Manny Machado, less than halfway through his 24th year of life, is set to enter Major League Baseball’s arbitration process for the first time this offseason. Machado, a two-time All-Star, two-time Gold Glover, is coming off a season in which he finished fourth in the American League MVP vote, hit 35 home runs, added 30 doubles, scored 102 runs, and stole 20 bases. All of that was worth a 7.1 WAR season. Under the provisions of his rookie deal, the third baseman earned a grand total of $548,000 in 2015.
Manny Machado will be due for a very substantial raise entering the 2016 season. MLB Trade Rumors projects him to receive $5.9 million through the arbitration process. The Orioles and Machado, however, should be thinking more long-term. Prior to the 2015 season, Machado expressed a desire to work out a long-term deal with the Orioles, but with two major knee injuries in two years and another cheap season coming, the front office really had no impetus to get a deal done immediately. That is no longer the case, as Machado is coming off his best season and was the only player in the entire league to play all 162 games. Machado made huge strides as a hitter, but also as a team leader, showing much more maturity than in years past. The time has come to lock Manny Machado up.
The Orioles and Machado are in a unique position when it comes to a contract extension. With only three more seasons of club control, the Orioles will likely be buying out three or four years of Machado’s free-agent years. For the purposes of this exercise, let’s assume Machado would like to re-enter the open market before his 30th birthday, which comes on July 6, 2022. Under those assumptions, Machado and the Orioles are looking at a six-year extension that would cover three years of arbitration and three years of free agency.
The arbitration years for Machado should obviously be a bit cheaper than the free-agent years, but even if Machado runs all the way through his arbitration-eligible seasons, they won’t be cheap either. Keep in mind that Hunter Pence did in fact receive $13.8 million following a 2012 season in which he batted only .253 with 24 homers and 104 knocked in. Pence and the San Francisco Giants ironed that deal out without arbitration. That same year, Buster Posey earned a raise from $615,000 to $8 million in his first year of arbitration, coming off an MVP season. Posey was worth 7.3 WAR in his MVP year.
Those two Giants stars could help set the formwork for Machado’s extension. Ryan Howard was the first $10 million first-time arbitration-eligible player, and it’s unlikely Machado will be joining him in the ranks. The Philadelphia first baseman had already had a 58-homer season as well as a 47-homer season. Machado is unlikely to get the same $8 million that Posey got in arbitration, but if the Orioles are talking long-term extension, $8 million for the first year of the deal is a good starting point. From there, the Orioles can gradually work Machado’s salary up. A bump to $13 million in 2017 seems plausible, followed by another bump to $18 million in 2018. David Price set the all-time arbitration record prior to the 2015 season with a $19.75 million deal. Accounting for rising salaries and inflation, $18 million for Machado entering the 2018 season, his final arbitration year, seems fair.
The final three years of the deal will encompass seasons in which Manny Machado could have tested the open market. The Orioles will need to start paying up here. By this time, Machado will likely have converted back to shortstop, his natural position and a far more valuable position. Hopefully the Orioles will have curried enough good favor by giving Machado $31 million, a value he would be hard-pressed to match in arbitration, between 2017 and 2018, that the final three years of the deal will not be extremely costly. Assuming negotiations go well, the Orioles may be able to get Machado for $20 million, $22 million, and $24 million over the final three years of the extension. By the end of the 2021 season, Machado will be 29 years old and able to re-enter the open market and cash in big once again for six more years.
What I’ve laid out for Manny Machado is a six-year deal worth $95 million total, approximately $10 million more than the Adam Jones extension. The Orioles could very easily tack on an extra $5 million to bring the deal to $100 million total, a fair figure for a seven-WAR player like Machado who will eventually bring 40-homer power to the shortstop position. Realistically speaking, the Orioles may even have to be prepared to approach the $110 million range with Machado. If Machado wants to commit to a seventh year, $140 million could be in play.
The Orioles should be able to spread the money out evenly, paying Machado more than his arbitration value in the first two years, while getting him below market value in the last two years. Both sides can get what they want out of a six-year extension, and the Orioles can lock up their brightest young star in a way that will not tie their hands financially as the back end of the deal plays out. The Orioles need to get this deal done, and quickly, before Machado cranks out a 40-homer season, likely pushing his deal even closer to the six years and $144.5 million extension of Mike Trout. The Orioles have a lot on their plate this offseason, but taking care of Manny Machado cannot be neglected.
Final Prediction: Six years, $105 million