The Astros Made A Precedent-Setting $10MM Investment…That Didn’t Pay Off

It isn’t any secret young and controllable star talent is just about the most valued commodity in baseball, and over the last three offseasons, we’ve seen four instances of clubs looking to gain even more potential control (and score a future payroll bargain in the process) by extending players before they have made their Major League debuts.

Scott Kingery inked a six-year, $24MM deal with the Phillies in March 2018 that also contains three club option years, meaning that Kingery’s contact could ultimately become a nine-year, $65MM pact.  The White Sox inked both Eloy Jimenez and Luis Robert to six-year deals (with two club option years) over the last two offseasons, with Jimenez signing receiving $43MM and Robert $50MM in guaranteed money.  The Mariners also got in on the action with first base prospect Evan White last November, signing White to a six-year deal worth $24MM in guaranteed money and up to $31.5MM more over three seasons’ worth of club options.

The logic for the teams is simple.  An early-career extension eliminates any of the service-time manipulation we so often see with top prospects, and thus the Phillies, White Sox, and Mariners were or will be able to get the players into their lineups as soon as possible.  The clubs were willing to bet that their youngsters would provide immediate dividends at the MLB level, and thus would become more expensive as they entered their arbitration years, so these extensions lock in cost certainty over those arb years and also give the teams control over 2-3 free agent seasons.  Those free agent years could become extraordinarily valuable if, as hoped, these players develop into star big leaguers — we’ve already seen quality production from Jimenez and Kingery in 2019.

From the perspective of the four players, there is also sound reasoning in signing these extensions so early in their professional careers.  The quartet has guaranteed financial security for themselves and their families before even seeing so much as a big league pitch…or, in White’s case, even a Triple-A pitch.  (In Robert’s case, this is actually his second big payday, as Chicago gave him a $26MM bonus as an international amateur in 2017.)  No matter how confident a prospect may be in their ability, the transition to the majors is always something of an unknown.  There’s always the risk of a fluke injury scuttling a promising career, or perhaps a player — like so many star minor leaguers in the past — simply doesn’t produce against MLB competition.

It’s also fair to assume that, before putting pen to paper on their extensions, Kingery, Jimenez, White, and Robert all considered the case of Jon Singleton.  The former Astros first baseman was the first non-international player to sign an extension before the start of his Major League career, agreeing to a five-year, $10MM deal with Houston back in June 2014.  Singleton’s deal contained three club option years that added up to $20MM if were all exercised, plus another $5MM more in potential bonuses.

All in all, it could have been a $35.5MM contract over eight seasons had Singleton lived up to his potential.  Unfortunately for both Singleton and the Astros, that promise didn’t develop into a reality.  After hitting .171/.290/.331 over 420 plate appearances in 2014-15, Singleton never played in the big leagues again, and didn’t play any affiliated ball in 2018-19 before signing with a Mexican League team this past April.

Singleton was an eighth-round pick for the Phillies in the 2009 draft, and he came to Houston as part of the trade package in the deal that sent Hunter Pence to Philadelphia at the 2011 trade deadline.  As one of the early building blocks of the Astros’ total rebuild process, Singleton picked up where he left off in the Phils’ farm system, beating up on minor league pitching and quickly becoming a staple of top-100 prospect lists.  His stock was never higher than during the lead-up to the 2013 season, as Baseball Prospectus ranked Singleton as the 25th-best prospect in the sport, and MLB.com and Baseball America weren’t far behind in slotting Singleton 27th.

In both 2012 and 2013, however, Singleton tested positive for marijuana, and he served a 50-game suspension during the 2013 season.  Marijuana addiction was an ongoing problem for Singleton, as he spoke openly in 2014 about his efforts to break his addiction, including a month-long stay in a rehab facility in 2013.  As it happened, Singleton’s issues continued to plague his career, leading to a 100-game suspension prior to the 2018 season after the first baseman failed a test for a drug of abuse for the third time in his pro career.  Houston released Singleton in May 2018.

Needless to say, these off-the-field problems provide an important detail in looking back at Singleton’s decision to accept the Astros’ offer.  Signing the first “pre-career” extension made Singleton a notable figure in baseball transaction history, and it also opened him up to some rare public criticism from his peers.  Such veterans as Mark Mulder and Bud Norris were open in their displeasure with Singleton’s deal (and, more specifically, the advice given to Singleton by agent Matt Sosnick), arguing that the Houston prospect had shortchanged his future earning potential.  As Mulder put it in a tweet, he questioned if Singleton “doesn’t believe in himself to be great.”

Almost six years after the fact, of course, Singleton made the right choice.  Shortly after his extension was announced, MLBTR’s Jeff Todd wrote a detailed piece about the wisdom of Singleton’s decision in the context of several other top first base prospects and comparable players, noting how relatively few of those players ended up topping Singleton’s $10MM guarantee, and many of those who did top the $10MM figure had the benefit of some actual Major League success.  Plus, there was also the additional element of Singleton’s drug issues — coming off two suspensions and a lackluster 2013 season in the minors, one can certainly understand why Singleton was attracted by the security of an eight-figure contract.

Looking at the extension from the Astros’ end, the Singleton extension can be chalked up as a definite miss.  Calling it a true “mistake,” however, is a stretch.  Considering the money Singleton surrendered due to his 2018 suspension, the Astros’ overall investment in the first baseman ended up being less than $9MM, which was a more than reasonable bet to make considering Singleton’s high prospect ceiling at the time.

The early-career extension was a key tactic of then-general manager Jeff Luhnow, as he navigated through all of the young players amassed in trades and draft picks during the Astros’ lean rebuilding years.  George Springer also received an extension offer before his MLB career even began, as Houston reportedly tabled a seven-year, $23MM deal in September 2013.  Matt Dominguez and Robbie Grossman also received extension offers either before or just after their big league careers got underway.

These other examples illustrate the pros and cons any young player must face in deciding on an extension.  In Springer’s case, he made the right call in turning down that extension, as he has already made more than $28MM in his career and had agreed to a $21MM salary for 2020 (though that number will now be reduced by an as-yet-determined amount due to the shortened 2020 season).  On the flip side, Dominguez and Grossman probably both would have been happy to have Singleton’s $10MM deal in hindsight — Dominguez hasn’t played in the majors since 2016, and Grossman has yet to hit the $10MM mark in career earnings despite racking up 675 appearances with the Astros, Twins, and A’s over the last seven seasons.

It could be telling that there was almost a four-year gap between Singleton’s contract and the next pre-career extension in Kingery, as teams may have been wary of making such a commitment given how Singleton underachieved.  Baseball’s transactions marketplace also underwent some significant changes between 2014 and 2018, with the stagnant free agent winters of 2017-18 and 2018-19 perhaps underscoring how free agency was no longer a guaranteed pot of gold at the end of the service time window for many players.

With four pre-career deals in three years, it stands to reason that we will see more of these contracts in the future — especially perhaps in the wake of the coronavirus pandemic, as financial security could become even more of a priority for players.  Much will depend on how Kingery, Jimenez, Robert, and White live up their deals, and whether or not Singleton will continue to be the lone cautionary tale for teams trying to score themselves a bargain on the extension front.