Evaluating the Biggest Contracts in MLB History

by on April 6, 2012 · 2 comments

I owe you dear readers a qualifier.  This is really about some of the largest contracts in baseball history that were signed prior to 2011, because it might be a tad bit early to grade that Votto deal for $225M with the ink still wet.

  1. Alex Rodriguez (Yankees) – 10 years for $275M signed in 2008
  2. Alex Rodriguez (Rangers) – 10 years for $252M signed in 2001
  3. Derek Jeter (Yankees) – 10 years for $189M signed in 2001
  4. Mark Teixeira (Yankees) – 8 years for $180M signed in 2009
  5. CC Sabathia (Yankees) – 7 years for $161M signed in 2009
  6. Manny Ramirez (Red Sox) – 8 years for $160M signed in 2001
  7. Miguel Cabrera (Tigers) – 8 years for $152.3M signed in 2008
  8. Todd Helton (Rockies ) – 11 years for $151.5M signed in 2000
  9. Johan Santana (Mets) – 6 years for $137.5M signed in 2007
  10. Alfonso Soriano (Cubs) – 8 years for $136M signed in 2007
  11. Vernon Wells (Blue Jays) – 7 years for $126M signed in 2007 & Barry Zito (Giants) – 7 for $126M signed in 2006

1.  The first A-Rod ginormous contract (#2 above) was for 10 years, but it actually covered just 2001 – 2007.  During that time, Rodriguez was paid approximately $158,389,252.00.  During that same period, he played in 1114 games and totaled 874 runs, 1284 hits, 201 doubles, 329 home runs, 908 rbi, and a slash line of .304/.400/.591/.991.  That .991 OPS was good for an OPS+ of 154, and he averaged about 7.5 rWAR per season for a total of 52.6 rWAR during that period.  That works out to approximately $3.011M per 1 win above replacement.

2.  The A-Rod megadeal remix (#1 above) is also for 10 years.  In the first 4 seasons of the new deal, A-Rod has played 498 games with 323 runs, 100 doubles, 111 home runs, 390 rbi, and a slash line of .284/.375/.521/.896.  The .896 OPS translates to an OPS+ of 133.  For his age 32-35 seasons, Rodriguez has managed an rWAR total of 14.9 which is good for about 3.7 rWAR per season.  With a total salary during that time of $126M, A-Rod has provided a ROI of $8.456M per 1 win above replacement.

3.  Interestingly, the Derek Jeter mega deal has actually run its entire course, so we have the benefit of passing judgment on a $189M contract that covered a superstar player starting in his prime years through some of the later years in his career.  In the 10 years covered, Jeter played in 1509 games, scored 1080 runs, hit 315 doubles, 156 home runs, 721 rbi, 215 stolen bases and compiled a respectable .310/.380/.445/.824 (117 OPS+).  Despite failing to post a season above 6.3 rWAR, Jeter proved to be the model of consistency while averaging almost 4.3 rWAR per season for a total of 42.7 rWAR.  That’s $4.426M per win above replacement.

4. Teixeira just finished the 3rd season of 8 packaged into his current deal, but he has played almost 470 games.  During those 470 games, he has 306 runs, 105 doubles, 111 home runs, 341 rbi, and a .266/.363/.514/.877 (128 OPS+).  Teixeira’s 12.0 WAR during that time has come at a cost of $64.375M which approximates to $5.365M per rWAR.

5.  Although Sabathia’s pay rate has since been modified, the original 7 year / $161M deal has some value in terms of scrutinizing.  His current contract extension made not changes to the original terms for 2009-2011, so his numbers from those 3 years are fair game.  That’s fine, because Sabathia went 59-23 with a 3.18 during that time.  The Yankee workhorse averaged 235 innings a season while yielding a 1.189 WHIP.  CC’s 16.2 rWAR came in exchange for $63,857,142.  For those of you keeping score at home, that’s $3.942M per rWAR.

6.  8 years and $160M may have been a lot of money for a guy who couldn’t remember to cash his paychecks, but I doubt the Red Sox had any complaints.  Man-Ram played in 1136 from 2001 to 2008, and he was good for 779 runs, 1306 hits, 270 doubles, 291 home runs, 921 rbi, and a stout .315/.415/.595/1.010 (158 OPS+) line during that period.  Ramirez accumulated 34.8 rWAR (4.3 per season) for the tidy sum of $147,238,269.  Although that $4.231M per rWAR may not have been a bargain, that certainly doesn’t account for the human interest and unintentional comedy factors.

7.  Given the recent glut of enormous contracts passed out to guys who play the not-hot corner, you might think that Miguel Cabrera is underpaid.  You might be right.  It’s likely that 8 years for $152.3M sounded ridiculous at the time, but since signing that deal that took effect for the 2008 season, Cabrera has been an absolute beast.  In the first half of that deal, Miggy has played in 631 games, scored 403 runs, and hit 163 doubles, 139 home runs, 461 rbi, and maintained a line of .322/.403/.571/.974 (157 OPS+).  While spending $65,683,049 on anything may be tough to consider a bargain, getting 21.5 rWAR from a player in 4 years does not usually come cheap anyway.  Cabrera might be the exception, because his average rWAR cost is just $3.055M.

8.  Todd Helton‘s original deal covered seasons 2001 through eternity, but he has since signed an extension that runs from 2011 – 2013.  Still, he played the 10 seasons under his $151.5M deal, and that’s good enough for this exercise.  In those 10 years, Helton averaged 142+ games played per season while also accumulating 927 runs, 390 doubles, 226 home runs, 871 rbi, and a batting line of .321/.428/.539/.967 (138 OPS+).  His offensive prowess combined with his defensive contributions helped Helton ring up a total of 44.0 rWAR (4.4 rWAR/season) for $128,925,000.  At $2.930M per rWAR for Helton, I’d argue that the Rockies would do it all over again.

9.  Johan Santana‘s 6 year /$137.5M deal has reached the 2/3 point, and you can imagine how the numbers look.  If you only judge Santana’s contract based on when he pitched in 2008-2010, you have a guy who went 40-25 with a 2.85 ERA, pitched 200 innings a season, and maintained a really solid 1.175 WHIP.  In that regard, you might say that the Mets did well to get 14.4 WAR for $56,005,062.  After all, that works out to $3.889M per rWAR from the ace of the staff.  On the other hand, you also have to consider that Santana missed 2011 due to injury, but the Mets were still on the hook for his $21,644,707 salary.  When he’s healthy and at the top/near the top of his game, he’s well worth the money, but questions abound about that “healthy” part.

10.  Alfonso Soriano has become synonymous with the concept of a “contractual albatross” in Chicago, but I can’t blame Soriano for signing the deal.  Over the first 5 years of the contract, Soriano has played 645 games and produced 354 runs, 161 doubles, 132 home runs, 367 rbi, and a slash line of .266/.320/.498/.816 (109 OPS+).    Even with a dWAR of 1.2 during that time, Soriano has managed only 7.8 rWAR for a cool $79M.  That’s an astonishing $10.128M per rWAR.

11a.  Maybe 8 years and $126M for a guy (Vernon Wells) who hits .262/.309/.454/.762 over the first 4 years of a contract seems like a lot to you.  It is, especially when you think of it in terms of 6.0 rWAR for $50,250,000.  It’s not quite up there with the Soriano albatross, but $8.357M / rWAR isn’t exactly a bargain, either.

11b.  Understand first that wins and losses provide an extremely narrow view of a pitcher’s performance.  Unless you can provide additional data to expand that view, then you simply lack the multi-dimensional view necessary to evaluate a pitcher’s body of work.  Then there is Barry Zito and his 43-61 record with a 4.55 era and 1.407 WHIP over the past 5 seasons.  That’s exactly 3.8 rWAR for $80M even.  Granted not all “rWAR” is created equally, and some would argue rather convincingly that rWAR for pitchers misleads at best.  Yeah, I can flow with that, but $21.053M per 1 win above replacement qualifies as a “dodo” instead of an albatross.  A contract “dodo” is a deal so infamous that it is never seen again, and the Zito deal just might qualify.

Of course, hindsight is always 20/20 or something like that, but are the potential downsides to all these deals so unpredictable?  Let’s review.

1.  Say all you want about Tom Hicks, but he and the Rangers get his money’s worth and then some out of A-Rod until they passed the point of sustainability.

2.  The Yankees extended a guy who had already reach the 500 home run club and was just coming off of a season in which he hit .314/.422/.645/1.067, so locking him down as a franchise icon through his age 41 season didn’t seem all that ridiculous as long as A-Rod didn’t fall apart.  He currently still possesses the ability to loom in the on-deck circle, but he no longer has the same aura.  For now the money isn’t all that badly spent, but just imagine what paying $20M a season to his reanimated body will feel like in 2017.

3.  In retrospect, the big Jeter contract was reasonable in terms of baseball production.  Throw in the added benefits of “Jeter the Icon”, and the Yankees made out like, well….the Yankees for a long while.

4.  Realize that the Yankees got their man.  Also realize that they got their man, and he has been a beast at times in the heart of that great lineup.  Understand that Tex probably won’t be much of a bargain for the last 5 years of his deal, and that assumes he doesn’t leverage his way to a reconstructed extension-type deal.

5.  It should come as no surprise that Sabathia has been worth every penny in terms of both his performance and maintaining his reputation as a big game pitcher.  If no changes are made to his current contract, this whole exchange could be a tossup, and there is nothing wrong with that for either side.

6.  Manny was just being Manny, and that helped the Red Sox in ways that cannot be adequately measured by money.  Since I don’t care about all that extra stuff, though, I’ll just say that Manny delivered the numbers and the attitude the team needed for a long time.

7.  When properly framed in the context of what other players have been paid (or overpaid), the decision to lock up Miggy through his age 32 season seems like a stroke of brilliance.  Imagine having possibly the best hitter in all of baseball signed for another 5 years, and your team is paying him an amount that may actually be a bit low in the current market.

8.  It almost does not matter one iota what Helton does for the next 2 seasons.  As long as he can still rake when healthy, the guy owes nobody anything in terms of his contract.  Seriously, the Rockies got a perennial All-Star and face of their franchise for almost a decade for about $3M per rWAR.  SIDE NOTE:  I just truly feel that Helton’s career in Colorado should end with the PA announcer declaring “He was a player of Coors.  Honor him.” as his teammates carry him off the field.

9.  Even after missing 2011, Santana’s relative value has not suffered to the “dodo” point yet.  Imagine just how good he was before getting injured.  If he can re-invent himself and succeed, then his contract may not go down in history with the “albatross” asterisk in the minds of many fans.

10.  Soriano may be the contract anchor that just keeps on dragging the Cubs as an organization for another few years.  He simply hasn’t performed up to the expectations inevitably set by having a $136M contract.  That’s alright.  I mean, that’s alright for just about everybody but Cubs fans.

11a.  I get it on some of these big deals.  Vernon Wells was a .281/.331/.478/.809 career hitter and was coming off of a big year.  That still does not justify a $136M contract for a guy who averaged 2.2 rWAR per season.

11b.  No. $21M+ per 1 win above replacement?  Just no.  I can’t.  It hurts me as a fan of baseball.

TIDBIT:  To truly break all this information down into comparable bites useful for an apples-to-apples comparison, it would be necessary to divide each contract into individual seasons, apply a correction for inflation/deflation/stagflation/irrigation, and assign a different monetary value to rWAR for each season.  I am not that man.  I mean that I could technically be that man, but I’ve got baseball games to watch.

MORE BITS OF TID:  I will not directly imply that the history of these huge contracts has anything to do with what will happen to the likes of Albert Pujols, Joe Mauer, Adrian Gonzalez, Carl Crawford, Troy Tulowitzki, Prince Fielder, or Joey Votto, because I cannot predict the future.  I do know that the only 1 of those deals that seems like a good return on a team’s investment right now is the Tulo one, but maybe I’m just biased against first basemen.

Follow gr33nazn on Twitter for more talk of “slash lines”!

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Cardinals fan since I could hold a fishing pole steady. Accidental blogger. Opinionated. I could care less about what you think of me. Constantly confounded, bemused, and confuzzled (ie I'm a pc and a mac). I'm an IT infrastructure analyst with a penchant for breaking tech toys. I ate a sabermetric primer for breakfast. I love playing "All-powerful GM of MLB". The 2010 Cardinals represented a good, practical definition "cognitive dissonance". The 2011 version got by on duct tape and a prayer, and I'm fine with that. They just need new tape for #12 in 12.
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{ 2 comments }

OtherScreen April 6, 2012

Nice data and analysis. Makes me feel a bit better about the whole Albert thing.

I suppose I should know this but what’s the market value of 1 rWAR?

Dennis April 6, 2012

The “market value” of 1 rWAR kind of depends on who you ask and when, but an easy rule of them is $5M / rWAR. That just makes the calculations a bit easier when working through value propositions and ROI stuff.

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