Juan Soto Contract Extension Evaluation
- Harrison Greenfield
- May 12, 2023
- 5 min read
This post was written for a Society for American Baseball Research case study from the perspective of the San Diego Padres front office, discussing how much their offer should be to extend Juan Soto's contract.
Juan Soto has 2 years of arbitration left before moving into free agency. This analysis will cover the following factors in determining an appropriate offer that extends Soto through his arbitration and unrestricted free agency years:
1. Soto’s past and projected statistical output.
2. The value of other MLB batters and outfielders who are statistically similar to Soto.
3. San Diego Padre’s team outlook.
4. Soto and Boras likelihood of acceptance.
The following analysis will show why the San Diego Padres should offer Soto a 7 Year, $191,290,659 contract extension.
Statistical Profile
Soto’s offensive output in his first 5 years (2018-2022) in the league has landed him 3 Silver Slugger awards and 2 All Star appearances (2021 and 2022). He is 5th in OPS and OPS+ (.950 and 157 respectively), 23rd in HRs (125), and 17th in RBIs (374) and 1st in BBs (508 – 102===84 more than Bryce Harper who is 2nd) in this period. He is also 13th in bWAR (23.2) among all batters in this timeframe. Among players who have played at least 50% of their games as outfielders since 2018, he is 3rd in OPS and OPS+, 13th in HRs, 2nd in RBIs, 1st in BBs, and 4th in bWAR. His bWAR is also negatively affected by his defensive WAR (dWAR) which is -3.4 for his career (187th among outfielders since 2018).
Player Comparison Analysis
From a valuation standpoint, we will look at players statistically similar to Soto based on bWAR for the seasons 2018-2022. Based on this, the 6 most comparable players to Soto have been Mookie Betts (31.9), Aaron Judge (29.3), Mike Trout (27.7), Christian Yelich (18.7), George Springer (17.8), and Ronald Acuna Jr. (17.7). Each of these players have the following contract salaries, lengths, and AAVs:
By calculating the WAR/Year for these players over this 5-year span, I was able to determine their AAV/WAR/Year (i.e., if they accumulated their 5-year average WAR in 2023, this is how much their respective teams are paying / win in 2023). The average AAV/WAR/Year across the 6 players is ~$5.89M. If this method was applied to Soto’s rational, his value in 2023 would be this number multiplied by his 5-year average WAR ($27.33M). The average years among the 6 comparable players is 9. If you apply this with his projected value above, his overall contract value would be $245.95M.
Soto is currently 24 years old. The average age of the 6 players we are comparing him to is over 30. Thinking from the perspective of Soto and Boras, they’d probably want a deal in a 7-year timeframe, making him 31 at the end of the contract in time for another massive deal (31 was the same age Aaron Judge was when he signed his record-breaking $40M AAV deal. Reasonably, I assume they would want the overall contract value to still be equal to the $245.95M mentioned above, which would make the AAV $35.14M, third highest for outfielders behind Judge and Trout.
Team Analysis
The Padres are in win now mode. Anything less than at least one championship in the next 11 seasons (when Manny Machado’s and Xander Boegarts’ contracts expire) will be considered a failure, so having the ability to hold a player of Soto’s caliber for at least 7 of those seasons would be helpful in reaching that goal. However, based on prior research, outfield spend is not nearly the most important for a team to have a high win percentage or even make the playoffs, and is even less related to a team appearing in or winning the world series. This graph shows the relative importance of spend on each part of the field and developmental rankings (current, 1-year prior, and 2-year prior) to winning percentage since 2011:
This shows that not only are infield spend and pitching spend more important than outfield spend with relation to winning percentage, but rookie performance and 2-year prior prospect ranking are more important as well. Furthermore, when we look at the same data points with relation to playoff appearance, world series appearance, and world series win, we always see pitching spend at the top:
The Padres do already have the second highest starting pitching payroll behind the Mets for this season, and third in relief pitching payroll behind the Astros and Braves. However, Blake Snell will be an Unrestricted Free Agent next year, and Seth Lugo has a player option at the end of the season, so on the starting pitching front they may have to spend some money to replace these players. Additionally, Josh Hader will be an unrestricted free agent, and Nick Martinez will have a salary double to his current (should the team choose to exercise their club option). So, there are a lot of future moving parts for the club with regards to pitching – money will need to be saved and spent over the next decade for the Padres to continue to be relevant.
Recommendation
As previously mentioned, the Manny Machado and Xander Boegarts contracts go through 2033 – those contracts have AAVs of $31.82M and $25.45M respectively. Fernando Tatis Jr. is another outfielder who is already signed by the team through 2034 at $24.29M AAV. With the amount of spend on position players already, plus the additional spending on pitching that will be required, adding another loaded contract for Soto for 9 years wouldn’t make sense for the team, nor would it be what Boras and Soto want. However, I would not give Boras and Soto the extension with a $35.14M AAV as I think they will request. The most I would offer is the value I explained originally ($27.33M AAV) which over 7 years would be an overall contract value of $191.29M:
I would go as high as a $29M AAV, which would be a $203M overall contract if that’s what the negotiations with Boras come down to, with a player option after year 6 as additional incentive to sign. However, I would not go higher than this. The reason is that even if the extension is denied (and I think there is about a 60-70% chance it will be) Soto is on contract through next season – if it’s looking like the Padres are going to be contenders, keep him. If not consider trading for prospects that will be MLB ready within 2 seasons and/or elite pitching. As stated earlier, these two factors are more correlated with winning than outfield spend, and it might be worth it to invest in this early in the Machado, Boegarts, and Tatis contracts while there is still time to build a prospect pool and pitching staff for them.
Getting Soto at his value for 7 seasons would be a big boost for the Padres. We know he has been an elite hitter for the first 5 seasons of his career, not to mention is a World Series Champion with the Nationals. However, he is a subpar defender, the team has three other long-term contract obligations for position players, and the team must consider focusing on pitching and a prospect pool to build a sustainable winning team. As such, the team should offer Soto a contract based on his value – 7 years, $191,290,659.
There is a Glossary containing a number of terms and phrases unique to analytics and/or baseball. All salary cap data is sourced from spotrac.com. All statistical data is sourced from baseball-reference.com unless otherwise noted.
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