Projecting a Jedd Gyorko Contract Extension

Extensions. We love to talk about extensions. Or a lack of extensions. But for now lets focus on a single extension candidate: Jedd Gyorko.

Gyorko came into the 2013 season as the Padres third best prospect per a handsome blogger and managed to lead San Diego’s offense in a disappointing season. Early in the season we examined giving Gyorko the Evan Longoria extension, and recently we asked ourselves why in the world they haven’t given Gyorko that extension.

Last week in a contract extension guide Dustin estimated that extending Gyorko would cost the Padres approximately $50 million over seven years, akin to what the Braves gave Andrelton Simmons. Contracts are all about comparable players. In this case Simmons profiles as the greatest defensive player in generations coming off a 4.7-win season, while Gyorko profiles as a potentially above average offensive-minded second baseman coming off a 2.5-win year.

Looking at contracts given to second basemen over the last few years we find a group of Aaron Hill, Brandon Phillips, Dan Uggla, Howard Kendrick and Marco Scutaro that provide a mix of contract extensions and free agent deals. This group averages out to an approximate average annual value (AAV) of $12 million, which will be our baseline for looking at a Gyorko contract.

Gyorko is entering his second season with the Padres, meaning – assuming he is never optioned – that he will be eligible for arbitration following the 2015 season.

Quick background: When a player is called up to the Majors, the team has 6 years of player control. During the first three seasons the team can pay the player anything over the MLB minimum salary. During the final three seasons of player control the player and team go through salary arbitration where they agree on an increased figure each year. Further research.

Arbitration is designed to gradually increase a player’s salary as they approach free agency. The typical model is designed to give a player 40% of their worth in year one, 60% in year two and 80% in year three. This means that if Gyorko goes year-to-year through his six years of team control rather than signing an extension we’d expect him to get approximately 40%-60%-80% of the $12 million AAV given to comparable second basemen.

The Extension

For an extension to work between the Padres and Gyorko a few parameters need to be met:

  • The team needs to save money on what they would be paying through arbitration
  • Gyorko needs to be guaranteed a significant amount of money to give up earning potential

So lets take a look at how this could break down in the form of a six-year, $31.1 million deal that would lock up Gyorko’s first free agent year with a $12 million option year and $2 million buyout. This contract estimation was created based off the AAV and arbitration numbers mentioned above as well as contracts given to similar players based off service time – like Paul Goldschmidt (five years, $32 million in 2013).

The top line of the table below is an estimate of the six-year contract extension with a seventh-year team option (red text). The bottom line is an estimate of what Gyorko can expect going year-to-year with the Padres through arbitration.

contract breakdown

Click to Enlarge

Here is a breakdown of how the total dollars look over the life of the contract.

total dollars

Click to Enlarge

While the actual contract savings are just $3,525,000 in this model the Padres are also receiving cost certainty and a guarantee of protection should Gyorko continue to progress in his development. Additionally, the Padres are only committing themselves through his age-30 season, which should avoid paying Gyorko past his physical peak.

On Gyorko’s end he is guaranteeing himself life-changing money while also setting himself up to cash in once again at age 30 or 31 should his positive performance continue.

On Saturday, Matt Carpenter and the Cardinals agreed to a six-year, $52 million extension. Here’s how Carpenter’s contract and the suggested Gyorko deal would line up:

gyorko vs carpenter

Click to Enlarge

While the suggested Gyorko deal checks in at a much less $31.1 million in guaranteed money, it lines up well with their established production levels after Carpenter led all of baseball in 2013 in hits, doubles and runs scored. His advanced ability with the bat and average glove netted a 7.0-win season, compared to Gyorko’s 2.5 wins.

Signing Gyorko now could provide significant cost savings for the Padres. One year ago the Cardinals were in a similar spot with Carpenter after he posted a .294/.365/.463 line in 340 at bats. They elected to let things play out, which ended up costing them upwards of $20 million in guaranteed money on a contract that even still is viewed as a win-win for both sides.

UPDATE: Baseball Prospectus has re-released their long-term PECOTA projections. Here’s Gyorko’s WARP projection through the proposed contract extension along with a simple (and conservative) $5,000,000/WARP estimate. For reference, his 2013 WARP was 1.3.

Screen Shot 2014-03-12 at 8.34.37 PM

Click to Enlarge

*****

Follow Padres Prospects on Twitter

You are encouraged to comment using an exisitng Twitter, Facebook, or Google account. Upvote comments you find helpful, and only downvote comments that do not belong. The downvote is not a 'disagree' button.

  • Dustin

    Hey, we’re in the same ballpark, after you add in the option year on your outlined deal. Glad I wasn’t too far off. Great piece.

  • Billy Lybarger

    “Extend Gyorko?” “The Padres have plenty of time to figure out what kind of player Jedd is.” “Let’s worry about this in five more years.” “Maybin Hundley and Luebke proved that extensions are the devil’s work.”
    ~ Josh Byrnes – probably.