Cubs working on extension with Starlin Castro

According to Dave Kaplan, the Cubs are working on a long-term contract with Starlin Castro.

With the focus of the Cubs management team of Theo Epstein and Jed Hoyer clearly on a long term plan of overhauling the Cubs organization, nearly every move they have made since taking control of the team has been with a vision towards the future.

With that approach in mind, two industry sources who have represented several MLB players over the past decade confirmed to me tonight that the Cubs are working on a long term deal for star shortstop Starlin Castro.

The deal, which could be six or more years in length, is expected to be finalized before the end of the 2012 season and would not only buy out the remaining arbitration years that Castro has, but at least two years of free agency which he will reach after the 2016 season.

Castro enters next year being eligible for arbitration for the first time. Since he’ll be a super two he’ll have 4 years of arbitration before he can reach free agency. It’s unlikely any contract would be shorter than 5 years so 6 years or longer makes a lot of sense. What might it cost the Cubs to sign Castro that long?

I’m on my iPad at the moment so I’m not going to break out the spreadsheet or consult the projections. I want to work through this “out loud” and get your thoughts.

Let’s start with a 3-WAR projection in 2013 and increase it by .5 each year for 4 years and then decrease it by .5 the final 2 years. That’s 22.5 WAR.

We’ll star the win value at $5.5 million and increase it by $0.5 million each year.

2013: 3 WAR, $5.5 million/W, $16.5 million $WAR
2014: 3.5 WAR, $6 million/W, $19.5 million $WAR
2015: 4.0 WAR $6.5 million/W, $26 million $WAR
2016: 4.5 WAR, $7 million/W, $31.5 million $WAR
2017: 4.0 WAR, $7.5 million/W, $30 million $WAR
2018: 3.5 WAR, $8 million/W, $26 million $WAR

That’s a total of $149.5 million. That’s what we’d be looking at if he was a free agent, but Castro is 4+ years away from that. In arbitration salaries he’s probably looking at something like $3 million next year followed by $6 million, $10 million and $15 million. If the Cubs went year to year they’d probably pay around $34 million over the next 4 years and Castro would then enter free agency worth $56 million over the first year years after free agency. Add it up and get $90 million.

The Cubs won’t be paying full price. The entire point of taking the risk of signing a pre-arbitration or free agency player is to get them at a discount. If the Cubs have to pay $90 million they’ll just go year to year. How much of a discount? I’m not really sure, but I wouldn’t go 6 years unless you get at least a 30% discount. Teams already get a 10% discount on contracts longer than 3 years. A 30% discount would be 6-years and $63 million.

Personally, I’d shoot for somewhere between 30% and 40% off so take another $5 million off and you get $58 million over 6 years. Castro is coming off the worst offensive season in his career so I might even be tempted to reduce it further.

What do you guys think?