Unless you've been living under a rock since the start of the calendar year, the historically penny-pinching San Diego Padres- yes, OUR San Diego Padres- have been connected to two free agents, who also just happen the two of the best players in the game: Bryce Harper and Manny Machado.
The team has been linked to Machado for several weeks now, and met with Harper in his hometown of Las Vegas on January 31st.
Surprised? Well, so were the Padres too, apparently- per The Athletic's Dennis Lin, the Padres pursuit to land one of the two superstars began upon realizing that the market for the duo was surprisingly thin- traditional big spenders like the Red Sox, Dodgers, Cubs and Yankees were not opening up their pocketbooks, leaving Harper and Machado- who are looking for 300-million dollar plus contracts- in limbo with the start of Spring Training just days away.
If you're a fan of this team, you're almost certainly checking Twitter and MLB Trade Rumors at least several times an hour (emphasis on "at least"), waiting for the latest updates. If you're not a fan, you're probably pretty skeptical.
Heck, even if you are a fan, you're probably also skeptical. I know I am. The Padres have been connected to virtually every big name player this offseason, and we have exactly nothing (sorry Ian Kinsler) to show for it. Besides, this team has never spent Bryce Harper or Manny Machado money in the past, so why would they do it now?
I don't have a good answer for that. But what I do know is that the Padres can afford it, and that giving out a gargantuan 10-year, 300+ million dollar contract makes sense from both a baseball and business perspective.
Wins Above Replacement, or WAR, is a good (if imperfect) statistical guideline for us to judge if paying Harper and Machado obscene amounts of money makes sense from a baseball perspective. WAR is a way to value a player's contributions to a team in terms of how many "wins" they add when compared to a "replacement level player" (essentially, just some random guy plucked from a Triple A roster).
For the purpose of this exercise, we'll use Fangraphs' projection for the 2019 season of how much one added win should cost: 11.7 million dollars. Per Baseball Prospectus, Bryce Harper is projected to produce roughly 47.7 wins over a replacement level player over the next 10 years, while Manny Machado is projected to produce 35.5 over the same time period.
By multiplying the number of wins each player produces by 11.7, we should get a rough estimate of the "dollar value" each player will be worth over that time period: Harper will produce 558 million dollars in production value, while Machado will be worth 415 million dollars.
It's highly likely that both players set out to shatter the number Giancarlo Stanton earned in his record-setting 12-year, 325-million dollar contract, but with the total breakdown of the free agency market, it looks like both will have to "settle" for, in the best case scenario, only moderately surpassing that mark.
Let's assume that the Padres, or whoever signs Machado or Harper, inks one of them to a 10-year, 335 million dollar contract. Such a contract would be most lucrative contract in sports history by total dollar figure, and would earn whoever signed it 33.5 million dollars per season (the crazy part is, both of these players would almost certainly consider that figure a disappointment!), but it would still be totally justifiable from a valuation/performance perspective.
Giving out monster contracts to players is generally seen as something to avoid: past top free agents have been in their early-to-mid thirties and on the precipice of entering the twilights of their career- and the teams that signed them generally ended up with a couple good seasons before having to endure 5-8 years of poor production at a premium price (see Pujols, Albert). This isn't the case this time, however: Harper and Machado both entered free agency at the strapping young age of 26-they're both all-decade players in the middle of their primes who also figure to still be pretty good once they get older.
Indeed, they're the kind of rare, once-in-a-generation free agents that are not just worth the asking price- whichever team that signs them is getting them at a Black Friday discount. Assuming that they live up to their BP projections over the length of their entire 10-year contract- and importantly, without correcting for the expected yearly inflation rate of 5.9%- Harper would net the Padres the most surplus value with a staggering 68.6% return on investment, while Machado would also provide the team with a sizable 23.8% return.
Oh yeah, it gets better: did I say that we're getting these guys at a Black Friday discount? I stand corrected: we're getting these guys at a "store-closing, everything-must-go" bargain.
Because inflation wasn't corrected for, these ROI projections actually underestimate the actual returns Machado or Harper might provide, because, while the contract's AAV is fixed, the dollar value of a win will increase yearly as team payrolls continue to rise- for example, Fangraphs projects a single win added to be worth about 13.9 million dollars in 2022. Because I'm too lazy and unqualified to do the more complex math, the true surplus value that will follow is likely much higher than what I just described. For example, Bryce Harper would be, on average, a 4.77 WAR player per year. If he were to make an average of 33.5 million, the 2027 version of 4.77 WAR Bryce Harper would be far, far more valuable than 2019 4.77 WAR Bryce Harper because the cost of a win would increase as time goes on. Of course, it should be noted that whatever contract either Harper or Machado signs will almost certianly provide them with an option to opt-out after several years so they can become free agents again, thereby allowing them to be paid closer to their true value.
Long story short, it makes total baseball sense for the Padres to give Harper or Machado whatever they want. The payroll argument is much simpler: the Padres can afford it.
The Padres have about 74 million dollars committed to players right now- putting them in the bottom 15% of all teams. In 2015, the Padres had a payroll of about 107 million. Adding Machado or Harper at a yearly rate of 33.5 million dollars would put them at a payroll of....... 107 million. Shockingly, signing Harper or Machado would push the team's payroll into a perfectly precedented territory.
Repeat after me: "The Padres can afford to sign Bryce Harper or Manny Machado."
With scores of young and controllable prospects coming up, the team will have plenty of financial flexibility for the next five years. They'd still be in the bottom half of baseball with room to move closer to the league average payroll, as the ownership has promised. They might even still have space to use that extra money to, I don't know, maybe sign a good starting pitcher or something? Harper or Machado could very well be the last offensive pieces the team will need for quite some time.
The business side is even easier: it's Bryce Harper and Manny Machado. They'd put butts in seats and eyes on televisions. They'd sell jerseys. They'd attract sponsors and national attention to the Padres. They'd make Ron Folwer and company copious amounts of money. They'd be revered here.
Sound good? My preference is for Harper, but I feel like a world wherein I have to take the Padres signing Manny Machado as a consolation prize is a pretty good one indeed.
Friends, keep your fingers crossed- this could be the most important couple weeks in Padres history.
(also LOL at the fact that if we didn't sign Eric Hosmer we could've had the space to sign BOTH Harper and Machado ahahahahhaha)
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