Good luck to any baseball team seeking to get reasonable value out of a 10-year commitment to a player in his 30s.
But let’s try to follow the Tigers’ logic in committing $292 million to Miguel Cabrera over the next 10 years, difficult as it might be.
These endless contracts always work the same way — teams pay a premium for the early years, knowing their asset will depreciate over time.
The expected value of a win varies from club to club, year to year. One executive, however, said the current number generally is between $6 million and $8 million.
Cabrera, who turns 31 on April 18, was 7.6 wins above replacement (WAR) last season, according to Fangraphs.com. So, by the rawest of measures, Cabrera was worth between $45.6 million and $60.8 million.
Those figures, though, are calculated in a vacuum, removing payroll considerations, market size and ownership goals, as well as other qualifiers.
WAR is an inexact assessment. What’s more, clubs determine value on a sliding scale. A team might pay a player $12 million for two years but not $30 million for five.
Cabrera right now is worth far more than the $22 million per season he will earn over the final two years of his current deal, and even more than the $31 million per he will earn over the eight of the extension.
Again: right now.
Of course, some used the same arguments to justify the Angels’ 10-year, $240 million investment in free-agent first baseman Albert Pujols, and look how the first two years of that deal turned out.
At the time Pujols signed, he was a year older than Cabrera is now. Yet, from one perspective at least, his contract actually made more sense.
The Angels had to give Pujols the money to land him in a competitive marketplace. The Tigers faced no such urgency with Cabrera; they had him under contract for the next two years at $22 million per season.
What, then, was the rush?
Cabrera is a designated hitter in waiting who offers minimal defensive and baserunning value. Would he be worth more at 31 or 32 than he is at the moment?
The Tigers might have feared inflation. They also might have feared that Cabrera would win his third straight MVP award — and then next offseason, with free agency a year away, grow itchy to hit the open market.
In effect, the Tigers awarded Cabrera this eight-year, $248 million extension to prevent him from even pondering such possibilities.
A smart bet? Not in any rational world. But who says the Tigers, under owner Mike Ilitch, are operating rationally?
Clearly, Ilitch is willing to continue overpaying to secure his preferred big-ticket items. The question is whether the team will exercise greater financial restraint when Ilitch, 84, is no longer as involved.
The Tigers recently traded first baseman Prince Fielder to escape a huge contract. Now they’re investing long term in another big-bodied slugger, albeit one who is even more gifted.
In a post-Ilitch era, they could end up following an NBA model, sinking huge money into a few stars and skimping on the rest of their roster.
Indeed, the Tigers now will pay two players – Cabrera and right-hander Justin Verlander – a combined $59 million per season from 2016-19.
Right-hander Max Scherzer, who recently turned down a six-year, $144 million offer according to Jon Paul Morosi of FOX Sports 1, almost certainly will depart as a free agent at the end of this season.
Stupid money? Of course.
Fans complain about salaries, say they’re insane, but teams keep paying them and none is going broke. Quite the opposite, in fact. Considering that baseball is a $9 billion industry, an investment of nearly $300 million in the game’s best hitter might not be crazy at all.
In any case, the next beneficiary will be the Angels’ Mike Trout, who is at a much lower service level than Cabrera, one year away from arbitration.
Trout was 10.4 wins above replacement last season — a $62.4 million to $83.2 million player based on the raw numbers cited earlier. He’s also 22, years away from entering his prime, still full of upside.
Should Trout accept the six-year, $150 million deal reportedly under discussion, knowing it only would be slightly more than half of the Tigers’ total investment in Cabrera?
Why not? He would become a free agent at 28, and heaven knows what he will be worth then.
Cabrera, a lesser all-around talent, just raised the bar at 31.