Looking at a Ronald Acuña Jr. Extension

Looking at a Ronald Acuña Jr. Extension

As we get closer and closer to the end of spring training, the growing expectation is the Braves will start Ronald Acuna Jr. in AAA to begin the season. If you look at his numbers last year, his production this spring, and the current need for an upgrade in the outfield, that notion doesn’t make a lot of sense. Only when you view it through lens of baseball’s economic system does the idea even begin to gain merit. The bottom line is, holding Acuna back two weeks at the beginning of the season means more years of control at a cheaper cost. And barring a long-term extension, that should be the expectation.

It’s that last point we’re focusing on today.

What if Atlanta and Acuna were interested in a long-term extension? What would it potentially look like?

To answer that, we’re going to have to look Acuna’s career hypothetically and then do some math to figure out what kind of salary he’s looking at over the next few seasons.

To start, let’s assume Atlanta is just going to go year-to-year with Acuna. That means year 1 is 2018. Atlanta holds him back for at least two weeks to start the year to ensure he doesn’t gain a full year’s service time and pays him league minimum of $560K, pro-rated.

Because of the manipulation of service time in 2018, Acuna starts 2019 technically still in his first pre-arbitration year and Atlanta simply renews his contract. We’ll call it $700K.

2020 is still a pre-arb year even though technically would be Acuña’s 3rd year in the majors. The price of that though, is the next 4 years will be arbitration years. Because he has so many days over 2 years of service time, he’s a Super Two player. So this would be the last year they can simply renew his contract. We’ll say $1M.

2021 would be his first arbitration year and this is where we have to assume a little about the type of player he’s going to be. Given he’s the number one prospect in baseball and the kind of numbers he’s put up to this point, we almost have to assume he’s going to be an elite player. So the question is what does an elite player get in his first year of arbitration three years from now? Kris Bryant just set the record for first time arbitration at $10.8M. We won’t quite go that high even thought it’s certainly possible. Especially 3 years down the road. For now, we’ll go with a conservative estimate for Acuna and say his first-time arb salary is $9M.

2022 is his second arbitration year and from this point, it’s an easy calculation. The arbitration process follows a pretty standard increase year-to-year. If he’s at $9M year-one, then a safe bet in year 2 is around $12M.

2023 is arbitration year three, so we’ll increase it again to $15M.

2024 is his final arbitration year and we’ll set his salary at $19M.
After that there’s no more team control. If you’re still going year-to-year then from here on out, you’re paying market rate. And 7 years from now, for an elite talent, you’re easily talking about $40M to $50M a year. Maybe more.

So to sum it up nice and neat, if Atlanta goes year to year with Acuna, and he’s the player everyone expects, their yearly commitment will look something like this:

2018: $560K
2019: $700K
2020: $1M
2021(1st arb): $9M
2022(2nd arb): 12M
2023(3rd arb): 15M
2024(4th arb): 19M
2025 and on (free agency): $40M+

For his team control years (2018-2024), that’s around $55M. To make an extension worth doing, Atlanta would probably like to buy out at least one free agent year. So, if you take his 7 team control years plus one free agent year, you’re looking at around $95M. For a nice round number we’ll call it $100M. So that’s 8 years/$100M.

Now Atlanta wouldn’t actually offer 8 years/$100M because that’s at the top of the scale of what Acuna could earn the next 8 years, and they’d certainly want a discount for guaranteeing that much up front. After all, Acuna isn’t actually an elite major league player yet, and while he has about as little risk as a 20-year-old can have, he still has risk. And the system is set up where young players under team control don’t have much leverage in contract negotiations. Teams know that. So do players.

On the other hand, you do have to get close enough to that number to incentivize Acuna to take the deal. He’s good enough where betting on himself is a viable option and he’s not going to just give away one of his free agent years for nothing.

Factoring in all the above data I’m going to set the mark at 8 years/$75M.

For Atlanta, you’re getting what you think is an elite talent for around $7M a year, including one of his free agent years. And you could still set it up as a gradual step up in salary, paying a million or two in the first couple of years with bigger increases the last few years. This also gives you price certainty going forward and frees you from any kind of service time manipulations. You can just play the best player.

For Acuna, you’re only giving up one free agent year, and the bump that comes with it, for life changing money guaranteed. If, God forbid, you tear an ACL or just struggle like most young players do, you’re still set for life. Worse case scenario for you is, you do turn out to be an elite player, and you hit the open market at 29 instead of 28. Or more likely, you force Atlanta to give you another extension much closer to market rate. Either way, you get your big payday if you’re the real deal. And if you’re not, you got $75M in the bank.

The most likely scenario is this doesn’t happen, but I think both parties could benefit exploring the option. It would also mean Acuna is the on opening day roster so I don’t think the fans would mind either. What do you guys think? Would you do it?

3 Comments

I like it. It reminds me of the Christian Yelich contract, which I think would be Ronald Acuña Jr’s floor. Actually I like 8 years/$80M would be the best figure. I also think the good business would entice free agents and future elite international prospects.

I wouldn’t do anything until after the 2019 season if I were the GM of the Braves, just to see how Acuna performs at the ML level over an extended period. Plus if he has the usual sophomore slump, you might get a bit of a discount.

At that point, if he’s been solid, but not yet reached superstar levels, I’d try to go 6 years for 75 million. That’s right in line with what the Astros paid Jose Altuve yearly, and slightly more per year than what Longoria got a few years earlier. If he’s flourished, maybe 6 years for 95 million?

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