The Risk of Giancarlo Stanton

The Miami Marlins have signed their star right fielder, Giancarlo Stanton, to the longest and richest contract in baseball history: 13 years, $325 million. The 25-year-old Stanton can opt out of the deal after the 2020 season. We don't know the details of the contract, i.e. how the dollars are spread around over the years, but I'll go out on a limb and say that at an average value of $25 million per year, he's going to be paid a lot of money every season. Stanton, who turned 25 earlier this month, was an All-Star and finished second in MVP balloting in 2014, leading the National League in home runs (37), total bases (299), slugging percentage (.555), and, in a statement both of his talent and that of the Marlins lineup surrounding him, intentional walks (24). He's tied for tenth all time in home runs through age 24:

Rk	Player	HR	From	To	G	PA	AB	R	H	2B	3B	RBI	BB	SO	BA	OBP	SLG	OPS
1	Eddie Mathews	190	1952	1956	732	3141	2634	497	735	119	24	492	471	443	.279	.388	.559	.947
2	Alex Rodriguez	189	1994	2000	790	3515	3126	627	966	194	13	595	310	616	.309	.374	.561	.934
3	Mel Ott	176	1926	1933	983	3978	3367	680	1059	195	31	711	537	258	.315	.412	.548	.959
4	Jimmie Foxx	174	1925	1932	810	3270	2750	612	923	159	57	667	460	377	.336	.432	.625	1.056
5	Mickey Mantle	173	1951	1956	808	3491	2944	642	907	136	43	575	524	578	.308	.412	.560	.972
6	Ken Griffey	172	1989	1994	845	3606	3180	518	972	194	19	543	374	477	.306	.379	.541	.920
7	Frank Robinson	165	1956	1960	735	3155	2741	501	818	145	27	449	321	427	.298	.380	.552	.932
8	Albert Pujols	160	2001	2004	629	2728	2363	500	787	189	9	504	304	279	.333	.413	.624	1.037
9	Orlando Cepeda	157	1958	1962	764	3220	2987	471	922	163	16	553	172	463	.309	.350	.532	.881
10	Giancarlo Stanton	154	2010	2014	634	2640	2288	350	619	138	8	399	318	742	.271	.364	.540	.903
11	Johnny Bench	154	1967	1972	782	3229	2887	421	781	142	12	512	288	470	.271	.334	.488	.822

Provided by Baseball-Reference.com: View Play Index Tool Used

Generated 11/18/2014.

As you can see, he got there in fewer plate appearances than anyone on the list (among players with 100 or more homers through age 24, only Mathews, Pujols, Bob Horner, and Willie Mays went deep more often than Stanton's 5.8% of plate appearances), and he's also struck out more than the others. 

The contract has resulted in predictable reactions.

• It's too much money. Yes, it's the biggest contract in baseball history in total dollars, but not in average annual value. Miguel Cabrera, Clayton Kershaw, Alex Rodriguez, and Justin Verlander are in contracts that pay them more than an average of $25 million per year, and the $25 million average equals the current contracts of Ryan Howard, Josh Hamilton, and Felix Hernandez. There are players whom one might view as more valuable than Stanton (Mike Trout and Andrew McCutchen, to name two), but Stanton's contract isn't out of line with those of the players on the $25 million-plus list.
• No, I mean, it's too much money for a player. Sports Illustrated's Joe Sheehan has pointed out that the share of baseball revenues going to player salaries has steadily declined since the turn of the century. Given that no teams were going bankrupt in 2000, and that fans would probably rather watch Stanton hit than watch his owner, Jeffrey Loria, count money, I can't see a problem with the players getting a bigger slice of the pie.
• No, seriously, we can pay a baseball player that much and we can't pay schoolteachers and firefighters? This argument will make sense when kids walk around wearing their teachers' replica jerseys and firefighters negotiate with regional sports networks to televise their rescues.
• Thirteen years is too long. There's no question that's a risk. But Stanton will be 38 when his contract ends. Cabrera's will pay him at least through age 40, possibly a couple years longer, depending on options that vest based on his MVP vote. Rodriguez is under contract through age 41. Same with Albert Pujols. It's a long contract, but not ridiculously long. 
• He won't age well. Stanton is 6'6", 240. One could easily see him slowing down as he ages, moving from right to left to, eventually, first. He's in the National League, so he can't become a DH. But here's the thing: Historically, players with "old player skills" (home runs, walks, strikeouts) tend to flame out relatively early. Stanton last year was first in the National League in homers, second in walks, and sixth in strikeouts. On the other hand, Stanton is a good athlete. He grades out as an above-average right fielder and was 13-for-14 as a basestealer in 2014. He's not just a slugger.
• His owner's crazy. Well, that's true. He's "the most hated man in Major League Baseball." The Marlins' payroll last year was $42.4 million, last in the majors. The average annual value of Stanton's contract equals nearly 60% of that total. It doesn't make sense to pay that much to one guy while doing everything else on the cheap. Is this indicative of a willingness to spend? If so, the Marlins, who have a lot of promising young players, could contend. But we've been down this road before with Loria, when he added players after the 2011 season only to unload them after a disappointing 2012. But say this for Loria: His sins have consistently been of being penny-pinching, not profligate.

Rather, there are two things that I worry about with Stanton:

• Durability. Stanton's first full year in the majors was 2011. He played 150 games that year. He hasn't matched that total since. In 2012, he missed 39 games due to knee pain that required surgery in July. He also had oblique and shoulder injuries that year. He missed 46 games in 2013 due primarily to a strained hamstring but also with shoulder soreness and an ankle sprain. Last year he was healthy until September 12, when he was hit in the face by a Mike Fiers fastball in one of those can't-watch-it injuries, suffering multiple facial fractures. Hard tissue injuries (bones) tend to fully heal and are as much bad luck as anything. Soft tissue injuries (muscles, ligaments, tendons, cartilage) can be recurring. Toronto shortstop Jose Reyes, for example, has been on the disabled list five times, and day-to-day several other times, with hamstring problems. Stanton's been on the DL only twice in is career (the hit-by-pitch last year was in September, when teams don't bother disabling players), and he had a healthy 2014 until the Brewers' Fiers beaned him, but his record isn't scot-free. (All injury data from Baseball Prospectus.)
• Sustainability of revenues. The reason baseball revenues have grown dramatically in this century is television. With the proliferation of DVRs, consumers can record the programs they like and watch them when they want, fast-fowarding through the commercials. Sports are one of the few events consumers watch live. So they see the ads for beer and trucks and insurance while watching a game that they skip while watching sitcoms. That has made sports programming particularly valuable to advertisers and, therefore, for the networks that carry them. Additionally, TV broadcasting has shifted from national networks to regional sports networks (RSNs), like NESN in New England, YES and SNY in New York, and MASN in Baltimore/Washington. Teams have national contracts with ESPN and FOX, but they also have local contracts with RSNs that can dwarf the national contracts. Cable subscribers pay to have RSNs bundled with other channels. However, there's been a move to "unbundle" cable, letting consumers pick and choose the channels they want rather than the average of 189 that they receive now. Will your great aunt want ESPN, much less the RSNs, if she could pick her channels? And if she doesn't, and many others don't, what will happen to RSN revenues? The prospects for unbundling, as well as the savings it might yield, are unclear. But Stanton's contract assumes a stable economic model in baseball. In my role as a financial analyst, I've often said that Wall Street has a penchant for seeing a point and drawing a line through it. Baseball's doing the same thing with its current revenue mix. What works today may not in 2027, the last year of Stanton's contract.

Overall, I can't get too excited over Stanton's contract. Baseball's rolling in dough; might as well give it to a marquee player. I question what the Marlins have in mind longer term, and I worry about his injury risk, but the focus here's on the field of play anyway.