Here's How Massive a Carlos Correa Contract Needs To Be

In a recent story on his substack, Matthew Trueblood laid out an excellent example of what a creative contract entails, and I'd like to unpack that. But before we do, it's essential to understand what a baseline contract looks like for comparison purposes. Fortunately, Trueblood speculates on that, too.

It's intimidating: nine years at a $37M average annual value (AAV) totaling $333M. That deal is a "Bryce Harper" contract, meaning it has a no-trade clause for the player and no player opt-outs for the team. Both sides are making a long-term commitment that also gives Correa and his agent, Scott Boras, a record-setting contract AAV for a position player.

Is that too much? I like the way Trueblood responds to that concern:

"Those numbers sound gaudy. Tough. Get used to it. That's the reality of the sport right now, and Correa is going to get that kind of payday somewhere."

(There is one additional factor that raises Correa’s price tag beyond just being a great, young player: unlike many other premier free agents, the Twins can't give him a qualifying offer. So there are no draft picks attached to signing him.)

Even if the Twins have indeed offered Correa the biggest contract in Twins history - say, a 10-year, $270M deal - it would come nowhere close to that deal. It would likely finish in third place. Hell, he turned down a deal like that last year before he even signed with the Twins.

So what about something more creative? That's a route Boras has gone before. Trueblood (you can sign up for his free newsletter here) lays out a somewhat complicated contract structure that gives Correa a record-setting deal but contains less guaranteed money overall. Here's an overview:

1. It starts with a 4-year deal for $175M, which gives him a record-setting AAV of $43.75M.
2. After that third year, there is a team option. Either the team can extend the contract for another five years, paying Correa $25M annually through his age 36 season. Or they can be on the hook for just the fourth year, but then….
3. At some point after the team decision, Correa has a player option. He can choose to extend the contract for three years for $60M or become a free agent. Similar to Correa's deal with the Twins, this provides him with insurance.

There's a lot to unpack here. One way to break this down is to parse what the contract looks like on the extremes and in the middle, and compare it to the baseline contract.

Worst-case scenario - Correa goes downhill fast.

With $175M up front, and a $60 player opt-in, Correa gets $235M guaranteed in this deal. That's worse than he would get with the baseline contract, but he ends up with a seven-year deal that averages about $33.5M AAV. Meanwhile, the team has protected itself on the back end by committing more money on the front end.

Best-case scenario – Correa thrives and continues to increase his value.

Odds are the team opts to extend him, meaning they have him for $300M over nine years, which is also a little bit better than the baseline deal for the team (and worse for Correa) but still is worth ~$33M AAV over nine years.

Middle Scenario – Correa thrives in his prime and then gradually falls off.

Then both sides have decisions to make. The middle ground is that Correa makes $175M and then gauges the free agent market again after his 31-year-old season to see how it values him. He knows he's worth at least $60M over three years by opting back into his contract.

We can diddle about the details; the structure is the most exciting aspect of it to me. I'd suggest that Correa should probably get more AAV up front and try to make the final numbers closer to an average AAV of $36M, but we can debate that in the comments.

But the biggest takeaway is that even if the contract is "creative," it's still likely to be painful to those who are fiscally conservative. The Twins can be aggressive. They can be creative. But ultimately, they will have to be borderline crazy to land a prize as big as Correa. 

OK. Then call me crazy. I'm in. But let's not kid ourselves about what the Twins will be signing up for.