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Quick Hits: Just how big of a bargain is Acuña’s extension?

Short answer: yes

MLB: Chicago Cubs at Atlanta Braves Dale Zanine-USA TODAY Sports

With free agency looking grosser and grosser over the last couple of offseasons, it’s no surprise that teams and players both have caught extension fever. The volume of extensions seems to be crescendoing rather than dying down — despite it being a nondescript April Tuesday, three good, young major leaguers got long-term guarantees on the same day yesterday. The most prominent of these, of course, is the reigning National League Rookie of the Year awardee, Ronald Acuña Jr. himself.

The thing with these extensions is that, at first glance, they’re always bargains for the team. It has to be this way, just because of risk. From the team’s perspective, they are guaranteeing monetary outlays that were not previously set in stone, because prior to inking the contract, they always had the ability to non-tender the player and pay him no longer. In order to counterbalance that added risk, the team needs something — specifically, some kind of discount on what the team would have otherwise had to pay to retain the player.

In thinking about Acuña’s deal, it’s not an apples-to-apples comparison to use the “going rate for market WAR” and apply that to his contract. It makes no sense to say, “Well, WAR costs $8M [or whatever] per season, so if the Braves have Acuña average 4 WAR for 10 years, that’s 40 WAR x $8M = $320M, less his $124M guarantee means a massive surplus of $196M.” I mean, sure, you could say that. No one’s stopping you. But, the Braves were never going to give Acuña the market rate of WAR during his team control years anyway — the current team control salary structure essentially codifies that. So, the comparison should be between what would have actually happened with Acuña’s compensation relative to what this new deal guarantees.

The big question mark here, as ever in baseball, is actually about future production. If we knew nothing about Acuña, it wouldn’t actually be possible to judge this deal at all. After all, the current deal is a loser for a 1 WAR player, but looks better and better as player quality increases. And, luckily for us, we actually know a fair about Acuña — namely, that he’s at least pretty good.

I built a quick spreadsheet to compare Acuña’s compensation but for the extension, compared to his current contract status. If we use a very basic 4 WAR-per-season estimate, here’s what the world looks like. (Note: 4 WAR is basically where ZiPS and the Fangraphs Depth Charts have him, so it’s more of a central estimate than anything particularly aggressive or pessimistic.)

On the left-hand side, using very basic assumptions ($8M/WAR due to payrolls dropping league-wide, no inflation, no discounting, standard 20-33-50-70 pay scale for Super Two players in arbitration), we can see that the Braves would have had to pay Acuña around $55 million over six years, but gotten more than three times that value out of him. Not only, as shown on the right-hand side, does his new deal give the Braves more overall surplus, but even the cumulative six-year mark has more surplus. In other words, this deal is kind of wild — not only are the Braves getting a potential bargain because they get more years at below market rate, but even through his original team control horizon, they’re not actually giving Acuña extra compensation to make up for it. A lot of times, these deals are structured in a way that pays players relatively more earlier and relatively more later, but that doesn’t quite happen here (maybe a little bit in 2022, but of course, the now-moot arbitration estimates are just educated guesses). We can see that a 4 WAR/season assumption is basically a breakeven for the first-six-years comparison. In other words, the Braves basically get $15M per season of surplus value in this extension without guaranteeing Acuña any more money than he’d likely make in arbitration anyway. Of course, what the Braves are doing is taking on risk, as they’re guaranteeing him $100 million that would have otherwise been contingent on him performing well enough to earn it.

In any case, looking for a break-even between the but-for surplus value amount and the current one shows how wild this deal is in actuality. So long as Acuña averages 2.7 WAR per season, the Braves end up in the same place, surplus value-wise, either way. But, even if this occurs, the Braves still end up in a good place, because while the surplus values are the same, the Braves are getting an above-average player for four additional years.

If Acuña ends up being worse than an average of 2.7 WAR/season, then yeah, this deal will be not-that-great, and perhaps superfluous (after inflation, discounting, etc.) if not kinda bad. But anything above that (and believe me, there’s a lot of room above that), and it becomes a pretty substantial victory. Even if you think Acuña is just “good not great” (and perhaps shame on you if that’s you?), this deal is a winner.

At this point, I don’t know what real projection systems think the odds of Acuña posting a sub-2.7ish-win season are. All I know is what IWAG has, and there, it’s about a one-in-eight chance, and a one-in-twelve chance if you remove injury risk from the equation. (That is, around a 12 percent chance he falls short in a given year, or an eight percent chance that he falls short on a rate basis.) The flip side, though, is an expectation that he’s going to produce a lot more than that the other 88/100 times. And with the deal only running through age 30, it avoids saddling the team with any potential decline — the Braves aren’t paying for more production now and less later, but probably something akin to a steady state the whole way through.

Last note: here are some players making $17 million (the price to procure Acuña’s services under this deal when he would otherwise be a free agent): Nathan Eovaldi, Carlos Santana, Corey Kluber, Chris Davis, J.A. Happ. One of those guys is similarly underpriced, extended in a deal similar to Acuña’s (Kluber). Two of those guys are older pitchers that signed this offseason. One of those guys, well, his contract is a Superfund site-level disaster. I don’t know what the price for free agent WAR will be in 2025 and beyond, but I’m not sure it’s really going to tank. The Braves will be able to have Acuña for his age 27-30 seasons for the same price that teams are paying right now to have J.A. Happ, Hyun-Jin Ryu, and Ian Kennedy (speaking of Superfund sites...) pitch for them. That’s mind-boggling, and great for the Braves. It’s hard to know exactly how big of a bargain Acuña’s extension will be in the end, but my guess is big, even relative to the below-market compensation he was already going to receive over his team control years.

Even if Acuña only manages to average 3.0 WAR from here on out, that’s an extra $15 million in surplus for the Braves (again, no discounting, inflation, etc.). At 3.5? Closer to $40 million in extra surplus. If he’s a perennial five-win player? The extra surplus exceeds $100 million. The sky’s the limit for Acuña, and by extension (sorry not sorry), for the value to be generated by his extension.

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