🧓 by Jeffrey Bellone
Francisco Lindor is a New York Met. And one big reason for that is a man sitting in a Greenwich estate tweeting about black jerseys with Mets fans.
The superstar shortstop acquired last week in one of the biggest trades in Mets history is a free agent after the upcoming 2021 season. But it is widely expected that New York, flush with their new owner’s cash, will eventually offer him a contract extension to make him the face of the franchise over the next 8-10 years.
Just don’t necessarily expect it to officially happen this offseason. And the same can be said of Michael Conforto. Here’s why.
The way the luxury tax works, player salary is calculated on an average annual basis. While the actual salary paid each season can vary (i.e. $15 million in Year 1 and then $30 million in each of Years 2-3), for competitive balance tax purposes, using this example, the salary in relation to the tax would count as an even $25 million over three years.
This has implications for the Mets as both Lindor and Conforto are extension candidates who are still arbitration eligibile for one more season (2021).
Their arbitration estimates ($10MM for Conforto and $20MM for Lindor) provide the Mets with efficient market value on both players before their salaries balloon next season. It also gives the team more breathing room to spend money in 2021 before reaching the initial luxury tax threshold of $210 million.
If the Mets were to extend Lindor or Conforto this offseason, their 2021 salaries would immediately jump to the average annual value (AAV) based on their new deals. Let’s use an example to illustrate this point.
If the Mets wait to extend Lindor, his 2021 salary will be negotiated off his arbitration value, which is estimated to be around $20 million.
But if they sign him to an extension this offseason, even if they negotiate his 2021 salary to remain at $20 million, the amount used in calculating the team’s luxury tax payroll would be the AAV of the total extension value: so if the Mets sign him to a 11-year, $370 million mega-deal ($20MM in 2021 and $35MM per season in 2022-2031), they would be charged $33.6 million in 2021, and each year thereafter.
While the Mets would save ~$1.4 million in 2022-2031 (assuming if they wait to extend him, they eventually negotiate the same 10-year, $350 million contract) by including a smaller 2021 salary in a deal this offseason, they would be losing $13.6 million in breathing room this year.
The Mets are roughly $20-$25 million below the tax line as their payroll currently stands, meaning extending Lindor and/or Conforto before the start of the season, along with any final roster additions they plan on making, would firmly put them over the tax. And while that’s not necessarily a problem with Mr. Cohen cutting the checks, the penalty becomes more punitive for repeat offenders, something the team must consider in looking ahead to 2022.
And even if the Mets don’t extend their star players this offseason, there’s a chance they could touch the tax in 2021 by signing a few more free agents, whether that’s one more big signing, like George Springer, or a few smaller moves.
You can see in the table below how quickly 2022 becomes an expensive year. Focusing on the players who are due to become free agents on the current roster, and adding Robinson Cano’s salary back to the mix, it’s pretty much impossible for the Amazins to see their payroll drop next season after extending both Lindor and Conforto.
If Cohen shows an appetite to dip his toe above the tax line in 2021, it will almost certainly mean he will be a repeat offender in 2022, which would cost him a 30% penalty.
THE PAYOFF PITCH: Both Lindor and Conforto are under team control for one more season. Lindor doesn’t seem insistent on getting a deal done anytime soon. And come next season, as the CBA is set to expire, the rules of the game could be changing, making it difficult to plan long-term. Will the tax penalties become even more punitive in the future? As long as the Mets prove they are going to be a team who spends money and tries to win baseball games, while offering an attractive work environment, they will have no problem locking up players to mega-deals. But right now, there’s no reason to rush.
MORNING BRIEFING
Below are the additional sections that were sent in the original email newsletter this morning. We later move the analysis section to the top of this page for linking purposes.
⏰ Catch me up on the Francisco Lindor press conference…
😍 HELLO LINDOR: Mets fans got their first glimpse of Francisco Lindor in a Mets cap on Monday, as the star shortstop was introduced by the team via Zoom press conference. Here are some key quotes.
On learning he was being traded from Cleveland…
“Once I got the call, there were a lot of mixed feelings. Cleveland was home, I love Cleveland, the people in Cleveland have treated me well…But also, there has been so much excitement about the Mets…I’m blessed to be able to play the greatest game in one of the greatest cities in the world.”
On the Mets’ place in New York…
“It’s not necessarily about what happened in the past, about the championships [the Yankees] won in the past. It’s about today in the present. If we’re able to win today, that’s what matters. It’s about winning each and every single day...Obviously, everyone wants to be the winning team in New York, but at the same time, we want to be the No. 1 team in the entire country.”
📺 OFF-FIELD APPEAL: From Ken Rosenthal: “At times, Lindor was on television even when he was not playing in games. His national commercials during his time in Cleveland included Boys & Girls Clubs, Gatorade, SmileDirectClub, Taco Bell and T-Mobile. He figures to gain even more endorsement opportunities in New York, and the Indians’ media guide described him as ‘very active’ in the community as well.”
🤩 GREAT MOMENT: Lindor took time after the press conference to meet with a young fan whose reaction to Lindor’s trade to the Mets went viral.
On a possible contract extension…
“To all of those fans out there, I live life day-by-day. I’m extremely happy and excited about what’s happening right now. But I haven’t really sat down and talked to anyone…I have never been against an extension. I have never been against signing long-term.”
🗓 INITIAL DEADLINE: Lindor added, “I have never negotiated a contract during the season. Once it gets to a point in spring training, it’s time to enjoy the ride and focus on winning and that is the only thing I should be focused on. Not how much money I am going to get, how much money do I need to get. It’s about focusing on what I have every day, my task.”
More in a bit…
Watch the full Francisco Lindor press conference
☀️ SEASON ON SCHEDULE: MLB Commissioner Rob Manfred informed teams on Monday that they should be preparing for Spring Training to start on time and for there to be a full 162-game schedule, according to USA Today.
37 Days: If the Mets have their pitchers and catchers report the customary 10 days before their first spring game, we are only 37 days away from the best date on the winter calendar.
🍎 TOP STARTER: Ex- Mets manager and Indians pitching coach Mickey Callaway talked to the NY Post about his former player Carlos Carrasco: “[Carrasco] was a No. 2 in Cleveland only because Corey Kluber was there, but he is a No. 1 for most teams.”
🗣 BAUER WATCH: While it seems incredibly unlikely the Mets would be in play for Trevor Bauer after adding $30+ million to their books in the Lindor trade, it’s interesting to monitor the market for the NL Cy Young winner who said on his recent YouTube show that his “career is too short to really be part of a rebuilding window” and “I want a team that’s open to having an honest discussion with me about pitching every fourth day.” He wants a lot of money, a lot of input on day-to-day decisions, and he wants to win. There’s a very short list of teams who can provide him all of those things.
🎤 INTRODUCTIONS: Mets fans can get their first glimpse of Carlos “Cookie” Carrasco at 1:00 PM today during his introductory press conference that will be streamed from the team’s social media channels.
⚾️ The White Sox have agreed to a 4-year, $54 million contract with top free agent reliever Liam Hendriks, which sends a jolt through a quiet offseason market as the deal will carry the highest AAV for a reliever in baseball history. All $54 million is guaranteed, but there is a buyout structure that would spread out the final $15 million over 10 years (!) if the fourth option year isn’t exercised.
⚾️ Toronto is among the teams who has checked in with the Cubs on Kris Bryant, per Jon Morosi.
⚾️ The Marlins are one of the teams engaged in trade talks with the Red Sox for outfielder Andrew Benintendi, per Jim Bowden.
⚾️ While MLB expansion is “inevitable” at some point, Ken Rosenthal reports it is on hold for now.
🔗 What might Francisco Lindor’s contract extension cost the Mets? by Tim Britton, The Athletic: “There have been 15 contracts in major-league history worth at least $200 million for position players, starting with Alex Rodriguez’s landmark deal with Texas in 2001 and running through extensions signed in 2020 by Christian Yelich and Mookie Betts. How does Lindor compare to players in that obviously very elite class?”
🔗 Why Jackie Bradley Jr. isn’t a perfect fit for Mets, by James Chapiro, MetsMerized Online: “If the Mets sign Bradley to be their starting center fielder, Nimmo will shift over to left. If Nimmo plays left, Smith will either move to the bench or split time with Pete Alonso at first base. Either way, signing Bradley will cut down on playing time for Smith, Alonso, or both. And if Bradley is putting up an OPS around .725, as he did every year from 2017 to 2019, that’s not a change worth making. Bradley will also turn 31 in April, so there’s a chance he starts to decline on both sides of the ball.”
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Well if the Mets wait they won't bid against themselves either. $350m might have been more of a lock in a pre-covid world. I'm not so sure the Mets will have to go nearly that high. There are also many other SS options on the market in 2022. I think its definitely prudent to wait regardless of the tax.