As we would have expected, the Detroit Tigers and outfielder J.D. Martinez have confirmed mutual interest in negotiating a contract extension this offseason. Locking up one of your best players seems like a slam-dunk decision, but the negotiations with Martinez will be one of the first big tests in Al Avila’s tenure as general manager.
Martinez made $3 million in 2015 as a first year arbitration player. Because he has only a little over four years of major league service time under his belt, Martinez will be under team control for (at least) two more arbitration years (2016 and 2017). Those two seasons will take him through his 30th birthday.
Players can certainly stay productive into their 30s (especially the early 30s), but we know that players generally have reached their decline phase by that point in their career. Decline phase doesn’t mean they’ve become bad (necessarily), but it usually does mean they’re worse than they were at ages 27, 28, or 29.
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As we learned with the Justin Verlander and Miguel Cabrera extensions, one should be careful in extending players two years before they hit free agency as it’s difficult to project their future level of production.
Like Verlander and Cabrera immediately before they signed their extensions, J.D. Martinez has likely already played his best season. So, in an extension for 2018 and beyond, the Tigers wouldn’t want to be paying for a 5-WAR season like he just had in 2015 or even his (shortened) 4-WAR season from 2014.
The risk here isn’t so much in (potentially) overpaying Martinez for a year or two into his free agency years (2018 and 2019), it would be in granting an beyond those years with the expectation of All-Star level production.
Current arbitration estimates peg Martinez’s 2016 salary at about $8 million. Factoring in another tremendous season and a big third-year arbitration boost, he could maybe hit something in the range of $18 million as a third-year arbitration eligible player in 2017. So, in a sense, the Tigers should act like they already have a two-year, $26 million extension for him on the books.
Martinez might be a $26 million per year player right now, but the Tigers cannot give him an extension with an average annual value anywhere close to that. Maybe they could buy out free agent years (2018 and beyond) at a rate close to that, but even then his salary figures should be discounted for aging and the uncertainty of the future (injuries, ineffectiveness, etc.).
What the Tigers don’t need is more long-term money committed to aging players in their decline phase. To avoid that with Martienz, the organization should aim for a four-year deal worth a total of $70-75 million.
If Martinez wan’t much more (in terms of either years or dollars), the Tigers should be content taking the wait-and-see approach for at least another year. They should be in no rush to commit to a long overpay here.