The Astros Should Have Matched the Twins Offer
On the Hard to Explain Decision to Let Carlos Correa Go on a Short-Term Contract.
I had expected for a long time that Carlos Correa would sign with another team this off-season. So I’ve been thinking for a while about what to write, and had assumed that I would focus on what Correa meant emotionally to me. I had embraced Correa early, when his prospect star started to rise in the minors, because he was the reward that we Astros fans would get after all of the suffering that we went through in the dark times of the three straight 100 loss seasons.
But this is not that column. Because my anticipation is that Correa would sign a long-term contract, one that lasted 8 to 10 years and would lock him up not just for the prime of his career, but for much of his decline phase in his 30s. And while I think the Correa is one of the few players worth a contract of that length, I would understand why the Astros ownership wouldn’t want to give out such a contract. But Carlos Correa did not sign a contract like that.
Instead, he signed a one-year contract with two player option years.1 It is for a large annual value—$35.1 million per season for each season, but the financial commitment is short term, even in the worst case scenario.
It is a contract that the Astros could have matched based on their current financial situation, and should have matched based on their place in the competitive window. That ownership did not match this contract is odd and stunning, even as I write this a day after I learned the news when I woke up on Saturday morning.
What is stunning is not only that ownership didn’t sign Correa on these terms, but that ownership didn’t try. In an article on Saturday, Ken Rosenthal reported that “the Astros, according to sources, did not make Correa a new offer in the past week…. the Astros did not budge from their last reported offer in early November — five years, $160 million.”
The offers the Astros made represented the worst of all possible worlds for Correa—as he would get an annual contract value about what he could expect in a longer term deal but the need to go back on the market in his early 30s, when he would be less valuable.
Without a long-term offer on the table, Correa and his representatives pivoted to a short-term deal with a higher annual salary and the opportunity to go back out on the market next season at age 28 if Correa chooses. The Astros ownership and front office stuck to an offer that was designed primarily for public relations value—to show that they made an offer to fans, but an offer they knew would be turned down.
They failure to adjust to the new reality that Correa was not finding the long-term contract he wanted this season shows that ownership did not want to sign Correa, even if he was available at a price they could match.
They Could Have Matched The Offer
The first reason that the Astros could have matched the Twins offer is that Jim Crane, like all MLB owners, is a rich guy with lots of money. He could spend the money from his personal funds if he wanted.
And he could spend the money from the money he makes from the Astros. Revenue has increased in recent years for MLB clubs with their biggest cost—player compensation—has remained steady. Crane could have invested that money.
Or he could invest money from his future payout when he sells the team. Crane bought the Astros in 2011 for $465 million. Forbes estimates that the franchise would sell for $1.8 billion if Crane put it on the market today.
But as you may have noticed during the lockout, MLB owners and their hired staff regard paying players as one of life’s greatest injustices. And they hold strict budgets for how much to give to players. For many teams—including the Astros in recent years—that limit is the first luxury tax threshold.
But even under that context—meeting a prescribed budget of the luxury tax threshold—the Astros had the money to sign Correa.
Thanks to the efforts of the players’ union, the first luxury tax threshold was raised significantly in 2022 to $230 million. The Astros currently have an estimated payroll for 2022 of $197.0M, according to Roster Resource.2 That’s $33.0 million below the first threshold. So a contract of $35.1 million for this season would put them just $2.1 million over the threshold. Ownership could pay the small tax on that (like they would have had to do in 2020 had that season happened as planned). Or they front office could find some small ways to trim payroll to get the number under $230 million for the season.
In short, the budget for 2022 seems to account for a contract the size of Correa’s. Now, as I have noted on here, the Astros payroll will increase in 2023 when young stars like Kyle Tucker, Yordan Alvarez, Jose Urquidy, and Cristian Javier enter the arbitration process for the first time.
But the likeliest scenario is that Correa has a strong season again in 2022 and does not take his option for 2023, testing free agency again. If that’s happens and Correa signs elsewhere, the Astros can manage the 2023 payroll increase while staying under the luxury tax threshold as ownership prefers.
Of course, the worst case scenario for an option contract like Correa signed is that he gets hurt in 2022, it tanks his value and he exercises his player option for 2023 and 2024. Again, the front office can find ways to manage this. For example, Michael Brantley’s contract expires this off season, and the team can find a cheaper replacement for him in left field (one scenario is prospect Pedro Leon).
The coming payroll increase is something the front office will need to manage, but that is true whether or not Correa re-signed with the Astros. The large increase in the luxury tax threshold in this year’s CBT makes it much easier to manage the payroll. It gave ownership the opportunity to sign Correa while still keeping their payroll around a level that they prefer. But they didn’t take advantage of the opportunity provided to them.
They Should Have Matched The Offer
Let me tell you something you already know: Carlos Correa is a really good baseball player. Over his 7 year career, he has a slash line of .277/.356/.481, good for a .356 wOBA and a 128 wRC+. He’s an above average hitter at one of the most difficult defensive positions on the diamond.
And speaking of defense,
Carlos Correa won his first Fielding Bible Award [in 2021], with a breakthrough season in which his 20 Defensive Runs Saved at shortstop were five more than the next-closest player. Correa ranked third in Good Fielding Plays per 1,000 innings and had the fourth-fewest Defensive Misplays & Errors per 1,000 innings.
Last season, your eyes told you that Carlos Correa was great at defense, and the objective measures back that up.3
Projections indicate that will again be one of the best players in baseball in the 2022 season, again expected to contribute on both offense and defense. For example, the Depth Charts system projects that Correa will post 5.4 fWAR in 2022, 9th best in all of baseball. Obviously, he could exceed that projection (like did last year when he had 5.8 fWAR) and he could go under that projection. But walking into the season, Correa is one of the most valuable players in baseball. That’s the type of player you want on your team.
And of course, the Astros are a contending team in 2022. They currently have the third highest projected fWAR of any MLB team, according to the Depth Charts projections used at Fangraphs. It’s a year to go for it.
The Astros seem to have an unofficial rule that they will not offer a contract of more than 5 years. The longest contracts signed by Astros brass in the Jim Crane era is five years—for Jose Altuve, Lance McCullers, and Alex Bregman4
There are clear strengths and weaknesses to this decision rule. The strength is that you don’t get tied down in really long term contracts for players that pay them in their mid-to-late 30s based on their value in their younger years. We’ve seen long-term contracts like those given to Albert Pujols by the Angels and Miguel Cabrera by the Tigers become albatrosses for those teams as those Hall of Famers aged into average players.
The weakness is that the market will give long-term contracts to baseball’s most valuable players. This off-season, we saw Corey Seager get a 10-year contract, Marcus Semien get a 7 year contract and Javy Baez get a 6-year contract. These are good baseball players who will help their teams win in 20225 The five year rule trades off efficiency in future payrolls for shopping among a smaller pool of players today.
Correa’s market for a long-term contract apparently never developed, in large part because teams that seemed to have a clear need at shortstop and which should run high payrolls like the Yankees and Angels decided not to spend money. The Phillies could have used a defensive upgrade, but chose instead to lean in to being a beer league softball team.
This gave the Astros front office a chance to shift their strategy. They had internally committed to losing Correa, seemingly because he’d get a longer contract than they were comfortable giving to players. But when that contract wasn’t out there, it left the Astros the possibility of adding Correa on a short-term contract. They could pivot to what is a win-win outcome for the Astros. Retaining a valuable player for some of his prime years during your championship window while avoiding paying for his decline phase.
And instead of trying to get him, they decided not to budge off of their contract offer from November. It is a baffling decision. The market moved exactly toward the Astros preferences, but it now seems like their preference was not to pay for Carlos Correa’s services. The move does allow for small levels of flexibility for the 2022 and 2023 seasons, but those benefits seem small, especially in comparison to adding a 5 win player to the roster of your World Series contending team.
Welcome to the Jeremy Pena Era
Of course, the Astros will not leave shortstop barren. On Wednesday, Dusty Baker said that Jeremy Pena was “the frontrunner” for the Astros shortstop job this season. Pena slashed .287/.346/.598 in 133 plate appearances at AAA Sugar Land last season, indicating he is ready for a big league call up. There is good reason to think that Pena will be the Opening Night shortstop when the team opens in Anaheim on April 7.
Projections indicate that he could be a low average but occasional power hitter in the big leagues this year, with projected batting numbers just below league average. Pena has always been a glove-first prospect. Shortstop wouldn’t be a gaping wound with Pena as the starter, but it will not be an asset.
Depth Charts projects Pena for 2.0 fWAR. That’s the mark for an average player. But that’s 3.4 wins less than Correa projects for this season. Could the Astros use an extra 3 1/2 wins going in to this season?
At one level, the answer is not much. The Astros are clear favorites in the AL West for 2022 as none of the rest of the teams in the division seem to have their depth of star level players—the Angels have a couple of stars, but not depth of them; the Mariners have depth, but lack stars. And with the postseason expanded this season to six teams per league, there is more cushion before a good team like the Astros falls out of the playoffs.
But on the other hand, the new playoff format rewards teams that finish in the top two of each league with a first round bye, meaning they have one less round for the crapshoot that is playoffs to affect their chances. An extra 3 1/2 wins would greatly increase the Astros chances of getting that first round bye.
The third and fourth teams in each league will host all the games of a best-of-3 series in the first round. That is not as big of a reward as the bye, but it’s an advantage nonetheless. An extra 3 1/2 wins would help the Astros avoid going on the road for the entire first series of the playoffs.
And of course, Correa would help in the postseason itself. As noted, the playoffs are a crapshoot, and the results of individual series tend to be pretty close to random. There is no foolproof way to “hack the playoffs” to guarantee wins. But the best strategy teams have is to stack their roster as much as they can and hope for the best. The Astros would clearly be a better postseason team in 2023 with Carlos Correa as their shortstop than the alternatives.
These downsides are in many ways modest. Signing Correa only increases the team’s chances of winning the World Series by a few percentage points. But given the context of the deal Correa signed, it should have been worth that to Jim Crane and his front office. Unfortunately, they disagree.
I like this language better than a three year contract with opt-outs.
The payroll is still estimated because the arbitration process has not happened yet, due to the lockout.
If you want, enjoy this article on Correa’s 2021 defensive season titled “Carlos Correa’s Amazing Slides, Dives, and Jumps.” Though I recommend consuming it with bourbon neat and Sarah MacLachlan playing in the background.
Though Bregman’s contract bought out only 2 years of his free agency, unlike the Altuve and McCullers contracts.
Don’t worry about Seager and Semien, Astros fans. The rest of the players on the Rangers will keep them from winning too many games.