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  1. Nicely written. I feel that after reading this I don’t need to read the other articles you plugged but I will anyway.

    (The third “here” link returns a FG page not found. I’m guessing it’s Dave Cameron’s article here —> http://www.fangraphs.com/blogs/index.php/the-pujols-contract/ )

    Comment by Half Full — February 16, 2011 @ 11:38 pm

  2. I think option 1 is significantly possible. Of the 15 players listed, 12 played more defensively challenging positions, that could lead to more missed games. And of the 4 who didn’t play at all in years 6-10, 1 stopped playing due to an extremely rare illness, something we can’t possible project for Mr. Pujols.

    Comment by Dave — February 17, 2011 @ 11:57 am

  3. Half Full:

    Thanks for the feedback. You are correct about the Dave Cameron article. There are a number of different ways to look at Pujols’ future value and others have done a good job presenting that information. The only problem with looking at the comps, is that there are not enough of them to have any certainty. Of course, if there were more comps, then Albert Pujols would not be HOF bound all-time great Albert Pujols. That’s why its important to consider a few different perspectives when considering just how much Albert is worth, both for the cardinals, and other teams. Even in my most conservative projection above, it appears the cardinals have undervalued Pujols. Of course, we don’t have all of the information and the team may be attempting to take a discount due to signing him before the season. Just be ready for a Pujols Index on ESPN come November.

    Comment by craigjedwards — February 17, 2011 @ 4:06 pm

  4. So using your WAR numbers by year, and going with $5 million per win for this season then increasing by 5% per year, we end up with a “fair” value of $220 over the 10 years (remarkable it ended up being exactly the same as what you got assuming $6 million per win). However, that’s assuming it’s a front-loaded deal (ie he gets paid each year what he’s projected to be worth that year). if we were to spread it out to give the same annual salary, i would guess that that numbers raises to somewhere in the 230-240 range. add in the fact that arod’s numbers haven’t been added to the second half war numbers, and i would guess that 10 years @25 million per year makes sense.

    also, by raising the 5% inflation number to 8%, it adds about $30 million to his value over the 10 years. so really, it seems like anything between 220 and 300 is reasonable, depending on how it’s structured (front vs. back-loaded) and what your expectations of inflation are.

    Comment by Jono411 — February 17, 2011 @ 9:43 pm

  5. Jono411:

    That is interesting. I had not thought about it that way. Assuming there was a way to invest the excess value you are getting at the beginning of the contract, you would end up with more value as money today is going to be worth more than in 10 years. Using the same 5% salary inflation, and assuming they could take their excess and invest it, receiving 4% annually, adding the excess amounts in the first five years, and removing the lost value in the last five years, the team ends up with an extra 18 million dollars at the end of 10 year, 22 million per year contract. It would be interesting to see what the break even annual salary number would be. If I have a little bit of time, I might do that later.

    Comment by craigjedwards — February 18, 2011 @ 9:29 am

  6. Option 5: Realize that the money you will owe toward the end of the contract can be offloaded to a team with excess cash (Yanks, Red Sox, Mets, etc.). Any long-term contract offer from a team is done with the expectation that it will not be on the hook for all x years, bc certain teams are able and willing to overpay (take on a bad contract). I.e., the spending habits of the high-revenue teams are effectively driving the contract terms offered to free agents by mid-level spending teams.

    Comment by evo34 — February 19, 2011 @ 3:57 pm

  7. evo34:

    That will certainly be the case if Toronto signs Pujols. I think if the Cardinals sign Pujols, it will be very difficult to trade him. If he is still somewhat valuable, it will be hard to trade a player who has spent 17+ years with an organization and has 600+ homers. If any other team signs him, there are going to be handful of teams willing to take on a decent portion of the contract, especially in the AL with a DH spot open.

    Comment by craigjedwards — February 19, 2011 @ 6:52 pm

  8. It is a useful exercise to value contracts on the basis of $/WAR, but it is not the bottom line for a baseball team as a business. I think any team should pay a larger $/WAR for a player that has spent the first 10yrs with that club. And even more if that player is one of the 2 greatest players in the history of the franchise. If you look at other assets in the world of equal scarcity – say the best property in Manhatten or London, or the most sought after artwork, then common valuation metrics fail to explain the prices in the market. The same should be true for Pujols.

    Put another way, Cardinals fans will be happier (and spend more money on the franchise) with Pujols even if that means they average 2 less wins/yr for the next decade. 2 wins/yr is trivial in fan happiness compared to losing Pujols.

    And for context, Pujols at $30mm/yr would cost St. Louis $2.5mm/mo. By comparison, the people of St. Louis have spent $74mm/mo funding their share of the Iraq War every month for the past 8yrs. He may look expensive on a per-WAR basis, but he looks like a great investment as an entertainer and public project!

    Comment by robclark52 — April 6, 2011 @ 11:09 pm

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