The Rays Go All In On Wander - A Signing Analysis

Like many baseball fans, I was completely taken aback after reading the headlines. Wander Franco of the Tampa Bay Rays inked a $182 million agreement that would pay him an average of $16.5 million per year for the next eleven years. MVP incentives, trade bonuses, and veto rights are all included in the deal, which further contains a $25 million club option for a twelfth year. And yes, the team that prides itself on having a cheap cost per WAR has just signed a uncharacteristically-odd blockbuster agreement. This is especially surprising as Franco has a small sample size in the Major Leagues, only having 70 total games and 308 plate appearances. In fairness, he did flourish in that little time. The Rookie of the Year candidate slashed .288/.347/.463, .348 wOBA, 127 wRC+, and 2.5 fWAR in his first season. While he was not chosen, many believe that with more At-Bats, he would have been. Personally, I agree. But does that justify this large of a deal?

Wander Franco has been a top MLB prospect for years. Ranking first on MLB Pipeline’s list for quite a bit of time, he never had a wRC+ below 150 at any Minor League level in his career. At the time of some of those plate appearances, he was barely 17 years old. It is sufficient to say that the young slugger’s call-up was highly anticipated. While he had a rocky start, Franco quickly picked up the pace, tying MLB Hall of Famer Frank Robinson’s consecutive on-base rookie record at 43 games. With this much hype surrounding him and the production to match it thus far, it is interesting that he decided to tie himself down at such a young age.

It may appear to be a financially sound move to sign with one team for an almost constant AAV for a long time, there is one crucial issue - the cost of WAR. Every year, most players continue to sign for more money with less production. The dollar value of one single fWAR continues to rise, experiencing a long-growing trend that has been around since baseball began. Ten years ago, an AAV of $25 million on a contract was considered high. Now, while somewhat above average, it is far from the ceiling. Shown below is the continous overall growth in these ceiling costs.

Figure 1. Data via SABR.org and Spotrac.com.

Inflation does play a role, but I can assure the reader that the overall growth in contracts far outpaces the inflation. With the old CBA agreement set to expire in December, these salaries will continue to grow. By signing this deal, Wander disregarded that growth and took a major stake of his upside-earning potential off the table.

Yet, credit must be given where credit is due. The future star likely realizes the insane level of downside if he did not sign the deal. As I mentioned earlier, he has not played in a lot of games. Anything can happen. From a rare career-ending injury to failing to perform at a level even similar to his rookie campaign, baseball is a sport of randomness. Either way, he is still guaranteed a solid dollar amount. Franco is reasonably investing in an insurance policy with this long deal, an action that can be appreciated. For those reasons, I give Wander Franco an 8.5/10 on this deal.

The Tampa Bay Rays are one of the cheapest teams in the entire league. Consistently carrying one of the lowest payrolls, it continues to shock many that they manage to put a winning product on the field. Simply put, the Rays win not because of the dollars they spend on the diamond, but the focus and attention they put off of it. They have some of the best analytical and technical experts that a team could ask for, successfully evaluating, trading, and developing players that seem to be a lost cause to others. Led by general manager Erik Neander and head coach Kevin Cash, they have successfully mastered the art of making a flawless team for cheap. In that lies the dilemma of Wander Franco.

Some of the fundamental ways that the Rays have achieved this sort of feat lay their fundamental policy of signing very low AAV contracts with few years. Long-term contacts tend to have a hefty downside for a team, making these deals less likely to profit. If it also occupies a large portion of the salary cap (which most do), it can massively affect a team’s playoff chances for years to come, making avoiding this sort of transaction much more pleasant. This deal completely disregards that philosophy. $16.5 million per year is on the higher end of their payroll, and 11 years is a very long commitment. It is worth noting that the Rays must see something that they’re excited to keep. As this lengthy extension is an outlier to their normal operations, the analytical team must see much promise. With Tampa Bay's track record in regards to these signings, it is easy to trust them.

By signing this contract, Tampa Bay just took on a lot of risk. They are now stuck with their young prospect for a long time, whether they like it or not. And with the insane randomness that is the sport of baseball, this is a high-risk play. But, it is also high-reward. If Wander can manage to average only 3 fWAR a season over the life of this deal (33 total fWAR), which may be a conservative estimate, the Rays are in for a load of profit. As Fangraphs currently values 1 fWAR at $8.03m and assumed it is a constant, the production would be worth roughly $265 million. With the value being under no circumstances a constant and will more than likely grow, this estimate can easily be below the actual benefit. While the team has gone into a financial hole, it can dig itself out for a load of success. For those reasons, I give the Tampa Bay Rays a 7.5/10 for this deal.

In analyzing this deal, Wander Franco was the winner. Franco was rated 1 point higher, showing that his grade was above Tampa’s by a decent margin. It is also worth noting that teams that sign long-term deals are automatically at a disadvantage. They carry so much more downside than the players, a factor that weighs in the evaluation. The Rays invested a low AAV (by MLB standards) to lock up a young potential MVP for a long time. Wander took a comfortable insurance policy on a minuscule sample size. And while he could be bitten if he manages to be a star, the Rays took a gargantuan gamble by signing him this early, making the deal not entirely equal on the surface. With both parties intertwined since the beginning of his professional career, the contract does have the potential to be mutually beneficial. Now, Wander has the opportunity to lead the Rays to their first World Series Championship.

Sources:

Baseball-Reference.com

ESPN.com

Fangraphs.com

MLB.com

SABR.org

Spotrac.com