The Tampa Bay Rays have signed Wander Franco to a $3.5 million contract for the 2019 season and beyond, which is both highly lucrative for Franco as well as his team. As MLB clubs continue to struggle with the idea of player contracts being worth more than standard salary, this deal could be seen as an example of how turning things upside down may work out better in the long run.
Wander Franco is a player who has been in the MLB for over ten years, but he has never had a contract that was as lucrative as this new one. The Tampa Bay Rays have signed him to a deal worth $21 million dollars per year. This is rare because teams typically don’t offer players contracts that are so large.
We just have a few weeks of hot burner activity left before the cold reality of a possible labor stoppage sets in. Smaller labor squabbles have erupted in recent years, undermining happy occasions with financial realities. (This is his major league debut! But they messed with his service time?)
But, now, this week, we’ve arrived in a haven.
Wander Franco’s new 12-year, $182 million contract with the Rays is a rare win-win-win situation for fans, players, teams, and leagues alike: Human-explosion-of-joy Franco is a multi-generational millionaire, the Rays maintain their franchise player until he is 32, and the league sees a young star continue to play for the league’s best-run team (at a time when it could really use a morale boost). Let’s take a look at how each of these three scenarios views this historic deal:
Franco is on the move. For more casual baseball fans, the way a young player is paid by his team is as follows: basically just the league minimum ($570,500 for the 2021 season) for the first three years of his big league career, then three years of arbitration in which the player gets escalating percentages of his actual market value (in a convoluted process). After six or more seasons (typically six complete seasons and a tiny portion of a seventh), he becomes a free agent. Franco, who is 20, only had that minor role in 2021, so if he doesn’t receive this deal, he’ll have six full seasons of being paid less than he’s worth before hitting free agency at the age of 27.
Carlos Correa, a 27-year-old who is expected to earn approximately $300 million in free agency, is in a similar scenario. This is what Correa’s pay looks like when broken down year by year:
$507,000 in 2015 $516,700 in 2016 $535,000 in 2017 $1,000,000 in 2018 $5,000,000 in 2019 $8,000,000 in 2020 $11,700,000 in 2021
Correa earned $27 million in his first six years while contributing 25.1 WAR to the Astros. Mookie Betts, who made $59.7 million and got 40.1 WAR, and Manny Machado, who made $34.1 million and achieved 30.2 WAR, are two recent comparisons who followed similar paths before landing significant paydays in free agency.
Franco has a higher level of polish than these three when they first arrived in the major leagues. It’s unrealistic to expect him to produce at these levels every year, but the Rays have made it obvious that they expect it, so let’s play out the year-to-year situation.
Inflation affects baseball salaries (which is why the MLBPA would love for every elite player to avoid an extension and continue setting higher arbitration precedents), so if Franco posts 30 WAR over his controlled years (he’s already posted 2.5 WAR and Steamer projections peg him for 5.1 WAR next year), he could earn $40 million or more. Again, nothing is assured — a serious injury might drop him into the 20s, while overtaking Mike Trout would mean he’d shatter all of Betts’ records — but a weighted average projection should definitely start at 4. If we simply throw out a figure that would get him into his late 30s and represent the most of his earning ability, hitting free agency in that scenario would definitely get him somewhere around 10-12 years, $400 million (heck, maybe $500 million?).
Franco’s new deal guarantees him 11 years and $182 million, with a $25 million club option and a series of escalation up to 12 years and $223 million. If we continue to assume Franco will perform as expected, the 12th-year option will be taken up, and he will hit many of the escalators, so let’s call it $220 million over 12 years to be conservative. For his 33rd season, he’d be eligible for free agency. Freddie Freeman, 32, is expected to earn almost $150 million this winter. With inflation, it’s not unreasonable to believe Franco will be worth $200 million more after this agreement, as long as he continues to put up 5-plus-win seasons.
Although we don’t know the specific structure of Franco’s extension, I believe it’s safe to presume both sides used the same arithmetic. Let’s suppose the agreement pays $45 million for the first six years, which is more than $10 million more than Correa or Machado earned in their first six, and $137 million for the next five free-agency years, or $27.4 million per year. Machado’s free-agent contract in 2019 pays him $30 million per year, so Franco isn’t giving up a lot of potential in exchange for all the stability.
Yes, Franco could earn over $500 million by his late 30s if he were to take on all types of risk and gamble on himself by going year-to-year. Even if you assume the same amount of output over those same years but start with this extension, you’ll still be far above $400 million. He didn’t leave that much money on the table, based on our admittedly shaky figures and best-case scenarios, and all he truly lost was the possibility to sign the richest deal in baseball history in six years. That may seem like a lot, but he’ll almost certainly earn 80 percent more money with much less risk. Keep in mind that Franco has only received one genuine paycheck, a $3.825 million contract signed in 2017. He’d have to wait three more years in the major leagues to earn that much money.
The Rays are a baseball team based in Florida. This one is simple. Franco’s greatest years will be spent with the Rays (in whatever city). The only figures in the pact that don’t fit inside the Rays’ (self-imposed) present bargain-level wage structure come in 2027 or 2028, when their income position should, in some manner, improve dramatically. The only other Rays player with a guaranteed contract beyond 2022 is Brandon Lowe, but the team has so much young potential that it can afford to be choosy and watch how this wave of talent works out before signing others.
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Young Rays fans may purchase a Franco jersey with confidence and declare him their favorite player for the next decade. Franco’s image can be slapped on whatever the marketing department produces, and the excitement around him makes the rest of the squad more marketable as well. Fans can now think that their club can afford to maintain its greatest young players; if Franco had departed six years ago, they would be asking some uncomfortable questions.
MLB If you were to find a negative here, 29 other clubs won’t be able to acquire Wander Franco in an open-bid procedure six years from now — but I would argue that this stability among non-revenue behemoths is a net benefit for the league in the long term. The next smaller-market team with a top talent may have a better chance of keeping him for a long period. The Rays should be in the playoffs a lot over the next dozen years, which means many more opportunities for Franco on the national stage. Tampa is a fertile breeding ground for executives and indisputably the best-run organization in the game, so the Rays should be in the playoffs a lot over the next dozen years.
On the cynical side, I’m curious whether the recent owners meetings included a session in which the league briefed the owners on labor discussions and then added, “Hey, if any of you guys wanted to give out a large extension, before December 1 would be a wonderful opportunity.” Although it isn’t a top priority right now, modest payrolls like Oakland, Pittsburgh, Tampa Bay, Miami, Baltimore, and Cleveland have been targeted by those in the union trying to modernize the game’s economic model. It would be more of a talking point if, on Dec. 2, half of those clubs were operating miniscule payrolls and/or fire sales after accomplishing nothing since the World Series. Backloading extensions to young players does not alleviate the difficulties caused by the existing abysmal competitive incentives, but under the CBA’s present regulations, teams want to invest more of their payroll on young players, and extending Wander Franco is the best way to do it.
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