Over the weekend I read the news that former Florida Marlins slugger Dan Uggla signed a five-year extension with the Atlanta Braves that will take him through his age 36 season. I wanted to congratulate Uggla on getting the extension that he wanted; I will never argue against a player getting the contract he feels he deserves. I will, however, analyze that player’s comments as they relate to his actions. Remember this tidbit that was mentioned at Uggla’s press conference, as related by Dave O’Brien of the Atlanta Journal-Constitution:
"Uggla said that he understands some free agents want to get most dollars they can, but that he’s just looking for fair offer from #Braves"
As mentioned here, Uggla was just looking for a fair deal. The extension Uggla received was ultimately worth $62M. Compare that to the counteroffer that Uggla supposedly made to the Marlins, asking the Fish for a five-year $71M extension. After the trade with the Braves was made, I offered an analysis of both offers from either side and found that the differences between either side were not terribly far off. In fact, here is what I had to say on what the Marlins may have valued Uggla at for five years:
"Given the Marlins’ starting projection of around 3.7 WAR for 2011, a five-year offer at their estimation of Uggla’s talent would have been worth around $63.4M, a difference of less than $8M in total to Uggla’s proposal."
Am I prescient or what? I guessed that, given the decent projection for 2011, the Marlins would have thought a five-year, $63.4M deal would have been a fair offer for Uggla. It turns out Uggla agreed, signing a five-year extension at $62M!
So it seems as if everyone was correct in their evaluation of Uggla’s performance. Uggla accepted the offer, meaning that he felt he was given reasonable value. The Braves are clearly happy with their move. The Marlins had to figure that such a deal would have been a fair offer for Uggla given their evaluation of a four-year extension. So why did this move not happen two months ago, when Uggla was still a member of the Fish? It all goes back to the risk of the perceived risk of the fifth year.
Five years is one year too many
Uggla and the Marlins likely reached an impasse when it came to the fifth year. The team was willing to go to four additional seasons of Uggla, and I am fairly certain they upped their offer from their initial four years and $48M. The deal the team offered seemed fair presuming a typical aging curve and inflation in the price of WAR in the future. Of course, part of the problem is that predicting either a player’s decline or the market of any object or good five years from now seems like a fairly difficult thing to do. The Marlins had assumed something like a 10% inflation in each of the next four seasons for their extension offer, which seemed fair a long time ago. However, in the last few years, we have not seen this sort of spending in the free agent market. Teams have held back, and the market has recorrected itself in recent times. After spending two seasons at around $4.5M / WAR, teams were paying around $4M / WAR in2 2010.
Having said that, there has also been a bit of a resurgence in terms of how teams are paying for WAR this season, and accounts say that the market rate could be close to $5M / WAR. Still, with the economy as unpredictable as ever, it would be difficult to get anyone to agree on how much baseball teams will be spending on players in the years to come. Maybe the Fish had an idea on how much Uggla would decline in future seasons; after all, the team and its staff are the people closest to Uggla’s development. However, they may have been less confident on how much teams would want to pay for performance in the future and were not willing to hazard a guess on a fifth season. In order for the four-year extension to work out around where it should work out, the team had to make a price assumption of about $5.3M / WAR in 2014. This means that a fifth season at 10% inflation would have meant almost $6M / WAR, a pretty hefty price compared to nowadays. That risk may have been too much for the Fish to swallow in exchange for offering a fifth season to Uggla, and if that was the case, the Marlins were right to ultimately part ways.
The price of an organization
I am under the impression that the Marlins were not willing to go to five years with Uggla, but I have my doubts that the Fish would have been able to sign him even if they had offered a fair five-year offer. Uggla’s response of $71M for five years could have been a simple negotiating ploy, but it could have also been a sign that Uggla simply did not want to be in Florida for much longer. Indeed, Uggla may have valued himself as much as the Marlins did but wanted to be somewhere outside of Florida; as a result, in order for the Marlins to sign Uggla, the team would have had to offer above market to get him. The fact that he then signed a deal with the Braves that was close to market value makes me believe that Uggla was charging the Fish a bit of a premium to stay in Florida.
In the end, I have no problem with any of this. Uggla is well within his right to ask for more, and the Marlins are well within their rights to refuse to pay more. Ultimately, both sides did what they had to do, and what is done is done. Let use close the chapter of Dan Uggla‘s career with the Florida Marlins and allow both sides to move on to (hopefully) greener pastures.