January 19, 2009
Heard on the Street
The Rockies avoid arbitration with Huston Street, signing him to a $4.5 million dollar contract.
With the money players are making in arbitration now, I wonder if pre-free-agency long term contracts are looking as desirable. Take this Street deal. After taxes, dues and agent fees he'll take home around $2 million. If he sticks that in something relatively safe, he can probably make about $100,000 a year off it. So if he never works in baseball after this year, he would have a very tidy yearly income. Street certainly isn't a superstar closer. If he's making this kind of money now, imagine what he'll make if he saves 40 games for the Rockies this season.
I used to think long term deals were win-win for players and teams. As salaries grow, however, I'm starting to believe players are better off with one-year deals until they get to free agency.
David,
I have to disagree with you here.
A guy signing a guarantee for 20 million over 3 years is great insurance against injuries or ineffectiveness, even if he could make 25-26 in one year deals.
If you have 2 million invested, you'd better go find a job; if you have 10 million invested, you can pick if/when/where you work. The extra 5-6 million (2-3 after taxes) you'd make in 1 year deals probably doesn't change what you do post baseball.
If the player is not injured and still effective at the end of the deal they can make big bucks in free agency. If they are injured/ineffective, then it was a great deal for them...
Great blog.
