The Cincinnati Reds went out this offseason and made a big splash. Then another one. Then they went out and made a few smaller splashes. In total, they brought in free agents Mike Moustakas, Wade Miley, Pedro Strop, and the subject of today’s article – Nick Castellanos. A team that has approached free agency like it had cooties, the Reds finally decided to try and utilize all of the ways available to them in order to improve their team and hit free agency with Redszilla shooting piles of cash at players.

One of the bigger bats on the market, Nick Castellanos was coming off of a season where he hit .289/.337/.525 between Detroit and Chicago – but it was his time with the Cubs that really showed what he was capable of. After joining the Cubs and getting out of Comerica he hit .321/.356/.646. His 21 doubles and 16 home runs in just 51 games showed off the big power he had, and those 21 doubles combined with the 37 he had already hit in Detroit gave him a Major League best 58 on the season.

Those numbers gave the Reds confidence in offering him a four year deal worth $64,000,000. The contract, however, isn’t spread out evenly when it comes to money, and there are two different option years involved, too. In 2020 he’s under contract for $16,000,000 and there’s an opt-out following the year. In 2021 he’s under contract for $14,000,000 and he has a second option year. Then in both 2022 and 2023 he’s under contract for $16,000,000. There’s also a potential fifth year at $20,000,000 for 2024 that is a mutual option year and contains a $2,000,000 buyout.

When the deal was first announced there were more than a few who felt that this deal was eventually going to turn into a 1-year contract. The reasoning was quite simple: Put Nick Castellanos in Great American Ballpark for a season at age 28 and he’s going to rake. And if and when he does, he’s going to opt out following the season and try to cash in even more in free agency.

But then the world was set on fire with COVID-19 and we are in a spot where the future, both for the 2020 baseball season and for our own lives, is very uncertain. Last week the Major League Baseball Players Association and Major League Baseball came to an agreement on many things for the 2020 season, whether it’s even played or not.

However, even if the season is played in some manner during 2020, things are going to be a lot different now. And that isn’t just about if they will be playing baseball in front of fans in the crowd or if the stadiums will be empty until we have a way to treat this virus in a way that makes large gatherings an acceptable thing to once again allow.

But when it comes to the Cincinnati Reds and Nick Castellanos, this situation may very well mean that he’s going to be sticking around beyond 2020. The season, even if it happens, is going to bring in less revenue for the teams. If they aren’t allowed to have fans in the stands, that’s going to cut off tens of millions of dollars from every team in baseball.

What that likely means is that teams aren’t exactly going to be heading into free agency this winter all that willing to spend boatloads of money. On top of the fact that they lost a lot of expected revenue in 2020, the likelihood of a more depressed economy moving into 2021 and a possible uncertainty about what they can expect fans to do in the next season as they may have to cut off some expenses of their own. The uncertainty in all aspects probably just leaves teams being very careful with the kinds of deals they are handing out.

If you are Nick Castellanos, are you going to turn down a 1-year deal for $14,000,000 for next season, that will also include another guaranteed $34,000,000 beyond that if you want, to try and cash in facing that sort of situation? Or are you going to return to Cincinnati with a lot of money on the table and see what happens all while knowing you can opt out after the 2021 season if things look a lot better in the market? It seems like a rather easy decision right now, doesn’t it?

8 Responses

  1. Tom Mitsoff

    Doug, I think you have captured the essence of what will happen in most, if not all, cases when players have options for next year. I heard a discussion (the source of which I cannot remember) in which it was suggested that the non-contending teams are going to be in full contract dump mode shortly after this season starts (if and when it does). The Reds and other contenders will have the chance to significantly beef up, depending on how much they are willing to add to 2020 (and beyond) payroll.

    • Tom Mitsoff

      There are a lot of variables we won’t know for awhile. For example, will stadiums, arenas, music halls, etc., be required to limit the numbers in attendance? Will they limit (voluntarily or by health department mandate) how close people can sit to one another?

      How long will it take before people feel comfortable going to such events and risking sitting close to someone who is a carrier? 2020 is going to be a bloodbath for all sectors of our economy, and sports will be no exception.

  2. RedsGettingBetter

    At this moment, it seems the case of Trevor Bauer is interesting too, in a point of view of if he will take the chance of free agency or maybe sign again with Reds chosing an likely qualifying offer… Desclafani’s situation may also be attractive, though the Reds would have to solve the possible dilemma about giving him a qualified offer or an extension.

    • JayTheRed

      I honestly feel that if players do opt out and try to get more they will fail to do so and end up probably having to take even less than they would have gotten from the team that had the rights to them before they opted out.

      As for Bauer I think he might try to stay here as long as they give him something either equal to or slightly more than he is making this season.

      DeSclafani I feel like he probably will get a 2 or 3 year deal maybe around 30 to 40 million. Or maybe 12 million for 21, 14 million for 22 and a club option for maybe 16 million. My numbers might be even a little high.

  3. BK

    I think your analysis is spot on. Revenues will be down dramatically this year even under the most optimistic of circumstances. Accordingly, most teams will lose money. A team like the Reds, one that operates with a goal of breaking even each year, will have far less to spend next year than anticipated. It’s likely that several teams will be in the same position. MLBPA put service time as their top goal in their latest deal with MLB. The question is will there be any money to sign free agents?

    Related, I wonder how many minor league teams will ultimately go bankrupt as a result of the pandemic. I think it is quite possible MLB and MiLB may find common ground on a smaller MiLB system.

    I would love to know why MLB and MiLB aren’t pushing to play games ASAP, even if in empty stadiums. Having the teams play in the Florida or Arizona spring training facilities would seem to offer a solution to travel. Finding ways to keep the teams largely sequestered together (lodging, meals, transportation, etc.) after a quarantine period could potentially negate the risk of spreading the virus among participants. If they wait, as they have said they intend to do, until they can play in front of fans, I think they will miss the 2020 season and incur losses that will impact subsequent seasons for multiple years.

    • RedNat

      I have the feeling it is the payers that are holding things up right now. they are at very high risk to catch the disease with close the close contact. athletes seem to be at higher risk of contracting it. Like Doug said, sports will resume When there is wide spread testing and effective treatment and or vaccine. I don’t think these players will take a risk otherwise unless it is purely on a volunteer basis

      • BK

        I don’t disagree with most of what you said, except players being more susceptible. On the field, there is very little contact in baseball and very little risk from my reading on this subject. The problem is essentially keeping the virus outside of the community and then having sufficient safeguards to protect the team (players, coaches, staff) and umpires. The close contact would be more likely at team meals, in the dugout or during travel. If the stadium is empty couldn’t player social distance in the stands, near the dugout? Use multiple busses to keep players more distant? Larger dining/individual meals to keep distance? Waiting for the old “normal” is certainly an option, but it may be a very long wait and result in a totally changed financial landscape for both players and owners. I am absolutely for not putting anyone at risk, but I would like to hear that all options have been explored. That’s something I haven’t read, yet. BTW, Japan and S. Korea are taking the approach I offered and we should know soon if it’s viable or not.

  4. Harish Vemuri

    Doug – I think I tend to disagree here. Analyzing to broader markets in general, when there is less cash available, those who have some on hand can buy assets at depreciated prices and make off like bandits.

    In this scenario, I think that big market teams will be at a distinct advantage. The box office revenues are a much smaller piece of their overall pie, and so they’ll be less impacted than a team like the Reds. Given that, if Castellanos has a great year (the sort of year that would normally earn him a $20M per year contract under normal circumstances), then he may leave anyway, as the Reds (or another small market team) wouldn’t be able to offer more than $14M, but someone like the Yankees might have the cash on hand to offer 15-16M, getting a discount for themselves but still giving Castellanos more than he would’ve had otherwise.

    Such teams may also be able to package several such deals together and offer the additional incentive of playing for a surefire contender.

    I might be wrong here, because you’re certainly right that prices overall tend to drop in a down economy, but that’s also when those people who do have capital on hand can collect valuable assets at down prices. I’m worried that’s what’ll happen to the Reds with Castellanos (and maybe Bauer)