Monday, February 27, 2012

More details on Zimmerman's contract

VIERA, Fla. -- There have been a lot of numbers thrown around since yesterday about Ryan Zimmerman's contract extension, and there's been a bit of confusion over the total monetary value of the deal. Is it a six-year, $100 million extension? Is he guaranteed $126 million over the life of the contract? Or is it $150 million?

It's actually more confusing than that. I did, however, talk to someone today who has an intimate understanding of Zimmerman's contract and managed to get some details that should help clear up the confusion.

Let's start with Zimmerman's annual salary figures, including his current deal that has two remaining years and the new extension that will kick in starting in 2014...

2012: $12 million
2013: $14 million
2014: $14 million
2015: $14 million
2016: $14 million
2017: $14 million
2018: $14 million
2019: $18 million
2020: $18 million club option or $2 million buyout

So, if you add that all up, Zimmerman will make either $132 million over the next nine years if the Nationals pick up his 2020 option, or $116 million if the club elects to pay the buyout instead.

Now, what about that personal services contract included in the deal? The Nationals will pay Zimmerman $10 million over five years after he's retired to continue working for the organization. So that money will be deferred for quite some time. It is, however, guaranteed money, meaning he's guaranteed to make at least $126 million over the life of the deal (if the Nats buy out his 2020 option) or as much as $142 million (if they pick up the option).

But wait, isn't the maximum value of the deal $150 million? Yes, it is. So where's the missing $8 million?

That's the escalator payment the Nationals would be responsible for if they somehow dealt Zimmerman before his no-trade clause takes effect in 2014. The chances of that happening, as GM Mike Rizzo made clear yesterday, are zilch. But, in theory, Zimmerman could wind up earning as much as $150 million total from the Nationals between today and five years after he retires.

As you can see, the numbers are a bit confusing, and they can appear overblown at times. The reality is that Zimmerman will make only $90 million over the actual six-year extension. And his annual salary won't exceed $14 million until 2019.

That's still a boatload of money. But for an All-Star caliber player, it's far from outrageous. And it's not the kind of money that should prevent the Nationals from being able to sign (or re-sign) several more key players over the rest of this decade.

79 comments:

SonnyG10 said...

Wow, that does sound like a team friendly contract to me. Only $14M per year until the end.

UnkyD said...

Nice. For everyone... Good Health, and Gaudy Jewelry to you, Mr. Zimmerman!!

(gulp...BANG!!!)

Tcostant said...

Once you look at these details, this is such a team freindly contract, it just hard to believe. I was on record saying that doesn't sign this offseason unless the extention paid an average of $18M per (Werth's average), but to think he doesn't even make $18M until 2019. I'm just amazed this deal got done at these levels. I guess they is something to be said for liking a place so much, a few extra millions doesn't mean as much once you get over $100M. Great job by the Nats FO and good for Zimm to know he is happy here and why push it any longer.

sm13 said...

Thank you Ryan for not tying the Nats financial hands for years to come. This is the 180° opposite of the Pujols situation.

Dave said...

Wow. . .this has to put more pressure on Werth this year. I wonder if he can handle it cause i am sure fans will not pull any punches if he does not drastically increase his production this year.

Anonymous said...

the one person this contract _can't_ be good for is Zim's agent. If you are a player with the Nats, who you gonna get as your agent: Zim's guy (who (i believe) is also Lannan's agent (who lost at arbitration)) or Boras?

Just wonderin' said...

And is it fair to assume there are also 'incentives' for winning things like the MVP or Gold Glove or making the All-Star Team? I know that's probably pocket change in this kind of contract, but just wonderin'.

natsfan1a said...

Whaaa? Get Heyman on the horn! :-)

NatsJack in Florida said...

Yah 1a.... I think Heyman needs to rewrite his article. Talk about team friendly. The only way it could have been better is if Zim went backwards in salary.

baseballswami said...

I cannot even conceive of making 12 or 14 million dollars in one year. Let alone year after year for a stretch.What can you actually do with that much money in the off-season? And - even though you retire relatively young, you still would have waaaay more than you or your family needs to live on. A house, a few nice cars? This is serious money, folks.

NatsNuts said...

You still can't throw out the $10 million like it isn't part of it since it is guaranteed. I think it is a fair deal, I just don't see the spin like NatsJack as I don't put much stock in player post career services contracts. I see it more as a deferred salary and $16,333,333 per year is the comp before the 2020 option.

Again, a fair deal and glad its completed!

Anonymous said...

No, it's a $16.67M average annual value, not $14M, and it makes Zim the highest paid 3B ever (other than A-Rod). Wow.

Not sure I understand why they had to make this deal now. Hard to see how, even if Ryan has a huge season, that they'd be paying more tghan they did after 2012; and if Ryan plays poorly or is injured in 2012 they look foolish for jumping the gun. Oh well, we'll see how it plays out.

Best 25 go North!

dfh21

Anonymous said...

Zim just does not deserve this contract. Is he realy the best 3B in the game not named A-Rod? He's not even a free agent and they are paying him as if he was one right now.

The Nats got fleeced. They gave up a ton of money to an injury prone guy with one All Star season under his belt and coming off of a subpar year and got little in return (paying more on this extension than Beltre is getting on his actual free agent contract). Where is the discount to the Nats here?

Nice to have a star caliber player locked up, but the price is way wrong and the risk is way high that he does not return elite level performance; and to say that the contract does not effect what the club does going forward on other contracts is naive. They owe $252M to TWO guys!

Anonymous said...

Zimmerman is well worth it. Thankfully, we can x that off the list.

Time to move on to the next thing ... and as Boz pointedly made clear it ain't CF.

The biggest problem is holistic, the entire offense ... even while the younger players evolve and become better sustaining an offense that is above the league average still seems out reach. It didn't happen with Dunn and Willingham should anyone jump to that conclusion. I don't think LaRoche is going to help ... its an offense that's going to have to rely on an ensemble and not one or two impact hitters. The closest they have to a true impact hitter is Morse. Harper may be 2-3 years away from that level. Sans Harper left-handed hitting will be weak unless Espinosa and Lombardozzi prove they can hit well from the left side.

Anonymous said...

How can anyone seriously think that $100M of guaranteed money to a guy who can't stay on the field and who is two years removed from the market is a team-friendly deal?

Anonymous said...

Zim just does not deserve this contract. Is he realy the best 3B in the game not named A-Rod? He's not even a free agent and they are paying him as if he was one right now.

Actually its probably a guy name Longoria AND he's in your division you Ori'hole fan you! He's a big reason why last place again is your destiny : O-R-I-O-L-E-S got sour milk dude? Hahahahaahahahaahahaha. And even when he becomes an FA you know Angel'O's would never sign him. Hahahahaahaahahaahaahah

Anonymous said...

I guess David Wright is looking at something north of $17M AAV when he hits the market? If he goes for less, the Nats will KNOW they got hosed in this deal.

Anonymous said...

Poor Matt Skole... drafted by the Nats and have Zim and Rendon infront of you.

@SCNat, that's your power hitting left-handed first baseman in the offing. His fielding is not up to third or second in the majors. Should theoretically be ready right at the end of Morse's contract around when Votto is an FA, if he doesn't sign an extension with Cincinnati.

NatsNut said...

I'm kinda curious HOW they're paid. Do they only actually get paid during the active season or can they have it spread out over the year? Do they have a payday, like, every Friday or every two weeks, etc? Is there a check delivery by the clubby?

Don't they also get per diem when they travel?

Anonymous said...

I guess David Wright is looking at something north of $17M AAV when he hits the market? If he goes for less, the Nats will KNOW they got hosed in this deal.

And how old is David Wright? The only team that's getting hosed is the one-and-only last place ORIOLES and Peter AngelO's.

DL in VA said...

I'm very curious as to why people like Heyman don't think this is a good deal.

NatsTown Fan said...

This deal was not in the Nats best interest to do this now with 2 years left.

It was another attempt to silence the idiots who send disparaging emails to the Lerner family and troll with hatred. The immoral minority got them to cave to the pressure and some of those same people are politically spinning this to say the team got a great deal.

No, it was a decent deal if the objective all along was to keep Zimmerman that long.

Anonymous said...

David Wright is 2 years older than Zim, he'll be 32 when the 2014 seasons starts. He has also out-performed Zim offensively by a mile and his glove is comparable. Should the Mets be locking the guy up now for say another 4 years and $67M or would that be kind of silly to do right now before the guy shows that he can stay healthy and produce under his current contract?

Anonymous said...

What do the O's have to do with anything? Why would thier fansw care either way? Zim was gonna be here regardless for a couple of years and they play in a different league.

Anyway, I am guessing tht the club took a gamble that Zim's performance is going way high and that this deal will look like genius down the road when Ryan is a HOF caliber guy. They see Zim as being a 30+ HR 100+ RBI .300+ hitting Gold Glove guy year in and year out. I hope they are RIGHT.

dfh21

HHover said...

dfh21

I think the pt is that the neganons have come out of the woodwork, and are spewing the kind of nonsense that on other sites has come from Os fans.

I hope you're right about Zim. I also hope the Nats FO is using more sophisticated metrics in assessing Zim--and any other player--than RBI totals and Gold Gloves.

MurrayTheRed said...

I think as the team continues to get better Zims numbers will grow especially his RBI totals. For example Ryan Howard is a good hitter, no question, but his RBI totals are through the roof because of the other players on that team.

I can't wait for Opening day, sitting in my seat eating a dog, and watching the warm ups! Really sort of upset that I will miss the pre-season game against the RedSox.

NatsJack in Florida said...

Peric @4:53 forgets to add that his summation of Skole depends alot on whether or not he developes.

And I'm not being disparaging here because the kid raked in upstate New York. It's just that he has a ways to go.

Just sayin' said...

NatsNut @ 4:53,

I don't pretend to know all the details (biweekly vs. monthly, paycheck vs. direct deposit or whatever), but one interesting point is that players do have to pay a pro-rated share of state (and, I presume, local) taxes in all the jurisdictions where they 'work' (including Canada if you travel to Toronto). In essence, if the Nats' play nine games in Atlanta, nine games in Philly, three games in Pittsburgh, etc., each players will owe Georgia the taxes due on 9/162 of his annual income. Pennsylvania will get their due on 12/162, etc. I'm sure their accountants earn a nifty fee for keeping it all straight.

Bowdenball said...

HHOver:

Well put. As a general rule, I dismiss anyone who's not even willing to create an online name under which to defend their posts. And no offense to our friend dfh21, but I also tend to dismiss anyone who thinks RBIs and gold gloves are still useful ways to measure baseball players.

DWS said...

I'd like to see a list of 3rd basemen superior to Ryan playing now, that does not need a ballparks dimensions adjusted for them.

Also age is a factor.....

whatsanattau said...

This just in ... Keith Law criticizes Nats ... this time for signing Zimmerman to such a large contract before he proved he could stay healthy ...

MurrayTheRed said...

Bowdenball,

That was sort of the point I was making about RBI's and Ryan Howard. RBI's sorta' measure how good the players in front of you are doing, so it's not a good way to measure a specific hitter. A guess it's possible for some guy to be a good hitter but chokes when his teammates are in scoring position, but that would have to be a rare guy. And Zim is anything but a choker under pressure!!!

MurrayTheRed said...

I used to like Keith Law, he claims he doesn't have a bias, but it is definitely there.

Anonymous said...

Oh please, RBI's matter a ton. OBP does not score runs, hits score runs, sacrifice flies score runs, HR's score runs. Knocking in runs is a skill. Sure, it can be luck driven in a lot of ways, but so can fielding and hitting for average and any number of other stats. At the end of the day, the offensive game is about runs. Scoring them and knocking them in. Being a 100 RBI player certainly means something, no?

dfh21

NatsJack in Florida said...

If it's ESPN and it's anybody but Tim Kurtjen or Kruk , I don't pay attention.

Steady Eddie said...

Just sayin' @ 5:20 --
It's no sweat for sports accountants to keep that stuff straight. Software companies just input all the tax info for pro franchise cities, get a nice annual update fee to add the new schedule for each pro sport, input the team name and player salary, and they're good to go.

(As long as they don't have to apportion incentive bonuses to specific games!)

NatsJack in Florida said...

I'm with you on the RBI thing dfh21. Gold Gloves, not so much.

Anonymous said...

I am guessing that visiting players do not pay any such tax when playing in DC (no commuter tax), is that right?

dfh21

Anonymous said...

When I was a kid NatsJack I would try to predict the Gold Glove by which guy in the hunt had the biggest Rawlings logo on his glove. It was fairly accurate sad to day.

dfh21

FS said...

Even after MarkZ went through trouble of explaining the details of the contract, the yearly salary through 2019, and how team friendly the contract is, if some fans are still questioning the move, I don't see how they can be convinced otherwise.
Personally, very happy with the deal. It is pretty obvious what can be done with prospects who develop into successful major leaguers.
I know Zimm is considered injury-prone around the league, but I think RZ will return more than what we are paying for.
Anyways, I am specially pissed at one executive who said that nationals has two $100 million contracts, but not two $100 million players.

section3, on the phone said...

RBI and gold gloves are useful, sure. Try getting one and then saying they are not relevant. Definitive? Maybe not, but not pointless. As someone else once said, "It doesn't have to be larger than life. It can be life-size and still be good."

Anonymous said...

Sad to *say*

dfh21

Steady Eddie said...

Actually, come to think of it, maybe I should get a cut of that $10m payment for additional services rendered the club. After all, just yesterday, Rizzo called RZim "a Steady Eddie kind of ball player."

And indeed he is, in more than one way.

Okay, that and 4 bucks will get me a latte at Panera.

NatsJack in Florida said...

Gold Glove is more like a popularity contest anymore.

Gonat said...

$14 million to $17 million or however you spin it is a truckload of cash.

I agree that when you go to Baseball Reference.com or other sites it will show up as the exact numbers Mark printed. It won't show incentives and won't show the $10 million deferral.

I think this is to the detrement of the Nats to present it that way as it gives an illusion of a deal that is millions below Adrian Beltre and in fact is above Beltre.

I am also in the camp that says it is a decent deal and the future production will determine who got the best of it.

MicheleS said...

Raffy Palmero got a gold glove for playing 25 games at 1B.. Nuff Said about that.

Anonymous said...

Brian Kenney on Clubhouse Confidential called Zim's deal paying Top Dollar but then said it was a deal that sends a message to its top players that they will pay to keep them.

MicheleS said...

Anon 6:01..

Saw that with B Kenney. Good call by him. The Nats do need to send a message to the young guys, us fans, and the Area at large (get on the bandwagon people)

FS said...

Gonat, is the deal not team-friendly? is RZ worth more than what he got in open market? does the deal stop Nationals from adding good free agents over coming seasons?

we all know how much it is total worth and I still think it is a steal in comparison to his real value.

Anonymous said...

and RZim is on Hot Stove now

Anonymous said...

Didn't the Nats already send that message with Werth's contract? Maybe they had to send it again. Good use of the $20M they just over-paid Zim to do that.

Gonat said...

FS, I think its team-neutral when you factor in the $10 million deferred as Beltre was the benchmark.

None of us know what Zim would be worth in Winter 2013/14 as a Free Agent.

I think its a good deal for both sides.

Anonymous said...

The Nats owe $252M to two guys who very well may not be worth half that much in terms of actual production. Scary stuff.

MicheleS said...

Werth's contract was to send a message to the Free Agents out there (bad team tax). RZim's contract is a message to the guys they develop in house.

Anonymous said...

Best 25 go North! (a couple of them in diamond studded in platinum Bentleys, but North they will be coming one way or another!)

dfh21

MicheleS said...

God I can't wait for actual game action

Anonymous said...

Gonat: I think that the deal will work out for the Nats, becasue I think the injuries Zim has had are fluke kind of things, not cronic back or knees or whatever. He does have big skills and he's a solid bet to be the guy they paid to get. I think that this is a risky move (the paying Zim more coins than Beltre got as a pure free agent at this stage), but the Nats wanted salary certainty and the promotional angle to have Zim in tow long haul and they see the upside for Zim as being sky high, so I have to think that they know what they've gotten themselves into. We'll see. Zim's healthy and in his 27 yr old season he could be poised for a huge year. I cannot wait til it starts.

dfh21

Waddu eye no said...

Any body yet got a number for what would be hus annual avg salary going back to his hiring? back when he was working cheap? ( well, cheap by current mlb standards)

John C. said...

When analyzing the contract, remember a couple of other things:

(1) The Nationals have set it up so that they will be paying Zimmerman $14 million a year for five years starting two years from now. Considering both inflation and the time value of money, that offsets a portion of the cost. The $10 million personal services money is not only very discounted for that reason, it is structured so that it doesn't count against team payroll figures. So "price paid" is not the max number that is getting thrown around.

(2) The Nationals get a jump on the market, part I. With the recent massive influx of cable TV dollars into baseball, the price for premium players isn't going down (as if it ever does). As this recent article in the Sports Weekly noted, when the San Diego Padres are about to ink a deal for $75 million a year for 20 yards, baseball's big market teams are about to have a lot of company. And competition. For players. Figure it out.

(3) The Nationals are getting a jump on the market, phase II: Third base is a position of relative scarcity in the big leagues even now, and most of the stars are aging (A-Rod, Aramis Ramirez, Scott Rolen, Placido Polanco, Adrian Beltre) and/or have injury risks (Youkilis) or have watched their performance diminish (Wright). After 2013 you might have had three mega-market teams (Yankees, Red Sox and Phillies) with a need at third base, and no established players to turn to other than Zimmerman (remember that Longoria is under team control through 2016, and Sandoval is under team control through 2014). That would also move the price needle a long way the wrong way, from the Nats perspective.

Is there a risk signing this deal? Sure. But there's also a lot of risks in not signing the deal. I'm no polyanna (I hated the Werth deal), but this deal makes a lot of sense in a lot of ways that Rizzo can't really say out loud.

John C. said...

Typo: the Padres are signing a deal for $75 million a year for 20 years, not yards. I speak fluent typonese!

Anonymous said...

John C -- I like that angle on the Phase I getting ahead of the market; I had not thought about that. I am not so sure about the lack of players being out there in FA in 2014, because at this level of money it is not Zim versus other 3B's as much as it is Zim versus other really expensive pieces that could be had in the market.

I think that it all comes down to Zim's health. If he's healthy, he should produce to the contract and provide great value. Rizzo must feel comfortable about Zim's ability to stay on the field.

dfh21

natsfan1a said...

Three more days. Woohoo! (Well, two counting the Friday game. Today doesn't count because it's almost over. :-))

MicheleS said...

God I can't wait for actual game action
February 27, 2012 6:11 PM

David said...

National media forgets how much Zimmerman means to the fans of this franchise. I mean, did the Orioles ever consider not signing Cal when he had one of his characteristic .255/ 70 RBI seasons (with 162 games of at bats). No, because there would have been fan revolt. And forget about all this injury stuff, ala Keith Law. Zimm is only 27 years old! 14 mil or 16.7 mil/year? Who cares! That's good value for the face of the franchise, especially one who's defensively the best 3rd baseman in the league for 5 years running, and is a 25/90 guy when healthy for a season.

Feel Wood said...

I mean, did the Orioles ever consider not signing Cal when he had one of his characteristic .255/ 70 RBI seasons (with 162 games of at bats).

As I recall there was serious angst in Birdland over the possibility that the O's might let Cal walk before he ultimately signed his last FA contract. Angst that equaled or exceeded what we just experienced with the Nats and Zimmerman.

DL in VA said...

I'd say that National Media also uses stupid metrics like "only one All-Star appearance" which can properly interpreted as "doesn't play for the Yankees or Red Sox."

It's hard to get votes for the All Star game when you play in Washington in 2007, for instance. Example: was Russell Martin actually the best catcher in the AL last year? Was A-Rod the best 3B? Was Jeter the best SS? No. But they all led the voting in the All Star race.

http://mlbreports.com/2011/06/30/allstar-voting/

Nats sign Zim and it's an "overpay." Tigs sign Prince for twice the money, and it's "commitment to win." Let's face it: this is nothing more than disrespect for the Nats, and disrespect for Zimmerman. I'm just surprised so much of the negativity is coming from fans on this board.

Anonymous said...

Well, All Star appearances are indicative of fan beleif that a player is elite. So, that measure has value in terms of the Dollars being paid. A player who merits All Star selection is generally a nationally known guy.

Anonymous said...

Disrespect for Zim? Come on. The criticism generally is that Zim has not proven himself worthy of a big extension 2 years away from free agency. It's a legitimate discussion. Only 2 non 1B inflielders have ever been paid this much money EVER and both got the coins after, dare I type it, All Star caliber seasons and in full health and with better historical performance. The Nats are somewhat controversial in making this move. It's not about disrespecting anyone by being critical, it's about questioning a questionable move.

HHover said...

DL in Va

To be fair, I think you'd be hard pressed to find any reasoned evaluation that the PF deal was anything but a gross overpay and an albatross over the long term.

sec3mysofa said...

Anon @8:07 is right that it's a fair qyluestion, but may I suggest it us not a fair argument to limit it to baseball stats? WAR us a useful stat, but it is limited to "inside the lines" values, and so it undervalues some tangible effects. Likewise, any purely play-based stat will give an incomplete result. Zimm is a star. Not like Harpwr will be, but he is important becaue he is Ryan Zimmerman, before he ever sees a pitch.

sec3 said...

Thumbs. What can U say?

Water23 said...

dfh21,

I believe the tax is based on "income tax" so DC collects. Which is why many players like living in FL/TX and other no personal income tax states.

Most states have gotten very aggressive in collect sports related personal income tax. B/C 1/365 of ARod's or Zim's salary is still a lot money!

Anonymous said...

Water23 -- I am thinking that there is no tax in DC on the visiting players, a complete guess. Just because DC cannot tax anyone else who does not live here, why would ball players be different? NYC and Philly have taxes on earned income by folks in the town, which is how they get coins from all those people coming over bridges every day, but DC has no such luxury. The feds say no. I think.

dfh21

sec3 my disenfranchised sofa said...

Dfh21 is, sadly, correct. There is no employment tax in DC.

Anonymous said...

What ever happened to KISS--keep it simple stupid?

Water23 said...

Glad the Nats did not trade for Bourjos. With their track record, they might not have caught this.

Peter Bourjos needs hip surgery at the end of the season.

http://eye-on-baseball.blogs.cbssports.com/mcc/blogs/entry/22297882/35011296

Soul Possession, PFB Sofa said...

9:49, I think KISS merged with The Archies to form a supergroup.

Feel Wood said...

Dfh21 is, sadly, correct. There is no employment tax in DC.

If a DC resident works in DC, they pay DC income taxes. If a DC resident works in VA, they pay DC income taxes. This is due to the same reciprocity arrangement that allows me, a VA resident who works in DC, to pay VA income tax. This is basically state income tax we are talking here, with DC being considered equivalent to a state. A commuter tax, should DC ever get one, would be over and above this. It would be the city of Washington, not the state-equivalent of DC, taxing commuters. Since VA has no local city/county income tax, there would be no opportunity for reciprocity to let VA residents avoid it.

I'm pretty sure that pro athletes playing games in DC have to pay a pro-rated portion of income tax to DC just like they do to most states, i.e. the states that have income taxes.

Bzl. said...

Feel Wood's tax synopsis is correct. Ryan would pay VA income tax; he would not pay income tax to DC, due to VA/DC/MD reciprocity. He would get a credit for taxes paid to other states for the games played there, up to VA max rate of 5.75%.

A visiting player (other than O's, since they are in MD) would very likely have to pay DC income tax. They'd probably get credits (to extent of their state's individual tax rate), so it wouldn't be entirely double-taxed.

Every state's (including DC) rules are different.

SFNats said...

Good deal

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