Will Smith Is the Latest Dodger With a Deferred Deal

Mookie Betts, Shohei Ohtani, and Yoshinobu Yamamoto stroll into the Dodgers clubhouse in 2032, the place… they’re greeted by Will Smith. There’s no punchline to this setup as a result of it’s not joke, because the All-Star receiver has joined these different three Dodgers in inking a deal that’s at the least a decade lengthy. On Wednesday, the day earlier than his twenty ninth birthday, Smith agreed to a 10-year, $140 million extension.

Smith has already helped the Dodgers win a World Sequence and established himself as one of many recreation’s preeminent catchers. He’s second in WAR amongst catchers since 2019, the 12 months he debuted, together with his 15.8 WAR trailing solely the 19.8 WAR of J.T. Realmuto, who took almost 500 extra plate appearances over that very same stretch. He’s tops amongst all catchers for the 2021–23 stretch with 12.9 WAR, a span over which he and Realmuto (who had 12.6 WAR) had almost an identical PA totals. Although he nonetheless had yet one more 12 months after this one earlier than changing into eligible free of charge company, he and the Dodgers had needed to hammer out a long-term deal for some time, a lot in order that based on MLB.com’s Juan Toribo, the 2 sides had engaged in extension discussions “every of the previous few seasons.”

Smith is coming off an admittedly uneven season. Although his 119 wRC+ was the bottom mark of his five-year profession, he posted his second-highest WAR (4.4). He hit .261/.359/.438 with 19 homers in 554 plate appearances, however tailed off after a scorching begin:

Smith made his first All-Star staff (!) on the energy of that first half, however even then, all wasn’t fairly nicely. On April 12, he suffered a concussion when a foul ball hit his masks and missed two weeks of motion. Three days after returning, on April 30, he was hit by a Jake Woodford sinker. He suffered a damaged rib and an indirect pressure however performed by way of them, and doing so created some dangerous habits as regards to his mechanics. From a September 22 piece by Jack Harris within the Los Angeles Occasions:

As a substitute of his usually easy, compact inside-out swing, Smith mentioned his bat path has been too “out to in” recently, resulting in extra whiffs and mis-hits on pitches he used to crush.

He mentioned his entrance aspect is opening up an excessive amount of, inflicting him to chop throughout the ball as a substitute of driving it together with his simple pop.

… Added [manager Dave] Roberts: “There was most likely just a little little bit of guarding [the injury] initially after. After which whenever you’re speaking concerning the rib, the indirect, that form of dovetails into some modified mechanics.”

Notably with the Dodgers’ consciousness of his stoop, the staff most likely ought to have dialed Smith’s workload again a bit greater than it did; he matched his 2022 whole of 106 begins behind the plate however DHed solely 14 instances, in comparison with 25 the 12 months earlier than. He had sufficient success in ironing out his mechanics that he went 5-for-12 with a double and a triple within the Dodgers’ three-and-out Division Sequence loss to the Diamondbacks, and he’s off to a 6-for-14 begin this 12 months, so there’s no cause to suppose he’s completely damaged.

As for the contract, it’s the longest ever for a catcher, surpassing the eight-year extensions of Joe Mauer, Buster Posey, and Keibert Ruiz, who got here up within the Dodgers’ system, typically a stage behind Smith, earlier than being traded to the Nationals within the Max Scherzer blockbuster in 2021. Smith’s deal isn’t almost as profitable as both the Mauer or Posey ones for $184 million and $167 million — and that’s with out adjusting for inflation, as each of these have been signed greater than a decade in the past. When it comes to unadjusted common annual worth, Smith’s $14 million a 12 months ranks simply twelfth amongst catchers traditionally and fourth at present, based on Cot’s Contracts. On an annual foundation, that $14 million common involves solely about 60% of the $23.1 million that Realmuto, the sport’s highest-paid catcher, is making.

That AAV requires adjustment, nevertheless, as a result of as with the Ohtani and Betts offers — and people of Freddie Freeman and Teoscar Hernández, as long as we’re as regards to the Dodgers — a major quantity of the cash is deferred. In his case, it’s $50 million, with the staff paying out $5 million a 12 months from 2034–43. That reduces the AAV of Smith’s deal to $12.24 million for Aggressive Steadiness Tax functions, about 53% of what Realmuto (who himself deferred half of his $20 million 2021 wage) is making.

Construction-wise, based on MLB.com’s Mark Feinsand, Smith will obtain a $30 million signing bonus — half payable on November 15, the opposite half on January 15 — and be paid $13.55 million this 12 months (changing the one-year, $8.55 million contract he signed in January), then $13 million a 12 months for 2025–27, $9.5 million for ’28-32, and $9.95 million for ’33. That’s a cool breeze working by way of Guggenheim Baseball Administration’s checking account; in 2028, Betts will likely be taking dwelling greater than 3 times as a lot ($30 million), and Yamamoto almost that ($26 million). Whereas he doesn’t have specific no-trade safety, he’ll attain 10-and-5 standing in mid-2028, and his contract has one different provision that protects him: If he’s traded, the deferred cash turns into payable in season, which means that the buying staff will take a bigger CBT hit except the 2 sides conform to an identical association.

Even given the size of the deal, ZiPS is surprisingly optimistic about Smith. Through Dan Szymborski:

That’s 23.9 WAR over the lifetime of the contract, with 17.1 WAR within the first half of the deal, a really sturdy return. The truth is, the ZiPS advised contract for this projection is $164 million over 10 years, however as soon as the deferred cash is accounted for, the Dodgers are paying him the equal of about 75% of that in current worth. It is a superb deal for them, and if it looks like Smith is getting the brief finish right here, it’s simply that the 2 sides have discovered a mutually advantageous manner of structuring the funds. To those eyes, the way in which it makes essentially the most sense is to consider that signing bonus and the upper salaries of the primary 4 years as one deal that with out deferrals averages out to $20.6 million a 12 months over the subsequent 4 years (which might be the second-highest AAV for a catcher, surpassing Salvador Perez’s $20.5 million), after which about $9.6 million per 12 months for the final six, rather less than the $10.15 million James McCann is making as a well-compensated backup.

Notably within the wake of the Ohtani contract, I’ve seen complaints that the Dodgers’ penchant for utilizing deferred cash is in some way a subversion of the Aggressive Steadiness Tax system — as if that have been sacrosanct — and due to this fact dangerous for baseball. I don’t discover this notion significantly convincing. The league and the house owners knew precisely what they have been doing after they designed this technique; as former MLBPA government subcommittee member Collin McHugh advised The Athletic just lately, “They’re higher at discovering loopholes within the system as a result of that’s their job, to maximise revenue” for the 30 house owners. Does anybody on the market really suppose that even essentially the most miserly of the multimillionaires and billionaires who personal groups obtained filthy wealthy with out understanding the time worth of cash and the benefits, tax-related and in any other case, of spreading out massive funds? The idea permeates our society; not all of us are lucky sufficient to have socked away cash for retirement, however in some unspecified time in the future, most of us have been inspired to take part in a pension plan, 401k, or IRA that gives tax benefits and spreads out our earnings to compensate for lesser earnings down the highway.

As for the gamers and house owners, in December the Wall Avenue Journal’s Linsdey Adler and Richard Rubin reported that the house owners have proposed limits on the quantity of wage that may be deferred, with one 2021 proposal together with a full ban, however the MLB Gamers Affiliation rejected the concept. Understandably, they haven’t any incentive to surrender that proper with out receiving main concessions in return. Perhaps they’d conform to forgo deferrals if the house owners have been to permit gamers to achieve eligibility for arbitration and/or free company extra rapidly, however everyone knows that’s not taking place anytime quickly.

Anyway, it’s not just like the Dodgers, who now have $915.5 million value of deferrals on their books for the salaries of Betts, Freeman, Hernández, Ohtani, and Smith, are doing this whereas avoiding paying the CBT. They’re nicely previous the fourth-tier threshold of $297 million, and determine to be paying taxes yearly for the foreseeable future, with more and more steeper penalties and the chance of an rigid roster; it’s hardly inconceivable that a few of these contracts might go south and trigger the Dodgers complications down the highway. As for Smith, he’s now obtained a good-looking deal that rewards him for his place as a part of the staff’s basis, with safety from the cumulative impression of so many innings behind the plate. Good for him, and good for the Dodgers.