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FiveThirtyEight

The big news coming out of baseball Thursday night was that Detroit Tigers slugger Miguel Cabrera had been re-signed to a 10-year, $292 million contract extension, the most expensive deal in the history of the sport. On the surface, the pact seems like lunacy on the part of the team’s general manager, Dave Dombrowski.

Cabrera has been the best hitter in baseball over the past nine years. Over the last four seasons, he won two American League Most Valuable Player Awards and three AL batting titles. But his gaudy offensive statistics overstate his value: He is a below-average fielder and baserunner. More important, Cabrera will turn 31 in April, meaning the Tigers will be paying him through age 40. Players are typically in decline by the time they hit their early 30s.

Baseball Prospectus’ PECOTA projection system expects Cabrera to generate about 35 more wins above replacement over the remainder of the contract (after rescaling BP’s value metric to the lower replacement level used more commonly by Baseball-Reference and Fangraphs). If the market rate for a single WAR was $6.5 million in 2014 (I split difference between this estimate and this estimate), and we add 5 percent in annual inflation to the cost of a win, Cabrera’s next 10 years will be worth about $275 million. By this rough math, the Tigers appear to have overpaid by something like $15 million to $20 million.

It’s also worth noting that Detroit already had Cabrera locked up through 2015 under his existing contract. The $234 million it’s paying him beyond that season will deliver just $204 million in value, according to PECOTA.

However, Dombrowski probably isn’t worried about the high likelihood that Cabrera will be overpaid (and vastly so) throughout the back half of this contract. Instead, he presumably put a premium on locking up the remaining prime seasons of one of the best hitters in baseball history. The Tigers were two wins away from a World Series berth last season with one of the AL’s oldest lineups, so the case can be made that the Tigers are discounting the long-term burdens of Cabrera’s huge contract in exchange for elite performance in the short-to-intermediate term.

Indeed, before we lump this deal in with other onerous contracts, such as the ones handed to Alex Rodriguez and Albert Pujols, I’d like to look into modeling those deals against the players’ expected WAR. But for now, it appears the Tigers paid a huge premium for the tail end of Cabrera’s prime, banking on him remaining an MVP-caliber player into his mid-30s.

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