A lot of teams are locking their players up long term. The Pirates added the most recent extension to the set today: signing Andrew McCutchen potentially through his 3rd free agent season. He’ll be a free agent long after his 30th birthday, and less attractive to teams like the Yankees, who may have sought to pay him big money previously.
Seeing so many teams lock up their young players through early free agency is a little depressing as a Yankee fan. I want my free agents signed when they are 27, not 32. It is natural to extend that depression into a feeling of, “Hey, we should get in on this party too!”, but that would be a mistake. The Yankees get to play by a different playbook than the Pirates.
Let’s take Michael Pineda, for example. He is an extremely talented pitcher. If he pitches very well in 2012, he could be a candidate for a large extension. The Yankees might buy out 1 or 2 of Pineda’s free agent years, in additional to two of his free agent years, for, say, $60 million. Pineda hits free agency at 30 instead of 28. This would be a bad outcome.
The Yankees would take a significant risk on their books, without a ton of benefit for success. If Pineda develops into the next C.C. Sabathia, they will have ‘won’ the contract. That’s great. But even if they had not signed him to it, the Yankees may have benefited from his age 29 and 30 seasons. The Yankees can afford it, and even if they can’t, they will have Pineda under control for 5 seasons. A more likely outcome is that Pineda instead develops into a pretty good MLB pitcher. At that point, you are gambling that he would make more money in arbitration and free agency than he would under the contract extension. You are also simultaneously gambling that, years down the line, you won’t need the flexible, fungible dollars on your payroll for another player.
The Pirates, Rays, and Nationals would prefer to make this gamble. They know that they cannot afford to pay most of their players once they hit free agency. They make this trade off because they don’t have the budgets to be truly risky. Truly risky involves waiting for a player to hit free agency, then being the highest bidder, likely net losing on the contract in the later years. Instead, they take the moderate, but unnecessary for high payroll teams, risk of paying very young players for a long time.We haven’t seen a ton of these contracts blow up in team’s faces yet, but we will eventually.