Why Teams Push for Big Extensions Early in Players Career

I don't have to remind you how team-friendly Paul Goldschmidt's contract is for the next four seasons. With young players that haven't completely established themselves as a household name in the league, teams try to extend them to long deals at a discounted price. Notable players that we've seen do that include Paul Goldschmidt, Madison Bumgarner, Salvador Perez, etc. In the Diamondbacks' case, they locked up Goldschmidt through 2019 a couple days before the 2013 season started. That very same year, he established himself as one of the league's best players.

So why would teams do that? It's simple, they want to be able to extend their best players at discounted prices. The team passes on risk and assumes the player will be healthy and continue to grow into the player the team believes he will. For Paul Goldschmidt, there were signs that he would break out in 2013 and were really pushing a contract so they wouldn't have to pay an exorbitant amount through arbitration. It's taking advantage of a market inefficiency where a young player is going to take the bird in the hand instead of two in the bush. It passes the element of risk from the player to the team, while sacrificing millions of dollars.

The most recent player to sign a similar deal is Pirates OF Gregory Polanco. Polanco is a very talented player with tremendous tools and could be an All-Star very soon. By locking him up to a 5/$35.5M deal and two very team-friendly options, the Pirates were able to lock in a franchise cornerstone for a very modest price. Polanco decided that $35.5M guaranteed was enough to buy himself out of the arbitration process while the Pirates were able to secure two free agent years on cheap options should Polanco grow into the player I think he will.

This type of deal is something that is heavily pushed by small and mid-market teams due to their tighter budgets. Those type of deals give those smaller market teams some payroll flexibility in the future. In the Diamondbacks case, being able to extend Goldschmidt for pennies on the dollar allowed them to send the Brinks truck to Zack Greinke's house and sign him away from the Dodgers and Giants in December. Paul Goldschmidt is under team control through basically 2019, something he'll never complain about because he loves it in Arizona.