It’s difficult sometimes to make sense of the extensions we hear about. Why is it that player A is earning so much more or less than player B? Sometimes it’s obvious; sometimes it’s not. In some cases, there are relatively unique, personal circumstances that help explain it — some of which may not even really become known publicly. In every case, the actual course of negotiations requires both sides to estimate market value at a point at which there are necessarily still key factors that are unknown. There’s plenty of variability based upon varying motivations of the particular team and player involved. Still, we like to think that market value underpins baseball contracts. Every deal is susceptible of examination from a value perspective.

Given all of that, it seems worth taking a closer look at the recently reported deal between the Royals and second baseman/center fielder Whit Merrifield. Despite two-straight All-Star seasons and an upward trajectory in his performance, he’s promised just $16.25MM over four years — less than the qualifying offer rate ($17.9MM) for a single season. He can boost that by a bit via escalators, but will also give away an option year at a $10.5MM salary. Even in the extension context, it seems like a bargain for a high-quality player who has immense versatility and a well-rounded skillset. So, how to make sense of this?

It all starts with his experience and age. Merrifield is still shy of three years of MLB service yet just recently hit his 30th birthday. Since he didn’t have enough service time to reach arbitration early as a Super Two qualifier, he was still a full season away from commanding more than the league minimum salary, with the inherent risks and limitations of the arb process to look forward to thereafter. Moreover, the recent trends in the aging curve have not been kind to elder statesmen.

Add to that the fact that Merrifield’s most notable skills — hitting for average, speed on the bases, and good and versatile glovework — are not particularly well-compensated in the arbitration process. To be sure, they do show up indirectly in earnings since the process pays players who see a lot of playing time. But power stats (homers and ribbies) have tended to pay best over time than the harder-to-quantify areas of the game. Even stolen bases, the counting stat in which Merrifield shines, aren’t considered major drivers.

Whatever one thinks of Merrifield’s particular outlook, in terms of skills and health, the overall situation was one in which his anticipated future earnings were rather limited. In arbitration, barring a huge power burst, he’d have profiled as a strong but hardly record-shattering player. And his hypothetical free agency was laden with risk. How might he look as a player four years in the future? Nobody knows, but odds are he won’t be quite in his prime, since his pre-existing arbitration control extended through his age-33 season.

Let’s dig into the numbers to see why this is the case.

First, looking at the forthcoming arb years, we can check in on some second basemen and other comps to learn about what Merrifield might have taken home had he elected to go year to year. As I’ve noted previously, DJ LeMahieu represents an interesting overall comp since he just wrapped up his own arbitration run. After starting with a $3.0MM salary, and posting one big offensive season during his arb years, he finished with a $16.3MM total — a near-exact (and perhaps not coincidental) match for what Merrifield will receive.

When I first proposed that comp last March, Merrifield had yet to post his excellent 2018 season. As things stand, it’s not hard to see a path to more than $16.25MM. Just how high Merrifield could have climbed would obviously have been dependent upon what he does in the season to come, but we can guess at some parameters.

In terms of starting point, Merrifield ought to end up with a case for much greater earning power than LeMahieu (.284/.329/.370, 15 home runs, 157 RBI, 1,901 plate appearances) and Joe Panik (.282/.345/.408, 29 home runs, 170 RBI, 1,818 plate appearances), who earned $3.45MM in his first arb year. The Dodgers’ Chris Taylor rode a breakout 2017 and solid 2018 follow-up to a first-year arb salary of $3.5MM. He’s sitting on 39 home runs and 152 RBI with a .262/.331/.435 batting line through 1490 plate appearances. Even if Merrifield isn’t able to push or top twenty long balls in 2019, he’d surely be on track to carry a much more impressive overall statistical baseline than Taylor. He already has more plate appearances (1,669) and RBI (167) and nearly as many long balls (33), with a full season left to improve upon those tallies.

On the other hand, it’s tough to foresee anything like the 34-dinger outburst and second-place MVP finish that allowed Javier Baez to achieve a $5.2MM first-year arb salary. In all likelihood, depending upon how things play out in 2018, Merrifield likely would have commanded an arb-1 salary somewhere between the numbers we’ve thrown out for consideration — say, in the realm of $3.75MM to $4.75MM.

A few other mid-arb players also help illustrate how things could have proceeded in the event that Merrifield would have kept producing throughout his arb years, quite apart from the starting point. Shortstop Marcus Semien entered arb with sixty home runs and near-average total productivity through just under two thousand plate appearances. He earned $3.125MM in his first year after an injury-limited platform season and bumped up to $5.9MM in 2019 salary after launching 15 long balls in 703 plate appearances. Scooter Gennett jumped from a $2.525MM starting point to $5.7MM and $9.775MM salaries, driven by a total of fifty dingers and robust overall productivity in his final two platform campaigns.

With good fortune and some continued improvement, Merrifield could have tracked those or even greater raises. In the best-case, reasonably realistic scenario — fully healthy seasons at the top of his prior power levels (~20 home runs annually) — he might have started at a $4.5MM level and taken home successive $3.5MM raises. That would have resulted in $24MM of total arbitration salary.

Of course, it’s imaginable that Merrifield’s performance, and/or intervening health issues, could deflect him from that sort of path. Joe Panik had set the stage for bigger earnings than that (despite suffering a major ballpark-related disadvantage vis-a-vis LeMahieu), but stumbled after taking down $3.45MM in his arb1 season. He settled for just $3.8MM for the coming campaign and has no hope of approaching LeMahieu’s overall earning level.

Obviously, any kind of significant injury would sap any player’s ability to command a raise. Since Merrifield is not even in arbitration yet, an ill-timed and significant injury (say, in camp this spring) could have been extremely damaging to his earning power. Even if things went well for a time, Merrifield would always have been vulnerable to injuries or downturns in performance. That’s the same for any player, but the risks were amplified (and the future free agent benefits diminished) by his age.

It bears emphasis that the risks still apply before Merrifield would reach arbitration, since he’s still a full season away. Don’t believe me about the variance in arb earnings? Here’s an illustration, using some big names. Francisco Lindor nearly set a first-year-eligible record when he agreed to a $10.55MM contract earlier this month. He has been healthier and more productive of late than the fellow star shortstop of the same service class to whom he’s often compared — Carlos Correa, who edged Lindor in the 2015 Rookie of the Year vote. The Astros star’s salary remains unresolved, but will fall between $4.25MM and $5MM. Despite piling up plate appearances at the outset of his career, Correa is now over five hundred shy of Lindor due to some injuries. Unsurprisingly, he has also fallen behind his contemporary in home runs and holds only a slight edge in runs batted in. Correa still holds a clear edge in overall, park-adjusted offensive productivity (128 wRC+ vs. 120 wRC+), and is still considered an elite talent, but took a down year at the wrong time. Lindor’s playing time and power ramped up in his platform years, allowing him to more than double Correa’s first-year arb earning power.

If $24MM of arbitration earnings represented a best-case scenario, then the downside was more or less unlimited. Obviously, it’s hard to imagine that Merrifield would be cut out of significant future earnings entirely, barring a truly catastrophic injury. But he’s still a full season away. And as Panik shows, it’s not hard to craft a scenario where the earnings come in well short of their anticipated trajectory. The risks are clear.

If there’s something potentially objectionable about this arrangement from Merrifield’s perspective, perhaps it’s the fact that he coughed up a free agent season. That’s where the Royals could find some real upside, since they’ll have a chance to hang onto Merrifield for only a one-year commitment, when he could in theory be in position to take down quite a bit more in free agency.

That said, just what kind of open-market earning scenarios is Merrifield really sacrificing (or, at least pushing back by one year)? It seems rather unlikely, even from four years out, that he’ll enter the 2023 season thinking he left an enormous amount of money on the table.

Take this comparison. We can all agree that Merrifield has had an outstanding pair of seasons. He’s sitting on a .296/.347/.449 cumulative slash with 31 home runs and 79 steals, with his other contributions leading to a cumulative valuation of 9.3 rWAR / 8.1 fWAR. Compare that to Jed Lowrie, who once had his own breakout season at 29 years of age. He was injured in the interim but turned things on more recently. Lowrie just hit the open market at a slightly more advanced age than Merrifield would have, sporting a two-year platform of .272/.356/.448 hitting with 37 home runs and 8.8 rWAR / 8.5 fWAR.

Lowrie’s free agent take? Two years and $20MM. That salary level is reflected in the one option year that Merrifield gave the team in his new deal, which is valued at $10.5MM — again, as with the LeMahieu arb comp, perhaps not coincidentally.

Even in a highly optimistic scenario, such as the Ben Zobrist bidding war, there’s a limit to what this sort of player can earn in free agency. Zobrist was a hot commodity entering his age-35 season, having a long track record of excellent offensive production (well outstripping Merrifield’s overall record to this point) and defensive versatility. He secured a four-year, $56MM contract.

All things considered, this seems to be rather a fair arrangement for both sides. It’s a deal that lets the team avoid a runaway arbitration salary, and perhaps gain another season of a respected veteran at a bit of a discount rate. But it’s hardly the Jose Ramirez contract — another deal involving a two-plus service class infielder who was coming off of a breakout campaign. Ramirez, of course, was just 24 years of age and was just beginning an ascendancy that has continued to levels that were perhaps not anticipated at the time. His deal conveyed a pair of valuable team options — for his age-30 and 31 seasons. The sort of upside present there just isn’t available in the Merrifield contract.

For a 30-year-old, non-slugging infielder/outfielder who is still less than three campaigns into his MLB career, this extension lands in a sensible realm in terms of both length and total guarantee. Upon sifting through some other recent contracts, it’s not hard to see how the sides landed where they did.