Originally posted on Fangraphs  |  Last updated 3/20/12

This afternoon, the Padres announced that they had agreed to a three year contract with catcher Nick Hundley. If you’re wondering why they would lock up their starting catcher now when they just traded for top prospect Yasmani Grandal over the winter, wait until you see the terms of the deal.

The deal is essentially a two year extension, since it leaves his already negotiated $2 million salary for 2012 in place. It simply adds a guaranteed $3 million salary for 2013, a $4 million salary for 2014, and a $5 million team option (with no buyout attached) for 2015, which would have been Hundley’s first year of free agent eligibility. So, in essence, Hundley converted his final two years of arbitration eligibility into guaranteed money, but did so at the price of taking minimal raises and pushing his first bite at free agency back a year.

This deal makes all the sense in the world for San Diego, but I’m not sure why Hundley agreed to this contract, to be honest. Over the last three years, Hundley has been a well above average player even while splitting time behind the plate – he’s hit .259/.323/.435 in 904 plate appearances, which is even more impressive when you consider that he’s been playing half his games in San Diego. From 2009 to 2011, his wRC+ is 109, putting him pretty much square in line with Miguel Montero. In fact, Montero is the best comp around for Hundley.

Montero became arbitration eligible for the first time after the 2009 season, so his 2007-2009 resume is what we should look at in comparison to Hundley’s 2009-2011 seasons. Here’s what Montero did in those three seasons:

921 PA, .267/.333/.447, 31 HR, 114 RBI

We’re using traditional markers because these are the numbers that determine arbitration payouts, and these are the criteria that Hundley would have been judged on over the next couple of seasons. Now, here’s Hundley’s last three seasons in comparison.

904 PA, .259/.323/.435, 25 HR, 102 RBI

Pretty darn similar – the small gap in HR/RBI can easily be explained away by park effects, and you don’t even have to quote wRC+ to help the arbitrators understand that Petco Park is a crazy good pitcher’s park. It should be no surprise, then, that Hundley settled for $2 million for 2012, the exact figure that Montero got in his first year of arbitration eligibility in 2010. Similar service time, similar playing time, similar performances, similar salaries. That’s how arbitration works.

So, looking at Montero’s salary progression should have set a pretty decent baseline for what Hundley could have expected. Montero battled injury issues in 2010 and regressed from his prior season performance, but still managed a raise to $3.2 million in his second trip through arbitration. Basically, as long as Hundley stays healthy and isn’t a total bust this year, he was in line for about a $1 million raise, and a strong performance could have garnered him quite a bit more. He basically settled for the minimum he would have gotten in 2013 just by staying healthy this season.

2014 is a little trickier, because Montero had an excellent season last year, and set himself up well for his final trip through arbitration. Not only did he hit exceptionally well, but he played in 140 games, letting him rack up the kinds of counting stats that arbitrators like. That resulted in a nearly 100% pay raise, as Montero’s final arbitration salary came in at $5.9 million. We probably can’t project Hundley to have that kind of season in 2013, so we’re probably best served estimating a $1.5 million raise rather than the $2.7 million that Montero managed. Still, if he would had gotten $3.5 million in 2013, that would still put him in line for something close to $5 million in 2014.

So, over the next two seasons, it’s probably fair to peg Hundley’s arbitration payouts in the $8-$9 million range assuming he continued to perform at a decent level but did not establish himself as a premier every day catcher. Settling for $7 million in order to get those payouts guaranteed ahead of time is reasonable, but giving up the club option for his first year of free agency just seems unnecessary. Hundley essentially agreed to become a free agent for the first time heading into his age 32 season, a time when he’s probably going to be unlikely to strike it rich with any kind of multi-year deal due to his age and position.

Assuming the club option for 2015 gets picked up by whoever trades for Hundley in the next 12-18 months, this deal may end up costing Hundley somewhere in the neighborhood of $5 million over the next four seasons, based on an estimate of what Hundley might have been able to get as a 31-year-old free agent versus being under team control for $5 million with no buyout. Perhaps Hundley is content to make $12 million instead of $17 million from 2013-2015, but a 30% discount on future salaries for a small guarantee seems a bit steep to me.

The Padres were wise to get this deal done now, even with Grandal on the way. Hundley’s trade value is going to go up with this deal, as any suitor is now going to know that it won’t cost them money down the road to make him a full time player and see if he can prove that his bat is legitimate. If Grandal is playing well in the minors during the first half of the season, don’t be surprised if Hundley is one of the hot names on the market at the trade deadline. The Padres have set themselves up well to be marketing a highly coveted asset in July.

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