Why are MLB prospects signing record contracts? 'Smart business' in Age of Dodgers

Another day, another record-setting rookie contract extension, setting up another round of wild theories.

It was the Detroit Tigers’ turn Wednesday to sign their prized young player, infielder Kevin McGonigle, to an eight-year, $150 million contract.

It comes a week after Pittsburgh Pirates’ shortstop Konnor Griffin’s nine-year, $140 million contract. Two weeks after the Milwaukee Brewers signed minor-league shortstop Cooper Pratt to an eight-year, $50.75 million contract.

And three weeks after the Seattle Mariners signed their prized infielder prospect Colt Emerson to an eight-year, $95 million deal without setting foot in the big leagues.

Just like that, there’s $435.5 million worth of contracts to four unproven players, none signed by the rich Los Angeles Dodgers, New York Mets or Yankees.

So, what’s the explanation?

Well, executives, GMs and agents around the game say teams think they are making shrewd business investments. There’s nothing sinister behind these contracts. There’s no hidden agenda with a likely work stoppage eight months away. It has nothing to do with a potential salary floor for small- and mid-market teams.

It has everything to do with these same small- and mid-market teams looking out for their future, knowing that if they don’t act now, they’ll be losing these players when they hit free agency.

“Just look at who’s doing these contracts," one GM told USA TODAY Sports. “It’s the same teams. These are the same teams that aren’t the most desirable places for free agents, so they’re locking up their guys now.

“That’s all it is. It’s not that complicated."

The GM spoke on the condition of anonymity for competitive reasons.

Indeed, it's not as if these franchises are premier destinations for free agents.

The Brewers, who reside in MLB’s smallest market, havent signed a free agent for more than the five-year, $80 million contract they gave outfielder Lorenzo Cain in 2018. Yet, they’ve been aggressive signing their own players to extensions, from All-Star outfielder Christian Yelich’s nine-year, $215 million extension to outfielder Jackson Chourio’s eight-year, $82 million contract before he played an MLB game.

Pittsburgh has hardly been a hotbed for free agents. The Pirates’ largest free-agent contract was a three-year, $39 million to pitcher Francisco Liriano in 2015. Ryan O’Hearn’s two-year, $29 million free-agent contract this winter was their largest for a position player since Russell Martin’s two-year, $13 million deal in 2013. Their best path to keeping their talent is with extensions, signing outfielder Bryan Reynolds’ eight-year, $106.75 million deal in 2023 and All-Star outfielder Andrew McCutchen to a six-year, $51.5 million extension in 2012.

The Mariners, who have had trouble attracting hitters to Seattle after their ill-fated 10-year, $240 million contract for Robinson Cano, wasted little time signing Julio Rodriguez to a 12-year, $209.3 million extension five months into his Rookie of the Year season in 2022. They also struck gold when they signed catcher Cal Raleigh to a six-year, $105 million extension last March, before his record-setting 60 home run season for a catcher and runner-up finish to Aaron Judge in the AL MVP race. The contract has already saved the Mariners tens of millions considering Raleigh makes just $11 million this year and will earn $12 million in 2027.

“It’s the same teams signing players to extensions, knowing that if they don’t lock them up," one executive said, “they’re going to lose them. They don’t have the luxury of waiting to see if they can out-bid other teams in free agency.

“Really, it’s smart business."

There’s a reason why the Cincinnati Reds would love to lock up rookie first baseman Sal Stewart and the Cleveland Guardians with rookie outfielder Chase DeLauter, too. If they don’t pay them now, will they have the opportunity to keep them later?

These teams wouldn’t be offering extensions if they didn’t believe their players would out-perform their contracts, even with a player like Pratt, who had never played a game above Class AA until this year. There are definite risks involved. While the Mariners are gambling on Emerson to be a star, they previously swung and missed on an extension for Evan White.

If nothing else, agents say, these extensions are proving that the game is doing quite well financially.

“Look at the Pratt deal," one agent said. “This isn’t the Dodgers handing out $50 million to an unproven player. This is the smallest market club handing out $50 million well before they’d have really any obligation to pay him. You have the smallest-market team willing to take that $50 million bet, which speaks to their belief in the player, but also speaks to how well the game is doing right now."

These mid- and small-market teams believe they can not only protect themselves in the future by buying out free-agent years, but also saving themselves money in salary arbitration, too. Tigers two-time Cy Young winner Tarik Skubal's record-setting $32 million salary arbitration award sent shock waves in the industry. If Skubal can compare himself to any pitcher in the salary arbitration process by winning the Cy Young awards, what would have stopped Raleigh from comparing himself to Philadelphia Phillies catcher J.T. Realmuto’s $23.875 million contract a year ago?

And if the new collective bargaining agreement lowers free agency from six years to five years, or permits players to reach salary arbitration earlier than the standard three years, the extensions could look like a steal.

Time will tell.

But for now, the mid- and small-market teams who know they can’t keep up with the Dodgers and Yankees’ spending sprees, believe it’s a necessary gamble.