Wednesday, November 19, 2014

MLB Games Are Over, Business Begins
The Year of the Backloaded Contract. I'll admit that it doesn't quite have a ring to it, but for Giancarlo Stanton and Russell Martin it's a reality nonetheless.

On Monday, Stanton signed the biggest contract in North American professional sports history at 13 years, $325 million. Regardless of Stanton's current talent-level and potential to still grow, it surely surprised many to see the Miami Marlins -- yes, the lowly Marlins! -- open up the checkbook wider than ever before.

With Stanton's monster deal, Martin's signing maybe did not get the attention it deserves. Martin, despite the wooing of the Pittsburgh Pirates, signed a deal with the Blue Jays for five years and $82 million. For a 31-year-old catcher, that's quite the investment even before considering his 111 games played last season was his lowest mark since 2010 in his last season with the Dodgers.

But for both, the raw numbers don't tell the full story. Both have a large chunk of money backloaded in their contracts.

As broken down by ESPN's Jayson Stark, $107 million of Stanton's deal will come over the first six years. That leaves the other $218 million for the final seven. The first three years breaks down like this, according to Stark:

2015: $6.5 million
2016: $9 million
2017: $14.5 million

Certainly a very reasonable price for a slugger of Stanton's stature for the first six. Now, six years is not just an arbitrary almost mid-way point either. The 25-year-old Stanton has an opt out clause after the sixth season, which, if he continues to improve as a player (a scary thought, could put him in line for a massive 10-year deal to take him into his 40s like Albert Pujols.

Also, marketing had to have come into play in some way with Stanton's negotiation. For that much money, you're not only looking to win, you're looking to fill seats and sell merchandise. It's a big bet on potential long-lasting super-stardom.

Martin's contract also backloads money in the final three years. As CBS's Jon Heyman tweeted, Martin's contract breaks down like this:

Looking at value, $7 million is a good value for Martin, if he can remain healthy. $15 million is pushing the limits for a would-be 33-year-old catcher, although it's worth noting he could be saved a bit by the American League DH.
It's those final three seasons that are problematic. Looking at it in that window, few would consider a three-year, $60 million deal for a 33-year-old catcher, save maybe Ruben Amaro, Jr. because you can't put that kind of thing past him.

However, what Craig Calcaterra noted on Hardball Talk, the Blue Jays could be looking to make a run in 2015 and saving money on Martin would help payroll flexibility. And would a contender be willing add Martin in the third, fourth or fifth year at the inflated price in the name of the "win now" mentality? Crazier things have been done.

What Stanton and Martin's contracts do highlight are mechanisms teams can use to manipulate contract money. Both have money backloaded into their contracts, and Stanton has an out to line himself up for another monster payday before his playing days are said and done.

Now, it's up to the Marlins and the Blue Jays to surround their investments with the talent to win.


Kevin Rossi is a senior Drexel Sport Management major with minors in Communications and Business Administration. Since joining the SMTSU, Kevin has worked his way up the ladder to President. Currently, Kevin is serving as the Sports Information Assistant for Drexel Athletics and  intern at Comcast SportsNet in web production. Kevin has writing experience with, The Triangle, Temple University, and various outlets in a freelance capacity. Follow Kevin on Twitter @kevin_rossi.

Connect with Kevin Rossi on LinkedIn.

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