Though he won't be a free agent for another two seasons, there's been an awful lot of discussion about an extension for Chase Headley. To be fair, why wouldn't there be? Headley was the Padres' best player heading into 2012, and, after exiting out the other end of the season attached to a .276/.376/.498 line, a Gold Glove, a Silver Slugger, and a fifth-place Most Valuable Player finish, it was clear that he was one of the National League's best players as well. Unlike when Adrian Gonzalez was traded for prospects heading into 2011, the Padres, under new ownership and armed with a lucrative television deal, can actually afford to keep Headley. The questions isn't so much should they extend Headley as it is when should they extend him.
The Padres have made it clear, by virtue of not signing Headley to an extension yet, that they do not believe the time is now. (It's important to remember that this is not the same thing as not wanting to sign Headley to an extension ever.) Given they offered him just $7.075 million for the 2013 season before settling outside of arbitration for a little more than that, it's also clear they aren't much in the mood to pay him for the years they already have him for. Even that is understandable -- if Headley's value stays down a bit now, maybe the sting of a raise through an extension won't be as severe. There is a risk inherent to this tactic in the potential to make a player feel as if they aren't being treated fairly when their leverage is low. Given Headley filed for nearly $3 million more for 2013 than the Padres initially offered, it's possible the Padres have already reached that point with their star third baseman.
That's all hypothetical, though: Headley could have taken the Padres to arbitration and let his award-winning season do the talking for him. Instead, the two sides settled for $8.575 million -- you would think this at least means Headley isn't feeling any open animosity towards his employers. This leaves 2014, Headley's fourth and final year of arbitration, up in the air, but there is still plenty of time to work out an extension before that goes down, never mind before that season is up and free agency arrives.
The 2014 season is the key, because there is no fair extension for both sides that exists right now. Chase Headley's 2012 season fit in with the likes of David Wright, Ryan Zimmerman, and Evan Longoria, three of the very best third basemen, and all three owners of long-term contracts. The difference is that that Headley has two great years under his belt, while Wright has been in the league for nine years and has been excellent more often than not, Zimmerman has been around eight years, and Longoria, while owning the least amount of service time of the bunch, has been incredible from day one back in 2008.
As a result, at this point, and that difference shows up in the arbitration filings of the two. Arbitration figures tend to be an agreed-upon estimation of free-agent value. By year three of arbitration, roughly 80 percent of free agent value should be paid out. The $7.075 million San Diego offered Headley is only 80 percent of about $9 million per year. While something close to that might be a fair extension for the Padres to offer from their side, given Headley's limited track record, there is no reason for him to accept such an offer, even if it were attached to six or seven guaranteed years. Wright just signed an eight-year, $138 million deal. Zimmerman signed a second extension that kicks in for 2014, and that plus his 2013 salary will pay him $114 million over the next seven years. Between Longoria's two extensions, he has a 10-year, $136 million deal. Add that all up and divide by the number of years, and you get about $15.5 million per year for the game's premier extended-run third basemen.
The Padres would laugh if Headley asked for that right now, especially attached to six, seven, or however many years. Hell, they scoffed at $10.3 million for one season that didn't include future guarantees. However, if Headley were to have another 2012 season in 2013, combining his defensive contributions, baserunning, and what has developed into a two-headed attack of power and patience at the plate, then the Padres can afford to listen to demands like that, and Headley would be in a place where he'd be right to ask for them.
Essentially, Headley could go for security over overall payout, and try to work something out that would make him a very rich man -- say, a six-year extension starting in 2014, that would pay him another $66 million on top of this year's payout for seven at around $75 million overall. Not bad! But how much could Headley increase his stock with another huge year? Enough to disregard what would be a fair and generous offer from the Padres' perspective.
After posting a 120 OPS+ courtesy of a .374 on-base percentage in 2011, Headley got a raise from $2.325 million to $3.475 million for his second year of arbitration. For the second year of arbitration, you expect roughly 60 percent of free agent value to be paid out, so the Padres and Headley essentially agreed that he was worth about $6 million per year as a free agent at that point. Even the Padres lowballing 2013 offer far surpassed that estimate, and the agreed-upon $8.575 million for 2013 shoots much closer to $11 million in projected free agent value. The point, though, is that his value adapted and changed significantly from a single season. Now, given another year of that, the Padres, thanks to both reassurance his excellence wasn't a one-time deal and the fact that their time is running out before he's a free agent, would be more willing to pay up, more secure in the knowledge that Headley truly is the building block his 2012 purported him to be.
If Headley repeated or approximated his 2012, or even split the difference between his last two seasons, he could probably bump his projected free agent value up another $3 million or so once more, putting him fairly close to the average of the deals that the Wright, Longoria, Zimmerman trio pulled in. Going $14 million per year for six or seven years is a lot more appealing than settling for what the Padres currently think his free agent value is. In fact, it's about $25 million more appealing over the life of this hypothetical contract, were it to go the full seven, through his age-36 season.
The Padres have reason to want to lock Headley up now, but Headley has no reason to agree to a deal given he could make significantly more money should he have another season like 2012. And, even if he should not perform that well, with the paucity of high-quality third basemen that will be available through free agency over the next few years, Headley might not even need to achieve 2012 levels of greatness to make bank. One more year of waiting and negotiating will bring clarity to both sides, as Headley's talent will be better understood, and there will be that much less time to work something out. It's difficult to be patient, but that's just what both sides need to be.