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.