Grant Brisbee has a good article that sums up my feelings on the unique contract the Royals recently gave catcher Salvador Perez.
In case you haven't read about it, what's significant is that Perez is very young (21) and has almost no service time. He doesn't have a terribly exciting minor-league record, either, and was never really regarded as a top prospect. He hit .331 in 158 plate appearances with the Royals last year, but that doesn't mean much -- his minor-league record indicates he can hit for a bit of average, but nothing like that. The Royals gave him five years and $7 million, and then there are cheap team options for three more years.
I'm not sure whether the Royals should feel great about this, or ridiculous. I'm sure Perez feels great (seven million dollars!), but I'm not positive his agent shouldn't feel ridiculous. From the Royals' perspective, this all comes down to scouting. They must feel Perez has a great shot at becoming a decent regular, and they might be right, especially if Perez is able to make good on his reputation as a good defensive catcher. It's easy to say, 'Eh, it's only $7 million,' but that's actually a fair amount of risk, since if Perez suffers a serious injury, or forgets how to hit a curveball, or just generally flames out (as players with his pedigree often do) anytime in the next three years, the Royals would have been able to let him go, having paid him almost nothing.
Anyway, here's Brisbee:
I have no idea if this is a good idea. Seems like it. But it's probably a little above my head, all this contract talk. It still fascinates me. And I wonder if it's going to kick off a trend, or if we're going to realize quickly that one side really hosed the other, and that will be the end of that little fad.
Right. We often see teams give young players long-term deals, but we don't often see them do it with players who are this young and this unproven. The Pirates gave one to Jose Tabata last year, of course, but Tabata is practically a grizzled vet compared to Perez, and Tabata was much more highly regarded as a minor-leaguer.
I'm not sure about Perez in particular, but my guess is that despite the risks, the Royals are on to something here. By the time a player like Perez gets to the big leagues, most of the baseball world won't know much about him, but the team that controls his rights certainly should. They'll get to sign the player when the player's personal level of uncertainty about his future in the majors is quite high, and his financial incentive to sign his life away for $7 million is great. Given how cheap the options are ($3.5 million, $5 million and $6 million, the last two of which would be free agent years), the Royals only need to get a contract like this right one out of every three or four times to come out ahead in the long run.
To suggest any particular player the Pirates might do this with would obviously be pure speculation, but as a hypothetical, let's take the case of Kyle McPherson. McPherson isn't a top prospect, but he has put up good numbers, and it's obvious that the Pirates like him, because they put him on the 40-man roster after the 2010 season. He was a 14th-round draft pick in 2007, so he probably isn't sleeping on a bed of cash. If he comes up at midseason in 2012 and handles himself reasonably well, that would make his situation very roughly comparable to the one the Royals had with Perez. What do you think? Would you sign McPherson to a $7 million contract in that scenario? And please don't say, 'Sure, why not?' $7 million is not 'why not?' money, even if you're the Yankees. And keep in mind, as some in the comments have already, the risk in signing a pitcher, as opposed to a catcher, to a deal like this.