Juan Soto Declined $350MM Extension Offer From Nationals Before Lockout

The Nationals offered superstar outfielder Juan Soto a 13-year, $350MM contract extension before the start of the lockout, reports Enrique Rojas of ESPN (Spanish-language link). Soto confirmed the team made him a long-term offer but tells Rojas he and his agents at the Boras Corporation prefer to proceed year-by-year via arbitration. He remains under club control through 2024, giving him three more seasons before hitting the open market.

According to Rojas, the offer did not contain any deferrals and would have gone into effect for the upcoming season had Soto accepted. The Nats have deferred payments in many of their recent big-ticket signings. Each of Max Scherzer, Patrick Corbin and Stephen Strasburg, for instance, agreed to push a substantial portion of their earnings beyond the term of the contract. That reduced the present-day value of those deals, but the offer to Soto would not have had the same effect. The specific payout structure of the offer is unclear, but overall, it included an average annual value just south of $27MM through the 2034 campaign.

Some fans will surely bristle at the notion of Soto leaving $350MM on the table. It’s obviously a life-changing sum of money, and it’d have gone down as the third-largest guarantee (before accounting for inflation) in MLB history. However, a deeper look at Soto’s situation makes it unsurprising that wasn’t enough to forego the possibility of an even more lucrative payday down the line.

Soto already has a strong amount of financial security, lessening his incentive to forego future earning power for up-front payments. He reached arbitration early as a Super Two qualifier last offseason, eventually agreeing to an $8.5MM salary for 2021. MLBTR contributor Matt Swartz projects him to earn around $16.2MM during his second trip through the process this year. That’s nearly $25MM that Soto has all but already earned.

Assuming he continues to perform as one of the league’s best players, Soto will see significant jumps in each of his final two arbitration seasons. He could approach or top the $27MM per-year salary the Nationals offered on the extension by his final year of arbitration. Mookie Betts’ $27MM agreement over the 2020-21 offseason is the largest ever for an arbitration-eligible player, and Soto’s Super Two qualification gives him a higher jumping-off point for future earnings than Betts had at the time.

As another frame of reference, take the 14-year, $340MM extension Fernando Tatís Jr. signed with the Padres last February. Soto’s deal narrowly tops that marker, but he’s negotiating from a greater position of financial strength. Tatís was four years from free agency at the time he signed his extension; Soto is currently three years away. And Tatís had not qualified for Super Two, so he was still a season from his first significant arbitration payment. Soto, as mentioned, has already banked $8.5MM and is in line for nearly double that amount this year. If one viewed Soto and Tatís as similarly valuable players, it’s hardly surprising the former’s comparatively stronger negotiating position set him up to decline a guarantee $10MM north of Tatís’ deal.

One can argue about precisely where Soto fits in discussion for the greatest players in the sport, but there’s no doubt he’s among the top few. He’s been one of the game’s best hitters from the moment he debuted as a 19-year-old in May 2018. Soto’s offensive production has checked in at least 43 percentage points above the league average, by measure of wRC+, in all four of his MLB seasons. He’s particularly taken off over the past couple years, posting numbers that look like they’re from a video game.

Since the start of the 2020 season, Soto has hit .322/.471/.572 across 850 plate appearances. He’s walked in an absurd 21.9% of his trips while striking out just 14.2% of the time, showcasing the sport’s best strike zone awareness. Among qualified hitters, only defending NL MVP Bryce Harper (.426) has an OBP within 50 points of Soto’s mark. Soto trails just Trea Turner (.330) in batting average, while Tatís (.598) and Harper (.594) are the only two batters with better slugging figures.

Soto has done all this as an astoundingly young player. He turned 23 last October, setting himself up to reach free agency in advance of his age-26 campaign. Thus it’s no surprise he’s viewed by most as being on a path towards at least baseball’s first $400MM contract, and it’s plausible he could top $500MM on the open market. Scherzer topped the $40MM average annual value mark this winter (by a wide margin, at $43.33MM). A $40MM AAV over a 13-year term — which would “only” run through Soto’s age-38 season — would mean a $520MM guarantee, for instance.

There’s plenty of time before free agency comes into focus for Soto, but he and agent Scott Boras are no doubt keenly aware of the chance he has at setting contractual milestones. Soto told Rojas he still envisions himself spending his entire career in Washington, but it seems his current plan is to allow the next few seasons to play out in hopes of getting to the open market. After kicking off an organizational retool at last summer’s trade deadline, it remains to be seen how quickly the Nats plan to install another competitive roster around Soto in hopes of capturing their second World Series title of his tenure.