Padres’ Tatís Jr Record-Breaking Contract
Fernando Tatís Jr — the young, fiery shortstop of tomorrow’s baseball — signed a 14-year, $340 million contract on Wednesday 2/17. Fully guaranteed with a no-trade clause, Tatís will be around San Diego through his age 35 season. Yep, that’s right, Tatís is only 22 years old. As I’m writing this, I’m a month into 23, living at home and preparing to go back to school.
It’s becoming a new trend in baseball to lock up the face of the franchise through their prime in these hefty long-term deals. With Mike Trout’s 12-year $426.5 million contract and Mookie Betts’s 12-year $365 million deal, Tatís has placed himself at the level of already established superstars. What is different though is that Trout and Betts signed their mega-deals at age 27 – 5 years older than Tatís. They already established themselves as greats before getting locked down through their prime years. Tatís has played two seasons in the majors, with one being the shortened 2020 season, for a total of 143 games.
The Padres are really taking a gamble here that Tatís will continue to excel. While there is little doubt that he will tank, the Padres still have themselves on the hook for $24 million a year for the next 14-years. Not only is this the longest contract in MLB history but this is also the biggest deal pre-arbitration. Arbitration occurs when a player is still under team control (the player hasn’t played at least six years in the majors) and has played at least three seasons but has no contract established for the upcoming season. Teams usually try to avoid arbitration by negotiating contracts in the year or years prior to arbitration eligibility. These contracts can either be a year or are typically a few years — in some cases, this would be a star players ‘first big-league’ deal. None until Tatís have signed a mega-deal so early in their careers.
One interesting caveat here is that Tatís signed with Big League Advance back in 2018 while still in the minor leagues. Serving as a venture capital firm, BLA invests in players offering upfront payments in exchange for a percentage of future earnings from MLB deals. Based on speculations from other deals, it is estimated that Tatís will owe $27.2 million dollars. I have my qualms with this concept and some of the information I’ve read on BLA but that’s a story for another day.
How will this deal impact the next class of free-agent shortstops around the league? Francisco Lindor, Carlos Correa, Trevor Story, Javier Baez, and Corey Seager are all set up for big paydays and Fernando Tatís Jr’s contract sets a precedent for future earnings expectations. A deal of this magnitude and significance will have an impact across the MLB — not just on a single position group. Teams will have to re-evaluate how to lockdown future faces of the franchise. For a small-market team like San Diego, this has a huge impact on the ability to draw in other top free agents. It shows that they are committed to success, and have the money to back it.
For teams, is it better for a team to lock-down a player at 22 for 15 years or a player at 27 for 10 years? The age at the end of the contract is the same but pre-contract years mean a lot for player value and performance projections. As for the next field of rising stars, it will be interesting to see what is valued in a contract. Is it the high-value yearly earnings? Or is it the job security of a decade-plus contract length? Long-term deals help ensure end-of-career security. A player with a big contract based on early years performance and projections will ensure more money overall regardless of future performance whereas a short-term deal with higher yearly earnings ending in poor performing years would jeopardize high-value future contracts. What happens if a player becomes unhappy with their team during their contract? Without a doubt, future contracts will continue to break records, and players stuck on year 8 of 14 have no means to test the free-agency waters.
