On Thursday, it was reported that the Detroit Tigers had agreed with Miguel Cabrera on an eight-year, $248 million contract extension that will keep him in Detroit through 2023, his age-40 season. That's on top of the two years that remain on his current contract, guaranteeing him 10 years and $292 million, but then there are also reportedly two option years that can vest, each valued at $30 million, that could push the total money earned by Cabrera over the next 12 seasons north of $350 million. All told, this is the biggest contract in the history of professional sports.
That is, needless to say, a lot of money, but Cabrera is the preeminent hitter in baseball, so it's not hard to see why the Tigers wanted to lock him up through the end of his career. He's coming off of back-to-back MVP seasons (Mike Trout be damned), five consecutive top-five MVP finishes, has led baseball in on-base percentage three of the last four seasons, batting average the last three seasons and slugging percentage the last two. He hits home runs galore and shoots line drives all over the field. He is not much of a fielder or base runner, but historically great hitters don't need to worry about that stuff as much as the rest of us. Who wouldn't want Miguel Cabrera? Every team wants Miguel Cabrera! The best hitter on the planet deserves the biggest contract on the planet, so just give it to him, light up the cigars, and move on to the business of building a World Series contender around him, right?
Except it's not that simple. It's never that simple. There is context.
If one were to make an argument for this deal, it would likely be this: Miguel Cabrera! Maybe it wouldn't include an exclamation point, but otherwise, that's it, and it's not a bad argument. If one were to make an argument against this deal, they'd likely bring up some variations of the following four points:
1. The history of long term, big money contracts
2. Cabrera's age and future health
3. When the contract was signed
4. The total dollars spent
Cot's Baseball Contracts at Baseball Prospectus keeps a running tally of the biggest contracts in baseball history. There have been 52 contracts signed with a total value of $100 million or more. Of those, I count 17 where we don't have enough information yet to judge their outcome. That leaves 35. Twenty of those have turned out badly, to the point where the team would love to expunge them from whatever things get expunged from. We can quibble around the edges -- maybe it's 18 that have turned out badly instead of 20 -- but either way it's not a good ratio, and really not a good ratio when we're talking about ways to spend $100+ million.
But Cabrera isn't Mike Hampton or Carl Crawford. In fact, Cabrera's current deal ($152 million from 2008-15) is on the good side of the ledger! Just because some players' contracts didn't turn out well doesn't mean Cabrera's won't. That is undoubtedly true, but if this list is anything, it's a commentary on the second half of players' careers. All of these players earned their contracts by playing well in their first seven-plus seasons mostly consisting of their 20s, and badly enough to make their teams regret them in the seasons following, mostly consisting of their 30s. That's the danger of the long-term deal, which demands All Star-level production from players long past the time they are capable of providing it. What's more, projecting any player a few seasons out is fraught with peril, let alone 10 seasons into the future. Still, if you were going to bet on anyone, bet on the best hitter in baseball.
But the best hitter in baseball will be 31 next month and as we've all seen, his list of injuries suffered has gotten a bit longer in recent years. As players get older, they suffer more injuries and heal from those injuries more slowly. That's every player, great players included. We always look at the great ones and think that will never happen to them, but it always does. Cabrera may look invincible now, but in a few seasons he'll likely look less so, and in five seasons, the chances he's turned back into a mortal are great. (At that point the Tigers will still owe him somewhere between $150 and $210 million.) To his credit, he's still stayed on the field for the most part, but it's a trend that has to be worrisome. It's a smaller worry when a guy is signed to a two-year, $44 million deal as Cabrera was before the extension, and a bigger one when the guy is signed for the next decade.
That brings us to another concern. Cabrera's deal is gigantic, but for Tigers fans, the only reason to worry is if it prevents Detroit from adding talent to the roster. Does Cabrera's contract prevent the Tigers from signing other players? Does Cabrera's contract keep the Tigers from spending on other players in any way to improve their roster? As long as the answer to both questions is no, then the numbers on Cabrera's contract are relatively unimportant. Of course, just because the answer is no right now doesn't mean it won't change to yes a few years later.
But forget opportunity cost, the checkered history of huge contracts, the frightening typical hitter aging patterns and the big scary numbers on the contract, all of which portend doom in varying amounts. Ignore all of that. The one thing that galls me about this deal is when it was consummated. The Tigers gave Cabrera his 10-year extension two years before his current contract was to expire. If he gets hurt or suffers a downturn in performance during the next few seasons, the Tigers will still have to pay him nearly $300 million. Other than the possibility of the back-end options not vesting -- and we don't yet know the conditions under which they will or will not -- they don't get to pay him less if he proves himself to be a lesser player and that is a risk that they've accepted.
What they get in return for accepting that risk is Cabrera's signature on the deal now, desirable in that it removes the possibility the market goes up and takes Cabrera's contractual demands with it. But how much higher can the market go? It probably can't go much higher considering we're only talking about the next season or two. There aren't any free agents who are going near a Cabrera-like deal after the 2014 season. A potential Mike Trout extension won't impact Cabrera. What are they afraid of? In essence, there is an implied discount given to the team by the player when an extension is signed so far from the expiration of the previous contract. But the deal they just signed is the largest in pro sports history, so how much of a discount could Detroit have received? What's more, even if he stays healthy and hits like he has in recent seasons, do you think Cabrera would turn up his nose at this deal if it were offered next off-season? Maybe, but it sounds unlikely.
The Tigers have simultaneously accepted all the risk and paid the most imaginable on this deal when they shouldn't have to shoulder both burdens. The long-term outlook for the deal is, like most, scary. But right now Miguel Cabrera is an amazing hitter, so maybe having him makes it all worthwhile. The Tigers should hope so, because one way or the other, they've got him.