Yankees agree to record-setting contract with Juan Soto to avoid arbitration

The Yankees and star outfielder Juan Soto have avoided arbitration, according to Joel Sherman of the New York Post. The sides settled upon a $31M salary for the 2024 season — a new record for the largest salary every agreed to by an arbitration-eligible player, as ESPN's Jeff Passan notes. Soto, a client of the Boras Corporation, surpasses the $30M benchmark that was established by two-time AL MVP Shohei Ohtani just last offseason.

The 25-year-old Soto is coming off another strong season at the plate. After being shipped to the Padres at the 2022 trade deadline, the young phenom struggled with his new club early in the 2023 campaign with a .183/.345/.344 slash line in his first 27 games. Soto managed to flip a switch from there, however, slashing an excellent .293/.423/.554 the rest of the way to elevate his season-long slash line to a strong .275/.410/.519. The performance saw Soto walk more often than he struck out for the fourth consecutive season, earn his third consecutive All-Star appearance as well as his fourth consecutive Silver Slugger award, and finish sixth in NL MVP voting while appearing in all 162 games for San Diego.

Between that walk year performance and the three prior times he’d been through the arbitration process as a Super Two player, Soto now stands alone as the highest-paid arbitration player in history (at least on a one-year deal). A new record was always the expectation; MLBTR contributor Matt Swartz’s model projected a $33M salary for Soto, and both the Padres and the Yankees were surely anticipating a new high-water mark as well.

The looming precedent served as the impetus behind the deal that shipped Soto to the Bronx earlier this winter, as the Yankees surrendered right-handers Michael King, Jhony Brito and Randy Vasquez as well as catcher Kyle Higashioka and top pitching prospect Drew Thorpe to acquire Soto and center fielder Trent Grisham. The Padres, after years of ultra-aggressive spending in free agency and on the trade market, were known to be looking to scale back payroll by as much as $50M and simultaneously looking to replenish a rotation mix that lost Blake Snell, Seth Lugo, Nick Martinez and Michael Wacha to free agency.

Soto’s stop in the Bronx could well be for one year, though the Yankees will surely do everything in their power to keep him long-term. However, he’ll reach free agency at just 26 years of age next winter and do so as one of the most accomplished young bats to ever reach the open market so early.

The rarity of this type of talent becoming a free agent at such a young age could position Soto to command a contract in excess of the $460M net present value of Ohtani’s extraordinarily deferred 10-year, $700M deal — and it’s also possible that he could lock in the lengthiest contract ever put forth if he and agent Scott Boras prioritize that. Last offseason saw teams willing to dole out contracts greater than a decade in length to Trea Turner and Xander Bogaerts, each running through the players’ age-40 season. A contract covering Soto’s age-40 season would need to extend a mammoth 15 years in length, but for a player of this caliber at such a young age, anything could be on the table.

Soto, in fact, already rejected a staggering 15-year, $440M contract offer from the Nationals back in 2021, which led to his original trade from D.C. to San Diego. Detractors panned the decision at the time, but with today’s $31M agreement, he’ll already have pocketed $54M since spurning that overture. He’ll “only” need to top $386M in free agency to come out ahead, and as surreal as that number sounds, it also feels quite feasible.

Any talk of a record-setting deal (or close to it) in free agency next winter is putting the cart before the horse to some extent, of course. Soto will need to remain healthy in 2024 and continue to produce at the prodigious levels we’ve come to expect throughout his incredible big league tenure. Despite having just turned 25 in October, Soto already has 160 career home runs and is a lifetime .284/.421/.524 hitter in 3,375 plate appearances. That incredible OBP currently stands as the 19th-best mark in MLB history.