Top of the Market
For the purposes of this analysis, the top end of the market captures: (a) contracts containing incentives with an annual average salary of $20 million or greater; and (b) contracts with a guaranteed length of 5 years or more.
1. Long-term FAs/Extensions: At the very top of the market are long-term (5+ years) free agent or extension contracts (regardless of average annual salary) that include incentives. This category includes the contracts for Juan Soto, Vladimir Guerrero Jr., Dylan Cease, Corbin Burnes, Blake Snell, Pete Alonso, Kyle Schwarber, Ketel Marte, Josh Naylor, and Jose Ramirez.
Award incentives are the most consistent incentive structure for these contracts. The two largest contracts in the category, those of Soto and Guerrero show some variability in valuation of the award incentives. RF Soto’s 2025 contract with the Mets has award incentives that pay Soto as follows:
MVP Bonuses: 1st – $500,000 ($1 million if repeat), 2nd - $350,000, 3rd to 5th - $150,000
WS MVP: $350,000
LCS MVP or Silver Slugger: $150,000
All Star, Gold Globe, Hank Aaron, or All-MLB: $100,000
1B Guerrero’s 2026 contract with the Jays contains fewer incentives:
MVP Bonuses: 1st – $150,000, 2nd - $125,000, 3rd – 100,000
All Star, Gold Glove, Silver Slugger, or World Series MVP: $50,000
LCS MVP: $25,000
The other position players in this category generally have a similar structure, with award incentives structured around MVP finishes, All-Star appearances, and Silver Slugger and Gold Glove awards. The value of these incentives in the contracts for Naylor and Alonso are similar to those in Guerrero’s contract, while the value of the award incentives in Ramirez’ contract resemble those in Soto’s contract.
The two outliers from the position players are the Schwarber and Marte contracts. DH Schwarber’s 2026 contract with the Phillies has the least incentives, with the only reported incentive being a $59,000 bonus for winning DH of the Year. 2B Marte’s 2025 contract with the Diamondbacks stands at the other end of the spectrum, as it the most heavily incentivized contract in this category. Marte’s contract contains performance and award incentives that escalate his salary for the subsequent year if achieved. Marte can escalate his salary by $3 million for a top 3 MVP finish, and $2 million for a 4th-7th place finish. Marte can also escalate his salary by $500,000 for each of making 500 and 550 plate appearances, and can further escalate it by an additional $750,000 for each of making 600 and 625 plate appearances. Marte had 556 plate appearances in 2025, escalating his contract by from $15 million to $16 million for the 2026 season.
The award incentives in the two largest pitcher contracts by overall value (Cease and Burnes) are quite similar, with both players receiving tiered incentives for Cy Young finishes starting at $50,000 for a fifth place finish, and both players receiving $50,000 for an All Star, Gold Glove, or WS MVP. The main differences between these two are that the Cy Young bonus for Burnes maxes out at $250,000 for a first place finish with Cease only receiving $150,000 for a first-place finish, and that Burnes can also receive $50,000 for an All-MLB award.
SP Snell’s 2025 contract with the Dodgers is notable as it includes a $5 million trade assignment bonus (the only one in this category, with other players having no-trade clauses), and an interesting option structure that provides the Dodgers with a team option if Snell spends a certain period of time on the IL for a specific injury (covered in the analysis on Options and Incentives and Player Health Incentives).
At a general level, the incentives in these long-term, high-value free agent signings are relatively small in value compared to the guaranteed money in the contracts. For example, if Soto was to somehow win MVP and be an All-Star in every year of his contract, he would earn an extra $16 million over the term of his 15-year deal, a relatively small price (roughly 2%) in comparison to his $765 million in guaranteed money. The same is true with Cease, who would only earn $1.4 million for winning the Cy Young and being an All-Star in every year of his contract. This is less than 1% of the 210 million he will earn in guaranteed money.
The main outlier to this trend is the Marte deal, which contains a larger potential incentive upside. Even in the relatively conservative hypothetical where the only incentives Marte achieves in the contract are the annual escalators for 500 and 550 plate appearances, which he achieved in 2025, Marte will earn an extra $6 million before his player option in 2031. This is close to 5% of his total contract value, and he can of course exceed this with the incentives tied to more plate appearances and MVP finishes. There are two possible reasons for this difference in Marte’s contract. First, unlike most of the other players in this category (other than Guerrero), Marte did not sign as a free agent, and has rather been repeatedly extended by the Diamondbacks. Second, Marte has the lowest annual average salary of any player in this category, being the only player in this category to have a guaranteed average salary lower the $20 million.
The Snell contract may have a similarly significant monetary impact, albeit in a different way. If the team option in Snell’s contract is activated based on Snell having a specified injury and spending time on the IL, the Dodgers could gain an extra year of Snell at roughly 1/3 of his average annual salary prior to the option year, representing a $20 million discount compared to the average annual salary.
2. Short-term FAs: The next category here are free-agent contracts shorter than 5 years but which have an average annual salary over $20 million and include incentives. This category includes the contracts for Sean Manaea, Framber Valdez Nathan Eovaldo, Seth Lugo, Edwin Diaz, Teoscar Hernandez, Christian Walker, and Merrill Kelly.
The pitchers in this category have the highest average annual salary, led by Valdez, Manaea, Eovaldi, Diaz and Lugo. Valdez’ contract contains a very lucrative incentive structure, with Valdez able to increase his base salary by as much as $5 million per year depending on where he finishes in Cy Young voting ($2 million for finishing first) and on whether he wins a World Series or ALCS MVP. The incentives in the contracts of Manaea and Eovaldi are similar to the incentives in the Cease and Burnes contracts discussed above, although these are slightly more impactful for Manaea and Eovaldi as their salaries are lower than those of Cease and Burnes. Eovaldi in particular can receive $250,000 for a first place Cy Young finish (with incentives tiered down to 5th place finish) and can receive $150,000 for an All-Star appearance, a WS MVP or a Gold Glove. Manaea’s figures are lower, with a first place Cy Young finish, an All-Star appearance, or a Gold Glove earning him only $50,000.
Of note, the award incentives for pitchers drop off after Manaea and Eovaldi. Lugo, who is also a starter, has incentives tied to innings pitched that guarantee a team option for a 3rd year of his contract (see the Options and Incentives analysis). Diaz, the only relief pitcher in this category, has incentives tied to pitching appearances ($1 million for 55 games) and games finished ($750,000 for each of 45 and 50 games finished). Diaz also has a clause similar to that in Snell’s contract which gives the Dodgers a team option in the event of injury (see the Options and Incentives analysis).
Kelly, the other pitcher in this category, has a 2-year contract with the Diamondbacks, starting in 2026, which contains a vesting option based on innings pitched in 2027 (see the Options and Incentives analysis).
1B Christian Walker’s 2025 contract with the Astros is the only position player in this category to have award incentives. Walker’s incentives resembles those in the Guerrero, Naylor and Alonso contracts, as he can earn $100,000-$200,000 if he finishes in the top 5 in MVP voting, and can earn additional money for WS MVP ($100,000), LCS MVP ($50,000) or any of All-Star, Gold Glove or Silver Slugger ($75,000 each).
Hernandez’ 2025 contract with the Dodgers contains a team-friendly injury clause similar to that in Snell’s contract, which gives the team an extra option year if Hernandez spends certain time on the IL.
3. Pre-Arbitration and Arbitration-Eligible Contracts: The final category at the top end of the market are contracts for pre-arbitration and arbitration-eligible players. These contracts are included due to contract length greater than 5 years, but some contain average annual salaries lower than $20 million. The contracts in this category are those for Garrett Crochet, Jackson Merrill, Roman Anthony, Samuel Basallo, Lawrence Butler, Tyler Soderstrom, Kristian Campbell, Brent Rooker, Maikel Garcia, Tanner Bibee, Jacob Wilson, and Cal Raleigh. I have also included the contract of Geraldo Perdomo, which is only 4 years but contains a club option for a 5th year and closely resembles the other contracts in this section.
Starting with the position players, we see much more complex and potentially impactful incentive structures than in the free agent agreements, which is expected given that the players are giving up rights to arbitration and free agency in these agreements. Most of these agreements contain award incentives as the primary incentive format, with some also containing performance incentives. Salary escalators tied to incentives are also much more common in this category.
The most expensive position player contracts in this category by average annual salary are Cal Raleigh’s 6-year contract with the Mariners starting in 2025, Roman Anthony’s 8-year contract with the Red Sox, and Jackson Merrill’s 9-year contract with the Padres, the latter two of which both start in 2026.
OF Merrill’s contract contains a very player-friendly structure relative to the other contracts that we have seen thus far. All remaining salaries in Merrill’s deal increase by $1 million each time Merrill reaches 500 plate appearances. This incentive would be very significant in a hypothetical scenario where Merrill reaches 500 plate appearances in each year of the agreement, due to the compounding nature of this incentive structure. In this situation, Merrill would make an additional $36 million over the guaranteed term of his contract, over a 25% increase from the guaranteed $135 million in his contract.
OF Anthony’s contract also includes escalators, although unlike Merrill’s contract, the payout from these escalators only start in the 2031 season and are award incentives tied to MVP finishes. Anthony can earn $2 million for winning MVP, $1 million each for second or third place MVP finishes, $750,000 each for fourth or fifth place MVP finishes, or $500,000 each for sixth to tenth MVP finishes. While more limited than the incentives in Merrill’s contract, the award incentives for Anthony are significantly more valuable than in the free agent contracts reviewed above.
C Raleigh’s, has a relatively limited incentive structure with a vesting option for the 2031 season that vests if he catches 100 games in 4 of 6 seasons from 2025 to 2030. One possible explanation for the limited incentive structure in Raleigh’s contract, relative to those in the Anthony and Merrill contracts, is that Raleigh had more professional years at the time of signing that Anthony or Merrill, meaning he was foregoing fewer years of arbitration eligibility when entering into the contract.
The next tier of position players in this category by contract value are Butler, Rooker, Soderstrom, Campbell, Garcia, Wilson and Perdomo. These player contracts all have incentive structures similar to Anthony’s, albeit with some focusing on incentive pay-out in an option year:
OF Butler and DH Rooker, both signed to the Athletics, have contracts where their option year salary year can escalate by millions depending on if they finish top 10 in MVP voting during their contract.
1B Soderstrom’s contract with the Athletics has both one-off award bonuses and award escalators for his option year in 2033 and the final year of his contract in 2032. The award escalators are tied to his MVP finishes in the 2026-2032 seasons.
2B Campbell’s contract with the Red Sox is structured with incentives starting in the 2031 season, that can award him up between $250,000 and $2 million for the subsequent year depending on his finish in MVP voting, and $200,000 for the subsequent year if he makes an All-Star game.
SS Perdomo’s contract with the salary in the 2028-2030 seasons (the 2030 season being a team option year) can increase by up to $5 million based on MVP voting, with $5 million being awarded for MVP win, $2.5 million for 2nd to 5th, and $1.5 million for 6th to 10th.
3B Garcia’s contract with the Royals has award and performance escalators for the 2030 and 2031 (team option) years, which will give him $4 million each year if he finishes top-10 in MVP voting twice in the preceding contract years, and $1 million each year if he has two seasons with 525 plate appearances in the preceding contract years.
SS Wilson’s contract with the Athletics, starting in the 2026 season, guarantees 7 years with a club option for the 2033 season. There are a maximum of $4 million in escalators for the option year tied to finishes in MVP voting in the 2031 and 2032 seasons.
C Samuel Basallo, signed to the Orioles on an 8-year contract, has a more nuanced incentive structure, reflecting his value as a catcher. Basallo’s incentives kick in for the 2032 season, based on the 2031 season. Basallo’s salaries between 2032 and 2034 can increase upwards from $250,000 into the millions depending on how many games he starts as catcher in the 2031-2033 seasons, with the base payout coming at starting 60 games at catcher. Basallo also has escalators for the 2034 season tied to finishing in the top-5 in MVP voting in 2032 and/or 2033.
SP Garrett Crochet’s 6-year contract with the Red Sox, which avoided one year of arbitration eligibility, contains a combination of incentive structures seen in other contracts. Similar to Snell’s contract, Crochet has a trade assignment bonus ($2 million) and has a potential club option that comes into effect if he spends 120 or more days on the IL for a left arm injury. Crochet’s contract also has a salary escalator that can increase his salaries by between $500,000 to $2 million per year depending on where he finishes in the top 10 of Cy Young voting.
SP Tanner Bibee’s pre-arbitration 5-year contract with the Guardians also has a salary escalator based on Cy Young voting, with Bibee able to raise his salaries in the 2029 and 2030 (team option year) seasons by up to $4 million depending on where he finishes in Cy Young voting in the 2025-2028 seasons.