The Biggest MLB Contracts Can Kill Your Favorite Team
With Robinson Cano's impending free agency and rampant speculation he's seeking a 10-year, $305 million deal, the Yankees may be wise in offering something significantly less.
In fact, the New York Daily News reported the Yankees have offered Cano "deals of eight years, $138 million and six years, $144 million," each of which was rejected by Cano's representatives. So, considering the gap between the two sides is so enormous, the natural question becomes, who is making the right decision here?
Let's dig into the five largest 10-year contracts in baseball history to see how well those deals worked out for the players and the teams that signed them.
Team: New York Yankees
Amount: $275 million
Age of First Season: 32
This contract leads the charge not only in amount but also in its atrocity. While the Yankees may have won the 2009 World Series with Rodriguez as a valuable contributor, even after steroid allegations, suspension, and scandal, this deal has been marked more than anything by declining on-field performance from Rodriguez. Just consider his stat line for the average of the 12 full seasons prior to the deal compared to the next six:
On Base + Slugging
First 12 Seasons
Last 6 Seasons
With four more years and more than $100 million remaining, this is one the Yankees wish they could have back.
Team: Texas Rangers
Amount: $252 million
Age of First Season: 25
Yes, Alex has received not one, but two 10-year contracts worth more than a quarter of a billion dollars each. While it isn't totally fair to call it that considering his second contract technically overlapped part of the first, it is still nonetheless staggering to consider the $353 million he's been paid to play America's past-time.
The Rangers ultimately traded A-Rod after three years with the team, and the players they got in return were Alfonso Soriano (whom they traded after two seasons) and prospect Joaquin Arias , who only played 91 games for the Rangers. While A-Rod was certainly productive with the Rangers (he averaged 52 home runs and 132 RBIs with the team), you have to wonder if the Rangers perhaps wished they'd never signed him.
Team: Cincinnati Reds
Amount: $252 million (12 Years )
Age of First Season: 28
When Joey Votto signed with the Cincinnati Reds before the 2012 season, Reds owner Bob Castellini said simply, "Is it risky? No doubt."
Considering Votto missed almost a third of the season in 2012 with a knee injury, it's tough to judge how well he's performed. However Baseball Reference tells us his Wins Above Replacement, which attempts to standardize player performance, was 7.0 per 650 plate appearances -- meaning he accounted for 7 more wins per year than an average player -- compared to 6.1 his first four seasons .
Votto has been a cornerstone for the small-market Reds team, so this is likely one the Reds are happy with thus far. But this contract is still brand new. Only time will tell how they feel at the end of this deal.
Team: Los Angeles Angels
Amount: $240 million
Age of First Season: 32
While Albert Pujols will likely go down as one of the best players ever, he has had his fair share of difficulties through the first two seasons of his most recent 10-year contract with the Angels. In fact, his two seasons in LA are the worst of his career:
On Base %
On Base + Slugging
STL (11 yrs)
LAA (2 yrs)
While the most recent season was marked by a foot injury that cost him 63 games, with eight years and $212 million remaining on his deal, the Angels have undoubtedly begun questioning the value of the deal they offered Pujols.
Team: New York Yankees
Amount: $189 million
Age of First Season: 27
In 2001 Derek Jeter received what was then the second largest contract in baseball history following his World Series and All-Star game MVPs in 2000. While the first five years of his Yankees tenure were met with four World Series rings and the next 13 only saw one, Jeter's legendary status both on and off the field have made him one of the most iconic players of a generation.
According to Forbes, "The value of the Yankees and its related enterprises has increased by nearly $5 billion during Jeter's career. Yes, other stars contributed greatly to the Yankees success, but no one quite like the Captain."
While it's certainly the smallest contract on this list, it likely has returned the greatest value when you consider who Jeter is and what he has meant to the Yankees franchise.
While the list concludes on a positive note with a Yankees' great, based on the evidence, the team would do well to reconsider the 10-year contract Robinson Cano commands. In fact, renowned baseball statistician Bill James once noted "Good hitters stay around, weak hitters don't," but he continued "most players are declining by age 30; all players are declining by age 33."
Cano is certainly a phenomenal talent and worthy of the accompanying financial windfall, but a 10-year deal hasn't worked for those in baseball on the wrong side of 30 (he'll be 31 in three weeks). Knowing that, the Yankees are making the correct decision by offering Cano a shorter deal.
So the natural question becomes -- how much is Cano actually worth?
Thankfully baseball has a robust culture of analytical framework that makes this calculation relatively easy. First -- let's assume that Cano will play 8 more years retiring before his 39th birthday, just shy of Jeter.
Popular baseball website Fangraphs notes that a player's wins above replace declines at a rate of about half a win per season. It also suggests that each win in 2013 was worth about $5.25 million and that dollar values grows at a rate of about 5% per year .
While Cano's production declined from 7.7 wins above replacement in 2012 to 6.0 wins in 2013, for the purposes of this, we decided to be generous and suggest he would maintain his 6.0 level beginning in the first year of his contract:
Wins Above Replacement
Value Per Win
Here we can see that Cano's projected value is approximately 8 years and $216.5 million.
Now you may be wondering if those 34 wins from age 31-38 is out of the question -- and to bring it full circle we take it back to Jeter. From age 23-30 Jeter had 40 wins above replacement, and Cano had 36.8. Over the next eight years Jeter had 32.5 wins, so the projection of 34 doesn't seem too out of the ordinary.
In all of this we see that Cano probably isn't worth the $300 million he is commanding -- but he will likely be worth more than the 6 years $144 million. If those two did the simple negotiation tactic of meeting in the middle -- they'd end up at 8 years, $222 million -- or roughly the exact amount of Cano's is expected value.
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