MVP Winner's Short Stature Limits Ability to Rob Boston's Bank
Dustin Pedroia signed a six-year, $40.5 million contract today with an option for a seventh year at an undisclosed amount. These six years buys out one pre-arb year, all three arb years and two free-agent seasons. Thanks to the standard formula that arbitration typically comes in at 40, 60 and 80% of the player's market value, on average over the three years, we can easily figure out what the Red Sox are valuing Pedroia at.
Lop off the half-million for his pre-arb year and we're left with three arb years and two market years for $40 million. Assuming a static value for all five seasons, called X, we have .4*X + .6*x + .8*X + 1.0*X + 1.0*X = $40M as our formula with X representing the market value that Pedroia has commanded. This simplifies to 3.8*X = 40M or just over $10.5M per season. Add back in the 10% discount that players take for long term security, divide by 4.5M per market win and the Red Sox are paying Pedroia as if he's worth about 2.6 wins a year.
I'm not confident on what Pedroia's defense is like, but unless it's sneakilly atrocious, this looks like a steal. Even moreso when you consider the guy just won an unwarranted MVP Award. Pedroia was worth somewhere around 4-5 wins last year, depending on his defense and even with the regression that should come, he'll be just 25 next season and he seems like a sure bet to exceed three wins at minimum.
It's quite similar to the same amount that Robinson Cano is going to get paid for the same relative time frame. And want more evidence that Evan Longoria might be the most valuable commodity in baseball? He'll be making $10M less for the same six year period.
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True...
And want more evidence that Evan Longoria might be the most valuable commodity in baseball? He’ll be making $10M less for the same six year period.
But Longoria also had to sign his contract two relative years before Pedroia. Given that the MVP is two years closer to arbitration and free agency, this deal was quite a coup for the Sox.
Beyond the Boxscore // Calling BJ Upton lazy is lazy.
by Sky Kalkman on Dec 3, 2008 12:18 PM PST reply actions 0 recs
defense
he won a gold glove, i think its safe to say his defense isnt atrocious :p
by spinz on Dec 3, 2008 12:30 PM PST reply actions 0 recs
Gold Gloves mean nothing
they’re awarded based on reputation for the most part.
Nice Guys Finish Third - Hopelessly lost, but makin' good time.
by pdb on Dec 3, 2008 12:42 PM PST up reply actions 0 recs
Derek Jeter's won several
Nice Guys Finish Third - Hopelessly lost, but makin' good time.
by pdb on Dec 3, 2008 12:58 PM PST up reply actions 0 recs
For a season where
he played 1B 15 times, iirc.
Duck Around - a progressive blog about the Eastern Shore of Maryland. And getting off my lawn.
by duck on Dec 3, 2008 1:29 PM PST up reply actions 0 recs
was Scottish
Nice Guys Finish Third - Hopelessly lost, but makin' good time.
by pdb on Dec 3, 2008 2:21 PM PST up reply actions 0 recs
We use the shift key and our cerebral cortex here at Lookout Landing.
by Matthew on Dec 3, 2008 1:27 PM PST up reply actions 2 recs
Now that's what I call multitasking.
Nice Guys Finish Third - Hopelessly lost, but makin' good time.
by pdb on Dec 3, 2008 2:21 PM PST up reply actions 0 recs
I like it a lot.
- hits well
- fields well
- plays up the middle
- can snag a base
- under control through his age 31 season
- fan favorite
Great extension.
by Teej on Dec 3, 2008 1:05 PM PST reply actions 0 recs
The opinion expressed on Pedroia
is quite a turnaround from 2+ weeks ago.
by Gomez on Dec 3, 2008 3:49 PM PST reply actions 0 recs
It wasn't anything serious
I was pointing out how Pedroia drew negative sentiment for his MVP award, and now he’s a great buy.
by Gomez on Dec 3, 2008 4:02 PM PST up reply actions 0 recs
Pardon my misunderstanding:
Assuming a static value for all five seasons, called X, we have .4*X + .6*x + .8*X + 1.0*X + 1.0*X = $40M as our formula with X representing the market value that Pedroia has commanded. This simplifies to 3.8*X = 40M or just over $10.5M per season.
It was a six-year contract, not a five, so I am not understanding the formula perfectly. And then if it is $10.5M per season, then 5 x $10.5 = $52.5, much more than the $40.5 actual total (not including the sixth season).
Just need some clarification of where I am not understanding the reasoning behind the formula.
by Wilder. on Dec 3, 2008 6:30 PM PST reply actions 0 recs
They also bought out a year of pre-arb, which Matthew accounted for by lopping off a year and $0.5m
by Jeff on Dec 3, 2008 6:37 PM PST up reply actions 0 recs
And there it is.
But as for the 5 x $10.5 = $40?
by Wilder. on Dec 3, 2008 6:39 PM PST up reply actions 0 recs
Oh yeah
The $10.5m result represents Pedroia’s market value as a free agent implied by the contract.
In other words, the Red Sox are paying Pedroia as if he’s worth $10.5m a season. In reality he’s worth quite a bit more than that, which is why it’s an excellent deal for Boston.
by Jeff on Dec 3, 2008 6:44 PM PST up reply actions 0 recs
So they're paying Pedroia as if he is worth $10.5M a season, but it's actually less per season, and yet he is more than both.
Okay, I’m following now. That’s an amazing deal for any team to have.
One last question, though: will Pedroia swing harder with this new contract?
by Wilder. on Dec 3, 2008 6:54 PM PST up reply actions 0 recs
No reason to. Now he's got the big bucks!
Yes, you’ve got it. I was worried that I wasn’t explaining it very well.
by Jeff on Dec 3, 2008 7:03 PM PST up reply actions 0 recs
he's happy.
“I’m happy with this, extremely excited. My wife is excited. My parents, they’re ecstatic. All my friends, even my teammates.”
by msb on Dec 4, 2008 10:45 AM PST reply actions 0 recs

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