Assignment - Contract Extensions
OBJECTIVE:
Evaluate the strategic and financial feasibility of signing your focus player to a multi-year contract extension. You will use market precedents to construct a realistic contract offer that balances player security with team value.
INSTRUCTIONS:
Find 3 recent MLB contract extensions signed by players with similar service time, age, or performance profiles to your focus player
State whether the team should consider a multi-year contract for your focus player at this stage of their career.
Consider: Does an extension provide "cost certainty" for the team? Does it "buy out" expensive free-agent years? Does the player's injury risk make a long-term deal too dangerous?
Design a potential extension offer. Your offer should specify:
Total Years & Total Dollars
Structure: Which years are "guaranteed" vs. "team options"?
Incentives: Does the contract include bonuses for awards (MVP, Cy Young, All-Star)?
Junior Caminero
Please note: For this assignment, I’m assuming Junior Caminero is going to sign an extension at the end of the season with 2 years of service. Now that we’re a month into the season, I don’t expect an extension to happen until the offseason or spring training.
Market Precedents
List three extensions that serve as benchmarks for your focus player’s value:
Tyler Soderstrom - Athletics: 7 Years / $86,000,000 Guaranteed
Relevance: Corner defender which derives more value from their hitting than their defence. Hit 25 HRs with a 3.4 fWAR in 2025 compared to Caminero’s 45 HRs with 4.6 fWAR. Additionally, Soderstrom’s wRC+ is more consistently above average 114 & 125 than some of the other potential options I’ve considered. Service time is a little different at 2.053 at time of signing compared to Caminero’s 1.058. However, I do think that, if Caminero were to sign an extension it would be after the 2026 season which would mean he’d be at 2 years of service as well.
Jackson Merrill - Padres: 9 Years / $135,000,000 Guaranteed
Relevance: 1 Year of service and similar age at the time of signing. Worth 5.3 fWAR after his first season, this is closer to the value I think Caminero brings - even if Merrill’s is through a combination of hitting and defence. With 24 HRs and a wRC+ of 130 in his first year of service, this again more reflects the offensive upside of Caminero.
Austin Riley - Braves: 10 Years / $212,000,000 Guaranteed
Relevance: Cheating a little here since Riley’s contract was during his first time through arbitration (as a Super Two), I think he better reflects the player Caminero is/could be. He is a power-hitting 3B with below average defence. With 33 HRs, a 136 wRC+, and a 5.1 fWAR in his first full season, this better matches Caminero’s potential. In Riley’s second full season (in which he signed his extension near the end of it - Aug 2022), he had 38 HRs, a 144 wRC+, and a 5.9 fWAR. While Caminero’s forecasted metrics (both mine and Fangraphs) don’t have him hitting that value in fWAR, I do think this is a better player comp and potential for a future Caminero contract.
Honorable Mentions
Ke'Bryan Hayes - Pirates: 8 Years / $70,000,000 Guaranteed
Relevance: Similar service time (1.075) and same position 3B, but ultimately decided against since Hayes derives most of his value through defence.
Lawrence Butler - Athletics: 7 Years / $65,500,000 Guaranteed
Relevance: Similar age and service time, but the defensive value didn’t quite make it the comp I wanted. Additionally, I thought Soderstrom was a better offensive comp and didn’t want two players from the Athletics.
Strategic Recommendation
Should the team extend this player now? Yes - absolutely!
Justification: My projections have Caminero as a minimum 4 fWAR player throughout the time of his pre-arb and arb years. The two most common comp players were Devers and Guerrero Jr. Both of these players were 3-6 WAR players and ended up signing deals worth $300M and $500M. If you can get a player of that caliber for less, then that is an absolute must. You’d be “buying low” on a superstar and saving your team money during their prime years. Additionally, take into account it’s the Rays, they would appreciate the surplus value of a contract more than most teams.
The Extension Offer
Based on your analysis, propose a contract:
Total Contract: 9 Years / $155,000,000 (Club option in 2036 for two years for $25,000,000 per year for years 10 & 11)
Average Annual Value (AAV): $17.2M/AAV for the 9 years ($18.1M AAV with club options)
Contract Breakdown:
Guaranteed Years: 2027-2035
Option Years: 2036 club option for 2 years (2036 & 2037) worth $25M/Year with a $5M Buyout
Key Terms:
Escalators:
2036 & 2037 - $5M escalator for top 3 MVP during 2027-2033 seasons
$500,000 escalator for each season with 600 Plate Appearances
Award Bonuses:
Allstar - $50K
MVP $150K
Comparison to Arbitration
How does this offer compare to the total arbitration estimates you calculated in the arbitration assignment?
Arbitration Estimate
Direct comparison for these years with extension (not including buyout in the AAV here, so a straight $150M over 9).
Total value of proposed contract (option years included) is $200M compared to Devers comparable contract of $300M. So, while you might be paying ~$25M more than you would going through the arbitration process, the potential value saved (~$100M+) on a longer term deal for Caminero for 7 free agent years, is value well spent as you are paying him through his prime and can move off him at age 30 or 32 if you no longer determine him valuable for your team. Compare that to a contract that would likely pay him until 36+ if you were to go through arbitration and re-sign him in free agency. The risk is worth the reward for this one.