clock menu more-arrow no yes mobile

Filed under:

Did we learn anything from Alex Rodriguez's awful contract?

The Yankees made a huge mistake when they signed A-Rod to a 10 year, $275 million contract and served as a warning for the rest of Major League Baseball.

Brad Penner-USA TODAY Sports

For 22 years, Alex Rodriguez has been Major League Baseball. After his 24thhe's planning to step away, according to ESPN's Andrew Marchland, just as soon as his contract with the Yankees runs out. A-Rod has pushed back on that notion, telling the New York Post that he has no plans, but it's not hard to see the writing on the wall. Alex Rodriguez's time with the Yankees is, soon enough, going to come to an end, and we have two more years of A-Rod to kick around. By the end of it, he will have spent 13 years (14, if you count the one he was suspended) with the Yankees, thanks to the incredible 10 year, $275 million contract he signed in 2008 that is still the second biggest overall contract in baseball history, even as its annual average value has been blown away by Zack Greinke, Miguel Cabrera, and David Price over this offseason.

When he signed it, A-Rod was approaching 32, had just been named AL MVP, and was pretty clearly still the best player in baseball. Nevertheless, the contract has been, in many ways, a failure. A-Rod helped the Yankees win the World Series in 2009, but he's been a shadow of his former self since then, providing something like 23 or 24 wins across seven seasons. He's still been a fine player, but nowhere near worth the contract he signed on the open market. So, at this point, I'm left to wonder, has baseball learned anything from this failure?

Well, it depends on how you look at it.

10 Year Contracts?

They are rare, but they still happen. Albert Pujols got the next one from the Angels. That...has not worked out well for the parties involved, as Pujols has consistently declined and played hurt. The Mariners gave Robinson Cano a ten-year deal two years ago. They aren't regretting it yet, but it should look pretty ugly by the time he reaches 40. Joey Votto's extension with the Reds, which he signed before the 2014 season, should as well. Giancarlo Stanton's deal, however, is another story. It could run as long as 13 years, taking him through his age 37 season. However, Stanton also has an opt out built in, which would allow him to leave after the sixth year if he thinks he can get more than $218 million on the free agent market, which seems like a certainty at this point.

The fundamental difference between these contracts and A-Rod's is that they're for significantly less per season, especially once you account for inflation. Teams seem to have learned to at least not bid against themselves in both years and price.

$27.5 million per year?

Oh, we're well past this, with Zack Greinke and David Price both blowing past the $31 million dollar mark this offseason, joining Miguel Cabrera. Clayton Kershaw and Max Scherzer also make in excess of $30 million per season. That said, it's not at all clear that these are as out of step as the A-Rod contract was back in 2008. For one thing, when A-Rod signed in 2008, the next highest paid player by average annual value was Jason Giambi, at just a shade over $23 million. That's about 16 percent less than Rodriguez signed for.

Also, the average MLB salary back then was $2.9 million, according to the MLB Players Association. The average of players with more than six years of service time was $7 million. Last year, the average MLB salary topped $4 million, and the average free agent salary for players eligible for free agency has shot up as well. If we accept as a general premise that the salaries of veterans are up by 25% (and, honestly, it's probably more than that), then it's pretty clear that Greinke is in the right neighborhood, and everyone else is getting paid comparatively less than the A-Rod deal.

So, back to the original question. Have teams learned anything from Alex Rodriguez and the Yankees? It's not readily apparent, but I think they have. Some teams are still willing to give out ten year deals, even to guys in their 30s. And some teams are willing to spend huge amounts of money on an annual basis to their players. But no one has combined the same length with a similar price to A-Rod's deal. In spite of all the money being thrown around the game right now, no one is willing to go above and beyond what the Yankees did in 2008. So maybe they did learn something. Or, maybe, since no one matched the Yankees' bid eight years ago, it was something they already knew. Paying someone $27.5 million when they're 40 is generally a pretty bad idea.