Cardinals Under Contract: Matt Holliday

The newest addition to this group of Cardinals under contract long-term is Matt Holliday. His highly publicized signing this past week now makes Holliday the Cardinal under contract the furthest into the future. Matt Holliday's new contract could keep him with the Cardinals through the 2017 season with all options.

Contract Terms: Matt Holliday's new contract will pay him $119 million over the next seven seasons. The Cardinals hold a team option for $17 million for the 2017 season as well. The deal does not feature any back-loading or front-loading with Holliday receiving the $17 million average annual value each year.

2010: $17 million
2011: $17 million
2012: $17 million
2013: $17 million
2014: $17 million
2015: $17 million
2016: $17 million
2017: $17 million (Club Option - $1 million Buyout)

In addition to the financial aspect of the contract, Scott Boras and John Mozeliak negotiated a few interesting clauses as well. Matt Holliday holds a full no trade clause during the entire contract. The option for the 2017 season must be exercised within five days of the completion of the 2016 World Series, but it becomes guaranteed if Holliday finishes in the top ten of the 2016 MVP voting. Holliday's contract also stipulates that he stays in a suite while on road trips, possibly related to his propensity for bringing his wife and young children on road trips last summer.

The Rationale Then: I won't bore anyone by rehashing why Matt Holliday has been resigned, you can read about that anywhere!

The Outlook Today: I would like to address briefly two interesting parts of this contract. First, Holliday will have $2 million deferred without interest from his $17 million salary each year. My rough estimate is that this will reduce the present-day value of the contract at signing by about $6 million. This estimate assumes an average inflation rate of 3.5% in 2010 through 2029 and some variables were simplified somewhat. For more information on this phenomenon, check out the forthcoming post on the Time Value of Money in MLB Contracts.

The second interesting clause regards the 2017 option. The contract reportedly stipulates that the Cardinals must accept or decline the option within five days of the completion of the 2016 World Series and that the option is guaranteed with a top ten finish in the 2016 MVP voting by Holliday. The clause about the MVP voting might be the most irrelevant clause in Cardinal contract history. This assertion is based two facts. First, the Cardinals would obviously exercise the option if Holliday was still performing at that level in 2016. Second, but more importantly, the MVP voting is not released within five days of the completion of the World Series. The Cardinals have to accept or decline the option before the necessary information is available to know if the option has vested or not! For the sake of brevity, I won't delve into this topic more in this post.

Moving Forward: Some fans have expressed worries over the length of the contract. Holliday will be 36 years old for the 2016 season and there are not many outfielders of that age that produce at a $17 million level. The time value of money could be important in this long-term deal, but Holliday's health and aging process are the major determinants of how this deal will be remembered at the end of the decade.
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Cardinals Under Contract: Albert Pujols

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Contract Terms: Albert Pujols is nearing the end of a contract signed in 2004. The contract was worth an even $100 million guaranteed over seven seasons with a club option for an eighth season.

2004: $7 million
2005: $11 million
2006: $14 million
2007: $15 million
2008: $16 million
2009: $16 million
2010: $16 million
2011: $16 million (Club Option - $5 million Buyout)

The Rationale Then: The Cardinals and Pujols signed his seven year contract to avoid arbitration in February 2004. Pujols had completed the most impressive three years to begin a career in recent history and his extension reflected those accomplishments. While the $100 million pricetag was the 7th highest for a position player in baseball at the time of signing, Cot's estimates that the deferred money involved in the deal reduced the present-day value at signing to just $90,276,957 million.

The Outlook Today: The Albert Pujols contract has been a beautiful partnership. Pujols has collected three MVP awards, annual selections to the MLB All-Star Game, three Silver Slugger awards, and one Gold Glove award. It is difficult to assign a dollar value to that kind of production, but the current contract is certainly a good value for the Cardinals.

Moving Forward: With Matt Holliday signed to a long-term contract, the Albert Pujols contract extension saga is the top storyline for most Cardinals fans. Pujols is under team control for another two seasons, but many members of the national media have questioned the team's ability to pay both Holliday and Pujols while fielding a competitive team.

The answer to that question will depend on whether Pujols has meant statements during the last two years about money not being the most important factor in his contract extension. If Pujols is willing to take a hometown discount, likely in the form of large sums of deferred money like his current contract, then it will give the Cardinals more payroll flexibility to field a team around him for years to come. My expectation is that a contract extension will be signed during this calendar year and that the amount of money involved will be lower than many national media personalities expect. Time will tell, but I expect to break down at least one more Albert Pujols contract on this blog before his Cardinal career is finished.
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Cardinals Under Contract: Trever Miller

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Contract Terms: Trever Miller was reportedly about to sign a two year deal with the Cardinals last offseason when a shoulder injury showed up in his physical. Miller accepted an incentive laden one year contract initially, but when he proved healthy and effective the Cardinals were quick to rework the veteran LOOGY's deal. In the end, Miller ended up with a two year contract worth $4 million and an option for a third year.

2009: $2 million
2010: $2 million
2011: $2 million (Option)

Miller's option is mindful that he is playing with an injured shoulder. The 2011 option vests automatically if Miller pitches at least 45 games while staying off the disabled list in 2010. If Miller reaches 45 games but spends time on the disabled list with a throwing arm or throwing shoulder injury, the option becomes a team option with a $1 million buyout. There isn't any clear information on what happens in Miller does not reach 45 games played in 2011, but inductive logic tells me that it would probably be a club option and not have the $1 million buyout anymore.

The Rationale Then: Trever Miller was signed to get left-handed opponents out late in games, something the 2008 Cardinals bullpen struggled mightily to accomplish. Miller posted a 3:1 strikeout to walk ratio in Tampa Bay in 2008 and lefties batted just .209 against him. Miller was the reliever the Cardinals bullpen needed and that's why he was originally signed. Miller was extended because he was even better against lefties in 2009. His strikeout to walk ratio improved to better than 6:1 in 2009 and the batting average for opposing lefties fell to just .135 with a .398 OPS. This performance and Miller's health prompted the reworking of the deal.

The Outlook Today: The deal still looks good this offseason because Cardinal fans do not need to worry about the team's left-handed relief options. Miller headlines a strong duo of LOOGY's at an affordable price.

Moving Forward: Miller is an aging veteran, but LOOGY duty isn't overly stenuous and he is not a power pitcher. Miller seems likely to stay healthy and continue retiring left-handed batters for another year or two. If Miller does not stay healthy or his performance declines, his $2 million salary will not hamstring the Cardinals ability to find another solution to their LOOGY role.
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Cardinals Under Contract: Yadier Molina

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Contract Terms: Yadier Molina signed his current contract two months before Adam Wainwright signed a very similar deal. The Cardinals locked up this half of their young battery with a four year contract covering his three arbitration years and his first year of free agency. The deal guaranteed Molina $15.5 million during the four years of the contract while the Cardinals hold a club option for the 2012 season.

2008: $1.75 million
2009: $3.25 million
2010: $4.25 million
2011: $5.25 million
2012: $7 million (Club Option - $0.75 million Buyout)

The Rationale Then: Molina has been the primary starter in St. Louis since the 2005 season. Yadier catches as many games as any catcher in baseball and has been very durable. Then 25 years old, Molina was entering his prime years and beginning to show progress at the plate. The Cardinals took a risk on Molina continuing to develop at the plate by guaranteeing him $15.5 million in his contract.

The Outlook Today: Like Adam Wainwright, Yadier Molina's contract has been very good for the Cardinals. The defensive expert has received the National League Gold Glove at catcher in both 2008 and 2009. Molina has also continued his offensive development, hitting .298 with a .745 OPS since signing his contract. Molina is a well-rounded catcher and earned his first career All-Star berth in 2009. Molina somehow managed to finish 23rd in the National League MVP voting last year as well!

Moving Forward: Molina will be 30 years old when his contract expires, assuming the Cardinals exercise his 2012 option. As with most of these contracts, Molina needs to stay healthy. Molina's contract seems especially reasonable compared to the contracts that veteran catchers of inferior ability are landing in free agency this year. The Cardinals ability to resign players like Yadier Molina at such a reasonable cost has allowed them the payroll flexibility moving forward to retain players like Matt Holliday at higher costs.
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Cardinals Under Contract: Ryan Franklin

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Contract Terms: Ryan Franklin received a two-year extension during the 2009 season replacing his 2010 option year from his existing contract. Franklin will make $6.5 million over the next two seasons, but the exact distribution of the money over the 2010 and 2011 seasons has not been released. I will estimate an even split of the total value for simplicity.

2010: $3.25 million
2011: $3.25 million

The Rationale Then: Franklin signed the extension on September 1st. He was in the midst of an excellent season in the closers role that earned him his first All-Star Game appearance of his career. Franklin had an ERA of 1.05 in his 50+ innings pitched in 2009 when the Cardinals extended his contract.

The Outlook Today: Franklin went on to stumble down the stretch in September with an ERA over 6.5 in 9.1 September innings. Franklin also struggled in the postseason against the Dodgers. Franklin may have been slowed by fatigue late in the year, but many Cardinal fans are uncomfortable with Franklin entering 2010 as the closer. Dave Duncan has expressed the team's desire to have another pitcher capable of spelling Franklin to minimize his use on back-to-back nights in 2010.

Moving Forward: Franklin might have stumbled as a closer in late 2009, but $3.25 million in average annual value is very cheap for a closer who was an All-Star last season. If Franklin excels in 2010, his contract will be a great discount for the Cardinals. Even if Franklin loses the closers role at some point in the next two seasons, a veteran reliever capable of pitching in the 8th inning would still be worth $3.25 million seemingly. The only way I can see Franklin's contract extension being a bust is if he is injured enough to miss an entire year or if his skills decline so rapidly that he cannot pitch in at least a set up role for the next two years. The Cardinals seem to have gotten a fair deal on the veteran reliever by guaranteeing him 2011 rather than just exercising his existing 2010 option and possibly trying to resign him next offseason.
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Cardinals Under Contract: Kyle Lohse

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Contract Terms: Kyle Lohse signed his current contract at the end of the 2008 season. The contract is worth $41 million guaranteed over four seasons and includes a full no trade clause.

2009: $7.125
2010: $8.875
2011: $11.875
2012: $11.875

The Rationale Then: Kyle Lohse became a Cardinal as one of John Mozeliak's infamous "low-hanging fruits" before the 2008 season. His original contract with the Cardinals covered just that season for a discounted salary of $4.25 million plus incentives. Lohse then pitched his way into an extension by helping carry an injury ridden Cardinal rotation in 2008. Many fans wanted Lohse back at the time, but the length and value of the deal looked excessive just a few months later compared to contracts received by other free agent starting pitchers that offseason.

The Outlook Today: After being the anchor of the injury ridden rotation in 2008, Lohse was the one who spent much of 2009 injured. The production that Lohse did provide in 2009 was actually closer to his career statistics than his standout 2008. Lohse's deal is quickly becoming the albatross of the Cardinals rotation in many fans eyes. The full no trade clause is especially troublesome in hindsight and limits the clubs flexibility in the coming three seasons.

Moving Forward: The Cardinals have Kyle Lohse for three more years for better or worse. This contract will expire after the 2012 and is a major reason why 2012 is the year that the Cardinals will have the biggest budget crunch in the near future. If Kyle Lohse can find a way to stay healthy and pitch 180+ innings in each of the next three seasons, he will earn his contract. The Cardinals do not need Lohse to carry the rotation as a top starter like he did in 2008. Chris Carpenter and Adam Wainwright are the aces of the staff, so Lohse simply needs to pitch every fifth day and provide at least league-average performance. If Lohse's performance cannot meet these baseline expectations, the Cardinals will regret rushing to extend the Scott Boras client one year ago rather than letting the market play itself out.
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Cardinals Under Contract: Adam Wainwright

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Contract Terms: Adam Wainwright signed his current contract in March of 2008. It covered his final year of pre-arbitration team control, all three years of arbitration, and club options for his first to years of free agent eligibility. The contract guaranteed the young starting pitcher $15 million over four seasons and gave the team affordable options for two years as well.

2008: $0.5 million
2009: $2.6 million
2010: $4.65 million
2011: $6.5 million
2012: $9 million (Club Option)
2013: $12 million (Club Option)

Wainwright's contract includes a variety of clauses that are somewhat unique. The club options for 2012 and 2013 are actually one option essentially because the club must either exercise of decline them at the same time. If Wainwright finishes in the top 5 in the Cy Young voting in 2010 or 2011, his option years become guaranteed. If Wainwright wins the Cy Young Award in the next two years his 2012 option increases in value to $10 million.

The Rationale Then: Wainwright came to the Cardinals in the trade of JD Drew trade with Atlanta, but sprung into most fans consciousness in 2006. Wainwright pitched 75 innings in relief that year and took over the closers role from veteran Jason Isringhausen. Wainwright then threw almost ten innings of scoreless relief en route to the team's 2006 World Series Championship.

Adam made a successful conversion into the starting role for the 2007 season. He posted an ERA+ of 119 that season while weathering an increased WHIP compared to the rest of his career. The Cardinals saw enough in the then 26 year old pitcher to offer him guaranteed money before he reached arbitration eligibility.

The Outlook Today: The Adam Wainwright deal looks great considering his Cy Young caliber campaign in 2009. Wainwright has also been very durable throughout his career so far. He suffered a fluke hand injury in 2008 but bounced back with a healthy 2009. The Cardinals have paid well below market value for Wainwright's production so far and if he maintains his current performance level the entire contract will be very affordable for the team. The Cardinals relative value on their second ace allows them payroll flexibility in other areas.

Moving Forward: Like most longterm contracts, injury is the biggest risk in this contract. The risk is moderated by the final two years being options. If Wainwright struggles or suffers a major injury that prevents him from pitching well in 2010 or 2011, the team will not be on the hook for the option years. The danger would be if Wainwright pitches well enough to vest the options with a Cy Young top five finish but suffers a significant injury in a subsequent season.

While an injury would be troublesome to the future payroll, the Cardinals have gotten such a bargain on Wainwright's prodution for two years already that the total contract might still be viewed as a positive even with one lost season. Contracts like Wainwright's allow the organization to remain competitive without spending like their larger market opponents like Chicago. A similar contract offer to Colby Rasmus would make sense if he continues to progress in 2010 based on the success of the Wainwright deal so far.
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