Five Takeaways of the Marin Perez Extension

Perez
This week the Rangers signed Martin Perez to a win-win contract extension that includes club options through what would be his first two years of free agency. If all options are picked up, the total value of the deal would be $32.5 million over seven years. Here are five key takeaways of this deal.
1. Texas is (still) a big market club operating with small market efficiency

The Rangers essentially copied the Tampa Bay Rays blueprint on this deal. Two years ago, the Rays signed their own stud prospect left-handed pitcher Matt Moore to a five-year, $14 million deal with three club options years at the end of it. Perez’s deal is four years, $12.5 million with three club option years tacked on.

Tampa Bay has successfully signed its key players to these kinds of extensions for several years now, twice doing it with Evan Longoria. Because of their market size, the Rays have to do this. The Rangers, on the other hand, opened 2013 with a payroll more than double Tampa Bay’s ($128M to $57M), and that gap is only likely to increase in the future. Texas has the budget and a new TV contract that starts in 2015 that says they don’t have to do these kinds of deals.

However, Texas is using the innovation created in the small market inefficiency, and leveraging it at the big market to not only gain an advantage on teams like Tampa Bay, but also against other big market teams. This contract puts the Rangers in a position to fill a future key role at a low price to allow for bigger expenditures and, if necessary, overpays in other key areas.

Starting pitching is always the most expensive commodity on the market, whether in free agency or in trade negotiations. Now, look at how the Rangers starting pitching lines up for the next several years. Try not to drool all over your space bar. It’ll get sticky. 

Picture

2. This won’t be the last deal we see the Rangers sign like this

This deal is all about risk placement. As the larger entity, the Rangers can take on more risk than Perez can. Texas is taking on a minimum of $12.5 million over four years. That is a very modest amount of risk for a ball club. However, Perez couldn’t take the risk of not signing a contract extension like this and suffering an injury or diminished performance that severely impacts his earning potential. Perez may be foregoing tens of millions of dollars by signing this deal, but he is also securing that $12.5 million. If the choice is $12.5 million or possibly nothing at the snap of a ligament, the answer is obvious.

So Texas essentially moneywhipped Perez into a very club-friendly deal, but that makes it no less player-friendly too. It’s a win-win for a player the club believes in.

This makes three straight offseasons that Texas has locked up a young player to a long-term deal. Perez joins Derek Holland and Matt Harrison and Elvis Andrus in a group of young players under team-friendly club control.

Should Jurickson Profar remain a Ranger through the 2014 season, it would not be surprising at all for Texas to sign him to a similar contract extension. And he still wouldn’t be the last one. It’s almost impossible for a team to get burned by these types of deals.

3. Prospect development isn’t always linear

The prospect hype on Perez was at its height after the 2009 season, when he earned a promotion to Double-A Frisco as an 18-year old on the accolades of a 2.31 ERA in Single-A Hickory. In 2010, he stayed in Frisco for the whole season, posting a 5.96 ERA. In 2011, he once again began the year in Frisco, but this time improved to a 3.16 ERA in 16 starts, before being promoted to Triple-A. There, he struggled, finishing his last 10 starts of the year with a 6.43 ERA. And in 2012, he didn’t light up Triple-A, yielding just a 4.25 ERA on 4.9 SO/9 and 4.0 BB/9.

After his meteoric rise to top prospect status as an 18-year old, Perez really wasn’t that special the rest of his time in the minor leagues before winning a job in Spring Training (until a broken arm set him back) and being called up to the big leagues in 2013.

But here the Rangers are putting their money where their mouth is in their belief in Perez.

4. The Rangers don’t think Perez’s 2013 was a fluke

Despite a 3.62 ERA over 124.1 innings and overall rock star performance in his rookie campaign, there are still warning signs with Marty P. His strikeout rate decreased with each level he progressed to in the minor leagues, going from 10.1 SO/9 in Single-A ball, to 8.3 SO/9 in Double-A, to 5.7 SO/9 in Triple-A, and in 2013 he posted a 6.1 SO/9 rate in the big leagues.

In fact, Martin Perez’s 2013 stat line looks nearly identical to Matt Harrison’s 2012 stat line.

Perez, 2013: 6.1 K/9, 48% GB rate, 4.23 FIP, 4.04 xFIP

Harrison, 2012: 5.6 K/9, 49% GB rate, 4.03 FIP, 4.13 xFIP

While strikeouts in the game have increased dramatically in the past several years, the Rangers have invested themselves into two decidedly not-strikeout pitchers who rely on generating ground balls. Considering the infield defense that Texas supplies behind its pitching, it is obvious why that strategy can lead to a recipe for success.

5. The core of the Rangers is changing

When the Rangers began their rebuild of the ball club in 2007, one of the keys to that rebuild was to assemble a core to the team and lock it down for years to come. That core ended up being primarily Michael Young, Ian Kinsler, Elvis Andrus, and Josh Hamilton.

Look at any World Series champion from the past several years, and it’s obvious a core exists on that team. A core is the foundation to which free agent acquisitions and trade deadline moves can be added to put the team over the top. The core is key.

Because of the importance and success of that “original” core, it’s often difficult to adjust my thinking to embrace the new core.

Now Young and Hamilton are just fond memories of 2010 and 2011 past, and Adrian Beltre has supplanted them in the core. And Leonys Martin. And Yu Darvish. And Derek Holland. And Matt Harrison. 

This core of the Rangers keeps evolving. It’s growing, getting younger, and continues to be one of the biggest strengths of the club. Having that core in place means the Rangers are legitimate candidates to sign Brian McCann, and will be one of the few teams who are going to be looking to add impact pieces next July before the trading deadline.

Welcome to the core, Martin Perez. 

Peter Ellwood is a Senior Staff Writer for Shutdown Inning. You can email him at Peter.Ellwood@shutdowninning.com or reach him on Twitter @FutureGM
Peter Ellwood

Leave a Reply