John Gibbons is right, Justin Smoak is losing a lot of money

When the Toronto Blue Jays signed Justin Smoak to a two-year $8.25 million deal last July, the prevailing reaction was mild bewilderment.

Sure, the dollar value wasn’t extravagant in the context of today’s game, but to that point Smoak had been a volatile hitter with a big strikeout problem. There just didn’t seem to be any urgency to lock up a guy who’d hovered around replacement-level for most of his career to a multi-year deal.

Fast forward 11 months and the Blue Jays certainly look like they know what they’re doing. Smoak is now slashing a robust .291/.353/.597 and has stabilized a Blue Jays lineup that’s dealt with significant injuries all year. No one could have predicted the extent of Smoak’s current breakout, but the club showed faith in a player that many wouldn’t have and it’s undoubtedly paying off.

Manager John Gibbons even joked with reporters after Monday’s game against the Oakland Athletics that the first baseman made a very poor financial decision.

“He shouldn’t have signed that contract,” he said. “He’s losing money now.”

The comment was made in good fun, but many a true word is spoken in jest. Right now, it looks like Smoak could be losing out on millions of dollars as the Blue Jays decided to invest at what now appears to be the perfect time.

Smoak’s contributions this season have been worth $10 million per FanGraphs, more than the cost of his entire extension. So in theory, if he never took another at-bat the Blue Jays would have gotten their value. That’s not how it works in practice with the difficulty of finding a replacement and how that would affect this season, but it shows the degree to which Smoak’s breakout is found money – or lost money, depending on your perspective.

To be fair to Smoak, his 2017 earnings wouldn’t have been radically different had he decided not to sign on the dotted line with Toronto. Prior to the season, he would have been a first baseman with no defensive versatility coming off a season where he hit .217/.314/.391 in a market very unkind to power hitters. A one-year deal probably would have been his best option and his current $4.125 million probably wouldn’t have been too far off the mark. In fact, it might be generous.

Things get interesting from 2018 on, however. In a world where Smoak hits free agency again after his current season, he’d be in for a serious payday. At 30 he’d be younger than the average free agent and coming off a monster season.

In order to buy that you have to buy Smoak’s breakout as legitimate, but at this point it’s hard not to. His BABIP sits at .281 – below 2016’s mark – so he’s not having outlandish luck on balls in play and he’s already hit more home runs than he did last season. That’s pretty hard to fake.

His biggest weakness historically has been a strikeout rate that has put a ceiling on his production. That ceiling has been demolished.

Again, hard to fake, and also backed by a drastically improved contact rate in and out of the zone.

So, if Smoak was doing this with another team, or even just the Blue Jays on a one-year deal, he’d be viewed at a starter going forward, with relative youth worthy of eight figures per season. Instead he’ll earn the same $4.125 next year, with a maximum of $8 million in 2019 if he hits a 1,100 plate appearances in 2017 and 2018 combined. So the most Smoak can make for the next two years is $12.125 million – a number he could top annually over multiple years if he were hitting free agency.

In the grand scheme of things, no one is going to feel to sorry for a guy who earns millions of dollars and plays baseball for a living. Out of context, Smoak is an extraordinarily lucky human being to have been born with great gifts and good enough health to use them to carve out a career.

However, within the context of that career, it’s pretty unfortunate for him that he’s improved immensely right after putting a hard cap on his earning potential until 2020. If this were the NFL he would likely hold out in the offseason for a new deal, but that’s a move almost never deployed by baseball players.

At this moment, it looks like the Justin Smoak deal is going to work out extraordinarily well for the Blue Jays, but this is something of a zero-sum game. That means it’s not going to work out particularly well for Justin Smoak.