Late Innings

Boston inked AL-MVP second baseman Dustin Pedroia to a six year extension today, worth 40.5MM in total (actually it’s 42MM including the signing bonus.) This contract covers his three arbitration years, plus two more years of free agency. I know people in Boston are referring to this as a “bargain", but I wouldn’t go that far. This is the fourth highest contract ever given to a pre-arbitration eligible player, following Hanley Ramirez (6/70MM), David Wright (6/55MM) and Ryan Braun (7/45MM, or 51MM if he’s “super two” next year.) Still, Boston would save 10MM extra now, since they don’t have to go year-to-year during his arbitration years.

Still I know that the economy was clearly a factor here. Pedroia originally expressed his intention to go year-to-year, as did Kevin Youkilis, Jonothan Papelbon, Russell Martin and NL Cy Young winner Tim Lincecum. When this news came out, I expected more of these players to suddenly have a change of heart. Within minutes of this signing, a piece broke on MLBTR about how Lincecum wouldn’t mind an extension (he sees a breakdown in the future apparently.)

Breaking down the Pedroia contract, we see that he only receives 16MM during his three arbitraiton years, including a paltry 3.5MM in his first season. The breakdown is as follows:

• 2009: $3MM (with signing bonus)
• 2010: $3.5MM
• 2011: $5.5MM
• 2012: $8MM
• 2013: $10MM
• 2014: $10MM
• 2015: $11MM (team option)
• Total: $42MM, $53MM with option

So with this all being officially done, I honestly expect Nick Markakis to change his mind as well and get the extension done. This signing only hurt him, especially since many were expecting that he’d grab 5MM alone in 2009, his first season of salary arbitration. My guess to the Markakis contract, 6 years/51.5MM does the trick (three free agency years.) That’s what Daisuke Matsuzaka got when coming over two years ago as well.

In either case, Boston made out well. If MLB player valuation remains constant or increases over the term of Pedroia’s contract, then I would declare this move a “steal” for the Red Sox. Still like everything else, including this offseason, to paraphrase James Carville, it’s clearly the economy, stupid.