Jose Bautista Is a Massive Bargain

When the Blue Jays signed Jose Bautista to a five-year, $65 million contract extension before spring training, I said the following:

I get why Toronto made this deal. I think there’s a pretty decent chance he lives up to the contract, even if he’ll likely be perceived as a bust for not repeating his 2010 line each year going forward. However, for me, I’m not sure Toronto got enough of a discount on his expected free agent price to absorb the extra risk of doing this deal now. If my option was take this deal now or let him play out 2011 and re-evaluate at the end of the year, I think I would have waited.

It’s a good thing for Blue Jays fans that I’m not in charge because I would have cost them a lot of money. What’s worse is that I probably would have cost them the chance to keep Bautista in Toronto past this year, because given the start he’s off to this year there’s little chance that the Blue Jays would have been able to re-sign him after this season. The question I want to ask today, though, is just how much did Alex Anthopolous save the Blue Jays with his preemptive strike, signing Bautista before his price went through the roof?

To estimate how much he would have gotten as a free agent this winter, we have to come up with a projection of his future performance. Bautista will be 31 in November, so whoever signed him was going to be buying out his mid-30s for the right to get his next few seasons and make a run at a ring while he’s still one of the game’s premier power hitter. Essentially, he’s at a similar point in his career to where Alfonso Soriano, Jayson Werth, and Matt Holliday were when they cashed in as free agents, and they all settled for basically the same type of deal – Soriano got 8/136, Werth got 7/126, and Holliday got 7/120, giving them basically the same AAV of $17-$18 million per season.

This gives us a pretty decent baseline for what the market has priced for a premium corner outfielder in his early 30s. But it’s fair to say that none of the three players listed had put up anything close to the kind of year that Bautista is on pace to have in his walk year. Incredibly, he’s already put up +3.9 WAR in 32 games, and even using his rest-of-season ZIPS projection (which probably undersells what we should expect considering it is still giving decent weight to his 2009 season), Bautista is likely to end the year with +8 to +9 WAR.

Soriano had a +5.4 WAR season in his walk year, Holliday was at +5.6, and Werth was at +4.9. All three of them had longer track records of success, but that has to be outweighed by the fact that Bautista is simply blowing them all out of the water in recent performance. As long as he stays healthy, he’s going to end the season with something like +17 to +19 WAR in his last three seasons, with most of that concentrated in the two most recent years. Or, to put it another way, Bautista will likely have accumulated as much value in his last two years as Soriano had in the three best seasons of his career before he reached free agency, and that’s just selectively picking years for Soriano rather than using most recent seasons.

So, while Bautista doesn’t have the quantity of performance, the level of quality that he’s putting up should more than make up for it. I’d have a hard time seeing Bautista having to settle for a similar-sized contract to those three. The length seems about right, but I’d imagine Bautista’s agent would be pointing more towards the AAV achieved by Alex Rodriguez, Ryan Howard, Joe Mauer, and Adrian Gonzalez. His performance warrants those kinds of comparisons, which would put him more in the 7/165 range for total contract. That number might sound crazy, but can we really make an argument that Bautista is less valuable now than Mark Texeira was when he hit free agency?

The Yankees signed their first baseman after a +7.3 WAR season, but +1.5 WAR of that was in defensive value, which we know the market doesn’t pay for at full price. He had only put up +7.7 WAR in the two seasons prior to his walk year combined, so he hadn’t exactly established a long term track record of premium performance either, but he was a couple of years younger than Bautista will be this winter.

Teixeira got 8/180, but we have to think that the Yankees were willing to go a bit longer with the contract because of his age. Knock off a year or two to account for Bautista’s date of birth, and we’d be looking at either 6/135 or 7/158. Though, while we’re making adjustments, we probably have to add in some more cash to account for the fact that Bautista is performing at a level that Teixeira has never reached.

So, $165 to $175 million over seven years sounds about right to me. That figure would place Bautista squarely in the best-players-in-the-game club without forcing a team to commit to him when he’s 40, and gives him a comfortable cushion over what lesser players got on the open market. If we assume that the Jays pick up his option for the sixth year, they’ll owe him a total of $79 million over the life of the contract. Even if we toss in an extra $25 million for a seventh year to make an apples-to-apples comparison, then their deal would be 7/104, or $60 to $70 million below what he might have signed for this winter.

It took some pretty huge cajones for Alex Anthopolous to give Bautista a big contract after just one good season, but by doing so he essentially saved his franchise as much money as he gave away in the deal. Combined with dumping the Vernon Wells contract, it’s probably fair to say that Anthopolous created something like $150 million in surplus value for his club this winter.

I doubt any GM has ever had a better off-season than than the one the Blue Jays young GM just had.

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Dave is the Managing Editor of FanGraphs.