Friday, November 29, 2013

Joey Votto's lucrative contract will spell trouble down the road

It hasn't happened yet, but history says it will.

The guaranteed money still owed to All-Star first basemen Joey Votto will eventually become so burdensome and crippling that it will put a serious strain on the franchise's financial health and flexibility, in addition to their ability to meld a competitive roster. In some ways, it already has.

As it stands now, Votto's remaining contract dictates that the Reds pay their prized player an astounding sum of $225 million through the 2023 season, at which point Votto will be the ripe age of 40. For the record, the 11-year extension that Votto signed prior to the 2012 campaign, with two years left on his then-current deal mind you, went down as the fourth-richest contract ever awarded to an individual player in baseball history. Only Alex Rodriguez ($252M/2001-10 & $275M/2008-17) and Albert Pujols ($240/2012-21) hold the distinction of receiving larger deals than Votto has.

Here is a quick breakdown of how much Votto will earn over the years:

2014 - $12M
2015 - $14M
2016 - $20M
2017 - $22M
2018 - $25M
2019 - $25M
2020 - $25M
2021 - $25M
2022 - $25M
2023 - $25M
2024 - $20M* (team option with $7M buyout)

[Source: Baseball Reference]

As you can see, the foreseeable future doesn't look too bad in regards to how much cash the Reds will have to spend for Votto's services. However, beginning in 2016, the ante is bumped up significantly and suddenly a 33-year-old Votto becomes a player who might be being paid more than he's worth. Then, by the time the Canadian enters the downhill side of his 30s, he will be raking in approximately $25 million for six straight seasons until hitting the dreaded age milestone of 40. 

Of course, a lot can happen between now and then. Namely, the Reds should have a new television deal in place that could potentially compensate them three to four times the annual rate they are getting now. Once you factor in such things as inflation, increases in sales revenue across the board with all things related to MLB, which the Reds will get a slice of, among other various influxes of money, then perhaps this binding financial snafu with Votto won't be so cumbersome. 

But the probability remains that the Reds will eventually regret investing so much into one proverbial basket. Although the surprising move was received very well by Cincinnati fans, and it has proven to be a worthwhile investment thus far, a very shallow dig into baseball history reveals that these kind of lucrative contracts tend to weigh heavily in the favor of players as oppose to teams. The only variable is time.

For example, here is a look at some players who have been given similarly handsome deals recently, and haven't quite lived up to the billing (amount in parenthesis is money still owed):

Alex Rodriguez - 10 years/$275M ($86M)
Josh Hamilton - 5 years/$133M ($106M)
Albert Pujols - 10 years/$240M ($222M)
Mark Teixeira - 8 years/$180M ($68M)
Joe Mauer - 8 years/$184M ($115M)
Matt Kemp - 8 years/$160M ($128M)
Ryan Howard - 5 years/$125M ($85M)
Adrian Gonzalez - 7 years/$154M ($126M)
Prince Fielder - 9 years/$214M ($168M)
Justin Verlander - 7 years/$180M ($160M)
Buster Posey - 9 years/$167M ($156M)

[Source: Baseball Reference]

Quick, without thinking too deeply, what do all of these players have in common? Well, each of them were rewarded with fruitful contracts based heavily on past production. This is precisely where clubs go wrong. Making business decisions with a blind eye toward future projections and without regard to realizing how poorly lucrative contracts have panned out in the past is futile, especially when it comes to the nature of baseball contracts. Seriously, name one long-term deal that has turned out well for both the player and the team. My guess is you will be hard-pressed to find one. Of course, the verdict remains out on some of these massive contracts, as players still have time to prove their worth. But an educated guess is that most will not.

So, where does that leave the Reds with Joey Votto? Obviously, the hope is that he will debunk empirical evidence and earn every bit of his enviable income. Considering a large part of his game involves skills that don't typically decline with age, such as plate discipline, instincts, strike zone awareness, and intangibles, he more than others may stand the chance to avoid the negative side effects accompanied with age. But even declining eyesight and the grind of many grueling seasons begins to take its toll on anyone at some point. Votto will be no different, but his propensity to favor finesse over power should help prolong the greatness of his career. Namely, getting on base at a phenomenal rate and avoid making outs over choosing to hit towering home runs and banging balls off the wall. Plus, the relatively easier demands of first base should prove to be helpful in keeping him healthy and effective down the road.

With that being said, it doesn't change the likely fact that Votto will not be worth $25 million a season once 2020 and beyond rolls around. If that's the case, and the club has failed to build a formidable cast of younger and more affordable players around him, it could be a very undesirable time to be a Reds fan, due in part to the team's inability to free itself of the debt it owes to one of its stars of the past. Sadly, it could potentially be an era filled with season-after-season of last place finishes and woeful records. For the sake of happiness in Reds Country, let's cross our fingers that such a situation doesn't come to fruition. But don't be surprised if it does.

The graphic seen above is a screenshot of the final results of the poll question recently posed on the blog. So, I must ask, do you believe Votto will live up to the expectations of his contract? 


Anonymous said...

Giving a contract like that is more a Marketing decision than a baseball one. Joey will continue to sell Tickets and Tshirts and fully payback ownership for the price of his contract. He may look bad on the field but he'll pay dividends; just like the Griffey dividends are being used now. Ill say thats why Cano wont be able to land the contract he wants. Hees good but not franchise good.

Earl said...

Some of the players whose contracts haven't met the contract are pretty good. I don't know why they are going beyond 5 years on any deal but some of those guys are putting up some production (Verlander, Gonzales & Posey).