What a Gerardo Parra Extension Might Look Like

In last week’s 2014 payroll analysis, I used a $4.5M figure for Parra’s 2014 salary, a working number that might work either as an arbitration award or as year one of an extension.  The truth is that this figure could be more than a million lower or quite a bit higher, given the number of unique issues his arbitration case presents.

In the projected arbitration salaries Matt Swartz has done for MLB Trade Rumors, he pegs Gerardo Parra’s likely salary at $4.2M.  Swartz’s model is excellent, and he published quite a few times in the last two winters about how he’s updated his model.  The fact that Parra’s case is so unique may pose some difficulties, however — there’s zero chance that his representatives will not come into the arb room with guns blazing about his defense, and no one has ever entered arbitration after a defensive season like the one Parra just put up (at least that we have good statistics for).  I’ll stick with my figure from last Wednesday.

But what might an extension look like?  Given current budget restraints, Parra would almost certainly not get paid an equal amount in all years of the deal; we can expect a significant escalation from 2014 to 2015, and then from 2015 to 2016.

As with the arbitration case, there are no good comparables for Parra at this juncture, particularly when you consider his situation as a Super Two player (with a total of four years of arbitration).  Here are the best I could come up with, from the last six years:

This is really the best I could do, and there are significant differences between Parra’s situation and that of all five of these players.  Only Carlos Gomez was a super two player, but he signed his extension before what would have been his extra (fourth) arbitration year, and the extension only covered free agent seasons (he had already signed for $4.3M for his last arb year).  Markakis was considered a more promising offensive force, and signed his extension before his first arbitration year.  Denard Span was similarly prized for defense, but signed so early in his controlled years that the money doesn’t form a real reference point.

Although they were signed essentially four years ahead of when a Parra extension would take place, the Victorino and Gutierrez cases are more telling.  Like Parra, Victorino had two years left under club control; and so even though Victorino has a different profile (better hitter, much better baserunner), his extension is a good reference point for if the D-backs were to try to buy a single free agent year in an extension this offseason.

The Gutierrez extension also bought out just one free agent year, but it included an option, and it was signed with three years left of club control.  For our purposes, let’s remove the first year of the deal ($2M, plus one fourth of the $1.25M signing bonus, so $2.313M or so).  That makes for a contract worth $17.5M in salary for three years, plus a $7.5M option with a $500k buyout.

Given Gutierrez’s reputation for defensive excellence at the time of his deal and that he was somewhat underwhelming with the bat, I think we have a good baseline here for Parra.  Parra is about as good offensively (96 wRC+ in 2013, projected by Steamer for 102 wRC+ in 2014) as Gutierrez was expected to be at the time of his deal (104 wRC+ in 2009, preceded by a 84 wRC+ 2008 and followed by a 85 wRC+ in 2010).  Of course, league-average offensive profiles better in center than in right.  But I think this gets balanced out by the fact that Parra’s 2013 might have been better defensively (42 Defensive Runs Saved) than Gutierrez’s platform year was (32 DRS in 2009, still one of the fifteen or so best defensive seasons in the last ten years).

Even after taking out the first year of Gutierrez’s deal, we still have two adjustments to make.  One is to adjust the Gutierrez numbers up a bit; had he actually not signed the extension until before the 2011 season, the numbers would have been a tick higher, just because the risk of getting far off track in 2010 would no longer be a factor.  The less certain the production, the more of a discount the player takes… just ask Denard Span.

The other adjustment is for baseball inflation.  Four years in MLB is an epoch.  Even if Parra’s value to the Arizona organization now is highly similar to what Gutierrez’s value was to the Seattle organization before the 2010 season, we might expect inflation as high as 20%.  Frankly, it could be more; Marlon Byrd just signed a $16M, 2/year deal and he’s much less of a sure thing than Parra.  After some of the other recent Phillies contracts, however, I’m not sure Byrd’s deal represents the market.

Given these factors and using the Gutierrez deal as a guide, I think that if Parra signed a three year deal (buying one year of free agency) with a single option year, these would be the numbers.  Keep in mind what I addressed in the payroll post about how backloading is likely.

2014: $4M

2015: $8M

2016: $9M

2017: $10M option with $1.5M buyout

Yes, that’s $21M guaranteed in salary, with $22.5M guaranteed overall.  The lower-than-expected salary in 2014 gets lumped into 2015, but no further (otherwise $7.6M might be a good expectation for 2015).  I think we can expect that if guaranteed years are tacked on here, they’ll be in the $9M-$10M range.  A four-year deal worth $33M or so in guaranteed salary also seems like a very likely scenario.

Yes, it’s hard to stomach salaries around $10M for a league-average hitter at a corner spot.  But if Gutierrez was believed to be worth $7M in 2013 back before the 2010 season, is it really that big a leap to think that Parra might be worth $10M in 2016, here before the 2014 season?  Melky Cabrera signed last year for $16M/2 years, and there’s the brutal Byrd contract.

Looking back up to the five comparable deals in the table above, I think we can use the Carlos Gomez deal for support.  Gomez was signed for 2013 already, so all three of the extension years were free agent seasons.  The salaries, therefore, were meant to approximate what Gomez could get on the open market (with a risk discount, as it was signed a year in advance).  Gomez signed a deal with an average annual value of $8M ($7M in 2014, $8M in 2015, $9M in 2016), and while most teams would probably prefer Gomez to Parra right now, Gomez’s deal was signed before his breakout 2013 campaign.

Just before Gomez signed his extension, it seemed that Gomez was a pretty good center fielder, defensively.  In limited playing time in 2011 (just 569 innings, or less than half a season), Gomez notched 15 DRS and 12.8 UZR, good for a very, very good UZR/150 of 29.3.  The 2012 numbers did not look as rosy as Gomez approached full-time status (3 DRS, 4.8 UZR, 6.9 UZR/150).  On the offensive side of the ball, Gomez had always been about 25% worse than the average hitter at creating runs, until he took a step forward in 2011 (82 wRC+) and showed league-average skills in 2012 (104 wRC+).  Better yet for Gomez, it seemed he was coming on strong at the end of the 2012.  But still — comparing the Gomez as of the end of the 2012 season to Parra now, doesn’t Parra profile better?  It looked like they were similar hitters, but Parra looks much, much better defensively.  That version of Gomez was also a very good baserunner, but I don’t think that makes up the gap.

At this point, the Brewers have themselves a wonderfully discounted deal with Gomez for what would have been his first three free agent seasons.  Gomez’s 2013 was amazing (130 wRC+, 24 HR, 40 SB, 38 DRS, 24.4 UZR), and since the offensive output can be traced to a change in approach, he’s a pretty good bet to keep performing near that level.  But I think the D-backs will have to pay more than $8M/year for free agent seasons.

I personally hope that Parra gets signed, because I think even at the above figures he’s getting a bit undervalued so long as he stays within throwing distance of the defensive numbers he put up in 2013.  But this close to free agency, it does not look like players sign for much of a discount, especially if the free agent years a club is buying will seriously eat into the player’s next deal.  In the 2015-2016 offseason, Parra will be 28 — a much stronger position than entering the market at age 30.  As former D-back Eric Hinske can attest, it can be a mistake to turn down set-for-life money just because there’s a chance to make more later.  But Parra is unlikely to sign an extension without getting more than $8M for seasons after 2014.

My personal feeling is that if Parra demands $10M per season for 2016 and beyond without taking a discount in 2014-2015, or if he demands more than $10M for those years, the team would be best served rolling the dice.  If Parra regresses in 2014, they’ll have made a wise choice and saved quite a bit of money and flexibility; if Parra repeats his 2013 performance or gets a little better, his price won’t get much higher than it is currently.

Should the club sign Parra to an extension, if the above parameters are what it would take?  Feel free to comment.