Article: Glen Perkins Signs Extension With Twins

[DaveW]

Great move!

 

The Twins announced that they have signed All-Star closer Glen Perkins to a new, four-year contract extension that runs through the 2017 season. MLB.com's Rhett Bollinger tweets the annual breakdown: Perkins will earn $4.025MM in 2014, $4.65MM in 2015, $6.3MM in 2016 and $6.5MM in 2017. The contract contains a club option for the 2018 campaign that is also worth $6.5MM. All told, Perkins is guaranteed $21.475MM, though it's not clear what sort of buyout is attached to the 2018 option, which would increase the guarantee.

Perkins' extension overwrites his previous deal -- a three-year, $10.3MM extension signed prior to the 2012 campaign that included a $4.5MM option for 2016. Under his old contract, the Minnesota native and Relativity Baseball client was set to earn $3.75MM this coming season. By restructuring and extending Perkins' contract, the Twins have added an additional two years of team control. Darren Wolfson of 1500 ESPN reports (via Twitter) that Perkins approached the Twins about working out a new deal and received some trade protection in the extension, essentially signaling to his hometown club that he wants to retire as a Twin.

[tobi0040]

Very reasonable for a very good closer. I never could understand the $10-$15M a year guy that throws 60 innings. I like this deal though.

[S.]

received some trade protection in the extension

Interested to hear the details on this. As much as I like Perkins, I can't say I'd be happy if there is a no trade clause.

 

Otherwise, seems like a good deal to me.

[DaveW]

Very reasonable for a very good closer. I never could understand the $10-$15M a year guy that throws 60 innings. I like this deal though.

Yup!

 

This ends up being such a great deal because the Twins had to foresight to extend him early on a few years ago. If they wouldn't have done that he would have been a year away from FA I believe? Where he easily could have gotten 30+ mil on the open market.

[sandbun]

Awesome news. Should make sure he's a Twin for life. Love that he initiated the talks.

 

I am a little frustrated with the FO though. Is this not a perfect chance to do exactly what some of us have been calling for them to do and frontload the deal? Give him the 12.5 million this year, and then you've only got to pay 3 mil per year the rest of the way. Oh well, maybe that makes him harder to trade so it means they'll keep him the entire contract.

[DaveW]

I can't say I'd be happy if there is a no trade clause.

Why?

[DaveW]

Awesome news. Should make sure he's a Twin for life. Love that he initiated the talks.

 

I am a little frustrated with the FO though. Is this not a perfect chance to do exactly what some of us have been calling for them to do and frontload the deal? Give him the 12.5 million this year, and then you've only got to pay 3 mil per year the rest of the way. Oh well, maybe that makes him harder to trade so it means they'll keep him the entire contract.

 

Teams don't front load contracts like that, and it would make no sense for the Twins to do so, it would set a really bad precedent.

[Brock Beauchamp]

Good for Perkins, good for the Twins. Glen gets some assurance that he'll remain a Twin, the organization gets a damned good closer for a great price.

[sandbun]

Teams don't front load contracts like that, and it would make no sense for the Twins to do so, it would set a really bad precedent.

 

Teams don't do x until suddenly one does, gains a competitive advantage, and then the rest of the teams play catch up. Besides, I'm not sure that one home town guy wanting to make sure he plays his entire career for his favorite team and willing to take less money than he'd probably get if he was to play out his contract to make sure it happens sets a huge precedent.

[S.]

I dont disagree with that assessment, but how does a no trade clause possibly help us? Whereas not having it certainly could help us if a contender is desperate for a cost controlled, elite closer at the trade deadline or All Star Break or whenever and is willing to overpay.

 

Edit: in response to Dave

[JB_Iowa]

• Mike Berardino ‏@MikeBerardino 2m
  Glen Perkins guaranteed $22.175M thru 2017 under new deal ($700K buyout for 2018). 3-team no trade clause, per person w/direct knowledge
   
   
  

[JB_Iowa]

Sounds pretty reasonable given the details available. It's clear that he and Mauer WANT to stay at home. Now the job is to get some talent around them before they are too far on the downward slide ... and yes, the Twins made a start but that's all it is. Pressure is on for prospects to mature and FA's to do their part.

[S.]

Well, my point is moot if the 3-team no trade clause part is correct. Like I said, I needed some more details, but if thats the case I have nothing even remotely bad to say about this.

[Sssuperdave]

I am a little frustrated with the FO though. Is this not a perfect chance to do exactly what some of us have been calling for them to do and frontload the deal? Give him the 12.5 million this year, and then you've only got to pay 3 mil per year the rest of the way. Oh well, maybe that makes him harder to trade so it means they'll keep him the entire contract.

 

This kind of logic results from looking at the team payroll for each individual year in a vacuum. Front-loading contracts doesn't make financial sense for the team because of the time value of money. Even if you have cash up front, it always makes sense to pay for something later and invest the cash now.

 

For example, here's some mental accounting TR and the Pohlad's could do: Set aside an extra $8.475M this year in a "Perkins contract fund" (to bring this year's "salary" up to $12M) and count it as part of this year's payroll. Then in future years pay Perkins out of this "fund" and don't count it against that future year's payroll. It has the same effect as front-loading the contract but they earn investment income in the mean-time.

 

I'm sure they don't do anything exactly like this, but I imagine they actually do things much more sophisticated in an attempt to maximize both the financial value and competitive "value" of the team over the long term.

[JB_Iowa]

I'm sure they don't do anything exactly like this, but I imagine they actually do things much more sophisticated in an attempt to maximize both the financial value and competitive "value" of the team over the long term.

 

I wish I shared your confidence.

[twinsnorth49]

Big thumbs up, it's a great deal for the team and I'm a big Glen Perkins fan. It will be great if he retires only wearing Twins colours.

[alarp33]

Does everyone here realize that Perkins was already under team control through 2016? Am I missing something? Why in the world would the team do this? Closers have short shelf life's, Perkins will be what, 35 in 2017? Why not wait 2 or 3 years and see if he is worth an extension. This is a head scratcher to say the least

[sandbun]

It's certainly true from the Polhad's point of view, paying tomorrow is better than paying today. I completely get that logic. But I don't care if the Polhads are getting the best deal they can get. I care about the Twins being the best team they can be, and from what they've said in the past about the 52% rule, the best thing for the Twins is to pay the money up front when they have it so they can use the revenue from next year on signing more guys. And Perkins would probably actually agree to less overall money if the deal was frontloaded.

 

If there was any indication that they were putting aside money like you suggest, then I'd be all for that. But I'm with JB_Iowa, I have no faith they're doing that, in fact I believe they've said the opposite, that each year's revenue is treated as if it was in a vacuum (if I'm wrong someone please correct me, it would make me exceedingly happy to hear that I am wrong). So I wish TR would take that into account. But he doesn't. In a related note, the Polhad's will let TR run the team for however long he wants to. He has absolute job security.

 

This kind of logic results from looking at the team payroll for each individual year in a vacuum. Front-loading contracts doesn't make financial sense for the team because of the time value of money. Even if you have cash up front, it always makes sense to pay for something later and invest the cash now.

 

For example, here's some mental accounting TR and the Pohlad's could do: Set aside an extra $8.475M this year in a "Perkins contract fund" (to bring this year's "salary" up to $12M) and count it as part of this year's payroll. Then in future years pay Perkins out of this "fund" and don't count it against that future year's payroll. It has the same effect as front-loading the contract but they earn investment income in the mean-time.

 

I'm sure they don't do anything exactly like this, but I imagine they actually do things much more sophisticated in an attempt to maximize both the financial value and competitive "value" of the team over the long term.

[Squirrel]

It's certainly true from the Polhad's point of view, paying tomorrow is better than paying today. I completely get that logic. But I don't care if the Polhads are getting the best deal they can get. I care about the Twins being the best team they can be, and from what they've said in the past about the 52% rule, the best thing for the Twins is to pay the money up front when they have it so they can use the revenue from next year on signing more guys. And Perkins would probably actually agree to less overall money if the deal was frontloaded.

 

If there was any indication that they were putting aside money like you suggest, then I'd be all for that. But I'm with JB_Iowa, I have no faith they're doing that, in fact I believe they've said the opposite, that each year's revenue is treated as if it was in a vacuum (if I'm wrong someone please correct me, it would make me exceedingly happy to hear that I am wrong). So I wish TR would take that into account. But he doesn't. In a related note, the Polhad's will let TR run the team for however long he wants to. He has absolute job security.

This is an early moderator warning to keep on topic about Perkins' contract. This is not a spending/payroll thread.

[twinsnorth49]

Does everyone here realize that Perkins was already under team control through 2016? Am I missing something? Why in the world would the team do this? Closers have short shelf life's, Perkins will be what, 35 in 2017? Why not wait 2 or 3 years and see if he is worth an extension. This is a head scratcher to say the least

 

He was under team control through 2015 with a team option for 2016. Not every closer has a short shelf life and Perkins has been very durable. The Twins get an all-star closer for an extra two years, during which part of they might be competitive team, for a reasonable price. It also makes it easier for them to turn down his option in 2018 as opposed to 2016.

[Dman]

Does everyone here realize that Perkins was already under team control through 2016? Am I missing something? Why in the world would the team do this? Closers have short shelf life's, Perkins will be what, 35 in 2017? Why not wait 2 or 3 years and see if he is worth an extension. This is a head scratcher to say the least

 

My thinking is he is currently grossly under paid for what he does and this is a way to garauntee him more money and give him more security in case his arm does fail him down the line. Both sides take some risk here. Perkins likely could have made more not giving his team a hometown discount and the Twins risk he may be injured beyond repair sometime later in the contract. If both sides agree to those risks it is a win, win.

 

Forget about trading him now. It won't happen because if he is pitching well the Twins have a great deal and won't want to give that away. If he is pitching poorly no one will want him anyway. He is virtually un-tradeable until later in the contract IMO.

[TheLeviathan]

Good deal for both sides. Perkins is an easy guy to root for.

 

And, sure, it takes a nice trade chip off the block but at some point you have to keep some guys around for stability too. So good move by the Twins.

[alarp33]

He was under team control through 2015 with a team option for 2016. Not every closer has a short shelf life and Perkins has been very durable. The Twins get an all-star closer for an extra two years, during which part of they might be competitive team, for a reasonable price. It also makes it easier for them to turn down his option in 2018 as opposed to 2016.

 

Team option for 2016 = under team control for 2016. They control what they do with him in 2016. Perkins has been durable, he also will be 34 years old in 2017.

 

"It makes it easier for them to turn down his option in 2018 as opposed to 2016?" Huh?? The 2016 option was for a very reasonable price, the 2018 he will be 35, unknown if he will still be healthy and/or effective, and it has a buyout attached to it.

 

Again, why would the team pay for his 2017 season pre-2014, not to mention give him raises the next 3 years

[JP3700]

I like Perkins a lot, but I'm not a huge fan of the extension.

 

The Twins already had him under control through the 2016 season for about $12.5M. Roughly $4M for the next two seasons and a $4.5M club option for the 2016 season.

 

So they essentially just added close to $10M in new money for a reliever and his age 34 season.

 

The 2018 club option is nice, but I just don't see much upside in this move. If everything works out they get him for about $16M+ for those two additional seasons.

 

So best case scenario, they paid market value. Guess we just hope for best case scenario.

[TheLeviathan]

Teams don't do x until suddenly one does, gains a competitive advantage, and then the rest of the teams play catch up. Besides, I'm not sure that one home town guy wanting to make sure he plays his entire career for his favorite team and willing to take less money than he'd probably get if he was to play out his contract to make sure it happens sets a huge precedent.

 

Teams don't do it because players don't want to/have agreed as a union not to. That goes for front-loaded deals and hometown discounts. Lots of discussion on this in the past, probably not worth rehashing - just look up the threads.

[JB_Iowa]

Again, why would the team pay for his 2017 season pre-2014, not to mention give him raises the next 3 years

 

Maybe because they believe in him and think that they just paid $22.175 M for Glen Perkins for 4 years whereas Detroit paid $20M for 2 years of Joe Nathan ($19M plus $1M buyout).

 

While Nathan's pedigree may be better, Perkins is 8 1/2 years younger than Nathan. Obviously the Twins have had a chance to compare both.

 

Apparently Perkins approached the team about re-working an extension. Overall years and dollars seem pretty reasonable. Of course there is risk to the team. But if Perkins performs well, he has also accepted risk because he undoubtedly could have gotten more money down the road.

 

That's what mutually agreed upon deals are all about.

[JB_Iowa]

One more factor. Perkins is another homegrown product, good in the community and popular with fans. The Twins do have some affection for that.

 

Some may think that the Twins have gotten/are getting burned by taking that into account in the Mauer contract. I suspect the Twins accountants know exactly how much Mauer and Perkins generate in jersey sales, etc.

 

Sometimes it isn't solely about what the player produces on the field.

[Squirrel]

I like this. I like Perk and I think it is good for all, all around.

[Mike Frasier Law]

It seems to me that the annual cost of this extension is nominal. If his arm fall off next year, this contract is not going to affect the Twins' ability to compete at all. On the flip side, "proven closers" are very expensive. I'm not contending they are worth it, but the value of a closer is what the market will bear. For example, Joe Nathan's salary from 2007-2013 was: $5.25m, $6m, $11.25m, 11.25m, 7m, 7m (missing all of 2010). Perkins is only guaranteed on average $5.37m. The biggest risk is that his arm falls off, and that's not too much money to eat. But if he stays nearly as effective as he was in 2013, it's a significant bargain.

[twinsnorth49]

Team option for 2016 = under team control for 2016. They control what they do with him in 2016. Perkins has been durable, he also will be 34 years old in 2017.

 

"It makes it easier for them to turn down his option in 2018 as opposed to 2016?" Huh?? The 2016 option was for a very reasonable price, the 2018 he will be 35, unknown if he will still be healthy and/or effective, and it has a buyout attached to it.

 

Again, why would the team pay for his 2017 season pre-2014, not to mention give him raises the next 3 years

 

There is risk in any contract, at some point you have to just get past that, as well a show of faith in a quality player is not a bad thing. Yes he's technically under control through 2016, this just allows them to delay whether they are going to exercise the option or not, it's a good chance by 2018 they don't.

 

If he performs close to the level he has been for the next two seasons the Twins will have got a great deal, that's the gamble with any player.