This weekend, an MLB team agreed with a player on the richest contract in American sports history in overall guaranteed money. In a shocking turn of events, that team was not the New York Yankees.
Instead, it's the Detroit Tigers who've set a new financial bar in baseball. The kitty cats of Motown came to terms with two-time defending American League MVP Miguel Cabrera on an eight-year extension worth $248 million. Add in the $44 million they already owed their soon-to-be 31-year-old first baseman through 2015 and you're looking at a $292 million commitment over the next ten seasons. Move over, A-Rod. Move over, Albert. There's a new big fat albatross in town.
The eight new years tacked onto Cabrera's deal carry an average annual value of $31 million, topping the $30.7 million that Clayton Kershaw got from the Dodgers when he inked his seven-year, $215 million agreement in January. Kershaw, though, is only 26. He'll be 32 when the deal ends, or, more likely, 29 if he exercises his 2018 opt-out. Although he's been worked hard in his early twenties, there's a good chance Los Angeles didn't pay for any decline years. Cabrera, on the other hand, will finish his new contract in 2023, at the age of 40. He isn't exactly known as a physical specimen. How many more MVP-type years will the Tigers get for their money? Baseball's brief and painful history of ten-year contracts for players in their thirties tells us it won't be as many as they'd like.
The most surprising aspect of the Cabrera deal is the timing. Sure, the Tigers don't have to play the next two years with the 800-lb gorilla of Cabrera's impending free agency squatting in the corner of every clubhouse they enter, but they've turned a position of financial strength into one of weakness. This wasn't Kershaw, who was entering his final year of arbitration, or Alex Rodriguez, Albert Pujols or Robinson Cano, all free agents who could entertain multiple bidders. The Tigers had the best hitter in the game under control for two more years at a team-friendly price. Odds are he'll get worse, not better in that time, given his age. Would they really have had to pay more than 8/248 to a 33-year-old Cabrera in 2016 had they waited things out?
As the preeminent big spenders in baseball, the Yankees are affected by Miguel Cabrera's new deal as much as anyone. The Tigers' commitment exemplifies the futility of the sort-of fiscal restraint the Steinbrenners employed in letting Cano head off to Seattle. The Yankees may have seen the error of the A-Rod deal first hand, but other teams haven't, not with millions upon millions in TV money bursting from their pockets. New York's financial advantage over other clubs - at least those at the top of the spectrum - is getting smaller and smaller. In the future, the Yankees won't be able to reel in the biggest free agents without conceding a price that's absolutely ridiculous.
There aren't any huge names on the current roster who'll need to be re-signed soon. After a winter spending spree that eclipsed the annual GDP of every nation in the world outside the top twenty, David Robertson is the only Yankee who's nearing a multi-year contract. Still, the price just went up for players on other teams. Hanley Ramirez will be entering his age 31 season next year, just like Cabrera is now. If he can stay healthy and produce like he did in 2013, is a ten-year deal unrealistic? What about Max Scherzer, who the Tigers probably can't afford now? Another elite season from the 29-year-old could propel him into the Kershaw stratosphere. In six years, Mike Trout could hit free agency. If Cabrera can get ten years at 31, how many can a player with superior all-around skills get at 28?
Since the Yankees can't control the market for baseball's top players, they'll need to decide if it's one they want to shop in, or if they'd prefer to pursue a slightly less expensive breed of free agent like they did this offseason. You can put together a pretty good roster from the likes of Jacoby Ellsbury, Brian McCann and Masahiro Tanaka - and there are more of those on next year's free agent radar - Chase Headley, J.J. Hardy and Justin Masterson, to name a few. Yes, it's sad that $150 million-plus deals are now "second-tier", and this isn't the "best guy out there every year" credo that the Yankees lived by in the mid-2000's. But other teams have done well signing role players over outright superstars, even if that approach requires a more substantial contribution from the farm system than the Yankees have received of late.
Or maybe Cabrera's new deal isn't as bad as it looks. With baseball revenues completely out of control, $300 million doesn't mean what it once did. Under that lens, Miggy's contract isn't really the largest in history, as MLB dollars seem to inflate at a much faster rate than those in the general economy. According to Fangraphs' Jeff Sullivan, Cabrera's contract will represent just 0.64% of the $38.8 billion teams are projected to spend on opening day payroll between 2016 and 2023. That's not even in the top 20 all-time, falling in well beneath A-Rod's 2001 deal with the Rangers (1.09%) and his 2007 agreement with the Yankees (0.87%). According to Sullivan's numbers, plenty of deals the Yankees have given out before - Jeter, Giambi, Sabathia - were way farther out of whack with baseball's overall spending than Cabrera's is now. The Yankees survived all those contracts just fine, and in the case of the ten years and $189 million they gave Jeter in 2001, they came out looking pretty good.
Ultimately, the Yankees should pick their spots. During the Cano saga we heard a lot of fan talk amounting to "I want him back but only for..." Sorry, but it doesn't work like that. Teams don't get to choose the price - only if they're willing to pay it. In the end, I was okay with not going ten years for Cano before the Cabrera news broke, and I still am today, but concrete, hard line policies are never a great idea. I'm not in favor of giving that kind of contract to Hanley Ramirez next year. If Scherzer can be had for seven years like Kershaw was, even at $30 mil per, I'll put him down as a maybe. Then there are the special cases. What if Bryce Harper hits the open market in 2019? (coincidentally, a year after the Yankees are done paying A-Rod)? What if Trout gets there a year later? Then the Yankees should be all in, regardless of consequence.