The Colorado Rockies have made a massive splash, signing star third baseman Nolan Arenado to a huge eight-year contract extension worth $260 million. This extension runs through Arenado’s age 35 season, and his $32.5 million average annual value is the highest ever for a position player. This is definitely a surprise; Arenado had seemed destined to test the free agent waters for years in search of playing for a contender and a big-market team. To be fair, the Rockies have quietly built a winning team around him, reaching the postseason in the past two seasons. Obviously, their future was always centered around trying to somehow retain Arenado, and they’ve somehow found a way to do so. This is definitely a day to celebrate in Colorado, as this was a no-brainer decision for the Rockies.

Let’s start off by acknowledging the primary concern with this extension: is Arenado worth the money? Yes, and by a longshot. The 27-year-old has career .886 OPS, including a .942 OPS over the past three seasons. This season, Arenado set career highs in hard contact rate (42.9%), walk rate (10.8%), and weighted runs created plus (132). All together, Arenado has compiled a 25.3 Wins Above Replacement (WAR) throughout his career and a 5.7 WAR this season, according to Fangraphs. With a new statistic I’m pioneering to measure a player’s overall value (article about it soon), I concluded that Arenado is worth around $47 million based on my projections (.903 OPS, 12 drs, 6.5 WAR). It’s possible that Arenado’s production will decline with age, but third basemen tend to age better than other positions, and either way, he’ll likely remain an elite hitter. Plus, age 35 is when the heavy regression starts to hit, and that’s the last season the Rockies will be paying him this historic amount. Furthermore, Arenado’s main red flag was his career .787 OPS on the road, but the Rockies certainly don’t have to worry if his numbers are inflated or not, since he’ll continue to reap the benefits of playing in Colorado. Unless there would be some sort of catastrophic injury, I simply don’t see a scenario in which Arenado does not match the value of this contract. When that’s the case, it’s safe to say that the Rockies made an extremely intelligent investment.

Coming off a 91 win season, expectations are high for the Rockies to contend. It’s concerning that their +25 run differential was by far the lowest among playoff teams, but there’s certainly enough talent on the team to make a playoff run. Either way, it will be easier for the team to not have to worry about Arenado’s contract situation; it gives the front office more flexibility to make a splash possible mid-season. The main importance of this deal, however, is that it allows the Rockies to continue to build a contender for the future around its superstar. Colorado’s rotation is filled with young arms with Kyle Freeland (age 25), German Marquez (age 24), and Jon Gray (age 27), who’ve all shown flashes of excellence in the past. Meanwhile, their offense consists now of Arenado, star shortstop Trevor Story (age 26), young outfielder David Dahl (age 24), and outfielder Charlie Blackmon (age 32, five more years under contract). On top of this young major league talent, the Rockies are complimented with plenty of prospects in a strong farm system. Those prospects included the tenth best prospect in Brendan Rodgers, who should be ready this season, as well as second base prospect Garrett Hampson and pitching prospect Peter Lambert. Farther in the future, first base prospect Grant Lavigne (age 19), and pitching prospects Ryan Rolison and Riley Pint (age 21) are all instrumental pieces towards the Rockies’ future. This also opens up the doors to shop corner infield prospects Colton Welker and Tyler Nevin, now blocked by Arenado, allowing them to pursue short term needs such as catcher. It’s safe to say that the Rockies are in a terrific position to continue to contend in the future, and extending Arenado definitely cements that.

To be frank, the Rockies could not afford to let Nolan Arenado leave. They haven’t had a superstar of this caliber since Troy Tulowitzki, whom they traded, and needed to keep their marketable face of the franchise. Rather than succumb to the big market Dodgers and Yankees like they previously would have likely done, the Rockies front office was extremely aggressive. Give them credit; the baseball world is a better place when small market teams are able to contend and keep their franchise stars. Letting Arenado leave would have had a similar ripple effect to what likely will happen with Mike Trout leaving the Angels in two seasons, the hole he would have left would have been irreplaceable and would have dragged the franchise down.

With the extension of Nolan Arenado, the Rockies made a very smart decision from a baseball and marketing perspective. They keep their long-term window of contention open while not losing their franchise star to a big market team, and prevent a ripple effect that could have been disastrous for them. Meanwhile, Arenado should prove to be well worth the contract, especially since this record for the highest average annual salary for a position player won’t last for long. This is a win-win deal for the Rockies and Arenado, which is the perfect type of contract. The baseball world is simply a better place when small market teams like the Rockies are able to keep their franchise stars and compete with big-market teams, and that’s what Colorado was able to do with this no-brainer extension.