Advice on Contracts

Oz touches upon a subject that serious Rotisserie players have to address every freeze date: when to give out a contract:

Do you have a rule of thumb for when to extend a player's contract?
I have Pedro Alvarez (10), Buster Posey (10), and Angel Pagan (5).
Trying to figure out if it's better to have all or any of the three for an extra year versus losing $5 of profit from each this year (i.e. extending their salaries to 15,15, and/or 10).

The general advice I gave out on contracts in the early days of this blog still applies, and I'd advise reading that post if you want a detailed read.

My general rules of thumb when it comes to contracts are as follows:

• Don't give a contract to a player that puts him within $4 or less of his projected value.
• Try to avoid giving contracts to players post-peak.
• Don't give a contract to a player that goes past when he will become a Major League free agent.
• Be more conservative with pitcher contracts than with hitter contracts.

I'd probably extend all three players based on these guidelines. Posey seems like a no-brainer to me. He almost earned $20 in his rookie season and will be 24 years old this season. Fifteen dollars makes sense for him. Pagan at $10 should be profitable for two years as well. He doesn't fit the profile of a young up and comer, but I'd be more wary if he were 31 or 32.

Alvarez is a somewhat tough call because pushing to $15 is somewhat based on projection and not performance. But while Alvarez might not wind up a superstar, I can see him earning in the low to mid $20s if the power comes through like I think it will.

As far as the other half of Oz's question goes, it is true that you're giving away value at the auction. However, you're getting that value back in your 2012 auction if you keep these players and - more importantly - you're creating dump chips if you're playing for this year (which I hope you are). A $10 0 Posey isn't going generate interest from teams in the second division. A $15 L2 Posey definitely will. Depending on your league's dump culture, this is also an excellent litmus test for whether or not you should give out a long-term contract. If you don't think you'd be able to sell a $15 L2 Alvarez to your league mates in July as a viable 2012 freeze, then you probably have your answer as to whether or not you should extend him.