Revisiting Eric Hosmer’s Big Financial Future

Eric Hosmer has become the superstar we all thought he would be when he came up to the big leagues in 2011. If you don’t believe me, just read this article about it. In the midst of the hot start he’s had to the season, many have pointed out that Hosmer started the 2015 season in a similar way to (and maybe even better than) this season. Of course, after Hosmer’s start to the 2015 season (.333/.410/.574 with 7 HR and 29 RBI in 36 games), he hit .233/.285/.289 with 1 HR and 13 RBI over his next 43 games.

It was the vaunted Hosmer slump. If you’ve followed the Royals for any length of time, you know that basically every year, Eric Hosmer looks like one of the best hitters in baseball for a decent length of time. You start to think he’s become the player we all thought he’d be and then he rolls over everything and hits ground balls to the second as it’s an incentive in his contract. If you were wondering, he came back from that slump to hit .314/.381/.495 in the final 79 games to give him his best offensive season to date.

So this year, Hosmer has the great start, some guy calls him a superstar on this very website and then he kept hitting. He was hitting home runs, doubles and all that. It was quite an impressive display. The homers were among the longest in baseball, so you felt good about him keeping that up. And then the slump started. It was pretty quiet when it began. He hit home runs in each of the first two games of the series with the Red Sox, but then hit a gentleman’s .103/.100/.138 over his next seven games. He didn’t walk. He struck out 11 times. He looked somewhat lost at the plate. The Hosmer Slump had begun.

Only this year, a funny thing happened. The Royals came home and the slump was over. On Friday night, Hosmer went 3 for 4 with a home run and 4 RBIs. On Saturday, he went 2 for 5 with a double and 2 RBIs. On Sunday, he went 3 for 4 with a double and an RBI. On Monday, he went 2 for 4 with a home run and 3 RBIs. Last night, he went 3 for 5 with a double and 2 RBIs.

You can imagine my confusion. Hosmer slumps were supposed to last for weeks, not a week. But here we are, Hosmer is back to hitting like crazy. Some have come to the conclusion that he’s an MVP front runner. I don’t agree with that necessarily. I think he’s probably behind guys like Manny Machado, Xander Bogaerts and Robinson Cano among some others at this point, but his offensive numbers would put him in the conversation. And not to get too far ahead of ourselves because it is only June 1, but if he keeps this up and leads the suddenly ragtag Royals to the playoffs, that storyline will be pretty juicy for the writers to grab ahold of.

So anyway, the point of this article wasn’t to sing Hosmer’s praises, but to revisit what he might get on the free agent market or in an extension after the season from the Royals.

I know a lot of people don’t believe the Royals have the financial firepower to sign a guy like Hosmer, and it seems like it’s been a foregone conclusion for awhile that he would be leaving for greener pastures, but I’m not entirely convinced that’s accurate. I mean, yes, I would absolutely take the field over the Royals if you were asking me to bet who he’d be playing for in 2018, but I think the Royals have a better chance than people realize. Better doesn’t mean good, but it is better.

So let’s look at the facts. Hosmer is an extremely marketable and likable player who will hit his free agency season entering his age-28 season. He’s a postseason hero (though the numbers are way more pedestrian than you’d guess by his 29 RBIs in 31 games). He’s an elite defender at first base. He’s also a first baseman, which is the easiest position on the field to defend. That’s not to say that the Royals don’t benefit greatly from him and that it’s not important, it’s just that it’s not that hard to find a first baseman. And it’s also fair to point out that he’s never hit 20 home runs from a power position on the field (though I think that changes this year given his lofty output already).

Now let’s look at some other contracts around baseball. In 2017, the top eight salaries in baseball are as follows:

Clayton Kershaw: $35,571,428
Zack Greinke: $34,000,000
David Price: $30,000,000
Justin Verlander: $28,000,000
Miguel Cabrera: $28,000,000
Yoenis Cespedes: $27,083,333
Felix Hernandez: $26,857,142
Albert Pujols: $26,000,000

Five of the eight contracts are pitchers, so they don’t have a huge impact on Hosmer’s potential deal outside of how much teams want to invest in a first baseman when pitching is so expensive. The first non-pitcher is the first 1B on the list, Miguel Cabrera. I think it’s fair to say Hosmer won’t be making more than Cabrera’s $28 million salary, so now we have something higher than our ceiling.

Now let’s take a gander at some of the other first basemen in baseball and what they’ll be making in 2017:

Cabrera: $28,000,000
Joe Mauer: $23,000,000
Hanley Ramirez: $22,750,000
Adrian Gonzalez: $22,357,142
Joey Votto: $22,000,000
Chris Davis: $21,118,782
Freddie Freeman: $20,859,375
Ryan Zimmerman: $14,000,000
Jose Abreu: $12,166,667

Those are the first basemen who will make eight figures in 2017. Of course, some of the best aren’t listed above because they signed deals early in their career like Paul Goldschmidt and Anthony Rizzo. I also didn’t include Ryan Howard’s $23 million option because there’s no way he’s making that in 2017.

And now, let’s take a look at some free agent contracts (or extensions) signed by first basemen.

We’ll start with Chris Davis. He hit free agency heading into his age-30 season and ended up signing a deal for seven years and $161 million. It’s equal distribution throughout the deal. Davis is a very different hitter than Hosmer. In his four years prior to signing the deal, Davis hit 159 home runs. That’s not quite double Hosmer’s career total, but it’s closer to double than it probably should be. He’s also very, very good defensively and can be put in the outfield in a pinch and not kill your team. He has his drawbacks, too. He strikes out a ton, has had a recent season where he hit under .200 (2014), and was even suspended during that year.

Let’s move on to Joe Mauer. He signed his deal as a catcher, but it’s an interesting one anyway because of when he signed it. It was signed prior to being eligible for free agency. He had already signed a deal prior to the 2007 season, so he didn’t go through arbitration in 2010 like Hosmer would in 2017, but that’s okay. His deal was eight years and $184 million. Like Davis, the deal is spread out evenly for $23 million per season. He signed the deal coming off an MVP season where he hit .365/.444/.587 with 28 homers and was playing gold glove defense behind the plate. He had to move to first because of concussion issues and, as we all know, hasn’t been quite the same since, though he was very good for the first two years of the deal. He was also heading into his age-28 season.

Mauer was obviously the far better player to Hosmer prior to his deal and wasn’t even a first baseman when he signed it, but the other parallels were interesting enough for me to include it here.

And finally, let’s look at Brandon Belt, who signed an extension prior to this season. Belt is older than Hosmer, has an injury history and has less service time, so it’s not a perfect comparison, but their numbers are fairly comparable. Heading into his third year of four in arbitration, he signed a new deal that would pay him $79 million over six seasons. His four free agent seasons will pay him $16 million per year. Prior to this season, Belt had been the superior offensive player to Hosmer. But again, he’s older, has more of an injury history, and signed the deal with less leverage.

Now we can get into the numbers. We know he’s not getting $28 million per year unless he signs a short-term deal. I don’t really see him wanting a three-year contract, so we can rule that out. He’s definitely getting more than $16 million per year. I think that $23 million per year is probably about right for him. So let’s say he plays out his final year in Kansas City and hits free agency following two fantastic seasons. I mean, we have to make some assumptions here since my crystal ball is in the shop.

I’d say an average salary of $24 million is what he’d shoot for, and assuming he has the seasons we’re assuming and stays healthy, I think he should be able to get. So I’d look for something like a seven-year deal for $168 million. The opt-out is all the rage, so maybe it’s after three years and $66 million or something like that. I’m not sure the Royals should pony that kind of money up. It would be a different story if they could develop some pitching, but they’ll need the money.

Now that we’ve assumed 7/168 makes some sense as a free agent, what would it take for the Royals to keep him?

If they sign a deal prior to the 2017 season, they’d have to include his final year of arbitration in the deal. He’s making $8.25 million this year, which I think would balloon in his final year of arbitration since they can compare him to free agents in the final year. I’d guess the deal is around $14 million.

Knowing that we have a $14 million year to start with, let’s structure the deal over seven seasons including that deal. That takes Hosmer through his age-33 season, which is right around the end of his peak years. We already have the $24 million number set, so let’s look at that.

2017 – $14 million
2018-2023 – $24 million each

That’s a grand total of seven years and $158 million, which is pretty close to what I had mentioned prior to the season. I don’t think it’s insane to think they could do it, but I’m not sure that’s a deal they should do.

The Royals payroll structure is a little bit weird right now anyway. In 2018, the Royals have a lot of money tied up in Alex Gordon and potentially Ian Kennedy if he doesn’t opt out. The same is true of 2019, and you can even add Yordano Ventura and Salvador Perez’s deal to that. So what if they backloaded it?

Think about it. We’ve talked about the television deal forever. It’ll be here in 2019 (hopefully the TV bubble will still be intact). Maybe the Royals can structure a deal like this:

2017 – $14 million
2018 – $17 million
2019 – $17 million
2020 – $29 million
2021 – $29 million
2022 – $26 million
2023 – $26 million

There’s seven years and there’s $158 million. I have a hard time believing the Royals will pay $29 million in a season for a guy and have a harder time convincing myself they even should.

But what if you defer some money? This is where it would take some compromise, and that’s difficult to assume, but what if they offered him a deal for seven years and $161 million so he gets Chris Davis money but with the inclusion of an arbitration season? Then you take $30 million of that and you pay it out over 10 years after the deal or something along those lines. It’s a little weird, and none of the parties involved may be willing to do it, but how would that look?

2017 – $14 million
2018 – $16 million
2019 – $17 million
2020 – $21 million
2021 – $21 million
2022 – $21 million
2023 – $21 million

It would be a tough pill to swallow to pay $3 million per year for 10 years to a guy who may not even be on the team, sure, but to keep him in the fold for the long term, it may be worth it. If anything, this exercise shows just how difficult it would be to keep Hosmer in Kansas City, even though it’s something that it seems both parties would like to do.

My words of advice to you are to enjoy the new, peak Hosmer while you can. I truly could see them working out a deal. Maybe he’s even willing to give a little bit of a discount because he loves Kansas City and this team. Who knows? I wouldn’t count too much on that, but stranger things have happened. What I do know is that it’s awfully fun to watch this guy right now and maybe he can help give the Royals a couple more flags before we have to worry about his next contract.