Being spurned by reigning AL Cy Young winner Max Scherzer hasn't reined in the Tigers' desire to spend big. On Thursday, they reached an agreement with two-time AL MVP winner Miguel Cabrera on an eight-year extension running through 2023, worth roughly $248 million. While there's little doubt that the 30-year-old slugger (31 on April 18) is the best hitter in baseball right now, this record-setting contract locks in what's likely to be his decline phase at a fairly steep price.
On top of the two years and $44 million remaining on his current deal (eight years, $152.3 million), Cabrera is now guaranteed a total of $292 million over the next 10 years, surpassing Alex Rodriguez's 10-year, $275 million deal as the largest in history. Without considering those two years, the $31 million average annual value over the new portion of the deal eclipses the $30.7 million of Clayton Kershaw's recently completed extension as the highest in the game's history. If that's not enough, Cabrera has a pair of vesting options valued at $30 million apiece tacked onto the end of the deal.
Traded to the Tigers in December 2007 after a five-year run with the Marlins that began at age 20, Cabrera has emerged as the game's most dangerous hitter during his time in Detroit. Among players with at least 1,500 plate appearances since then, his .327 batting average, .588 slugging percentage, 163 OPS+, 229 doubles, 227 homers and 737 RBI are all MLB highs, with the on-base percentages of Joey Votto (.421) and Joe Mauer (.411) the only ones surpassing his .407. Note that Mike Trout just misses the cutoff at 1,490 PA; his 166 OPS+ edges Cabrera, though none of his slash stats (.314/.404/.544) top the man who's beaten him out for the last two MVP awards, and his playing time is less than half of Cabrera's 4,054 PA in that span. Trout is the better all-around player — ready to make a mint himself — but calling him the game's best hitter is premature.
During his Tigers tenure, Cabrera has won three straight batting titles, led the league in OBP three times and in slugging percentage twice, all while helping the Tigers to three straight AL Central flags. He won the Triple Crown in 2012, the first player to do so since Carl Yastrzemski in 1967, and the "slash-stat" Triple Crown in 2013, something most recently done by Mauer in 2009. He hasn't led the league in Wins Above Replacement at any time since the trade thanks to below-average defense, but his 36.4 WAR across that span is second only to Albert Pujols' 38.3.
Given the length and dollars of Cabrera's deal, the specter of Pujols looms as a cautionary tale. In December 2011, the three-time NL MVP left the Cardinals after an amazing 11-year run and signed a 10-year, $240 million deal with the Angels. In the two years since (his age-32 and 33 seasons) he has fallen off considerably, hitting a combined .275/.338/.485, numbers that don't even measure up to the career-worst .299/.366/.541 line from his final season in St. Louis, let alone his overall .328/.420/.617 line as a Cardinal. Once a model of durability, he missed the final 65 days of the 2013 season due to plantar fasciitis, and what he can provide over the eight years and $212 million left on his deal looks a whole lot less appetizing than it did before.
Cabrera has been even more durable than Pujols; from 2004-2012, he averaged 158 games a year, falling below 157 only once. A series of injuries — back, hip, groin and abdomen — in the second half of the 2013 season limited him to 148 games and often forced him to the bench in mid-game; he wasn't nearly at full strength in the postseason, batting .262/.311/.405 with two homers in 45 plate appearances. After the season, he underwent surgery to repair a groin tear, and has since adjusted his exercise regimen to strengthen his core. By all accounts, he appears to be back at full strength.
Cabrera's game has generally lacked the baserunning and defensive skills that enhanced Pujols' value during his prime, though it's worth noting that he did battle third base to a bloody draw in 2012-13 in order to accommodate the presence of Prince Fielder, who was traded to Texas over the winter. His move back to first base is worth bearing in mind when considering what his next 10 years might look like from a value perspective, something I did during the offseason using a simple model for my What Is He Really Worth? series covering top free agents Robinson Cano, Jacoby Ellsbury, Shin-Soo Choo and Mike Napoli as well as Trout.
To recap, the model incorporates past performance, a projection of future performance, the market cost of a marginal win, inflation and aging, building on the top research done in those areas over the past several years. As I noted in that series, rather than pin a single value to a player, I showed how changes in our assumptions with regards to any of those parameters can affect an estimate of worth, producing a range of values that proved to be more or less in line with the seemingly shocking contract values thrown around.
For any player, the model starts with a baseline projection of future performance based on a weighted sample of the recent past. In this case, I used a 5/4/3 weighting of Cabrera's past three seasons, meaning that I multiply his 2013 WAR by five, his 2012 WAR by four and his 2011 WAR by three and divide the whole thing by 12 (5 + 4 + 3) to get an approximation of what 2014 holds. For Cabrera, that's an average of 7.4 WAR; had I used a 5/4/3/2 model using his 2010 season as well, it would have been 7.25. Because Cabrera is shifting to first base, that baseline needs to be adjusted, and even given Cabrera's woes at the hot corner (-22 Defensive Runs Saved over the past two years), the hit is a steep 12 runs a year based on the positional adjustments built into the Baseball-Reference.com version of WAR (+2 runs per year for a full-time third baseman, −10 per year for a first baseman). That knocks his 2014 baseline projection down to 6.2 WAR.
Using Dan Szymborski's $5.45 million per win figure based on this winter's free agent contracts, Jeff Zimmerman's finding of a 0.4 WAR per year decline for star hitters in the age 30-35 range, and a five percent rate of inflation, here's what Cabrera's next 10 years might look like:
I swear on a stack of Trout rookie cards that the $290.6 million free market valuation for Cabrera's next 10 years was the one spit out straight from the standard set of assumptions I laid out above; I didn't test any other values before dialing back. What that suggests is that the Tigers are seeing Cabrera's gradual decline and the movement of the market along lines similar to this model. Even in decline, it sees Cabrera providing 44.0 WAR over the next 10 years, for a yield of $6.64 million per win.
If I go back and assume Cabrera's decline gets a little steeper on the back half — say an extra couple of runs per year to reflecting more time at DH (which has a −15 run per year adjustment factor compared to −10 for first base) — that lowers Cabrera's production to 41.0 WAR over the life of the deal (down to 1.6 WAR in 2023, at a value of $13.5 million) with a market value of $266.8 million over the life of the deal, an average cost of $7.12 million per win based on the $292 million figure.
If I cut the rate of inflation to four percent while maintaining those assumptions, the market value drops from $266.8 million to $257.3 million; if I increase it to six percent instead, it rises to $276.7 million. If I restore five percent inflation and maintain that decline pattern but increase the current cost per win to $6 million to reflect the fact that the Tigers are in win-now mode for the foreseeable future and are thus willing to pay a premium, that 41.0 WAR is worth $293.7 million.
In other words, we're right in the ballpark; it's not hard to see how the Tigers can get to $292 million for 10 years. But while Cabrera's deal may be in line with a fairly standard set of assumptions, that doesn't make it a good deal, because in all likelihood, it's underestimating the risk of an even steeper decline. The problem with a simple model such as this is that it can't foresee catastrophe, the kind of career-disrupting injury or other situation that can turn a long-term deal into a Ryan Howard-sized lead balloon.
If that happens, the cost per win of the contract will soar, and Cabrera and the Tigers could wind up looking like Howard and the Phillies; due in part to an Achilles injury after the 2011 season, the once-mighty first baseman has been worth just 2.0 WAR over the past four years combined and has been 0.4 wins below replacement while pocketing $40 million over the last two. He's still owed $85 million for his age 34-36 seasons with a $10 million buyout for his age-37 season. This isn't to say that Cabrera — who doesn't have the same kind of platoon or defensive issues — is necessarily headed down that path, but it's within the realm of possibility. So is watching him blow past the 3,000 hit and 500 home run milestones (he has 1,995 and 365, respectively) as a Tiger while cementing his place as an inner-circle Hall of Famer.
For the near term at least, the Cabrera deal shows that despite the breakdown in negotiations over a deal that would have made Scherzer the game's sixth-highest pitcher, owner Mike Ilitch is still willing to pay top-of-the-line salaries to keep his top talent in Detroit. Cabrera will have Justin Verlander as a teammate through at least 2019 (the latter has an option for 2020) and both Anibal Sanchez and Ian Kinsler as teammates through at least 2017 (both have 2018 options). It's the rest of the roster that will be a mystery, and general manager Dave Dombrowski will have his work cut out in using his budget — and hopefully, the team's player development system — to find affordable, effective players to surround those expensive parts. If he's not keeping Scherzer, who appears headed towards free agency, that's at least $24 million more per year to play with.
Still, one can't help but feel that the Tigers are overcompensating at a time when they need a PR boost. With Cabrera two years away from free agency, there shouldn't have been any real urgency to wrap this up now, and yet the team has chosen to strike when he's at the absolute peak of his career, with nowhere to go but down.