Here’s a neat idea: players like Jon Singleton should look into “human capital contracts”

28 Comments

We talked about the stuff with Jon Singleton the other day. How he took what will probably end up being a well-below-market value from the Astros. At least well-below market if he becomes a solid everyday player. But hey, given the system, that’s what he felt he had to do in order to abrogate his risk.

But what if he had another option? Like the option D.R. at The Economist suggests: Singleton basically selling bonds to investors backed by future earnings?

The other possibility is a free-market solution from outside baseball: human-capital contracts, in which players would sell a share of their future earnings in exchange for cash up front. Just like the deal Mr Singleton accepted, such arrangements would guarantee athletes’ future financial security regardless of their on-field performance. But rather than having to negotiate with a single team, players could auction off the rights to a given percentage of their wages to the highest bidder, thus securing fair market value for the expected income. They would then be free either to take their chances with salary arbitration on a year-to-year basis, or to demand a far richer extension from their employer.

I’m not an expert in the Collective Bargaining Agreement or MLB rules along these lines, but at first blush I can’t see why this wouldn’t be allowed. It’d be like any other outside investment scenario that is none of baseball’s business, right? Or would someone consider it gambling or something?

I doubt baseball players break ground here — it’s somewhat radical for the sport and it’s the sort of thing that might get you labeled an oddball or egomaniac or something by teammates and the press, but I at least think it’d be legal. Someone let me know if I’m wrong, though.

Either way, it’s pretty cool.

MLB free agent watch: Ohtani leads possible 2023-24 class

Getty Images
1 Comment

CHICAGO – The number will follow Shohei Ohtani until it is over. No, not Ohtani’s home runs or strikeouts or any of his magnificent numbers from the field. Nothing like that.

It’s all about how much. As in how much will his next contract be worth.

Ohtani is among several players going into their final seasons before they are eligible for free agency. There is still time for signatures and press conferences before opening day, but history shows a new contract becomes less likely once the real games begin.

There is no real precedent for placing a value on Ohtani’s remarkable skills, especially after baseball’s epic offseason spending spree. And that doesn’t factor in the potential business opportunities that go along with the majors’ only truly global star.

Ohtani hit .273 with 34 homers and 95 RBIs last season in his fifth year with the Los Angeles Angels. The 2021 AL MVP also went 15-9 with a 2.33 ERA in 28 starts on the mound.

He prepared for this season by leading Japan to the World Baseball Classic championship, striking out fellow Angels star Mike Trout for the final out in a 3-2 victory over the United States in the final.

Ohtani, who turns 29 in July, could set multiple records with his next contract, likely in the neighborhood of a $45 million average annual value and quite possibly reaching $500 million in total.

If the Angels drop out of contention in the rough-and-tumble AL West, Ohtani likely becomes the top name on the trade market this summer. If the Angels are in the mix for the playoffs, the pressure builds on the team to get something done before possibly losing Ohtani in free agency for nothing more than a compensatory draft pick.

So yeah, definitely high stakes with Ohtani and the Angels.

Here is a closer look at five more players eligible for free agency after this season:

RHP Aaron Nola, PHILADELPHIA PHILLIES

Nola, who turns 30 in June, went 11-13 with a 3.25 ERA in 32 starts for Philadelphia last year. He also had a career-best 235 strikeouts in 205 innings for the NL champions.

Nola was selected by the Phillies with the seventh overall pick in the 2014 amateur draft. There were extension talks during spring training, but it didn’t work out.

“We are very open-minded to trying to sign him at the end of the season,” President of Baseball Operations Dave Dombrowski said. “We’re hopeful that he’ll remain a Phillie for a long time.”

3B Matt Chapman, TORONTO BLUE JAYS

Chapman hit 36 homers and drove in 91 runs for Oakland in 2019. He hasn’t been able to duplicate that production, but the three-time Gold Glover finished with 27 homers and 76 RBIs in 155 games last year in his first season with Toronto.

Chapman turns 30 on April 28. Long one of the game’s top fielding third basemen, he is represented by Scott Boras, who generally takes his clients to free agency.

OF TEOSCAR HERNÁNDEZ, SEATTLE MARINERS

Hernández was acquired in a November trade with Toronto. He hit .267 with 25 homers and 77 RBIs in his final year with the Blue Jays. He was terrific in 2021, batting .296 with 32 homers, 116 RBIs and a .870 OPS.

The change of scenery could help the 30-year-old Hernández set himself up for a big payday. He is a .357 hitter with three homers and seven RBIs in 16 games at Seattle’s T-Mobile Park.

OF Ian Happ, CHICAGO CUBS

The switch-hitting Happ is coming off perhaps his best big league season, setting career highs with a .271 batting average, 72 RBIs and 42 doubles in 158 games. He also won his first Gold Glove and made the NL All-Star team for the first time.

Chicago had struggled to re-sign its own players in recent years, but it agreed to a $35 million, three-year contract with infielder Nico Hoerner on Monday. The 28-year-old Happ, a first-round pick in the 2015 amateur draft, is on the executive subcommittee for the players’ union.

LHP JULIO URÍAS, LOS ANGELES DODGERS

Urías, who turns 27 in August, likely will have plenty of suitors if he reaches free agency. He went 17-7 with an NL-low 2.16 ERA in 31 starts for the NL West champions in 2022, finishing third in NL Cy Young Award balloting. That’s after he went 20-3 with a 2.96 ERA in the previous season.

Urías also is a Boras client, but the Dodgers have one of the majors’ biggest payrolls. Los Angeles also could make a run at Ohtani, which could factor into its discussions with Urías’ camp.