Detroit gives a bank to Miguel Cabrera

[jerichoholicninja]

http://www.mlbtraderumors.com/2014/03/tigers-to-extend-miguel-cabrera.html

 

The Tigers have agreed to terms on an extension with star slugger Miguel Cabrera. On top of the two years and $44MM he is already owed under a prior extension, Cabrera will be under team control for an additional eight years and approximately $248MM. All said, the Tigers will control the two-time American League MVP through at least the 2023 season, his age-40 campaign.

 

With those numbers, the deal would set several high-water marks. Most notably, an average annual value of $31MM would top the newly-minted record of $30.7MM set in the Clayton Kershaw extension. The figure of $248MM in new money would represent the the third-largest single contract in MLB history (and the biggest contract given to anyone other than Alex Rodriguez). With ten years and $292MM in overall future commitments to Cabrera, the Tigers stand to owe him more than any team has ever owed a single player at any point in time, besting the ten-year, $275MM Rodriguez contract in that respect.

 

And that is all before factoring in the deal's two vesting options, which could add two additional seasons at $30MM apiece. The vesting terms are not yet known, so it is impossible to assess how likely it is that they will be triggered. But if they are, the Tigers' total commitment to Cabrera from this point forward could reach $352MM over the next twelve years.

 

I don't even know what to say really. The money is probably right but the length is crazy. And with the options a 41 or 42 year old Miggy could be making $30M.

[JohnBriggs12]

Mike Ilitch is the poster boy for the need for a salary cap in baseball. He's an 84 year old billionaire. He can't take it with him. He wants a championship and if he thinks making Cabrera happy is key to that, he will do it whether it makes financial sense or not. This isn't the first time he's done this. The contract he gave Fielder was $50 million more than any other team was contemplating.

 

Is the contract bad? Sure. But chances are that the contract will outlive Ilitch.

[fondybrewfan]

Yeah this is going to be another Pujols contract. Maybe the first couple years won't be so bad but 5 years from now you are going to have an old fat untradeable DH that is making a bazillion dollars. Plus throw Verlander and Scherzer contracts in there. Detroit is desperate for a WS but this just reeks of stupidity if you ask me. They better not count on being able to offload him like they did with Fielder.

[JohnBriggs12]

Yeah this is going to be another Pujols contract. Maybe the first couple years won't be so bad but 5 years from now you are going to have an old fat untradeable DH that is making a bazillion dollars. Plus throw Verlander and Scherzer contracts in there. Detroit is desperate for a WS but this just reeks of stupidity if you ask me. They better not count on being able to offload him like they did with Fielder.

 

Look at it from Ilitch's viewpoint. He turns 85 in July and for obvious reasons, wants to win now. He's worth billions. If he's still around 5-6 years from now when Cabrera will likely be slipping, he's still going to be worth billions and he'll buy another star player. If he's not, well that's his heirs problem.

 

MLB needs a salary cap. Not all owners act in the best long term financial interests of their team. An owner like Ilitch isn't in the game to accumulate wealth, or even necessarily to increase the value of the franchise. He's in it for the kick of winning a championship while he's still alive and well enough to enjoy it.

[PrinceEatMeat]

Pujols deal 2.0 is basically my only thought on this.

[djoctagone]

if only some of that money could be reinvested in improving the quality of life for detroit residents and visitors . . .

[jerichoholicninja]

MLB needs a salary cap. Not all owners act in the best long term financial interests of their team. An owner like Ilitch isn't in the game to accumulate wealth, or even necessarily to increase the value of the franchise. He's in it for the kick of winning a championship while he's still alive and well enough to enjoy it.

 

Umm, isn't this the point of owning a team?

[sveumrules]

Say Ilitch dies in a copule years, Miggy blows out a knee and the team goes up for sale. You think owing a washed up player $250 million dollars is going to cause mega-rich potential new owners to balk at getting in on one of only 30 ownership stakes in a league which generated over 8 billion dollars in revenue this year?

 

Say Arte Moreno put the Angels up for sale today, would he lose money?

 

Hopefully these huge mega deals catch the eyes of young elite athletes all over the country and help to steer them towards baseball and away from other sports which are more physically (and mentally) perilous that don't offer nearly the financial rewards available to them in MLB.

[Fear The Chorizo]

This is the kind of deal that just crushes small market teams' long-term competitiveness. It's a contract that every other FA deal will use as a benchmark to raise their value. Give a guy of Cabrera's talent that much per year if you want, fine...but to give it to him guaranteed for TEN YEARS at his age??? I've been telling myself that at some point the market for FA veterans on the wrong side of 30 is going to start correcting itself now that PEDs aren't as widely used to extend career primes by 5-6 years. Guess I'm wrong. If I'm a big market team or trying to act like one, I overpay like crazy for FA's in the 26-29 range, but give them 4-6 year deals. Pay them for their primes. Until these insane 8-10 year deals stop being handed out, the economics of baseball won't make sense. Moreso than any other sport, today's MLB players are paid for past production moreso than future production and career stage. That's caused by the arcane arbitration system. It worked ok before the gap between league minimum and maximum salaries has turned into a complete joke.

 

For as great as Cabrera is, that's too long to sign a guy for who's going to be a DH in a few seasons...and he's got a history with substance abuse that should give alot of people pause.

[CheezWizHed]

if only some of that money could be reinvested in improving the quality of life for detroit residents and visitors . . .

 

I'm guessing he'll be paying his taxes on it.

 

Detroit could easily dump $292M into demolishing the burnt-out, abandoned buildings downtown alone...

[sveumrules]

This is the kind of deal that just crushes small market teams' long-term competitiveness.

 

Alex Rodriguez signed for 10 years and 252 million in the year 2000. Small market teams have remained competitive in the 13 seasons subsequent.

[bani1717]

Hopefully these huge mega deals catch the eyes of young elite athletes all over the country and help to steer them towards baseball and away from other sports which are more physically (and mentally) perilous that don't offer nearly the financial rewards available to them in MLB.

 

Anyone who makes a decision to play baseball over other sports because of "these huge mega deals" is making a very foolish decision IMO. For every mega deal there are tens if not hundreds of minor leaguers who will never makes the majors and who are scraping by making next to nothing (not just compared to other professional athletes either, even compared to much of the working population). And even for the cream of the crop elite athletes, if they are young then there is a lot that can happen before they are able to actually make the majors (and even then they will wait at least 6 years to get a mega deal).

 

I'm not saying that other sports are better to play as a professional... honestly I wouldn't want to be a professional athlete in any sport, and I think too many people have misguided views about how good the life of a professional athlete is.

[Fear The Chorizo]

Arod's first deal with Texas was when he was 25 or 26. That 10 year deal would've ended right around the end of Arod's prime. He was also among the best defensive shortstops in the game at that point.

 

That's not comparable to this Cabrera deal, which will end with Cabrera in his 40's, and who is already essentially a DH.

 

Not saying small market teams can't be competitive here and there, but what these mega deals do is price the best players on small market teams right outta town during their prime years, and make even keeping the 2nd tier of quality talent around much past arbitration hard on the budget. Yes, a small market team can always rebuild through the draft, but losing great players in their prime is inevitable whether the team wants to keep them or not. That's something a large market team almost never has to worry about, which creates competitive imbalance. It's when the large market teams get too stupid with contracts that they feel the sting for a season or two, but they almost always have resources to quickly get back to contention (unless your new stadium was financed by a ponzi scheme, or your new owner can't get a corrupt city to renovate a fossil of a stadium with ivy growing on it to open up revenue streams).

 

Since 2000, only one team outside the top 15 in opening day payroll won the World Series (2003 Marlins). It's true that literally any team can get hot and win a title if they are good enough to make the playoffs, but having only 1 true small market team winning in 14 seasons goes to show the overall competitive imbalance in today's MLB.

[owbc]

The length doesn't matter with these lifetime contracts. Free agent contracts now cost upwards of $7-8 million per WAR, possibly more now since at least 17 teams have a record payroll this year. The cost of the contract is simply the expected remaining lifetime value of Cabrera--the years and annual salary are mostly irrelevant.

 

Right now, Cabrera is playing at a value of $50-60 million/year. That's what he deserves. But the Tigers obviously aren't going to pay him that much in a single season, so they extend the contract out over 10 years to cover the rest of his career--overpaying in future seasons to make up for underpaying in the next few seasons.

 

My opinion is that he only needs to post 40 WAR to make the contract worthwhile from purely a production standpoint. That's about 5-6 seasons at his current pace. When you add in the value of marketing, merchandise, and his potential contribution to a championship, then the total figure makes sense.

 

All that being said, I agree with everyone else that this is a stupid contract. Detroit isn't LA or NY. Plus, they already had him signed at a tremendous bargain for the next two seasons--likely to be his most productive of the next 10. There was no rush to sign the deal now, his value wasn't going to go up.

 

It seems like these deals do not affect small market teams' ability to make the playoffs or remain generally competitive, but it really hurts them in the postseason. Lately we have been seeing small market teams with cores of young, pre-arbitration talent get beaten in the playoffs by big market teams with veteran superstars. I'm not sure if this trend will continue.

[JohnBriggs12]

MLB needs a salary cap. Not all owners act in the best long term financial interests of their team. An owner like Ilitch isn't in the game to accumulate wealth, or even necessarily to increase the value of the franchise. He's in it for the kick of winning a championship while he's still alive and well enough to enjoy it.

 

Umm, isn't this the point of owning a team?

 

Most ownership groups have some degree of financial restraint that's in line with their revenue stream. The Angels could justify Pujols because of their enormous tv revenues. But 84 year old billionaires have a much greater sense of urgency (check the actuarial charts) and are less likely to concern themselves with draining some of their fortune to accomplish their goals in their lifetimes and so aren't all that worried that revenue will cover an insane contract or two. There's already a hugely uneven playing field in the game of baseball. Adding another element (rogue elderly free spending ownership willing to risk massive year to year losses) just makes things that much worse.

[Bikeage77]

This is all I have to say about this: 50 Grand per at bat.

[JackNicholson1974]

This is the kind of deal that just crushes large market teams' long-term competitiveness.

 

There, fixed that for you.

[TheCrew07]

I think that the majority of owners, like many fans, only care about *this* season. Which is why you find many of the same types of GMs around, who will always buy to win now. The owner wants to win now and the GM placates the owner, so everyone basically ends up operating in the same fashion. I don't think Melvin and Attanasio are outside of the norm, more that they are firmly in the middle, which has been and remains my biggest issue with the franchise.

 

It's very difficult to sell a long-term view to pretty much anyone involved in baseball from the owners, GMs, coaching staffs, and press on down to the fans, hardcore or casual, there's really no difference. There's very little interest in building a brand, the focus is simply how to get the most out of their product each year. Quality isn't measured over time, it's measured from season to season, take the current run of the Brewers for example:

 

[pre]Rk Year Lg W L W-L% Finish

1 2013 NL Central 74 88 .457 4th of 5

2 2012 NL Central 83 79 .512 3rd of 6

3 2011 NL Central 96 66 .593 1st of 6

4 2010 NL Central 77 85 .475 3rd of 6

5 2009 NL Central 80 82 .494 3rd of 6

6 2008 NL Central 90 72 .556 2nd of 6

7 2007 NL Central 83 79 .512 2nd of 6

8 2006 NL Central 75 87 .463 4th of 6[/pre]

Provided by Baseball-Reference.com: View Original Table

 

 

I chose 2006 as the starting point because it didn't seem fair to peg Melvin with all of the losing before the core of those playoff teams was in Milwaukee and playing for the Brewers. Since 2006 the Brewers have posted a cumulative 658-638 record for a .507% winning percentage. What's so special about what's been done over that time? What exactly are people romanticizing? Was one trip to the NLCS worth it all? The objective truth here is that Milwaukee has been nothing but a model of mediocrity... of course that's better than being 23 games out by the end of August of every year, but that isn't being "good" either.

 

Many posters seem to equate being a good businessman with being a good owner, or in Mark A's case, he's a good businessman because he's a very good investment banker. I don't think any of that is synonymous, because sustaining success over a long period time in a professional sport is more like manufacturing a product than knowing how to manipulate investments. In business your end product is only as good as the materials you use during construction.

 

If you're a company concerned with quality that product is going to be constantly tinkered with and upgraded, all inefficiencies are going to be removed the from the manufacturing process to streamline production and reduce cost. It's also going to be built with quality materials that will stand up to the elements as well as daily wear and tear. Your product will be durable, it will hold it's value through the years, and if marketed properly will become an iconic brand over time.

 

Conversely if your a company just looking to hop on a hot idea and milk it for all it's worth (think cell phones for example) then you're basically only concerned with the bottom line for each product line. Since the primary concern is the profit line the product is constructed at a passable level for the consumer, it won't last, and will need to be periodically replaced. These products are normally associated with some kind of gimmick-ed salesmanship, the pitch isn't the about the longevity, it's about some kind of instant gratification.

 

Which extreme example above seems more like MLB? Minor league teams really don't have a choice, they don't control their talent, so they have no control over the product, they can only manage the experience of the game, so they are primarily going to be gimmick based. However every MLB franchise has the same opportunity to make every dollar count, acquire talent, and build their roster. Organizations that choose to focus on the quality of the product they produce aren't typically going to make frivolous moves in FA and will be labeled "cheap" by the fans and media until they prove over time that there was a method to their madness, it even happened with the Packers and Thompson. I think most major sport franchises operate on gimmicks and aren't really interested in their brand. They want you to be instantly gratified now so that you'll come back and give them a try in the future. There are a smattering franchises that are more like the first example, and that's where I'd like the Brewers to be.

 

The genius in the way the Rays operated to get the to the WS in 2008 has been routinely and regularly dismissed on this forum, the same goes for the Pirates. The Pirates still have quite a bit to prove, but they announced that they were going to focus their dollars on developing a better minor league system and even though that strategy has started to bear fruit there are still posts about them being "notoriously cheap". Why? Because it was easy for other owners, media, and fans to smear the franchise publicly, even though the investments they were making in facilities and talent were transparent to anyone who cared to look. Will Pittsburgh hold that tact long-term? I have no idea... a lot of teams have talked that talk, but when push comes to shove they'll sell for a win now move like KC or Toronto and set themselves back.

 

It would take some serious convincing of angles which hadn't previously occurred to me for me to believe that giving up 6+ years of both Odorizzi and Myers was worth 2 years of Shields in his early 30s and 3 of years of Wade Davis, though I've been a fan of both Shields and Davis for a long time (even though Davis has never come close to his ceiling). Was Toronto acquiring Johnson or Buehrle worth giving up Nicolino? Was a 38 year old Dickey worth Syndergaard? BA rated Syndergaard the 16th best prospect and Nicolino was the Marlin's #4 prospect... Johnson only managed 81.1 innings and none of those 3 MLB pitchers put up an ERA under 4, and Toronto finished dead last again in the AL east. If Toronto had just been patient in 2015 they would have Syndergaard as a potential #2, Sanchez as a potential #2, and Nicolino as a potential #3 to anchor their rotation for years.

 

The Brewers were *that* close to getting a great performance from Sabathia but ultimately netting nothing from him as well, the Mets had to totally collapse for the Brewers to make the playoffs, in mid September this forum was completely bummed because we thought it was likely over. The comp pick for Sabathia became Max Walla, he's proved valueless as well. Without falling ass-backwards into the playoffs that move would have netted nothing tangible other than, "at least they went for it...".

 

As noted beyond the way teams are operated all these mega contracts have the effect of pulling up the bottom of the market or put another way artificially inflating the salaries of all FAs, regardless of talent level. The only mild equalizer has been the draft pick penalty, very few teams have been willing to sign a mediocre talent just to have to give their 1st round pick for a player who declined his qualifying offer. Since as far as I know MLB revenue is never going to be split 50/50, I believe it's currently 65/35 or something along those lines, the Brewers will always have reduced buying power in the market. This means that for every $ they spend, they need to get 40% more value out of that dollar than do the Yankees, Angels, and so on.

 

I'm not certain that we'll get that much surplus value out of Lohse or Garza, but I'm damn sure that the large markets don't care about the value they are giving away. I'm also quite sure Detroit doesn't care about anything other than that elusive WS title. Some will applaud the move, some will be appalled, I'm largely indifferent because this is the reality of MLB financial system.

[502 to Right]

What was the urgency? He was already under contract for 2 more years. Ilitch might be dead in 2 years and then the Tigers get to pay Miggy for eight more years of getting fat.

[brewcrewdue80]

What was the urgency? He was already under contract for 2 more years. Ilitch might be dead in 2 years and then the Tigers get to pay Miggy for eight more years of getting fat.

 

Ageed with was going to be my response pretty much to this:

Yeah this is going to be another Pujols contract. Maybe the first couple years won't be so bad but 5 years from now you are going to have an old fat untradeable DH that is making a bazillion dollars. Plus throw Verlander and Scherzer contracts in there. Detroit is desperate for a WS but this just reeks of stupidity if you ask me. They better not count on being able to offload him like they did with Fielder.

 

Look at it from Ilitch's viewpoint. He turns 85 in July and for obvious reasons, wants to win now. He's worth billions. If he's still around 5-6 years from now when Cabrera will likely be slipping, he's still going to be worth billions and he'll buy another star player. If he's not, well that's his heirs problem.

 

He's in it for the kick of winning a championship while he's still alive and well enough to enjoy it.

 

There's no reason Illitch couldn't have just extended Cabrera for 4 year 150mil beyond the 2 years he already has with Cabrera and accomplish the same thing he's done....oh that insane near 40mil per year? I doubt anyone here would really argue with that 4year extension for Cabrera vs the 292mil/10 year deal. I don't get it even with Ilitch's perspective, he's a billionaire, he owns Cabrera for 2 seasons to begin with. What's really the problem extending him 2 years from now for what it costs for 2 more years? or 3/4? Like I suggest, Is anyone really going to offer 40mil per to Cabrera in 2 years? Ilitch could being a billionaire if his true goal is to see a WS victory? And how dumb does this look if that is Ilitch's goal before passing away if Detroit wins the WS this season, even next season B2B?

 

It's insane to guarantee any MLB years beyond the age of 36/37 years of age. 2 year deals fine but to be 6years away from the Age 37/38 season and guarantee 4 more years today? For what purpose? To save money? I mean isn't that sorta the purpose of these extension deals? To lock that player in for the future at today's market prices? The problem here is Detroit is setting the market with this deal, so it's pathetic. Not only that this deal being a market setter, is guaranteeing money to a player who is already past his prime and every year of it should deal with potential decline in ability at any given year as well as increased injury issues?

 

This deal doesn't affect Milwaukee's ability to sign FAs. Nobody here wants the Brewers to commit 10years of money to somebody 31years of age. Also, clearly Cabrera has a DH future something the Brewers can't commit money to a position player with that as a backup plan as one ages.

The deal to watch out for that will affect Milwaukee will be what Mike Trout gets. How many years. at what insane cost? Because extending players in the early 20s is about the only kind of extensions the Brewers brass should be invested in doing.

[DoubleSwitch]

Mike Illitch spends money like an idiot and that means the players should be punished? I would argue that increasing the % of revenue sharing is a better approach for increasing competitiveness and a more even financial footing for teams, while salary caps are primarily a means of putting more money in the owner's pockets. I'm always annoyed when people rail against pro athletes salaries and talk about the poor teachers/firefighters/unemployed/whatever as if capping players salaries would put more money in their pockets instead of an even richer dude than the player. I don't know about the rest of you, but I tune in to watch the players, and there is no one else who earns their chunk of 8+ billion in annual revenue as much as they do. Of course the whole point is moot, because the PA would never allow it. While the NFL, NBA, and NHL all have had lockouts in the past 5 years where their players get bent over the negotiating table, you have to respect the organization and loyalty of the players at the very least.

[danzig6767]

Mike Ilitch is the poster boy for the need for a salary cap in baseball. He's an 84 year old billionaire. He can't take it with him. He wants a championship and if he thinks making Cabrera happy is key to that, he will do it whether it makes financial sense or not. This isn't the first time he's done this. The contract he gave Fielder was $50 million more than any other team was contemplating.

 

Is the contract bad? Sure. But chances are that the contract will outlive Ilitch.

 

That's very true, odds are decent that when Cabrera eventually hits his declining years, Ilitch won't even be alive.

 

Regardless of that, i still don't understand why teams continue given out these 8-10 year long mega contracts, especially to players already over the age of 30. For a young guy like Trout, sure it would make some sense, but not a guy in his 30's who doesn't look like he stays in the best of shape.

 

I thought the Pujols mega contract and quick decline, along with Arod's long deal would scare owners away from doing the same, yet Seattle gave Cano 10 years, Votto will be making 25 million per in ages 35-40. and now Cabrera. It's crazy to me even if baseball is swimming in money. Prominent agents in baseball having to be loving this. Lots of MLB teams with huge revenue streams and dying to spend it, regardless of the risks they are taking.

[BrewCrewForever]

When I see deals like this, I just love Ryan Braun's current deal that much more. And some still say that deal is too big. I don't get it.

[3and2Fastball]

Deals like this are about a lot more than a players perceived value in a given year from ages 35-40. It is about marketing, sales hype, merchandise sales and yes TV $$$. It is about selling a "winning team" to the fans.

 

I still think the Brewers made a mistake not giving a truckload to Prince Fielder

[502 to Right]

Deals like this are about a lot more than a players perceived value in a given year from ages 35-40. It is about marketing, sales hype, merchandise sales and yes TV $$$. It is about selling a "winning team" to the fans.

 

I still think the Brewers made a mistake not giving a truckload to Prince Fielder

 

 

You sell a winning team to the fans by putting a winning team on the field. For the Brewers that means being smart with their limited resources.