Okay, So Miguel Cabrera's Contract Is Bad. Just How Bad Is it?

The only thing more predictable than ballplayers signing enormous deals is people complaining about them, so when news of Miguel Cabrera's new eight-year, $248 million contract extension broke, you knew that this sort of thing—it amounts to saying that $248 million is a lot of money—was coming.

What makes the dismay and outrage over this deal different is that people who know what they're talking about share it. Dave Cameron of Fangraphs calls it "terrible." Keith Law of ESPN calls it a "disaster." Jeff Passan of Yahoo describes it as "bloated, excessive, unnecessary, history-ignoring, common-sense-disregarding... [it] may well be the greatest debacle in the desolate baseball wasteland filled with bad-contract carcasses."

You don't have to bring in any fancy statistics to see what the problem is: The extension won't kick in until Cabrera is 33, meaning that the Tigers will be paying a fat designated hitter the highest salary in baseball history well into his decline years. There's a reason why Petchesky is proclaiming this deal "the one that's going to cause the lockout in three years." Still, the contract is nowhere near as bad as it looks, and there's a non-negligible chance that it might prove to be a pretty good deal after all.

The value of a contract is basically a function of two things: How good the player projects to be, and how much that's worth. Without going into too much detail, the rough consensus among baseball wonks is that Cabrera will be worth about 5.7 wins above replacement this year—that's what Dan Szymborski's ZIPS system comes up with—and that the market value of a win is around $5.2 million. Over time, Cabrera will get worse (the rule of thumb is that a player loses half a win's worth of value every year), but the price of a win will also inflate, at something like 5 percent per year. Run all that together and you get Cabrera being worth 34.5 wins over the full term of his contract, worth $79.5 million less than the Tigers will be paying for them. The chart below has this as the conservative model.

Okay, So Miguel Cabrera's Contract Is Bad. Just How Bad Is it?

There are, though, other assumptions you can apply. One is that ZIPS is understating Cabrera's value: He's been worth 7.8, 6.8, and 6.7 WAR over the last three years, and you wouldn't be crazy to peg him at something like 6.8 WAR for this year. The other is that valuing a win at $5 to $5.5 million might be a serious underestimation. Apply a $7 million figure, and project Cabrera more in line with his recent performance, and you end up him being worth $91 million more than his contract will pay him over the next decade. (That's the optimistic line in the chart.) Split the difference and you get $298 million—more or less exactly what he'll actually be paid.

This is another way of saying that the Tigers, a team run by smart people who definitely ran much more sophisticated versions of the analysis above before making a $300 million business deal, aren't idiots. They know that they're taking a calculated risk, but Cabrera—one of the best hitters ever— is the kind of player worth taking a risk on, the deal isn't going to cripple the team whatever happens, and there are even scenarios where Cabrera ends up being worth quite a lot more than he's paid. What baseball fans should take away from it isn't that statistics offer some sort of infallible insight into possible futures, but that modeling is really dependent on the inputs used, and that there are reasonable ones that make this deal look a hell of a lot better than even all the smart people seem to think it is.

All that said, there really is a serious chance that this deal will turn out at least as badly as Passan thinks it will. There aren't too many comparables for Cabrera as a hitter—he's right there with the likes of Musial, Mantle, and Aaron—but as an overall player, he's not quite in the company of the historic greats. The chart below shows how players who closely compare to him—corner players and designated hitters whose WAR was within 10 percent of his from ages 28 to 30—aged from 31 to 40. (There are some PED issues here, but those are pretty much impossible to quantify, so we'll just say that they're noted and move on.) It's... not encouraging.

Okay, So Miguel Cabrera's Contract Is Bad. Just How Bad Is it?

Get rid of the outliers here—Al Rosen was a terrific player who retired very young due to injuries, and Barry Bonds was Barry Bonds—and you get a range of players who were more pretty good than great in their 30s. Cabrera probably belongs more on the Frank Robinson/Mike Schmidt end of the scale, but these were all spectacular hitters, and as a group they didn't age all that well. You can do some figuring that makes this risk look a lot better for the Tigers than the "$300 million to play a child's game?!" crowd has it, but this chart says it all about just what a risk it is.

One last point that might be worth making: In different ways, Joe Posnanski and Buster Olney have both alluded to the idea that the kind of spending this represents for the Tigers isn't really sustainable, that this basically amounts to the Tigers mortgaging their future to win one for ancient owner Mike Ilitch. There might be something to that, but keep in mind that as much of a disaster as Detroit proper is, metro Detroit is really pretty prosperous. Its median household income is right there with Seattle's or Chicago's, and it's the eighth-biggest market in the country by size. It can support a free-spending ballclub, and as long as that club is good—something it can be even if Cabrera goes the way of Jason Giambi—it probably will.

Charts by Reuben Fischer-Baum

Photo via Getty