Fernando Tatis Jr. and the huge contract he signed affects baseball's prospect business
The 22-year-old Dominican player signed a $340 million contract with the San Diego Padres.
Fernando Tatis Jr. has signed a US$340 million contract, which commits him to play 14 seasons with the San Diego Padres. It would be the longest contract in baseball history and the third largest in the history of the sport. However, the bulk of the deal would be paid in the last six years of the historic contract.
Tatis has reported that of the deal he had with Big League Advance (BLA), a company founded in 2016 by Michael Schwimer, a former minor league pitcher, to invest in prospects earning low salaries. When Tatis was just a prospect, he agreed to receive money from the BLA; in exchange, he will give up a percentage of the inflated amount of his new contract to the company.
"For us as a company, this is really a testament to our modeling capabilities and how we have been able to forecast the success of minor league players. When we reached an agreement with Fernando Tatis Jr. he wasn't one of the top 50 prospects on the rosters. And there our numbers indicated he was the second-best over the last 15 years, including Mike Trout, (Bryce) Harper and all these guys.' Schwimer said.
Tatis and other players sign with BLA receive an upfront payment in exchange for a percentage of their future earnings. Schwimer said the average payout to a ballplayer is $350,000, without confirming figures for any particular one. "It was simply a family decision," Tatis said.
The deal has a no-change clause, from the time it becomes official and until its end, so until unless management decides to change it, Tatis will remain with the San Diego Padres until he is 36 years old.
The payout for the campaigns will progressively increase until the agreed-upon amount is complete. This year Tatis Jr. will earn US$1 million for the season, in 2022 he will receive US$5 million and in 2023 his salary will be US$7 million, meaning that in the first three seasons combined, the youngster from San Pedro de Macorís will receive US$13 million, plus a signing bonus of US$10 million. Starting in 2029, Tatis will be paid US$36 million per season.