This winter’s two biggest free agent names signed the two biggest free agent deals in history over the last week. Manny Machado will receive $300 million over 10 years if he doesn’t exercise his opt-out after 2023, while Bryce Harper will take in $330 million over the next 13 seasons. For Harper and his agent, Scott Boras, waiting for Machado to sign was likely part of a plan to secure a higher payout. That plan appears to have worked as Harper received $30 million more in guaranteed money. But because those dollars will be paid out over more years and the contract has no opt-out, it’s not entirely clear whether Harper signed the best financial package. Let’s take a closer look.

Before getting to the contract breakdown, here is a reminder of how biggest doesn’t necessarily equal best. Back in December, I took all the major league contracts of at least $100 million and adjusted those amounts to 2019 MLB dollars. As we now have a few more entrants, here is the updated version of the chart from that post.

If we wanted to employ the most precise method, we might want to calculate the net present value of all of those deals, along with the relevant state and local income tax. While that task was one I considered unduly burdensome, we can undertake a rough approximation with Bryce Harper, Manny Machado, and Nolan Arenado. The chart below shows the actual money expected to be paid out to Machado and Harper, as well as the present value of those salaries today using an eight percent discount rate.

Present-Day Value of Machado and Harper Contracts Year Manny Machado Contract (M) Manny Machado NPV (M) Bryce Harper Contract (M) Bryce Harper NPV (M) 2019 $30 $30.0 $30 $30.0 2020 $30 $27.8 $26 $24.1 2021 $30 $25.7 $26 $22.3 2022 $30 $23.8 $26 $20.6 2023 $30 $22.1 $26 $19.1 2024 $30 $20.4 $26 $17.7 2025 $30 $18.9 $26 $16.4 2026 $30 $17.5 $26 $15.2 2027 $30 $16.2 $26 $14.0 2028 $30 $15.0 $26 $13.0 2029 — — $22 $10.2 2030 — — $22 $9.4 2031 — — $22 $8.7 TOTAL $300 M $217.4 M $330 M $220.8 M 8% Discount Rate

While Harper received $30 million more overall, today, that difference is only around $3 million. Over the next 10 years, Machado will receive his full $300 million while Harper receives $264 million, and that makes a difference. A smaller discount rate provides a greater advantage to Harper, but not markedly so. To provide further context, we can create an equivalent 10-year contract for Harper and put it next to Machado’s deal.

10-Year Bryce Harper Equivalent Contract Year Bryce Harper 13-year Deal (M) Bryce Harper 13-year NPV (M) Bryce Harper 10-Year Deal (M) Bryce Harper 10-Year Deal NPV (M) 2019 $30 $30.0 $30.5 $30.5 2020 $26 $24.2 $30.5 $28.2 2021 $26 $22.3 $30.5 $26.1 2022 $26 $20.6 $30.5 $24.2 2023 $26 $19.1 $30.5 $22.4 2024 $26 $17.7 $30.5 $20.8 2025 $26 $16.4 $30.5 $19.2 2026 $26 $15.2 $30.5 $17.8 2027 $26 $14.0 $30.5 $16.5 2028 $26 $13.0 $30.5 $15.3 2029 $22 $10.2 — — 2030 $22 $9.4 — — 2031 $22 $8.7 — — TOTAL $330 M $220.8 M $305 M $221.0 M 8% Discount Rate

If Bryce Harper were to receive a 10-year deal of equal value to his 13-year contract, it would pay out $305 million over 10 years, barely besting Machado’s contract. It’s worth noting that Harper reportedly received a four year, $180 million offer from the Dodgers, which would have made him a free agent again at age 30; that deal would be equivalent to ten years and $225 million. While Harper did receive a full no-trade clause compared to Machado’s limited one, Machado also received an opt-out after 2023. For players, earlier opt-outs are more valuable as they are more likely to be able to sign another long contract. Machado’s is not especially early, but it does still have some value and that value is certainly more than $5 million. Based on that set of facts, it would seem likely that Machado’s contract is actually better than the one Harper signed. We also have taxes to consider.

The state of California imposes fairly high state income taxes relative to other states, at roughly 13%. The state of Pennsylvania has lower state income tax rates, at roughly 3%. The city of Philadelphia also imposes at tax of around 3.5% to 4%. The difference between the two tax situations is around 6%, though those taxes are only charged on half of each players’ income due to where the games are played. At roughly a 3% difference, we are talking about a total impact under $10 million over the life of these deals. As to who got the better deal, that depends on how you value Machado’s opt-out clause. If it is worth just a few million dollars, then Harper comes out ahead. Placing a high, $15 million to $20 million valuation on it swings things back over to Machado. If there’s a 20% chance that Machado can opt-out and receive $200 million after the 2023 season, then the Harper and Machado contracts are roughly equivalent in value.

We do have one more contract to consider. The eight-year, $260 million deal signed by Nolan Arenado is not a free agent contract, and Arenado was already set to earn $26 million this year. A player receiving guaranteed money a year ahead of free agency usually comes with some sort of discount, so for the sake of argument, let’s consider the money already guaranteed to Arenado and the discount Colorado receives for making a guarantee a year out a wash. Here’s the present-day value of the contract Arenado signed along with an equivalently valued 10-year deal.

Nolan Arenado Contract Year Nolan Arenado 8-Year Deal (M) Nolan Arenado 8-Year NPV (M) Nolan Arenado 10-Year Deal (M) Nolan Arenado 10-Year Deal NPV (M) 2019 $26 $26.0 $27.9 $27.9 2020 $35 $32.4 $27.9 $25.8 2021 $35 $30.0 $27.9 $23.9 2022 $35 $27.8 $27.9 $22.1 2023 $35 $25.7 $27.9 $20.5 2024 $35 $23.8 $27.9 $19.0 2025 $32 $20.2 $27.9 $17.6 2026 $27 $15.8 $27.9 $16.3 2027 — — $27.9 $15.1 2028 — — $27.9 $14.0 TOTAL $260 M $202 M $279 M $202 M 8% Discount Rate

Arenado’s contract is worth the same as a 10-year deal for $279 million. Arenado’s taxes are going to be less than Harper’s are in Philadlephia (assuming rates stay the same), and that might add a few million to the valuation. In addition, Arenado has an opt-out after 2021 in his contract. While he will be the same age as Machado when he opts out, and he has more money owed to him ($164 million), there’s an argument to make that Arenado’s opt-out clause is more valuable than Machado’s. Between the two players, because Arenado’s opt-out comes first, he’s more likely to be playing at a level similar to his current performance and thus more likely to receive another massive payday. How much more is open to interpretation, but putting a $20 million valuation on it would make Arenado’s deal just as valuable as the contracts just signed by Harper and Machado. All three players signed huge contracts with different dollar figures attached, but in terms of value, there’s an argument to be made that all three are worth the exact same thing.