Learning from the Chase Headley extension stalemate

Dustin is the newest member of the Sacrifice Bunt team. He may have had something to do with running the defunct Padres’ blog Friar Forecast, and he’s more recently published articles at Baseball Prospectus and The Chiefly. He’s still a bit of a sabermetric geek, a charter member of the Brian Giles Fan Club, and thrilled to be writing here at Padres Public.

Don’t miss Nate’s article from earlier today, which touches on a lot of similar ideas presented here. 

Every year in early June, the baseball world gathers to effectively decide the future fate for each of its organizations in the First-Year Player Draft. For teams that haven’t solved baseball like the St. Louis Cardinals have, the draft can be likened to being handed 40 lottery tickets, each with a varying – but strikingly small – success rate. Identifying, signing, and developing 18-to-22 year old baseball players is a tough assignment, but for small-to-mid market teams like the San Diego Padres, converting those lottery tickets into valuable major league commodities is essential to the sustainability of the franchise.

The Padres have had mixed results in this arena of late. They currently boast an exciting and deep farm system, but the dividends have yet to pay off. The injury bug hasn’t stopped biting either, which adds another wrinkle to the already tricky player-development game. Highly touted prospects like right hander Casey Kelley and outfielder Rymer Liriano fell victim to Tommy John surgery in 2013, dimming some of their prospect glow, and left-handed stud Max Fried was recently shut down with forearm/elbow soreness.

When teams like the Padres do strike it rich in the draft — with someone like, say, Chase Headley — it’s imperative that they maximize the value they receive from that player. Once that prized prospect steps onto a major-league field, the inevitable six-year countdown to free agency begins. (If he isn’t traded before then, of course.)

There is, however, a great equalizer that gives the smaller market teams a chance to retain their stars for longer than six years: the long-term, generally team-friendly, contract extension. The formula goes something like this: give young, not fully materialized player the security of a $50 or $60 million deal and, in turn, he will generally give you, the organization, a below-market price point and an opportunity to buy out a couple of free agent years.

This offseason, as David mentioned in a recent article Padres Public, the Atlanta Braves have put on an exhibition in this growing trend, locking up parts of their core in a series of long-term deals:

Player Years until FA* FA years bought** Contract
Andrelton Simmons 5 2 7 yrs, $58 mil
Freddie Freeman 3 5 8 yrs, $135 mil
Craig Kimbrel 3 1*** 4 yrs, $42 mil
Julio Teheran 5 1**** 6 yrs, $32.4 mil

*Number of years player had prior to entering free agency when deal was signed.
**Number of free agent years club bought out from player.
***Deal includes club option which could buy out second free agent year.
****Deal includes club option which could buy out second free agent year.

As you can see, especially with Simmons (age 24) and Teheran (23), the Braves haven’t hesitated to extend their promising young stars. Simmons had played just one full season when he inked his extension just last week, and he hit just .248/.296/.396 last year. He also fielded like the second-coming of Ozzie Smith, and the Braves are betting that the bat will come around. (Even if it doesn’t, he was still worth 6.8 rWAR last year thanks largely to the defensive wizardry.) Teheran, too, just finished his first full campaign in 2013 and finished with a sparkling 3.20 ERA and 3.78 strikeout-to-walk ratio.

The Braves aren’t the only ones locking up young, not-yet-fully-established players to long-term deals. The Tampa Bay Rays have become the model organization for small-market success in part by extending players like third basemen Evan Longoria and left hander Matt Moore to long-term deals just days after they broke into the big leagues. Rewarded for their decisiveness, the Rays now have two of their stars locked up at incredibly reasonable rates. Plenty of other organizations, like the Boston Red Sox and St. Louis Cardinals, have joined the party by signing young players to club-friendly deals.

The Padres, on the other hand, have played it year-to-year with their current franchise third basemen Chase Headley, likely making 2014 his last season in San Diego as he’s set to hit free agency next offseason. Headley, taken in the second round (66th overall) of the 2005 draft, is arguably the Padres best draft pick since the turn of the 21st century. Only Jason Bartlett (13th round, 2001) has accumulated more rWAR (18.6*) than Headley among Padres draft picks since 2000, and only Mat Latos (11th round, 2006) stands a reasonable chance of catching Headley’s WAR output.

*The Padres, of course, dealt Bartlett in July of 2002 to the Minnesota Twins for Brian Buchanan, and received just .4 WAR from Buchanan in parts of three seasons. To make matters worse, Bartlett returned to San Diego for a farewell tour in 2011, giving the Padres -1.0 WAR. That’s one way to squander a nice pick.

It’s difficult to place too much of the Chase Headley contract debacle on the shoulders of the current regime. After all, Headley’s career in San Diego spans three different ownership/front office groups. He was drafted during the Moores/Alderson/Towers era, started developing into a household name in the Moorad/Garfinkel/Hoyer years, and will finish out his Padres career in the beginning stages of the O’Malley/Fowler/Byrnes regime. All of the turmoil in the Padres’ front office during Headley’s career certainly hasn’t helped to create the type of environment where long-term, franchise-altering contract extensions are often made.

The real missed opportunity to lock up Headley was earlier in his career, well before his breakout .875 OPS, down-ballot MVP-caliber season as a 28-year-old in 2012. The other issue with extending Headley now, or even after his 2012 outburst, is the ominous specter – from the Padres perspective, anyway – of baseball’s out-of-control free agent market. Headley is set to cash in on his skill set next winter, and at this point he’s priced himself out of San Diego. There’s little incentive for Headley to sign a team-friendly deal now, as he’s just a year away from greener pastures.

Of course, the current front office/ownership group has done little to quell the angst surrounding Headley’s inevitable one-way ticket out of town. In fact, Ron Fowler only made matters worse when he took the Headley negotiations to the press early last season, as you surely recall:

But we will do an offer that will be the largest offer we’ve ever made to a player in San Diego history and think it will be very close to some of the numbers I read in the press.

The Padres’ front office only ended up with egg on its face after those comments, which caught Headley off-guard, and resulted in no serious progress on a long-term deal. Whether it was a marketing ploy gone wrong or simply a rookie mistake, Fowler’s comments didn’t cast the organization in a positive light and likely didn’t help to build a cohesive relationship between Headley and the Padres’ brass.

In a recent interview with Baseball Prospectus, Braves’ senior advisor John Hart – known for extending young players back in the ‘90s as the Cleveland Indians general manager – had this to say about his goals back with the Indians:

One was not to run an entire class through arbitration and two was to demonstrate to our fan base that we were in this for the long haul.  It’s sort of a turnover route in Cleveland – when a guy got close to free agency he was traded, there was no long-term commitment.

The current Padres’ regime would do well to take some of that advice to heart (sorry), as San Diego has developed its own turnover route for star players these days. Both Jake Peavy and Adrian Gonzalez were jettisoned from San Diego before they turned 29, and Headley is in line to suffer the same fate (though he’ll turn 30 in May).

Sometimes teams like the Rays are forced to operate in similar fashion, as they dealt ace starter James Shields to Kansas City for up-and-comer Will Myers and other prospects in the winter of 2012. It’s a strategy that can work, on occasion, as it did in that trade for Tampa Bay, but it also can quickly sour a fan base that is forced to watch stars come and go more often than desired. Further, it puts a tremendous amount of pressure on the organization to keep churning out young, productive players and cash in on the trades that swap established veterans for less reliable prospects. There’s nothing like a homegrown cornerstone player to build around, and the continuity gained from keeping familiar faces on board goes beyond on-field production.

It’s important to note that the Padres themselves haven’t, by any means, completely avoided these kind of extensions. They’ve struck small-scale deals with the likes of Cameron Maybin, Nick Hundley, and Cory Luebke over the past few years, and while those players have all had their post-extension struggles, at least the Padres are making an effort to some degree. Hopefully, the early returns on those deals doesn’t discourage San Diego from continuing to extend its young players.

While they missed the boat on Headley, new stars will begin to surface over the next few seasons. Jedd Gyorko has already laid the foundation for a productive career, popping 25 home runs and posting 2.2 rWAR as a rookie in 2013, and players like catcher Austin Hedges, right hander Matt Wisler, and outfielder Hunter Renfroe are poised to bust onto the scene at any moment. Here’s hoping the Padres have learned something from the Chase Headley situation. Headley’s likely approaching his last days in San Diego, whether he’s dealt at the trade deadline or allowed to walk in the offseason, but the next great Padres star doesn’t have to leave town so abruptly.

All stats in this article from Baseball-Reference

Note from Melvin: having Dustin on board is going to be a lot of fun, as I’ve been reading and learning from his Padre work for something like 7 years. He’s done a lot of great things for the Padres blogging scene and it’s an honor to be writing alongside him.

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  • Andrew Buitron

    You had me at “Brian Giles Fan Club”. Great article!

    • Dustin

      Thanks!

  • ballybunion

    The thing about Headley is, this might not be his last year here anyway. If the Padres contend, he’ll be here all year, but he isn’t an unrestricted free agent: there’s still the qualifying offer for $14-$15 million the Padres can make, and as this off-season has shown, a rejected offer and draft pick forfeiture is a bit of an anchor. The Padres could get a draft pick, or he accepts the QO and they have him short term for a reasonable amount, or he has to deal with the Padres for one or more years, if he didn’t have a good year. With his recent injury history, especially the knee surgery, part of any new team’s evaluation, he’s taking more of a risk than the Padres, but I’m not sure he realizes it.

    • Dustin

      That’s fair, and I definitely could have mentioned that. However, I expect the Padres to offer Headley the qualifying offer next offseason, and I expect Chase to swiftly decline it. It’ll be more of a formality than anything.

      I don’t think the QO stigma has much effect on elite free agents, and barring any serious ineffectiveness/injury this season, Headley’s going to be one of the most attractive free agents next winter. In fact, even with a down year, he will still likely be perceived as a top free agent next offseason, though it certainly won’t help his payday.

      Look at Jacoby Ellsbury. He seems like a reasonable comp for Headley. One huge year with some accompanying solid campaigns. Some injury issues. Entered free agency around the same age. Ellsbury got seven years and $153 million. The other elite free agents, too, had little trouble signing hefty deals (Cano, Choo, McCann).