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Conceptualizing a Creative, Realistic, Winning Contract for Carlos Correa


Nick Nelson
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With the Winter Meetings now less than a week away, the Twins appear fully invested for the moment in their pursuit of top free agent target Carlos Correa. 

As they vie for his services against big-market titans with bottomless coffers, there's been much talk of the front office's efforts to 'get creative' in frameworks for a deal. 

What might a contract look like that Correa would actually accept?

Image courtesy of Tommy Gilligan-USA TODAY Sports

 

The mutual affinity between Carlos Correa and the Twins does seem genuine. He appears very open to returning, and is at the very least giving Minnesota the time of day by entertaining offers, which is something we've rarely been able to say about top-tier free agents in past years. 

There have been reports of the Twins submitting multiple different proposals to Correa's camp, as the front office gets creative in trying to put forth a framework that entices him away from other monster offers he's sure to receive – while also not being so risk-filled and player-friendly as to defy their sensibilities.

That's a very difficult line to walk. Signing Correa would obviously be a precedent-shattering move for this franchise, at any level, and by all accounts they are ready to take that step. But it doesn't mean they'll hand Scott Boras a blank check. 

Is there a way the Twins could win the bidding for Correa without actually having the largest guaranteed offer? Is there are practical structure for a deal that doesn't force Derek Falvey and Thad Levine to abandon their regard for long-term planning?

I think maybe I've got something. But you tell me if it works for both sides.

Hypothetical Twins/Correa contract: 10 years, $325 million with two player opt-outs.

Here's how it breaks down, year by year:

Year 1: $40M
Year 2: $40M
Year 3: $40M
Year 4: $40M
*opt-out*
Year 5: $30M
Year 6: $30M
Year 7: $30M
*opt-out*
Year 8: $25M
Year 9: $25M
Year 10: $25M

It's a frontloaded contract that is essentially broken down into three parts. After earning $160 million in the first four years, Correa can opt out of six years and $165 million at age 32, or three years and $75 million at age 35.

The reason this feels like a realistic concept is that I can look at it from both sides and talk myself into it, even while accounting for the front office's known tendencies and preferences.

Why the Twins Like It

In trying to come up with this theoretical contract, I presupposed two things from the team's point of view:

  1. They're willing to dish out huge salaries in the short term (they'd have happily paid out Correa's full three-year, $105 million contract), but they're deathly afraid of being burdened by gargantuan commitments for aging mid-30s players down the line.
  2. They recognize that player opt-outs are an effective mechanism for making contracts more appealing to players and their agents, but don't want to include them in a way that robs all of the team's upside from a deal.

I believe the above framework satisfies their preferences on both fronts. The highest salaries are concentrated at the front of the contract, during Correa's prime years, so they'd be ostensibly paying most for his peak production. The diminishing salaries in the latter part of the deal reduce team downside to some extent should things go awry.

Meanwhile, the opt-outs probably aren't too inhibiting. If Correa chooses to re-enter the market after four or six great years the Twins will have been happy to have gotten them. 

Why Correa and Boras Like It

Well, for one thing, it's a legitimate all-time MLB free agent contract. Correa would tie Giancarlo Stanton and Corey Seager for the sixth-biggest guaranteed sum ever. His salary next year would be the highest for any position player in history, and second overall only to Max Scherzer ($43.3M).

These things matter to Correa and Boras – not sheerly out of greed, as some would proclaim, but to pave the way for future players and contracts. It's no coincidence the past contract made Correa the highest-paid infielder ever, just by a hair.

I also could see the frontloaded makeup of this framework having appeal to Correa, if he wants to be on himself an truly maximize his earnings. Should he tear it up while earning $160 million over the next four years, he could easily re-enter the market at 32 and seek another deal approaching $200 million.

Could It Really Happen?

Let's be clear: this contract would not only shatter precedence for the Twins, but for baseball at large. Of the 10 contracts that have ever been signed for $300 million or more, none came from teams outside of the major markets in Southern California, New York, Texas and Philadelphia. 

For Minnesota to be the first flyover mid-market club to break that barrier would be almost hilariously surreal, and yet, if ever there was a time I could see it happening, it's now. The Twins are ushering in a new era with a comprehensive rebrand and ownership shift. Out of sheer circumstance, they stumbled into getting acquainted with Correa and now have a verifiable IN with one of the most talented players in the world. They also have tremendously clear books going forward.

Do I think it will happen? No, I still don't. But I've talked myself into there being a path. What say you all?

 

 


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If there's a path, it's something like this, though I wonder if the AAV is slightly light. But it's in the ballpark, and if the Twins have the cojones, it's an offer structure they should consider. Correa would certainly listen, and it would be at the very least close.

I'm not afraid to look naïve: the Twins should sign Correa, and more than that, I expect them to. This is what they need to come and play.

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Over Thanksgiving, I was pondering something just like this, thanks for crystalizing it so well. If the Twins won 1 world series in that first four years and Correa was an average contributor the rest of his career (or left after 4), that would be well worth it. If you proceed with a strategy like this, I think you start with a bottom line at $300mil and let another team push you up to the $325mil (which is likely to occur).

I'm also curious about something from the forum community. Opt Outs are clearly around for good barring some larger shift in economics or strategies. Why haven't we (or will we?) start to see Team Options attached to the Opt Out year...essentially the equivalent of a "right of first refusal" for teams...embedded into contracts? It would work something like this as an example:

  • Player Opts out of deal after year 4
  • Team can automatically resign player (like an option) at a pre-agreed price (e.g. the established run rate of $40mil) before they hit the open market.

This way the player has the ability to leverage their performance potential and seize the market rate, but the team is also protected from outright losing the player to the competitive market if they are still performing at the high level, reducing fan anxiety and continuing player/team partnerships that are genuinely working. You could also get creative with what that option looks like. It could trigger multiple years or just one. It could be a pre agreed price or something similar to the "qualifying offer" where it is an average of the top X players salaries.

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Correa and Buxton would be 2 elite players you can build an offense around year in and year out if they remain healthy. The contract makes sense on that front.  For a year and only a year we will have excess pitching and within 2 years most of it will be gone.  We will have spent a lot of prospect capital for the next 1-2 year window.  I struggle with what it would take to get Correa to sign.   What it will mean is the organization will have to continually hit on prospects in the next 4-5 years to make this work. They will have limited funds to fill in the gaps for the next 6 years. I think we would be better off gambling on Lewis becoming a top 5 shortstop.  At this point it is a wait and see. 
 

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This might be what it takes, but I would only do this deal if Mr. Joe Pohlad is going to increase the budget a moderate amount to the $160-70M range.  Otherwise, I would be concerned that we would have too many financial eggs in one basket for the long run.  What happens if Correa falls off after 2 or 3 years?  Twins with a sub-$150M budget would be hamstrung.

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40 minutes ago, jdgoin said:

Please stop using the term creative to describe to describe these types of acquisitions. There have been plenty of contracts structured this way. 

Could you name one? 

There has never been a front-loaded $300M contract signed in MLB history, let alone one with an option layout like this. I'm not sure what you mean by "structured this way" other than the vaguest of generalizations.

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17 minutes ago, Steve71 said:

This might be what it takes, but I would only do this deal if Mr. Joe Pohlad is going to increase the budget a moderate amount to the $160-70M range.  Otherwise, I would be concerned that we would have too many financial eggs in one basket for the long run.  What happens if Correa falls off after 2 or 3 years?  Twins with a sub-$150M budget would be hamstrung.

If you wanna play that "what if" game you'll never sign an elite free agent in the entire existence of your franchise.

They'd be betting on their ability to develop cost-efficient pitching, but I'm okay with that. Even at a 150M payroll, I'm good with allocating $55M on two up-the-middle superstars in their prime in Correa and Buxton and building around them. 

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How many teams actually win the world series with a generally fiscally-conservative, don't take risks approach?  For a sample, take the last ten seasons - really only the Royals in that span could be described in that manner. 

Champions are bold and take calculated risks. Yes, a long term deal such as this is taking a chance. At least, it's taking a chance on a proven MLB elite-level SS and leader.

Risk avoidance is another term for also-ran in sports.

Fortune favors the bold....

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I like your idea Nick, Correa & Boras would love this contract. I don't think anyone would come close to offer this contract with this total amount of money & years, together with opt outs. But I agree with Steve this contract could very well hamstring our club.

I'd suggest a lower base pay with incentives (like an escalating price based on how many games he plays, WS, championships, awards etc) that could bring this total to the ammount you recommended. I wouldn't mind giving him these yrs. & $ if it's linked to incentives.

  Correa & Boras egos would be satisfied with having a record salary yet it gives the club some breathing room. 

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7 hours ago, GNess said:

Fortune favors the bold....

And look how well that turned out for FTX! At least we won’t have to look at their logos on Umps next year ?

But seriously, I think that contact structure would be win-win… which should be the goal with negotiations.

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8 hours ago, Nick Nelson said:

If you wanna play that "what if" game you'll never sign an elite free agent in the entire existence of your franchise.

They'd be betting on their ability to develop cost-efficient pitching, but I'm okay with that. Even at a 150M payroll, I'm good with allocating $55M on two up-the-middle superstars in their prime in Correa and Buxton and building around them. 

We’d be betting on their ability to develop cost - efficient pitching. Since they really haven’t shown the ability to do that I’m not taking that bet. 

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Use Opt-outs, differed money and Incentives to bring him in. $32, $32, $32, $32, $32, $30 Player Option w/ $5m Buyout, $30, $25m Player Option w/ $5m Buyout, $20, $21. Differed 5yr/$40m to 2036-2040, taken off of back-half of contract. $3m MVP Escalator Incentive, $1m Incentive for Gold Glove, $100k Incentive for a Post-season series MVP. That’s a 10yr/$326m Contract with Incentives to boot. I think 326 is a perfect number for Correa because he beats Seager’s contract.

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I like this idea. I honestly think the ten year length alone could do it. The Yankees and Dodgers don’t seem to be in on the shortstops this year, and Boston is focused on Bogaerts. I think the Phillies are a dark horse. Maybe Houston, but they just signed Jose Abreu and might want to spend somewhere other than the infield going forward. It seems like once again, teams aren’t lining up with these mega deals. 

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9 hours ago, Steve71 said:

This might be what it takes, but I would only do this deal if Mr. Joe Pohlad is going to increase the budget a moderate amount to the $160-70M range.  Otherwise, I would be concerned that we would have too many financial eggs in one basket for the long run.  What happens if Correa falls off after 2 or 3 years?  Twins with a sub-$150M budget would be hamstrung.

You pay your money and take your chances. 

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Someone on here said that if the Twins won the world series in the first four years of a potential Correa signing that it would be worth it.  Does anyone really think this team l, currently constructed, has any chance of winning a world series?  IMO it's going to take a lot more than Correa to win a world series.  When there is so much money tied up into one player it's nearly impossible to be able to afford upgrades needed in other areas.  Let's move on from this Correa nonsense and redistribute those payroll dollars into other areas.

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54 minutes ago, Linus said:

We’d be betting on their ability to develop cost - efficient pitching. Since they really haven’t shown the ability to do that I’m not taking that bet. 

Since when do the Twins give big contracts to free agent veteran pitchers?

I like the contract structure listed above. The first four years are a huge commitment, but as the team clearly looks to be using low cost young players for at least the next couple of years, it won't be a problem until MAYBE year four. And ONLY year four. After that, the contract in comparison to the total spending won't be any different than Joe Mauer's, and Joe Mauer's was never once an issue.

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5 minutes ago, Whitey333 said:

Someone on here said that if the Twins won the world series in the first four years of a potential Correa signing that it would be worth it.  Does anyone really think this team l, currently constructed, has any chance of winning a world series?  IMO it's going to take a lot more than Correa to win a world series.  When there is so much money tied up into one player it's nearly impossible to be able to afford upgrades needed in other areas.  Let's move on from this Correa nonsense and redistribute those payroll dollars into other areas.

After the #5 and #6 seeds made it to the NLCS in 2022, I say yes. This is assuming by currently constructed, it means after the Twins have spent their payroll for 2023 and the other offseason maneuvers are complete. 

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I do not know the specifics of the contracts offered, but reports are they have extended various offers ranging 8 to 10 years. Boras does not have his clients sign quickly too often and will wait to talk to all teams around the winter meetings is my guess. Even if CC would be willing to accept any of the offers made already, Boras will tell him to hold off and try to get more by using other teams to try and increase.  He tries to do this all time.  Even when there is only 1 team really willing to pay, like with JD Martinez years ago.  Boston made offer, and no other team really was willing to be close, but Boras kept saying other teams had interest, to try and get Boston to bid against themselfs. 

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It has been said that Correa wants at least 300 Million. I believe Gleeman and the Geek set their over under at 286 Million, 9 years to sign him. This got me thinking what would it take to get to 300 at 9 years? I also came up with a front loaded contract but not so big of a drop off... 35, 35, 34, 34, (Opt Out) 33, 33, 32, 32, 32 = 300. If you want to beat Seager, add one more year at more than 25 Million (Player Option of 26 Million? You pick...)

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I vote no. (Not that the front office cares what I think.)

Ten years is just too long. Those 10-year mega deals rarely work out. Correa is a great player, but a lot of his value is tied up in his defense. Do you think he will still be playing elite SS four years from now?  He also spends a fair amount of time of the DL.

The average annual value doesn't bother me,  but as others have said, a ten-year deal is just too much risk for this organization.

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I think Nick has the right structure in place for what the contract looks like but it is missing 1 key piece to ensure it is enough to win the bidding.

 

Deferrals.

 

If Correa is dead set on beating Lindor's deal you might need to kick in an extra 2M a year in deferred money for X number of years to exceed Lindor's guarantee.

Personally, my preference for big contracts would lean towards position players just because of the reduced chance of career altering injuries compared to pitchers. Nothing is guaranteed but as long as we are doing a crazy big deal investing in a great player it might as well be a great up the middle player.

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If the pitching pipeline looked solid this could make sense for the team. But that is an unknown right now. Without pitching a Correa signing would be a nice shiny object taking up too much salary. The big question under this scenario is what would the market be for Correa  with opt out after four years when he is 32? Boros wants to avoid that. Also I doubt Boros will consider anything but an 8-10 year guaranteed deal unless there is no team willing to go there. In that case offer Correa a similar contract to the previous one. By then the Twins will know if they have a long term answer at shortstop.

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I think a case could be made that including last year's $35 million, you could do this same structure minus the 10th year listed. That would make it a 9-year, $300 million contract. 300 will make Boras happy. Then considering last year's $35 mil, that is 10 years and $335 million. Bigger than Seager's! Win for everyone!

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Sounds right NIck, I think this contract offer would get it done.  I also think it is probably 10% higher than anything he would be offered (though it may be what it takes to get him to come here).  I think the opt outs would be necessary, as the Twins would probably be promising him a a better complimentary cast.  If it doesn't happen, he could leave.

We all would need to understand the last 3 years we would be overpaying for his skills, but the 10 years is less scary with his age than some of the others.

I also agree the bigger picture needs to be looked at:  Ownership and the FO would need to use this contract as a stepping stone, not an excuse.  There would need to be some willingness to push the Twins self-imposed salary cap when needed.  Not sure if I see that happening over the long haul.

 

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All sounds good. Bottom line is they need to pay what it takes to get/keep him. They can afford it if they want.

Don't lump in San Diego with Southern CA major markets. San Diego is actually a smaller market than the Twin Cities and quite separate than LA. However, the owner wants to spend money- whatever it takes to win. They can afford Machado, Tatis, and maybe Soto, plus Musgrave, Darvish, etc. The Twins and Pohlads could do this if they want and be heroes- they just don't want to that much.

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