As the gap between baseball’s spenders and savers widens, how will the Cardinals compete?
Rafael Devers and the Boston Red Sox reportedly agreed this week to an 11-year, $331 million extension that will keep the third baseman with his only professional organization through his mid 30s.
That deal is the fifth of at least $300 million guaranteed agreed to this winter, joining Aaron Judge, Trea Turner, and Carlos Correa twice, the first of which was abandoned after the San Francisco Giants took issue with his physical and the second of which, with the New York Mets, is currently in limbo for the same reason.
That plateau, in and of itself, is eye-catching. The Cardinals were famously acquired by current ownership for a net purchase price of only a quarter as much, and Judge’s deal is one of two (along with Justin Verlander and the Mets) signed this winter with an average annual value of $40 million or more.
If those numbers throw you for a loop, brace yourself.
Shohei Ohtani is set to hit free agency next winter, and in so doing, will redefine what ceilings look like for available players. Could he hit $50 million annually? A guarantee in excess of $500 million? It wouldn’t be safe to bet against either.
And yet, looking at a list of the 10 largest contracts in MLB history (Devers and Correa with the Giants excluded), it stands out that two of the 10 are now at least 15 years old. Pushing the bar north is nothing new, and given the heights to which Alex Rodríguez twice climbed, it’s almost an upset it’s taken so long for him to be thoroughly surpassed.
As with so many other aspects of society, the economics of baseball represent a problem of perceived scale. Individuals have a hard time reconciling how much more a billion dollars is worth than a million dollars, whereas we all understand the difference between having one dollar and a thousand dollars in the bank.
Win above replacement
When Devers and the others sign these outsized contracts with their employers, it’s not thanks to a sense of charity or an owner gambling on a wing and a prayer. Multi-billion dollar corporate organizations, complete with risk managers and actuaries responsible for measuring both on- and off-field success, offer contracts of that size because they know the value is there.
A commonly held — but likely out of date — projection holds one win above replacement is worth approximately $8 million to a team. By that standard, Aaron Judge was worth approximately $85 million to the Yankees in 2022, a year in which he made $19 million. Maybe you can’t spend surplus WAR, but you certainly can use it to nip and tuck and muscle your way through baseball’s financial landscape.
This is the competitive landscape in which the Cardinals find themselves.
Despite clearly remaining the best team in the NL Central and technically meeting a promise to increase payroll, Willson Contreras remains their only substantive addition of the winter. That addition isn’t insignificant; he signed the largest free agent contract in team history by a player who hadn’t previously been a Cardinal, and the second-largest period, behind only Matt Holliday.
And yet with the opportunity to invest more, the decision has been instead to rely on internal talent. There are easy defenses of that strategy. Verlander, for instance, may have preferred a bigger stage and a clearer path to World Series contention, to say nothing of a reunion with Max Scherzer.
Spenders and savers widening
Trea Turner appears to have always been locked in on Philadelphia, Xander Bogaerts may not be a long-term shortstop, and Dansby Swanson could turn out to be a mistake for the Cubs. Masataka Yoshida’s deal with Boston beat most, if not all, predictions. To spend the money without an obvious target would be foolhardy.
Still, the spenders and the savers are widening. Some idle chatter at the Winter Meetings centered on whether the entire NL Central would spend as much as the Phillies did in one shot on Turner; thanks to the Cubs (Swanson) and Cardinals (Contreras), it did, but the AL Central remains about $100 million short.
This is not the 1990s, where it was possible for family-owned franchises to simply lack the financial wherewithal to keep up. The Cincinnati Reds have whacked payroll by about 25%, and a quarter of what they are spending is being diverted to two guys named Mike (Minor and Moustakas) who are no longer on the roster. That’s not baseball’s economics failing the Reds. That’s ownership failing the Reds.
More on Cardinals
The Cardinals have never signed or traded for a contract which would require them to pay even as much as $200 million, factoring in deferrals and cash from Colorado owed to Nolan Arenado. They have, admittedly, not produced a homegrown player since Albert Pujols who would justify such an expense, but they’re quietly optimistic Jordan Walker could be at that level.
If he is, or well before, the time will come to adjust expectations and move with the market. It’s a bitter pill for ownership to realize that $87.5 million is a mid-tier acquisition, but some bitter pills have to be swallowed.
Whether they’re willing to do so will test whether their model is as malleable as they say.