Arizona did not attempt to hide the fact they were feeling generous and seeking a contract extension with Luis Gonzalez, so Tuesday's announcement that the two sides had reached an agreement came as no surprise. The three-year, $30M deal with a $10M mutual option for 2007 will go into effect after this season. Gonzalez will reportedly receive $8.25M in 2004, $10M in 2005, and $11.25M in 2006. The deal also supposedly includes a $250,000 signing bonus and a suite at Bank One Ballpark, as well as season tickets to both the Phoenix Suns and Dodge Theatre.

Gonzalez actively participates in several charities and has already announced plans to donate at least $1M of his new wealth, which will obviously leave him with a great deal to spend on his wife and 4-year-old triplets. Although his previous four-year, $16M contract certainly allowed the family to live comfortably, Gonzalez was near the top of the list of players receiving considerably less than market value for their production, which helps explain this deal. While his 57 homers in 2001 received little attention with division mate Barry Bonds launching them out of the park at an astonishing rate, those dingers still represent a noteworthy accomplishment.

The Diamondbacks were well aware of the bargain they have been receiving and wanted to make a gesture of their appreciation to Gonzalez. Over the past few years, baseball has moved away from this kind of rewarding players for their past production in new contracts, but the practice still exists. I think Gonzalez was sufficiently happy in Arizona that he would have agreed to a smaller deal in order to remain with the club, but the Diamondbacks didn't feel the need to push him in that direction.

While I'm sure possessing the ability to offer this contract to Gonzalez gave Diamondbacks' owner Jerry Colangelo a warm, fuzzy feeling inside, this type of contract is inappropriate if baseball is a business. I'm not suggesting that teams need to squeeze every penny. There are off-field contributions for which teams should feel free to pay. Spending a little extra to retain the face of the franchise or a Hall of Famer in his last years has benefits to the organization.

I'll readily admit that I have little on which to base my impression that Gonzalez would have accepted less money. He may have instructed his agent to take a hard-nosed stance at the negotiating table. However, his public attitude suggests that he would have given the Diamondbacks a "hometown" discount in order to finish his career with the club. Arizona may have felt they had a little extra money now, but there's no reason not to conserve funds when possible.

Gonzalez possesses considerable power, marginal speed, and strong plate discipline. The 35-year-old does not have an extensive injury history, however he'll turn 40 in the option year of this contract. Despite what we've seen from Barry Bonds and the inevitable extension of a player's productive years due to healthier living and better medical care, expecting a player to improve between their 35th and 40th birthdays currently is unrealistic. At best, the Diamondbacks are paying for Gonzalez's current level of performance and more likely gradually declining production. I don't think we're going to see contracts with decreasing yearly salaries anytime soon. Nevertheless, if you factor in the depressed market, there's no reason for this contract to be so large even if Gonzalez was playing hardball. Something in the $18M for two-years with a $9M option would have been far more appropriate.

The Diamondbacks next plan to focus on signing Randy Johnson, which won't be cheap but they can hardly overpay for what he provides. They should also probably seek to secure Curt Schilling, though I'd probably wait for him to post one more healthy season, since his contract doesn't expire until after 2004. Arizona doesn't have a poor minor league system, but it won't be able to provide replacements for all of their aging veterans, so they will need money for free agents.

Colangelo has pleaded with his players in the past to defer money, and the Diamondbacks are always one of the first teams mentioned when people discuss teams with financial problems. He is not the sole owner of the Diamondbacks, and his fellow owners will likely resist another capital call. The excess in Gonzalez's contract could prevent them from obtaining all the pieces they need to stay ahead in an increasingly competitive division. Less success on-field usually leads to fewer money spending fans, which in turn leads to less revenue for the club and thus starts the downward spiral. Owners then complain that the cost of winning is too high, but if the team just hadn't overspent on that one player, they would be fine. Consequently, teams have an obligation to their fans, owners, and even their players, not to pay more than what they need to acquire a player.

If you think players earn too much, first consider that the money raised by their labor would otherwise go to the team owners. Then if you still need someone to blame, blame the owners for giving the players irrational contracts.

Arizona seems to have developed a fairly devoted fan base with their recent World Series win. The Diamondback players have also been unusually willing to defer money from their salaries to open up more resources to spend on players now. As a result, Gonzalez's contract isn't likely to thrust them into the bottom of the league, but relying on such good fortune to continue isn't a financially sound policy.