In Paul DeJong, the Cardinals signed a risky player to a safe extension

Entering the 2017 season, St. Louis Cardinals shortstop Paul DeJong was not a highly regarded prospect. He was outside of Baseball America’s Cardinals top ten (for some perspective, #10 on the list, Eliezer Alvarez, was traded last September for Juan Nicasio, a reliever who would not have even been eligible to participate in the postseason for the Cardinals), and John Sickels had him at #10.

DeJong was called up to the Majors during Memorial Day weekend, he hit a home run in his first MLB plate appearance, and he never looked back. DeJong posted a wRC+ of 122 (he was 22% above league-average, a particularly impressive accomplishment for somebody who primarily played a premium defensive position such as shortstop; his mark equaled those of Alex Bregman and Andrew McCutchen over full seasons), he played respectable defense at shortstop, a position which he just started playing full time (he had been a third baseman) before the 2017 season, and he finished second in National League Rookie of the Year voting.

Paul DeJong had a terrific rookie season, but he also wasn’t supposed to be this good. The Cardinals know this. Paul DeJong’s representation knows this. And when the two sides agreed to a six-year, $26 million extension on Monday, which includes club options for 2024 and 2025, all parties knew the totality of Paul DeJong, and in the end, both parties agreed to a mutually beneficial contract.

The DeJong extension was historic—it was the largest contract ever signed by a player with less than one year of Major League service time. While DeJong had about two years of minor league salary accumulated (not exactly exorbitant wealth) and a prorated portion of the MLB minimum of $507,500 for 2017, he was hardly a wealthy man. Well-off, sure. In a better financial situation than the average twenty-four year-old, absolutely. But if something were to happen which would prohibit DeJong from being able to continue earning money in professional baseball, he would not have nearly enough money to live off of for the rest of his life. With $26 million in guaranteed income now heading his way, DeJong does.

Multi-year extensions of any kind create risk on a player’s end of leaving potential income on the table, as if he had a career year in the first year of a contract he could certainly earn more if he were negotiating a new contract after that. But the marginal utility, to borrow some Econ 101 terminology, of the first $26 million is much higher than of the next $26 million, and of any subsequent $26 million after that. While there is a good chance that Paul DeJong could earn more than $26 million if he played on a year-to-year basis, there is some chance he wouldn’t. By signing this contract, he is absolutely assured life-changing money.

As for the Cardinals, they are locking themselves into six years of Paul DeJong, while prior to yesterday, they had no such commitment. DeJong’s arbitration years were uncertain in terms of salary, but for the next three seasons, the Cardinals could (and, if Tommy Pham is any indication, likely would) pay the shortstop at or near a league minimum salary. Even adjusting for the possibility of incremental bumps in the league minimum salary, this means about $1.6 million in financial obligations, which means the Cardinals are essentially buying out his arbitration years for $24.4 million, in exchange for adding two years of team options at the end.

Paul DeJong is easily worth more than $24.4 million over three years on the open market—in his four-ish months of MLB service time in 2017, DeJong was worth $23.8 million by FanGraphs’s dollars-to-Wins Above Replacement calculations. Even by ZiPS, the projection system which is more cynical about his future (over 602 plate appearances, DeJong is projected for a 97 wRC+ and 1.6 WAR), he would still be worth $12.7 million in 2017 dollars (note: it is 2018).

But DeJong was not going to see the open market—in salary arbitration, players generally receive salaries lower than their actual value. Michael Wacha and Marcell Ozuna, for instance, are still going year-to-year in arbitration, and each is now entering his second year of salary arbitration—Wacha is scheduled to make $5.3 million in 2018 while Ozuna is scheduled to make $9 million. If Paul DeJong continues to improve on his 2017 (a season which was unexpected but also came mostly when he was only 23 years old), his average arbitration salary would be below his market rate, but it would still exceed an average of $8.13 million.

As for the downside for the Cardinals, it really depends on how bad one imagines it could get. And while Paul DeJong wasn’t expected to be the terrific shortstop he was last season, he still had the markings of a potentially useful big-league bench player. DeJong displayed solid power in AA Springfield in 2016, hitting 22 home runs, and he played third base, shortstop, and second base in the minors (while his second base time was somewhat immaterial, his twenty games in the Majors suggest he can at worst fake it there).

Say DeJong becomes similar in quality, if not style (DeJong being a high-power, low-walk hitter) to Greg Garcia—solid at third base, non-disastrous as a middle infielder, and an adequate bench bat (basically not Pete Kozma). Is Greg Garcia worth $24.4 million over three years? Probably not, but he’s not that far off. Consider that when the Cardinals acquired Jedd Gyorko, they inherited a four-year, $32 million contract and expected him to fill a bench role. Sure, they were also clearing out Jon Jay’s salary, but even if that were considered a sunk cost (despite his awful 2015, the Cardinals likely felt Jay had some value, but hypothetically), Gyorko was still slotted to earn $25.8 million more.

The Cardinals do not have great, MLB-ready depth at shortstop in the minor leagues—Delvin Perez is just 19 and was below-average offensively in Rookie ball last season, while Edmundo Sosa turns 22 today and was a below-average hitter in high-A. Each could develop more of a bat, but DeJong will likely be granted a much longer leash than Aledmys Diaz was last season, simply because there isn’t a Paul DeJong in the minors waiting to replace him.

Even if DeJong isn’t able to continue as an everyday shortstop, a bench player capable of playing several positions and hitting competently is, barring a complete disaster, likely Paul DeJong’s realistic floor. And even if DeJong becomes that, a six-year, $26 million extension, while unusual, is fine. If DeJong continues the progress he made in 2017, the extension could turn out very beneficial for the Cardinals, in addition to the financial security it guarantees DeJong.