THT Roundtable: Miguel Cabrera signs eight-year, $153.3 million contract extension

ESPN reports that the Detroit Tigers have signed Miguel Cabrera to an eight-year, $153.3 million contract extension that would buy out his last two arbitration years and pay him an average of $19 million a year for his first six years of free agency. Here’s what our writers think.

Matthew Carruth: I prefer to think of this more along the lines of a 6-year, $120 million contract given that Cabrera had two more years of arbitration left. Cabrera’s bat is clearly worth that and more, though it will be interesting to see if there’s any slippage due to the tougher league. The $20 million or so dollar question is his defense. How much of it was a result of his poor conditioning? How much of that poor conditioning is actually behind him? If Cabrera is still poor with the glove, he might undershoot $20 million/year in value from a pure win standpoint, but given that’s about the worst-case scenario, this is a gigantic win for the Tigers.

Geoff Young: Cabrera should still be in his prime (albeit toward the end of it) when this contract expires. His defense at third base and conditioning are potential concerns going forward, but that bat will play anywhere. I expect Cabrera to be an elite offensive performer for the next several years. A batting title or two isn’t out of the question, nor is an MVP Award or two. Assuming the market remains more or less what it is, I don’t see much, if any, downside here.

Brandon Isleib: We’ve already seen Cabrera motivated in conditioning this year—he reported to camp in better shape than before, and he seems to be spurred on by being out of the Marlins debacle, as we all would if we were in it. He’s obviously done something right to be this good in the majors when several of his age group are still prospects, and the improvement he brought to spring training is probably more indicative of his actual state going forward—more this than Andruw Jones, anyway, who got serious about things way too late, which bodes well.

Say what you will about the defense and conditioning, but he’s not historically as bad at either of those than Manny Ramirez, his head’s more in the game, he cares more about improving those things, and he looks more mature now than Manny was at 24 while getting about the same amount of money (slightly less, particularly with inflation).

On top of that, with all the minimum wage increases of 2007-09 devaluing the dollar significantly, I think it makes all the sense in the world to throw lots of current dollars at him. If you consider minimum wage as the baseline of the economy, then today’s dollar is worth 80 percent of what it will be even by the end of 2009, making this deal something like $122 million of today’s dollars over the course of it. This is one of those rare periods of history where we know tomorrow’s dollar is worth much less than today’s, so I’d throw all my money now into long-term contracts without batting an eye. At least for Cabrera.

Dave Studeman: We’re clearly in a new period of salary inflation—have been for several years. The key drivers are the relative scarcity of good free agent players (there are so many good one- and two-year players) and the great cash influx MLB has enjoyed recently. (I personally don’t think increases in the minimum salary have much at all to do with player salary inflation.)

I agree with Matthew that it’s not the same as giving an eight-year deal to a free agent. Since Cabrera has two years left of arbitration, it’s more like a six-year deal. It’s risky, but not as risky as it seems.

Here’s something to think about:

Over the last three years, Cabrera has been 17, 21 and 18 Win Shares Above Bench. or six-seven wins above replacement. I’m not sure that Win Shares gives him enough of a negative grade for his fielding, so I’ll take the low side of 18/6. Those are superstar numbers.

Last year, teams paid about $1.8 million for each WSAB, which means Cabrera would be worth about $32 million per year—in last year’s dollars! When you factor in inflation, that $20 million a year looks like even more of a steal. Cabrera should get a lower salary because of the multi-year deal (more risk for the club), but still…

See this article for details on last year’s salary structure.

The lesson to me is that teams don’t usually overpay for superstar talent—they overpay for average talent.

Lisa Gray: Remembering that the Tigers are an AL team and that Cabrera can be shifted to first base or DH after the departure of Gary Sheffield, I certainly would have given him a deal like this. I know that a lot of people talk as if he should have been offered a shorter deal, but I seriously doubt he would have taken it. I’m a fan of the team that signed Carlos Lee at age 31 to a 6 year contract.

I think that in spite of what looks like a huge amount of money, teams really don’t expect that the contract will hamper them in any way even if the player fails. Also, what people keep forgetting is that money is pouring into the MLB coffers and the players are receiving less and less of it and the owners are keeping more and more.

Chris Jaffe: There’s risk involved, but it’s well worth taking in this case, especially if a slimmed down Cabrera showed up in spring training.

A few years ago, former Craig Burley made an observation that really stuck with me. He noted that AL teams should be looking to increase their risk, not decrease it. Otherwise, if the Yanks and Red Sox make sensible moves (which they generally do), and they continue to have a major cash advantage (definitely) then avoiding risk will mean you’re accepting having a team not quite as good. Obviously, it applies less to teams outside the East, but it’s something to keep in mind.

And in fact, it’s something Dave Dombrowski’s done ever since coming to Detroit. Remember what all the critics said when he picked up gimpy-kneed Magglio Ordonez for five years and $75 million. I do—I was one of those critics.

Making a high risk/reward move does mean it can come back to bite you in the arse, but it also means you have a better bet to be the best team in the league. Risk is a dangerous thing, but it can be worth it. Maybe he’ll get injured, or get fat, or become so bad at third that they have to move him to DH or LF where his bat won’t distinguish him from his rivals as much. Then again, he’s a greatly talented hitter who the Tigers will have for his entire prime.

I really like this move.

Steve Treder: It’s an extremely reasonable contract for the Tigers. I’d have no hesitation to sign it in their circumstance.

Even if Cabrera’s conditioning issues persist, and haven’t simply been an aspect of immaturity, they likely won’t have a significant impact on his performance until the final few years of the deal. In the meantime he’ll almost certainly be one of the elite hitters in the game. And if his defense proves problematic at third base, he can always be shifted to a corner outfield spot, or first base, or DH as a last resort.

Cabrera is the sort of talent you lock up.