Contract Extension Tips

[EKomrska15]

Originally Posted by Perceptor

Thanks for this. I just signed Tommy Hanson to a 6-year extension that pays a straight $4.7 million per season. His arby number was $4.2 million and he was asking for $5.3 million for 1 year. I was able to buy out his arby years plus 2 years of free agency

It can be done to anyone.....Trust me on this...

[JMDurron]

Originally Posted by EKomrska15

It can be done to anyone.....Trust me on this...

The main variable is how many years the player will accept. I've had some players who absolutely will NOT accept more than a 4-year extension just before their first arb hearing. 3 arb years and 1 FA year isn't nothing, but still, it's frustrating when you're trying to get 8 years and can only get 4.

[Tyler87898]

Originally Posted by sc_superstar

What I would normally do.

1) He will ask for one year, usually guys under 5 service years wont ask for a long term contract on their own

2) Determine how long your willing to go, for a guy like this I would be shooting at 4-8 years depending on preference and how much his asking price is

3) Offer him the term you want him for with approx. 1-3 million taken off his arbitration estimate, he will accept, counter at 1 year for a higher AAV than his original offer, or counter with 1 year at in between your offer and his original offer.

4) If he accepts thats great, if he declines offer you have 2 options depending on his negotiating mood, if he is still happy you can go with your term but split the difference in contract value, if he seems like he is getting unhappy, then offer him 4 years and split the money difference, he will take this offer in most cases and you buy out his arbitration years, probably for below market value.

If he has the 4th year of eligibility by being a super 2, a contract extension cheaper than this years estimate will save you 10m or more

I don't get step 3. What do you mean when you say "he will accept," and then make him a counter offer? How I understand it is that I make the contract length however long I want to lock him up for, change the dollar value for each year to 1-3 million below his arbitration estimates, and then he will supposedly accept. But then it says to make a counter offer for one year.

Ugggh I'm confused... or maybe it just doesn't work for me.

[r0nster]

I apply number 3 all the time and 95% of the time it works beautifully

[Tyler87898]

Originally Posted by r0nster

I apply number 3 all the time and 95% of the time it works beautifully

Can you explain what you do exactly? I'm not getting something...

[sc_superstar]

i guess i should have used or, he will accept or he will counter...ect rest of post

[Perceptor]

Originally Posted by Tyler87898

Can you explain what you do exactly? I'm not getting something...

By number 3, he means after you make an offer, he will either accept it or counter offer with a 1 year offer with a value higher than the initial offer or a 1 year deal in between what you offered and what he wanted originally. Depending on his mood, then you go ahead and counter offer and negotiate things out until you work something out.

With star players, it will likely take a larger amount over the arbitration value to get them to commit to longer than one year. With Jason Heyward, he refused to sign a 5-year deal with me, but we settled on a 4-year deal worth $7 million per season. His arbitration estimate was $6 million. Not totally what I wanted, but it's still budget friendly and will buy out all his arb years plus a year of free agency

[r0nster]

while negotiating with a player especially if they want long term I always start with offering 1 million more than what their contract says for 2 years then bump it up another million for another 2 years so on and so forth. Players seem to dig that especially if you suggest an extra year on contract. However I always add 2 team option years with $300,000 buyout I did that with Caberra

[oman19]

I never understood why you want to buy out a players arbitration years. If his arb estimate is lower than what your offering. Anyone mind explaining it to me?

[Matt Arnold]

Originally Posted by oman19

I never understood why you want to buy out a players arbitration years. If his arb estimate is lower than what your offering. Anyone mind explaining it to me?

Depends on the player. For middling players, I'll often go year by year. But for a top player, you're usually better to lock them down long term for cheap, as they can get really expensive after a few years in arbitration.

So I had a top SP prospect, Colton Cain, for example. I signed him maybe 3 seasons ago in my game for like a 5 year/5M per year deal. His arb amount that season was probably something like a hare under 4M. But in those 3 seasons? He's been top 5 in wins, ERA, and K's each year. Had I gone year to year with him, he'd probably be making double what he does now, and would likely be a free agent next year too. But I still have him for another 2 years and he's being paid like a #4 starter.

There is risk. I've bought out a player's arb years only to have him fizzle out. But in general, I'm very willing to pay an extra 1M to a player now if I can save 3 or 4M or more in a later year.

[JMDurron]

Originally Posted by oman19

I never understood why you want to buy out a players arbitration years. If his arb estimate is lower than what your offering. Anyone mind explaining it to me?

FA salary > Arb 4 salary (Super 2s) > Arb 3 salary > Arb 2 salary > Arb 1 salary. Therefore, signing a multi-year extension at or near the Arb 1 salary amount that covers all arb years and a year or two of FA is almost always a good deal. The instances where a player flames out (after you've had 3 years to judge him by) are infrequent enough that just having 1-2 star players pan out more than makes up for any dead money on those guys.

[oman19]

Awwww I always play with a $100m cap so I've used that arb all wrong because I didn't want to pay them that extra couple of mil that first year

[Tyler87898]

Originally Posted by Perceptor

By number 3, he means after you make an offer, he will either accept it or counter offer with a 1 year offer with a value higher than the initial offer or a 1 year deal in between what you offered and what he wanted originally. Depending on his mood, then you go ahead and counter offer and negotiate things out until you work something out.

With star players, it will likely take a larger amount over the arbitration value to get them to commit to longer than one year. With Jason Heyward, he refused to sign a 5-year deal with me, but we settled on a 4-year deal worth $7 million per season. His arbitration estimate was $6 million. Not totally what I wanted, but it's still budget friendly and will buy out all his arb years plus a year of free agency

So let's say I have player A up for arbitration. His estimation is $8.4 million. Let's also say I want him for 6 years. So first I offer him let's say $7.4 million for 6 years. He rejects and says he doesn't want to be tied up for that long and he counters with a 1 or 2 year deal with for about $9.4 million. Now what? He's still happy, so I see that I should try to offer more money but the same term that I want. He rejects again and says again that he doesn't want to be tied up for that long. Is he just unsignable (at the moment)?

[sc_superstar]

Try either 7.4 or 7.9 over 4 years, he should take that

[tcblcommish]

I'm curious on the term buying out his arbitration rights, what does that mean?

If I sign a guy who is in his first season of eligibility, do I pay a fee for this?

[Tyler87898]

Originally Posted by sc_superstar

Try either 7.4 or 7.9 over 4 years, he should take that

Tried that, we ended up agreeing on a 4 year deal, $8.5 mil for the first three and $9.5 mil for the fourth (but with a team option).

Thanks!

[Perceptor]

Originally Posted by tcblcommish

I'm curious on the term buying out his arbitration rights, what does that mean?

If I sign a guy who is in his first season of eligibility, do I pay a fee for this?

Players at a certain point are eligible for arbitration meaning that while your team still has control over the player, his salary is decided by an arbitrator. On the salary obligation screen, players will have the estimate beside an A in parenthesis meaning that the player is eligible for arbitration.

Buying out arb years is not fee based and simply means that instead of going year to year with the arbitration, you can lock up your player on a contract that will last the duration of his years of eligibility for arbitration and into free agency. The reason why it's good to do this for your star players especially is that you get them at a consistent salary which makes it easier to balance your budget. As others have said, even if you pay the player a little more to sign him to a long extension, you usually will save more money than if you had gone year to year and he happens to have some monster production in those seasons.

I apologize for any mistakes, so any of the more seasoned vets can chime in and correct me

[Klew1986]

I'm trying to figure out the best contract to offer this player. Initially he wants 18.1 million per year for 5 years. He is the anchor of my rotation, so I will be keeping him regardless, but prefer not to pay him 18+ million.

[JMDurron]

Originally Posted by Klew1986

I'm trying to figure out the best contract to offer this player. Initially he wants 18.1 million per year for 5 years. He is the anchor of my rotation, so I will be keeping him regardless, but prefer not to pay him 18+ million.

Attachment 301528

I really don't understand why so many posters here (presumably the most informed players of his excellent game) seem so intimidated by a player's initial contract demands. That isn't a requirement, it's an INITIAL NEGOTIATING POSITION.

Both cost and (usually) length are negotiable. I generally don't let players reach their initial FA offering, as I always extend during arb year #1 until age 30 when I can, so this is a slightly different scenario for me.

The absolute first step is determining the length that you are comfortable with. I generally target the age 30 season as being the last year on the first big extension/contract. For your player, with a June birthday, you can count it either way. We'll call next year his age 26 season, so ages 26-27-28-29-30 would be a 5 year deal. So, for me, the length your player wants is perfect. If you want to set things at 32, you might be able to get a discount on a 7-year deal vs a 5 year-deal, but let's proceed under the assumption of a 5-year negotiation here.

Other posters have added excellent negotiating tips, but I would start with a 5 year deal at 12 million per year. He almost certainly won't accept it, but the manner in which he responds will help tell you how high to make the next one. I generally increment my deals up by 1 million per year until I see an angry face, at which point I will generally go up close to whatever the player is demanding as a counterpoint to my last offer. Those counters will almost always drop, so I'd be surprised if you had to pay more than 16 million per for that player if you put the effort in.

[tejdog1]

Originally Posted by oman19

I never understood why you want to buy out a players arbitration years. If his arb estimate is lower than what your offering. Anyone mind explaining it to me?

Same as in IRL

Lets say you have a pitcher like a Clayton Kershaw, Matt Harvey, Jose Fernandez. After 2.5 years, you of course managed their service time so they wouldn't be Super Two (lolMarlins), so you have a "4th" year of them at league minimum (0.5, 1.5, 2.5, 3.5 then arby).

Obviously you know they're going to get a metric TON in arby, maybe not first year, but second/third year (see Lincecum, Tim). So you go to them, and say:

We'll buy out your final team controlled season, your 3 arbitration years, and 2-3 years of free agency. Lets hammer out a deal.

Year 1: 550k; team offers 2.5m
Year 2: 4.75m; team offers 6m (first year arby)
Year 3: 9.25m; team offers 9m (second year arby)
Year 4: 13m; team offers 9m (third year arby)
Year 5: FA1; team offers 10m
Year 6: FA2; team offers 11m
Year 7: FA3; team offers 12m
Year 8: FA4; team offers 13.5m TOPT/1.5m buyout

See?