The boom finally dropped yesterday around noon, with the Red Sox and star 2B Dustin Pedroia agreeing to terms on a contract extension that will ensure he remains a member of the Boston Red Sox through his age 38 season. The deal, once it’s made official pending a physical, will pay Pedroia in upwards of $100 million dollars over seven seasons, making him the highest paid 2B of all time.
Even though Red Sox fans will have to scarf down the idea of a 38-year-old 2B in 2021, this is still a pretty great deal for all parties involved. Considering that it goes into effect next year and that the Red Sox were already on the hook for $11 million anyway, you’re really looking at the team spending $90 million to keep him – which, considering some of the recent contracts that have been given to other comparable, big-name free agents over the past few years, makes Pedey’s new penny pact even more attractive.
Without the specter of a serious injury and with a fairly ambitious 0.5 WAR drop off each year, here’s a rough, low level peak at what the Red Sox can expect in terms of production and dollars:
2015: 4.8 ($24.5 million)
2016: 4.3 ($21.5 million)
2017: 3.8 ($19.0 million)
2018: 3.2 ($16.0 million)
2019: 2.8 ($14.0 million)
2020: 2.3 ($11.5 million)
2021: 1.8 ($9.0 million)
Total Value of: 23.1 WAR at $115.50 million dollars ($5 million/ 1 WAR)
So given that Pedey is able to stay healthy and decline at a normal rate, the Red Sox are coming out on top by about $15.5 million here – and that’s just based on today’s valuations. With inflation, it’s very likely that by around 2019, $15 million might be the kind of price teams are paying for the likes of a Stephen Drew/Cody Ross type-player, making the deal a potential bargain over the long haul.
Now that’s not to say there isn’t risk. There’s the old meme about 2B getting banged up and languishing on the DL earlier than most and considering the kind of player Pedey is, it’s not altogether inconceivable that the right side of the infield at Fenway Park could be festooned with Pedey parts in a few seasons. But there’s also an equally great chance that he maintains his current level of production for slightly longer than expected, which means he will have earned the majority of his deal in the first 2-3 years of the extension and might even have a chance to exceed it. Even on the conservative end of the spectrum that’s laid out above, Pedroia stands to make $81 million of the new $90 million back by 2018. If he can ebb the flow of decline even a little bit, he should be worth every penny of the deal by the end of year 4 or 5 of the contract.
And that’s just from the baseball side of the deal. There’s also the business end of it, too.
With David Ortiz due to retire in the next 2-3 seasons and Pedroia’s contract being the only one on the roster that’s guaranteed past 2015, it’s safe to say that the Red Sox view him as the uncrowned face of the franchise – if he’s not sitting on the throne already. Between the T-Shirts, endorsements, the Red Sox brand being attached to him at every waking step in and around Fenway Park, the money that will come along with this deal should be off the charts, making this a sure-fire home run of a deal for the Red Sox, whether you’re Ben Cherington in Baseball Operations, or Sam Kennedy on the business side of things.
Long story, short – when it comes to this deal you’re dealing with a high floor and an even higher ceiling. That’s what I call placing a great bet in a great situation with a great player. I’d jump at this deal any day of the week and I’d be willing to bet that most MLB General Managers would, too.
Good job, everyone.