David Freese and the time value of money
The St. Louis Cardinals reached an agreement with third baseman David Freese on Friday on a deal for the 2013 season. The deal will be for a reported $3.1 million dollars, and with it, the team avoided heading to arbitration to settle the deal. However, the deal represents the just beginning of potentially difficult decision making process over the next few years. And the relationship between the 30-year old and the club could be put the test as well.
Freese represents a paradox in several areas. He’s a late bloomer that’s coming into his own during his prime seasons. While his 2011 postseason heroics and honors set the tone, he really put his stamp on his future in what he delivered in the follow up season. In 2012, he played a career-high 144 games, while hitting for a .293 average, along with 25 home runs, 79 RBI, 25 doubles and 70 runs scored, all career highs as well. He took this into his first arbitration-eligible season, and the Cardinals responded with a $2.4 offer, while Freese’s agent countered with a $3.75 million offer. While they settled at about the middle point between the offers, he’s in a position to get some substantial jumps up the ladder in the next few years.
Freese is entering into his negotiation years at an interesting time, for both player and club. The third base market has seen the majority of its top flight players locked to contracts the last two years. Ryan Zimmerman, David Wright, Evan Longoria and Martin Prado have all received new contracts at the position in recent memory, essentially setting the bar for money at the position for the near future. These deals average at around $15 million per year over the life of a five year deal, and each represents a franchise cornerstone. However, it’s Prado’s deal from last month that is the most intriguing when accessing what Freese’s worth could be.
The 29 year old Prado signed a four-year, $40 million extension with the Arizona Diamondbacks shortly after being traded from Atlanta last month. This deal represents what he will play at through his majority prime years (it will expire when he’s 330. It is a cut below the massive deals that aforementioned group received, but still a very a solid value-to-length deal. The similarities between the Freese and Prado are there as well: both are one-time All-Stars, with similar career batting numbers (Prado a .295 career hitter, Freese .296). Prado is a more versatile option in the field, but Freese carries a .345 career postseason batting average, a place where much of his value comes into play.
Freese is a large part of the foundation of the Cardinals going ahead, although he’s a notch below the type of cornerstone performer Wright or Zimmerman is. He’ll play this season at age 30, and is past the type of deal that either a young player or a player with longer resume would get at his age. While a medium-length/annual salary deal such as Prado received makes sense, it’s also hindered by his arbitration status. More likely than not, the Prado-like extension wouldn’t be approached until terms are exchanged next year, and for good reason. The raise he will play at this season is a raise of $2.6 million. If he continues to play at the level he established last year, a comparable raise could continue along, rising at close to the $7 million per year level by the time he is eligible to hit the open market in two years.
The Cardinals could very easily continue to maintain Freese through his arbitration seasons as a cost controlled option that continues to be a “wait and see” property. But if the subtle, yet hard line he stood this winter is any indication of what’s to come, Freese understands his value, and he won’t be long for having non-committal terms. Especially as he’s playing through his highest earning potential seasons, and the team is showing a willingness to put money up early to avoid arbitration, such as they did with closer Jason Motte last month.
There are several lines of legit questioning that can go into such a deal, many of which will be answered this year. Can he have another healthy summer? Will he continue to grow as an offensive presence, has he did a year ago or plateau? Obviously, the franchise won’t be forced into having to make a deal for two more years, which will serve as a fair measuring ground of what to do. A deal over five years would be difficult, which age as a primary consideration. Also, there’s the fact that much of the core of the team is in a similar place, with year-to-year deals with Allen Craig, Jon Jay and Lance Lynn to tend to.
But locking Freese up to a deal has some urgency to it that cannot be denied either. He’s a productive and already showing his prime level of play, but the Cardinals are also evolving as a team regularly now, and will be on the verge of a mini-youth movement over the next two years, as their top shelf prospects begin to push into the picture at the Major League level. Finding the right deal to keep Freese situated in St. Louis is important, and provides face and play value stability to the team at difficult position to do so at. However, timing is everything. And there is nobody wearing the birds on bat has a more bi-polar relationship with time than Freese does now.