The Cabrera Contract (update below)

There’s been a lot gnashing of teeth this morning over the eight year, $248 million contract extension the Tigers have given to Miguel Cabrera. The extension is tacked on to the two years and $44 million Cabrera has remaining on his current deal, so the new contract is being widely as a ten year, $292 million deal. Cabrera will be 40 when the deal ends and there have been additional reports that there are a potential two additional years of vesting options, which could bring the total payout from the Tigers to Cabrera to $350 million over the next 12 years.

That’s a lot money. The contract seems ill-advised. Yes, as Dombrowski’s defenders have noted, the Tigers’ president has an exceptionally good track record, so is anyone else to judge? But Cabrera, while a great player, does not have quite the value his hitting statistics suggest because, as Keith Law has said, other things matter on a baseball field, too. Furthermore, it’s not at all clear that another team would have thrown *that* much money at Cabrera, when he’d have hit free agency after the 2015 season, especially given the debacles of the Arod and Pujols contracts. It does seem, in other words, that as the Yankees did when they signed Arod to his monster deal after the 2007 season, the Tigers were bidding against themselves.

Still, I find it hilarious when other executives complain about such deals – Buster Olney reported this morning that team execs he spoke to were “appalled” by the deal. Cry me a river. Let me let everyone in on a little secret. Baseball is flush with cash. Local TV deals – the one enormous revenue stream missing from the NFL – are growing exponentially. The Tigers reportedly have the highest local TV ratings in the country. But the reality is that all the clubs are rich. And whether a club spends a lot on players is, to a much greater degree than is typically acknowledged, more a matter of choice than constraint. Just ask the (currently) woeful Astros.

Executives of pro sports franchises are extremely well-paid professionals who preside over very lucrative enterprises that owe their profitability to a particularly favorable mix of government policies and market conditions. For them to complain when one of their own decides to spend some of that largesse – even if ill-advisedly – is a reflection of their entitled sense that normal market pressures ought not to apply to them.

Update: Tim Marchman has a good assessment of Cabrera’s “likely” value over the next decade. I put the word likely in quotes, because forecasting player performance is inherently subject to lots of uncertainty. As Marchman points out, “modeling is really dependent on the inputs used.” If you guesstimate that Cabrera is worth 45 or so wins above replacement over the next ten years, and you value each such win at $ 7 million, then you’ll draw one set of conclusions about the contract. If you think Cabrera is worth closer to 35 WAR between now and 2023, and each win is worth $5 mil, you’ll come to a different set of conclusions. But as Marchnman concludes, either way, the Tigers can probably afford it. And so can the rest of the sport.


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