Altuve Signs An Extension at a Hometown Discount
Altuve Signs An Extension at a Hometown Discount
Signing Altuve is a move Jim Crane HAD to make, but Altuve gave him a hometown discount. That makes it possible for the Astros to get value from this contract and to duck the luxury tax in the future.
Do you like moments like this?
Or this?
Or this?
I’m fond of Altuve’s birthday party in Stadium. I was there.
Do you want to see more iconic home runs? More incredible postseason moments. More Yankee tears?
Good news. On Tuesday evening, the Astros announced that they have signed Jose Altuve to a 5 year, $125 million extension. The contract will last from 2025 to 2029, which are Altuve’s age 35 through 39 seasons.
Re-signing Altuve is not about sophisticated baseball analysis derived from Sabr-metric principles. It is instead a move about making a franchise icon—THE face of the franchise’s Golden Era—an “Astro for life.”
In short, the choice to re-sign Altuve is primarily one about marketing. It is about insuring there is a star on the team no matter what happens in the near future. And it is about assuring that Altuve is a one-team man when he is inducted in Cooperstown.
The attitude is best summed up by the first sentence in Chandler Rome’s article from Tuesday night: “Imagining Jose Altuve anywhere else is insane.”
At one level, the front office has to sign Jose Altuve. But Altuve made it easy on the Astros to sign him. He did not drive a hard bargain.
First, note the contract length. It’s five years.
Jim Crane has never given a player a contract that covers more than five free agent seasons. I have referred to this as the “five year rule.” Altuve was willing to abide bythis stricture in negotiations.
And the five years is a particularly big deal for Altuve. Last spring, Altuve told Rome “I want to play to 40.” That would be in that seventh season, one past when the new extension ends.
The contract has implications for Altuve’s chase for 3,000 hits. In August, I wrote that “Altuve will need somewhere between 3300 and 3600 at bats to [reach 3,000]. If he stays healthy and is a full time player, Altuve can do that in six seasons.”
Of course, it is not easy for old players to stay healthy, so Altuve may need a seventh season, and thus another contract, to get to 3,000 hits.
The contract’s annual value is “lower than Altuve might have commanded on the open market,” wrote Matt Kawahara of the Houston Chronicle.
That is notable in part because Altuve’s agent is Scott Boras, who usually takes his clients into free agency, because, as he said at a press conference yesterday, “in a free market, [money is] never going to be what it is in a unilateral market.”
But agents work for players, not vice versa. Boras said “You want him to have what he wants most. Economics certainly figure into that. But really for Jose, it was about keeping a lineage, keeping a legacy that was really, really important to him and Nina. I think everything Jose wanted was here.”
In short, Altuve gave the Astros a hometown discount. “Houston is my home” he reiterated in yesterday’s press conference.
Boras did extract one concession from Crane. The deal is frontloaded—a $15 million signing bonus, $30 million salaries in the first three years; $10 million in the last two years. Frontloading increases the deal’s “present day value” for Altuve.
But that was a relative easy concession for Crane to give. He is instead focused on the deal’s “average annual value,” which is $25 million a year.
Crane’s focus on AAV is because that is use for luxury tax calculations, and his team’s 2025 payroll is close to the tax. I estimated in December that the Astros were $36 million and $46 million below next year’s luxury tax threshold. Between signing Hader and Altuve, the team has now added $44 million to its 2025 payroll. But thanks to Altuve’s hometown discount, Jim Crane could duck the tax in 2025.
What kind of player will Altuve be over this contract? The one clear answer to that question is “an old one.” Altuve will turn 34 in May, and the contract will run past his 39th birthday. We should therefore expect declining production from Altuve because “father time is undefeated.”
But that drop will start from near the tops. Over the last two seasons, Altuve has slashed .304/.390.529 for a .918 OPS. His wRC+ of 160 is the fourth highest among all major leaguers.
For 2024, the ATC projections forecast that Altuve will slash .276/.354/.465. That’s a decline from his production over the last two seasons. But it’s still All Star level production. Altuve’s projected wRC+ of 127 is the 24th highest in the majors.
The biggest sign of decline for Altuve is on the defense, which is present in every advanced metric. His range seems to have declined as he as aged, and that will likely to continue. It is possible that Altuve will have to shift positions toward the end of this contract—left field maybe.
The other issue is durability. Altuve plays a demanding defensive position where injuries are common due, in part, to takeout slides. And all players find it harder to recover from injuries in the later years of his career.
There is, therefore, reason to think that Altuve will not be worth his contract on the field.
Of course, putting limits on Jose Altuve’s abilities has never been analysis that has been useful. Whether it was the Astros officials that sent him home on the first day of their tryout camp because he was too short—thank goodness he came back the next day and better scouts saw him—or those who thought he’d just be a slap hitter as a rookie or was in decline when he slumped in the 2020 COVD season, those who think that Altuve can’t do something have been proven wrong. Repeatedly.
We have gotten the pleasure of watching Jose Altuve prove his doubters wrong. And we will keep getting to watch that for the rest of his career.
Astro for life. Jose Altuve.