The Brewers and Contract Extensions: Part Two

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  This is the second part of our series on the recent contract extensions doled out by Doug Melvin. (If you missed part one, you can find it here.) Today, we’re going to look at the contracts of Yovani Gallardo and Bill Hall, and wrap things up with what we can learn from these deals. 

April 8, 2010- Brewers sign Yovani Gallardo to a 5 year, $30.1 million deal with a $13 million club option for 2015. 
 
Like the Braun deal, Gallardo’s extension appears to Melvin’s effort to lock as much of the Jack Z-drafted core as possible before it got prohibitively expensive to do so, and so far, things have worked out great. Gallardo has been a remarkably consistent pitcher, as well as a darn good one: The righty has struck out 200+ batters for each of the last 3 years, while his ERA has been within 5-10% better than league average over that time, in spite of some horrible defenses behind him. Also, Gallardo is yet to have any kind of significant arm trouble as a professional, and has made it out of his highest-risk years unscathed in spite of moderately high innings totals. The “number-one starter” tag is often misused, but Gallardo is likely to be pitching Opening Day ahead of Zack Greinke this year, and that says a lot about the pitcher he’s been.

Even better, it’s entirely possible that we (and the Brewers) are yet to see the best of Gallardo, who just turned 26. In addition to the upward career path his age would suggest, Gallardo should no longer have to deal with innings limits, and will also (hopefully) see better defensive support over the next few years. The Brewers look to have gotten a bargain here, and while the circumstances under which Gallardo signed his deal are completely different from those surrounding Greinke and Marcum, the way the Brewers drafted, developed, and locked up Gallardo is textbook for how teams should handle their young starters.

February 1, 2007- Brewers sign IF/OF Bill Hall to a 4 year, $24 million deal with a $9.25 club option for 2011 (that was declined).

Ouch. At the time of his deal, Hall figured to be an integral part of future Brewers playoff teams, with a bat that played in the middle of the lineup (.270/.345/.553 in 2006) and a glove that was serviceable anywhere in the infield. However, as the deal took effect, Hall’s batting average crashed, and his offensive game suffered greatly as a result. At the same time, the Brewers’ efforts to get him into the lineup everyday created a series of less-than-ideal situations, including a year-long experiment in centerfield (2007), and a return to third base the next year that his bat no longer supported; Hall’s role slowly shifted to that of a very well-paid utility player, and in 2009, the Brewers threw up their arms and flipped him to Seattle for next to nothing. Since then, Hall has bounced around from team to team, with his versatility always getting him a shot at a roster somewhere. Hall has continued to have a nice little career (and is a lot of fun on Twitter), but the decision to buy high on his career year in 2006 is one that the Brewers have probably been regretting, especially when so many of the Brewers problems in 2009 and 2010 could be traced back to the present need for cash that had already been spent in deals that didn’t pay off.

Conclusion 

We can roughly lump the contracts we’ve just seen into two groups: Long-term pacts with young, pre-arbitration players, and deals to avoid free agency with older, more established guys. The first type of deal is very much in vogue right now and involves the player leaving some money on the table for the long-term security, and the team absorbing the risk to lock up one of their young stars. The second consists of a player agreeing on a long-term contract a year or two before free agency; you see this less often because players that advanced will typically wait another year (accepting the risk of injury and such) for a bigger payday on the open market.

If the Brewers are able to reach an agreement with John Axford, it would definitely fall under the former. Axford is yet to hit arbitration, and the Brewers would hopefully be able to lock up one of the best relievers in the league at a slight discount. However, it wouldn’t be a perfect example: Axford is a couple years older than Braun and Gallardo were at the time of their deals, his injury history isn’t as clean either, but he still has the kind of skills and numbers that would ensure he’s well-paid whether he signs an extension or goes year-to-year. A potential Axford deal probably wouldn’t end up looking like the bargain Braun’s and Gallardo’s contracts appear to be, but that says more about their deals than what Axford’s might look like.

A Greinke or Marcum extension would definitely be an example of the latter, but that still doesn’t set much of a precedent: Weeks and Hart are both position players and don’t make great comps, and the closest the Brewers have come to having a quality, near-free-agent starter was either C.C Sabathia in 2008, or in 2005, when they signed Ben Sheets to a four-year deal in his second arbitration season. It’s very hard to draw detailed patterns in the sand based on the limited information we have, but there is a general theme to this process: The best way to get a good deal on one of your young stars is to lock him up as early as possible. There’s a lot of risk involved, but with every subsequent year, it gets more and more expensive to pay him annually; with Greinke and Marcum, the Brewers are to the point that it’s unlikely they’ll see much of a discount. I think we all hope that the club will be able to retain at least one of them, but the Brewers will probably have to pay close to market price for that to happen.

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