> Robinson Cano signed a ten-year, $240 million contract with the Seattle Mariners today.
This immediately conjures up images of Albert Pujols‘ near-identical deal that’s off to a bad start and a negative reaction to gigantic deals in general. We all know this was an overpay. We know Cano’s not going to live up to this contract. We know it every time one of them happens. We can be flustered by this (and probably should be in some sense), but we should also realize why teams keep doing this.
The Mariners have a $2 billion TV deal, which is enough to buy four different Major League franchises. The Angels had $3 billion right before they got Pujols, which is enough to buy five.
$240 mill is peanuts for these guys. When a team is so loaded that its multi-millionaire owner doesn’t have to spend a penny out of his own pocket, you do not assess an acquisition for them like you would for the Cardinals. The only question that matters is, “Does this make them better?” The answer in this instance is yes. The answer will still be yes ten years from now, because even if Cano disproportionately declines, he’ll still be better than whatever triple-A guy would otherwise be occupying the last spot on the bench.
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Teams without big TV deals, though, have to be a little more financially conservative. And the Cardinals appear to have done a great job in that respect with the Matt Holliday contract.
It was originally thought that the Cardinals had paid him too much, essentially outbidding themselves. But the deal has turned out to be a huge success. Below is every contract signed between 2007 and 2011 that were at least five years long and worth at least $50 million. Each player is ordered by how many dollars their team has spent per win above replacement.
The market now tries to pay about $5.5 million per win. Holliday has given the Cardinals a 40% discount.
For teams with humane financial capacities, going beyond five years is usually a terrible idea. The Cardinals went seven, and it has worked out so well they may end up exercising their $17 million option for an eighth.