5 takeaways from Nolan Arenado's record extension with Rockies

"If the Rockies come in with something nice," Nolan Arenado said recently, "I'll take it."

Evidently, the Rockies listened.

The Rockies and Arenado agreed to an eight-year, $260-million contract extension that makes the decorated third baseman the highest-paid position player in baseball history by average annual value. Arenado's new deal, which includes opt-out and no-trade clauses, will begin immediately, replacing his previously agreed-upon $26-million contract for 2019.

While the dust settles, here are five key takeaways:

Past misses don't faze Colorado

By wins above replacement, Wade Davis stumbled through the worst season of his career in 2018, the first in a three-year, $52-million deal he signed with Colorado in late 2017. Meanwhile, the returns on Ian Desmond's five-year, $70-million contract, which he inked prior to the 2017 campaign, have been non-existent.

As for the seven-year extension the Rockies gave Troy Tulowitzki to ostensibly keep him in Colorado through 2020? Ask the Toronto Blue Jays how well that worked out.

Unquestionably, a disconcerting percentage of the Rockies' major investments haven't worked out, both in recent years and historically (shoutout to Mike Hampton and Denny Neagle).

Still, when it came to Arenado, a franchise icon and a bona fide superstar in his prime (he'll be 28 years old in April), the Rockies were undeterred. Despite the team's dubious track record, it's hard to see this one blowing up.

Arenado, an elite defensive third baseman with significant pop (and, notably, major home/road splits), has racked up more WAR (20.9) over the past four seasons than all but nine position players, earning an All-Star nomination and winning Silver Slugger and Gold Glove awards each year.

During that span, Arenado's slashed .297/.358/.573, good for a 129 OPS+, without once hitting fewer than 37 home runs or failing to play in at least 156 games in a season. After adjusting for park effects, he's essentially been Manny Machado since the start of the 2015 campaign. And Machado, you'll surely recall, also just got paid.

Poor teams don't exist

Arenado's mammoth deal comes less than a week after the San Diego Padres inked Machado to a 10-year, $300-million contract.

According to Forbes, the Rockies are only the league's 23rd-most valuable franchise, at $1.1 billion, while the Padres, shockingly, rank six spots higher ($1.27 billion). A pair of financial lightweights just handed out two of the largest contracts in baseball history.

If you're still buying it when your team's baseball operations president bemoans "payroll constraints" or "budgetary realities," you're a mark. The league continues to set revenue records each season, and the players' percentage of that pie keeps dwindling. Any team can afford any player it wants.

Rockies believe in their core

For the first time in their relatively brief history, the Rockies made the postseason for the second straight year in 2018. Now, the front office clearly believes in the major-league team's core, as well as the organization's reserve of talent in the upper levels of the minors.

No team would commit $260 million to a soon-to-be 28-year-old without sufficient faith that he'll receive enough help to deliver a World Series title. For his part, Machado just joined the club with the strongest farm system in the game, and he's also two years younger than Arenado.

Considering how several key growth assets performed last year, the Rockies' confidence isn't surprising:

• Trevor Story, their 26-year-old shortstop, finished eighth in National League MVP voting.
• David Dahl, the former top outfield prospect whose career had seemingly been derailed by injuries, returned to the big leagues and acquitted himself well, putting up a 113 OPS+ in 77 games.
• Brendan Rodgers, Colorado's current top prospect, managed an .835 OPS against much older competition in Double-A.
• Massive improvements from both Kyle Freeland and German Marquez made run prevention one of Colorado's strengths, somehow.

None of those players will be eligible for free agency before 2022. And with Arenado leading the charge, the Rockies could easily unseat the Dodgers atop the National League West in the near future.

Without him, though, they almost certainly wouldn't.

Free agency is scary

Yes, Machado secured the bag, but free agency increasingly seems like more of a threat than a reward. It's hard not to feel like the shameless parsimony displayed over the last two offseasons factored into Arenado's decision to forego hitting the open market (despite his earlier insistence to the contrary).

After all, only a dozen free-agent position players received multi-year contracts this offseason, and just three inked deals guaranteeing more than two years of employment. Machado, who only turned 26 in July, is one of them.

Moreover, Arenado was set to hit free agency prior to his age-29 season, and anything less than another superb campaign in 2019 would've enabled teams to treat him, however disingenuously, like a depreciating asset.

Imagine Arenado taking a pitch off his hand on Opening Day and proceeding to play only 100 games this season, producing at a slightly sub-standard level upon his return. In that hypothetical scenario, Arenado amasses only 3 WAR, making 2019 his worst season since an abbreviated sophomore campaign.

He then hits free agency with draft-pick compensation attached to him after turning down the Rockies' qualifying offer. Would he receive much more than the $109.95 million that then 30-year-old J.D. Martinez pocketed from the Red Sox? Or the $144 million that a 28-year-old Eric Hosmer got from the Padres months earlier? Maybe. He's considerably better than both players.

In this economy, though, who knows.

Opt-out comes at perfect time

The current realities of free agency notwithstanding, Arenado's opt-out clause, which activates following the 2021 campaign, gives him the freedom to re-enter the market at perhaps the most advantageous time.

He'll be doing that under the auspices of a presumably more labor-friendly collective bargaining agreement, and after both Mike Trout and Mookie Betts have signed new deals that hopefully establish a new, even-higher financial baseline for top-level talents.

Hitting free agency just before turning 31 isn't ideal. But if Arenado exercises his opt-out clause, that means he's been sublime over the preceding three seasons, and he stands to make more money in a market the CBA has re-shaped to give the players a greater percentage of the wealth they generate for owners.

Jonah Birenbaum is theScore's senior MLB writer. He steams a good ham. You can find him on Twitter @birenball.