6 Days, $17 Million

Tampa Bay third baseman Evan Longoria has been a major leaguer for about a week, but the Rays have already signed him to a long-term contract. Here's a great break-down of the deal (also the link to part 1).

"The base deal is for $17MM over six years. Had Longoria gone year to year with Tampa Bay, his contract would have been dictated to him for the first three. Then he would have battled for three years in arbitration. Thanks to Tom Tango, we know approximately what arbitration payouts are: 40% of free agent value the first year, 60% the second, and 80% the third.

Therefore, Longoria would likely have been paid the league minimum the first three seasons, with perhaps a small bonus to build good will. That’s $500,000 per season or $1.5MM total, leaving $16MM over the final three years of arbitration.

Let’s translate what $16MM worth of arbitration money means on the free agent scale. The average arbitration payout is 60% of what a player would earn as a free agent, so the Rays are paying Longoria like a $27MM player ($16MM/.6) — that’s $9MM per year. Teams are currently paying $4.5MM per free agent win, meaning Longoria’s being paid as though he’ll be a two-win player during his arbitration years.

How good is two wins? It’s league-average. Longoria’s fielding should be worth half a win, meaning he can be a below-average hitter (.320 OBP and .400 SLG?) and still be worth his contract."

I agree with that analysis. The only realistic chance that the Rays will end up regretting this deal is if Longoria gets seriously injured and misses multiple seasons. That is definitely the kind of risk that a small-market team needs to take. It's why I wanted the O's to sign Nick Markakis before the season - waiting will end up costing them millions of dollars. The Rays also have some option years, which means that if Longoria plays as well as expected (or even a little worse) then they will have him at a reduced price - if he doesn't play well then they don't lose much. Great job by Tampa Bay to show their fan-base and their players that they are serious about their commitment to winning, and to reward talent.