Reyes have produced the best offensively, with Nomar at the end of his career and two seasons plagued by injury before rebounding for one more all star year in 2006. Elvis has a higher WAR total than Reyes, but doesn't compare well because Reyes produces significant value with his bat for any position and is truly at the elite level for a shortstop. Reyes has also had four seasons of at least 5.8 WAR before hitting free agency compared to Elvis' career high of 4.4 in 2011 and second best 4.2 in 2012.
The other side of the coin is that Jose Reyes has also had three years with significant time missed due to injury, including two of the three before free agency and was also two years older when he signed his contract than Elvis will be after 2014 making him a riskier signing than a younger, healthier player. Both Elvis and Reyes are excellent shortstops, but very difficult to compare because Reyes has been considerably better when healthy but carries more risks. Since Reyes has one of the largest contracts ever signed by a free agent shortstop in the recent past his contract provides a bar for Elvis to shoot for, comparable performance or not.
The contract figures in the extensions table only show the years beyond when the player would have been a free agent had they not extended. There is an additional column labeled Svc which indicates the service time of the player at the time of the extension and in this table Elvis' age is listed as what it will be on June 1st, 2013 under the presumption of a theoretical mid-season extension.
Elvis is middle of the pack in production among this group of typically younger players that have traded their ability to go to free agency for long term security. Many of the shortstops listed were among the best hitters at their position at the time of their extension, but some provided similar types of value as Elvis, and all but Starlin Castro extended at an older age than Elvis is today.
As with the bottom end offensive free agents, Jimmy Rollins appears again in this list as being the most comparable in terms of situation, value and type of production as Elvis right now. Rollins extended in the middle of the 2005 season with his free agency a year and a half away. His WAR value for the three years prior was 10.2, very similar to Elvis' 10.6, and his wRC+ of 91 is the closest to Elvis' 87. Both players were two time all stars at the same point in their career and provided value with defense and base running without being excellent offensive players. And Rollins had the same proximity to free agency as Elvis has now. Considering Rollins was just under two years older than Elvis would be if he signed an extension and 2005 was eight years ago the values would need to be adjusted for inflation. Jimmy Rollins' four year, $35 million deal becomes a four year, $45.75 million deal in 2012 dollars using the $2.6 million average salary in 2005 to the $3.4 million average salary in 2012.
A four year, $45.75 millon deal would be have an AAV of $11.4 million. A value that's close to Rollins' recent free agency deal that paid an AAV of $12.67 million, but considerably lower than Reyes' $17.67 million AAV paid the same year.
The Lure of Free Agency
While all of the other deals that have been handed out provide a framework for how a fair extension might be constructed, no extension is likely to give as much compensation as being a free agent where a bidding war can drive the dollar amounts to unprecedented levels. Clients of Scott Boras generally pursue free agency as the best method to determine their market value and maximize their deals unless the player is offered a deal much higher than typical extensions or in cases where the player decides they value stability over money like Jered Weaver's team friendly extension signed in 2011.
Every team that considers signing Elvis would have to evaluate their alternative cost to fill the shortstop position. It will be a question of internal options, such as Jurickson Profar for the Rangers, trades and less talented or older free agents that may cost in the $8 to $10 million range in AAV for an expected 3.0 WAR per season rather than paying perhaps double or more that amount to have Elvis' prime.
For most teams in the league, the alternatives will be a better allocation of finite resources in players and dollars to hopefully get 75% of the value for perhaps 50% of the cost. But it only takes one team to decide they have to have a player and many times Scott Boras has been the matchmaker to find the team willing to pay premium amounts for his players. With a wave of new TV deals generating significant additional revenue for multiple teams, inflation has the ability grow quickly for the most sought after players.
Another factor for Elvis in waiting for free agency rather locking in long term security now is his potential to improve and produce a season in the elite category similar to what the Derek Jeters and Jose Reyes have done before him. Keith Law notes in his article referenced above:
"I think Andrus' bat has another leap in it, one that will put his average in the low .300s and bring his OBP to a point where he'd help just about any club at the top of the lineup -- which club's lineup he'll top is, of course, the operative question.
If he reaches free agency after the 2014 season, look for him to get the deal that blows everyone away that winter, as the scarcity in the shortstop market leads to a bidding frenzy for one of the few sure things available at the position."
If Elvis does have another leap in his bat, he could receive a mammoth deal close to $200 million if he reaches free agency so young. But it's also possible that the player that Elvis right now, which is a very good one, is all he'll ever be, making it difficult to compensate him today for a bump that may never come.
If you consider Jimmy Rollins' 2005 extension as a strong comparable and use the inflation adjusted AAV of $11.4 million as an approximate fair value and then add an extra two years to compensate Elvis for his age, a six year, $72 million deal with a club option for a seventh year is probably a fair offer for Elvis' production that some players might accept and almost certainly one the Rangers would feel comfortable doing. But that probably doesn't move the needle much for Elvis and Boras if at all with the rumors that Elvis wants to exceed Jose Reyes' contract and get an AAV in the $18+ million range.
Ultimately I would offer a seven year, $105 million dollar deal for an AAV of $15 million. [Now may be a good time to note for those that don't notice bylines that I'm not Adam and he's on record for being comfortable with higher amounts] That number still may not move the needle enough for Elvis to forego the opportunity to be a free agent, but it's a very strong deal with the magical nine figure guarantee and compensates Elvis as a top shortstop in his prime without being at the Tulowitzki contract scale reserved for those that produce at a level more elite than Elvis to date.
The situation feels like it's coming to head given the tenor of many articles written and conversations within the community on this topic. But the reality is that it doesn't have to be resolved this week, month or even season. For 2013, Elvis very likely to be better than Jurickson Profar in his rookie year as a 20 year old the same way Elvis is better now than he was as a 20 year old rookie. For a team intending to compete for their division title there is much less risk in having Profar in AAA and Elvis as their starting shortstop than expecting Profar to fill his shoes immediately, and still time to either extend Elvis during the season or in the early winter after this season or trade him if an extension is beyond their comfort level. If the Rangers are able to extend Elvis beyond 2014, even if it's for an amount higher than I'd consider prudent, I'll be extremely pleased to be able to watch one of the best young players in baseball all throughout his prime for my favorite team.