NEWS
As MLB officially flips the switch to offseason-mode, the focus immediately turns to Juan Soto, the most exciting free agent since: well Shohei Ohtani 12 months ago. We’ll take a few moments here to dive into a calculated value & predicted outcome for Soto’s free agent journey over the next few weeks.
Calculated Valuation(s)
Using Spotrac’s market value analysis (which pairs the two-year production prior to the contract of four comparable players against Soto’s last two years of production), we’re given the highest calculated valuation in our history:
14 years, $513,842,854
However, we’ve opted not to use Shohei Ohtani as a variable for this valuation for the simple reason that Soto didn’t get the Padres/Yankees 298 innings on the mound. If we factor in Ohtani’s $70M per year contract to this math, Soto’s value soars to:
14 years, $647,090,402
This is a 26% increase over our initial valuation. Let’s cut that in half to account for the lack of pitching from Soto.
14 years, $580,642,425
Is it enough? The simple answer is no. This is what the math is telling us to report. But there aren't enough comparable players for Juan Soto. He's a rare combination of age (just turned 26) plus multi-tool production. We'll try to poke some holes into this process to get us to a number that fits a little better in this current climate.
A Logical Outcome
It’s never best practice in our opinion to give too much attention to the APY (average per year) metric, especially as it pertains to finding a player’s overall value (term & guarantee generally drive the process), but in a league like MLB that utilizes a luxury tax payroll that derives from the average salary, it’s at least in consideration.
MLB’s Highest Tax Salaries
1. Shohei Ohtani, $46.08M (10 years)
2. Zack Wheeler, $42M (3 years)
3. Aaron Judge, $40M (9 years)
4. Jacob deGrom, $37M (5 years)
5. Gerrit Cole, $36M (9 years)
It’s important to make note of the contract length here, as it’s the dividing factor that gives us the APY. Generally speaking, the top APY contracts in MLB have come from shorter term deals. Judge was able to sneak an extra year out of the Yankees, but if Soto is in consideration for a contract of 13-15 years, we’re talking about an historic combination of length & substance.
MLB’s Longest Active Contracts (APY)
1. Fernando Tatis Jr.: 14 years ($24.2M)
T2. Bryce Harper: 13 years ($25.3M)
T2. Giancarlo Stanton: 13 years ($25M)
T4. Julio Rodriguez: 12 years ($17.4M)
T4. Mike Trout: 12 years ($35.5M)
T4. Mookie Betts: 12 years ($30.4M)
T4. Yoshinobu Yamamoto: 12 years, ($27M)
Again, we see very little evidence that MLB teams have been willing to go mega-long-term with a mega-APY simultaneously. The obvious comparable here is Mike Trout, who signed his 12 year, $426.5 million extension back in March of 2019. Let’s break that down a bit:
The CBT threshold in 2019 was $206,000,000.
The CBT threshold in 2025 is $241,000,000.
This represents a 17% increase.
If we tack that 17% onto Trout’s $35,541,667 APY, we’re given a $41,584,000 figure. Trout signed for 12 years, so Soto would be looking at a 12 year, $500M contract in this comparison. But it’s largely expected that Soto’s free agent deal will come in at the 14-15 year range.
Will MLB teams be willing to keep this type of historic APY at that length? It only takes one, and on Day 1 of the 2024 offseason, it’s been reported that 11 teams have already reached out with interest in discussing a contract for Soto. That’s almost 40% of the league.
Generally speaking, especially as it pertains to free agency, we’re inclined to dial back a valuation or prediction that can often be “hot-stoved” out of proportion. But that’s just simply not the case here. The mathematical values come in (clearly) low because we simply don’t have enough variables that carry the age & across-the-board production that Soto brings to the table this winter. So in light of this, we’re going to buck our usual trepidation - and predict BIG.
A Final Prediction
Juan Soto is barely 26 years old (October 25th), and he’s already earned $82.3M on the field - without ever signing a multi-year contract. Ohtani’s 10 year contract takes him through his age 38 season, and guarantees him $742.2M of career earnings when it’s all said and done.
For Soto to eclipse this, he’ll need a contract that amounts to $660M in total value. If we align the landing age (38) with Ohtani, this would mean a 13 year contract for Soto, or an APY of $50.7M. A 14-year contract would chime in at $47.1M, running through his age-39 season, while a 15 year deal would mean a nice, clean APY of $44M, making Soto 40-years old at its completion. But we’re going to zag here at the final hour:
Ohtani’s deal exists because of an insane amount of deferred compensation ($680M). Soto and his super agent Scott Boras aren’t expected to agree to something that drastic, but it would be reckless to assume that deferred payments won’t at least be a conversation during this free agent negotiation process. So here’s our final offer, all elements included:
