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Alexei Ramirez Is Underrated No More

This piece has been updated since the original version hit the site to reflect new information gathered about the terms of Ramirez’s deal.

Ever since Jayson Stark released his All-Underrated Team, and it didn’t include Alexei Ramirez, I’ve been working on a post about the White Sox shortstop. Ramirez was the first name that came to my mind when I read the introduction to the column, and it seems he’s so underrated he couldn’t even make an All Underrated team.

Yesterday, however, the White Sox screwed up my post by giving Ramirez a four year, $32 million contract extension. It’s hard to argue that he’s an unappreciated asset who doesn’t get the recognition he deserves right as he’s signing a deal that makes him one of the highest paid shortstops in baseball.

Ramirez was scheduled to make just $2.75 million in 2011, the final year of his original contract. He then would have had two more arbitration years remaining before becoming eligible for free agency. While a normal deal for 4/32 at this point would essentially value Ramirez’s last two arbitration years and his first year of free agency at just over $29 million, this one is a bit different. Ramirez’s new contract actually covers 2012-2015, so it’s an add-on rather than a replacement for his current deal.

For comparison, here are this year’s crop of everyday position players that were eligible for arbitration with four years of service time – this is the group that Ramirez would be in next year.

Michael Bourn, $4.4 million
Erick Aybar, $3.0 million
Howie Kendrick, $3.3 million
James Loney, ~$5 million
Delmon Young, ~$5 million
Angel Pagan, $3.5 million
Kevin Kouzmanoff, $4.5 million
Ryan Theriot, $3.3 million
B.J. Upton, $4.8 million
Josh Hamilton, ~$10 million

While no one on that list is a perfect comp for Ramirez, it gives us a pretty good range of expected payouts. If Ramirez had a good but not great year, he could probably get something in the $5 to $6 million range next winter. If he wins the AL MVP, he might get $10 million, and if he falls apart, he’ll still end up in the $3 million range. Odds are he’d be somewhere in the middle of that if he took his case to arbitration.

But he wouldn’t necessarily have to go that far. He could do what his best comparable – Stephen Drew – from this arbitration class did, and sign a deal that buys out his final two arbitration years. For those two years, Drew got $15.75 million from the Diamondbacks. His traditional offensive numbers are nearly identical to Ramirez’s, and Drew came in with a similar base salary to build off of, making $3.4 million last year. While players who sign multi-year deals aren’t eligible to be used as comparisons in arbitration hearings, you can guarantee that Drew’s deal would have been seen as setting the going rate in negotiations. And, it follows pretty well with what the other eligible players settled for.

If Drew was in line for something like a $6 million payout in 2011, then he sold his final arb year for $10 million, which is about right, given how the normal percentage raises work as you go through the system. If Ramirez would have stayed healthy and played pretty well, he could have expected similar payouts in 2012 and 2013, so the White Sox essentially controlled his rights for the next three years with an expected cost of around $19 million. That leaves the difference of this extension – which covers his first two years of free agency – at $13 million.

Originally, I had incorrectly assumed that this was the total for just his 2014 season and saw it as an overpay, but as it covers both 2014 and 2015, this seems like a much more reasonable deal – in fact, it’s now probably something of a bargain.

One last comparison. Last winter, the Mariners locked up Franklin Gutierrez to a deal that bought out his three arb years and his first year of free agency. Gutierrez was coming off a season where he hit .283/.339/.425 with 18 home runs, 85 runs scored and 70 RBI as a full-time player with significant defensive value. Ramirez hit .282/.313/.431 with 18 home runs, 83 runs scored and 70 RBI as a full-time player with significant defensive value last year. It would be tough to find a better numbers comp for 2010 Ramirez than 2009 Gutierrez, whose deal was worth $20.25 million, and included a team option for the second year of free agency at $7.5 million. If the Mariners exercise that option, they’ll end up paying roughly $28 million to cover the same number of years as the White Sox just locked up Ramirez, which is a slight premium over what the going rate was last winter for a player of this skillset, but given the inflation we’ve seen in the market this winter, it’s not a big raise.

While the White Sox have now committed to paying Ramirez through his age 34 season, which inherently comes with a pretty decent amount of risk, they’ve done so at a reasonable price. Given that the deal is an extension of his current contract, and not a replacement of it, this looks like a fair deal for both sides.