Every offseason, players and teams agree upon a few different types of extensions. Some extensions tether a brand-new major leaguer to his team for a huge chunk of his career. Some buy out his arbitration years to simplify the process and avoid going to a hearing. Others are designed to extend a player through his arbitration years and a handful of his free agent years, allowing the player to lock in some security, and often providing the team with upside should the player flourish.
Let's focus on the latter type of deal. The Yankees don't often look to sign their younger players to such extensions, but there could be some value to be had from securing some of them for a longer term. If the Yankees did look to extend any of their arbitration-eligible players, what could those extensions look like?
The Yankees don't have a ton of arbitration-eligible players that would seem like extension targets, but the best such player might be Didi Gregorius. Gregorius is entering his age-27 season coming off a pair of strong campaigns as the Yankees' shortstop. This will be Gregorius' first time through arbitration, and he is under team control through 2019.
MLB Trade Rumors forecasts Gregorius to make $5.1 million in 2017, so any extensions would have to bake in raises in 2018 and 2019. The best parallel to a potential Gregorius extension might be Brandon Crawford's extension a year ago. Crawford is a better player than Gregorius, but both fit a similar profile of a shortstop with an average bat but a slick glove. Crawford's deal bought out his final two arbitration seasons for a total of about $14 million, plus his age-31 to age-34 free agent seasons at $15 million per year.
Could a similar deal fit for Gregorius? The Yankees would probably have to commit around $20 million to buy out Gregorius’ arbitration years, and then agree on how many free agent years to tack on and at what rate. If the sides were to follow the template set by Crawford and aim for a six year deal, would the team and player find something close to that $15 million figure fair for both sides? It's impossible to say, with both sides assuming risk, but it's an idea at least worth considering for Gregorius and the team.
Another possible target is Dellin Betances, though with reliever prices on the rise, this may not be the time to try to extend him. Like Gregorius, Betances still has three years of team control remaining, as he eligible for arbitration for the first time this year. He is projected to earn just $3.4 million in 2017.
There is actually a bit of precedent for a reliever of Betances' caliber. Like Betances, Craig Kimbrel was three years from free agency when he signed a long-term extension prior to the 2014 season. Kimbrel's extension bought out his three arbitration years at an average of $9 million, then tacked on an additional two years at $13 million, the second year being a team option.
Kimbrel was similar to Betances in that he had a track record of absolute dominance at the time of his extension, but there are some complicating factors. First, Kimbrel was 26 at the time, while Betances turns 29 next year. Plus, as the Yankees have thoroughly demonstrated, relievers seem to be valued more highly at this moment in time, meaning that a Betances extension would probably blow Kimbrel's $42 million guarantee out of the water. It might be worth approaching Betances, but since he is older and still not close to free agency, it's probably best for everyone to sit tight.
Among the Yankees' other arbitration-eligible players, the last natural candidate might be *gulp* Michael Pineda (Adam Warren, Tyler Clippard, Austin Romine, Aaron Hicks, and Tommy Layne make up the rest of the arbitration-cavalcade). That might seem preposterous, given Pineda's struggles in 2016, but the market pays for young pitching. If/when Pineda makes it to free agency, he will be a sought after commodity in all likelihood.
As he is on his final trip through arbitration, Pineda is slated to be the Yankees' largest arbitration expense at $7.8 million. Pineda has obviously been erratic in recent years, as his fielding independent numbers with the Yankees (a 3.42 FIP, 9.2 SO/9, 1.8 BB/9) are shiny, but his ERA+ is a middling 101. Given his very uneven results, perhaps a Pineda extension would come at a discount?
Unfortunately (for the Yankees at least), probably not. There are a few examples of pitchers with the same amount of service time as Pineda accepting extensions, but the most apt comparison is Rick Porcello. Prior to signing his extension in 2015, one year before free agency, Porcello was coming off a three year stretch in which he had a 100 ERA+ but a strong 3.70 FIP. Like Pineda, he was a bit of an enigmatic pitcher with results that didn't match his peripherals.
Did Porcello come at a discount? Not at all! Now that he is a newly-minted Cy Young award winner, his four year $82.5 million deal with Boston looks pretty good from a team perspective, but at the time it was signed, Porcello's extension seemed fairly pricey. Porcello's extension kicked in during his age-27 season, while Pineda is now entering his age-28 campaign, but if Porcello is any indication, underwhelming run prevention numbers are not enough to hold down the salary of a pitcher with talent.
Maybe that's not a bad thing. Over at The Ringer last week, Michael Baumann put a twist on the usual Most Valuable Contracts conversation and ran down the "worst" contracts that left many of baseball's better performers underpaid. Plenty of those deals were extensions for young players that locked them at prices well below what they’re worth. It doesn't look like the Yankees will be able to gain any value by signing their players to preemptive extensions, but if that means they are more likely to be paid what their true value, rather than just saving the Steinbrenners money, then perhaps that's not the end of the world.