The Death of Mega-Contracts in Baseball?

Last week, the Tampa Bay Rays signed their rookie third baseman Evan Longoria to a 6-year deal worth $17.5 million after just six games in the majors. The Rays have the option to keep Longoria around an additional three years if they like his performance, making the deal worth a possible $44.5 million over nine years.

In a similar fashion this January, the Colorado Rockies locked up their young short stop Troy Tulowitzki after just one full season to a 6-year $31 million deal plus a one-year club option.

Of course, teams haven't been shy about signing young stud players to longer terms deals in the past. After two fulls seasons, Vladimir Guerrerro was given a 5-year deal by the Montreal Expos in 1999 and Alex Rodriguez was given a 4-year deal by the Seattle Mariners in 1997. The Red Sox signed Nomar Garciaparra to a 5-year contract in 1998 after one full season.

But an increasing number of young players expected to become stars have been signed to extended deals in recent seasons. These contracts take players through their arbitration years and usually give clubs the option to hold on to them through their first through third free-agent seasons -- at discounted prices if the players perform at or near expectations.

Why might players agree to this instead of opting to wait for free agency and cashing-in then? We can probably chalk it up to financial security and not having to deal with distracting contract negotiations.

Since 2005, 14 players at least one-year removed from arbitration have been signed to long-term deals. Besides Tulowitzki and Longoria, these players include: Bobby Crosby, Brian McCann, Curtis Granderson, David DeJesus, David Wright, Grady Sizemore, Hank Blalock, Ian Kinsler, Jhonny Peralta, Justin Morneau, Nick Swisher, and Victor Martinez. Not all of these guys will turn out to be A-Rods and Guerrerros, but it'd be hard to argue that we shouldn't expect to see most -- if not all -- of them in multiple All-Star games.

The big question is whether these commitments will pay off. If you'll notice, all of the 14 contracts have been given to position players, which makes a lot of sense for the teams: Hitting performance is typically more persistent and predictable than pitching performance.

And Clay Davenport of Baseball Prospectus calculates that the typical peak years for hitters since 1947 has been when players were 26-years-old:

Some argue that with better conditioning and perhaps a little help from the cream and clear, peak performance has been extended by at least a couple of years. But even if you allow for that, the vast majority of players are at the end of, or past, their primes by their early 30's. And this is why these new crop of deals seems to be very smart for the teams making them.

Alex Rodriguez signed his record-breaking $252 million 10-year contract with the Texas Rangers when he was 25. That same year Manny Ramirez signed a $160 million contract with the Red Sox at 28-years-old. The average age for when the 14 contracts end -- if you include club option years -- is 31 (It's 30 without the option years). So not only are teams getting what are the likely to be the most productive years from these players, but they might even prevent having to pay out A-Rod or Ramirez-type contracts in the future.

(Major hat tip: Taylor Umlauf)

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