Beware the $100 million contract

Baseball salaries changed forever in the winter of 2000-2001. That off-season four position players and a pitcher signed contracts that would pay them a combined average annual value of $92 million, or just around the total salary of the Yankees, bearers of the league’s highest payroll.¹ In the following eight years, nine more position players and three more pitchers signed $100 contracts, in addition to Ken Griffey’s $116.5 million deal in 2000. So how did these $100 million players fare?

Clearly, the Matt Holliday signing spurred this question. Earlier this week he signed a seven-year, $120 million contract with the St. Louis Cardinals, the decade’s first nine figure deal. Because contracts for pitchers carry different risks than contracts for position players, we’ll focus on the latter. Let’s see where these contracts stack up. Played out contracts, obviously, have the edge.

1. Albert Pujols: 7 years, $100 million (2004)

We’re just six years into the Pujols contract and already it’s the best of the lot. The deal will look even better when the Cardinals pick up his 2011 option for $16 million. Pujols is one of four players on the list who signed before reaching free agency, so his contract is expected to provide surplus value. Over the last six years Pujols put up the best raw numbers in baseball: .334/.435/.636, a 175 OPS+. He has manned first base for the duration of the contract, the position furthest right on the defensive spectrum, but even so his numbers are just insane. Plus, defensive handicap or not, the value of his contract makes it the best of the $100 million lot.

2. Alex Rodriguez: 10 years, $252 million (2001)

Did Tom Hicks overbid? Probably. Did A-Rod live up to his contract? Absolutely. Over that span he hit .304/.400/.591, an OPS+ of 154. For the first three years he played shortstop, winning two gold gloves — though we know that they’re no measure of true defensive ability. In its first two seasons of usage, 2002 and 03, UZR had him as enormously positive. After that he moved to third, not quite as premium a position, but certainly ranked above the corner outfield spots. He also won all three of his MVP titles during this span. Plus, for what it’s worth, he outperformed his WAR-dollars in all but two years of the contract, and outperformed it on the whole.

3. Manny Ramirez: 8 years, $160 million (2001)

The Red Sox needed a big bat in the winter of 2000, and they got perhaps the best pure hitter on the market in Manny. His offensive numbers were actually better than A-Rod, as Manny hit .315/.415/.595, a 158 OPS+, from 2001 through 2008. But he stole only nine bases to A-Rod’s 128, and also played a far less important defensive position. Manny has faced endless criticism of his defense, though he did the one important thing for a Boston left fielder. He played balls well off the monster.

4. Derek Jeter: 10 years, $189 million (2001)

For a player who puts up Jeter’s numbers, that contract might seem a bit out of line. But by the time he signed the deal in the winter of 2000-2001, he was already the face of the franchise. Alex Rodriguez had just signed his mega deal, and Jeter wanted a favorable comparison. While Jeter ended up worth the salary, the Yankees could have had him cheaper. In the winter of 1999-2000, the two sides agreed to a seven-year, $118.5 million deal, which would have mean an AAV of $2 million less. Oh well.

Here’s where things start to get tough.

5. Carlos Beltran: 7 years, $119 million (2005)

While Beltran got off to a slow start with the Mets in 2005, he has generally shined during this contract. He hit .275/.362/.505, a 125 OPS+, through the first four years, during which time he played a stellar center field. He seemed poised for a career year in 2009 before he hurt his knee and missed half the season. Beltran has two years left on the deal, and if he performs like he did in the first four years, it will be a good value for the Mets.

6. Todd Helton: 11 years, $141.5 million (2001)

In 2000, Helton’s contract didn’t quite seem like a steal, but it seemed pretty good. He had just come off a year in which he led the NL in batting average, OBP, SLG, OPS, hits, RBI, and total bases. He went on to post an OPS above 1.000 for the next four seasons, and although his production has dipped a bit in the past five years it’s still at an elite level. Back issues have hurt him throughout the contract, though 2008 was the only year in which he missed significant time. Otherwise, a .326/.433/.554, 143 OPS+ performance sounds great to me.

7. Miguel Cabrera: 8 years, $152.3 million (2008)

Even though his OBP dipped during his first year in the American League, Miguel Cabrera still led the league in home runs in 2008. He followed that up with a much better 2009, with his OBP again approaching the .400 mark. During the two years of his deal he’s hit .308/.373/.542, a 135 OPS+. He’ll be 27 in 2010, meaning he’ll be just 32 during the contract’s final year. Once he’s through, he could be ranked above Beltran, and maybe even above Jeter. But that’s a tall order.

8. Alex Rodriguez: 10 years, $275 million (2008)

This was perhaps the toughest to rank. A-Rod missed time in 2009 but came back to produce big time. He also had a good but not great year in 2008. Part of this ranking is future potential. He should have a few more good years before he starts to decline. Plus, I couldn’t put Giambi’s contract over this, ill-advised as it may have been.

9. Jason Giambi: 7 years, $120 million (2002)

The good of Jason’s deal: He hit .260/.404/.521 during his deal, a 142 OPS+. He raked during the first year of the contract, had a huge comeback year in 2005 that powered the Yanks to the playoffs, and he contributed a lot to the 2006 team. The bad: in two years he missed about half of the games, and in two others he played in 139 games. His spot on the defensive spectrum hurts, but his bad D at that position hurts a bit more.

10. Mark Teixeira: 8 years, $180 million (2009)

We’re just one year into Teixeira’s contract, so it’s tough to judge it at this point. As you’ll see, however, this ranking is more due to Tex’s durability. The players below him either have injury concerns, or have underperformed their contracts. Tex was worth his salary in 2009, and is entering his age-30 season in 2010. He should have at least a few more very productive years in him.

11. Carlos Lee: 6 years, $100 million (2007)

It’s not that Carlos Lee has hit poorly in Houston. He’s actual hit quite well, posting a .305/.354/.524, 127 OPS+ line during the first three years of his contract. That’s not a $100 million performance, however, especially for a corner outfielder. Then again, it’s not like Lee demonstrated that he’d be any better. His 144 OPS+ in 2008 was the highest of his career, though he played in only 115 games. But he gets the nod over the three bad contracts.

12. Ken Griffey Jr.: 9 years, $116.5 million (2000)

Signed a year before the big contracts hit, Griffey was still an exciting player in 2000. Had had led the league in home runs in each of the previous three years, and looked to use that power to turn around the Reds franchise. Unfortunately, that didn’t happen. Griffey played well during his first season, but didn’t again reach 140 games played until 2007. He averaged just 110 games per year during the contract, so even though he put up a .269/.361/.510, 121 OPS+ line he was a disappointment.

13. Alfonso Soriano: 8 years, $136 million (2007)

Soriano is another player who parlayed a career year into an way too big contract. His .351 OBP and .560 SLG in 2006 were career highs, leading the Cubs to greatly overpay him during that off-season. Like Griffey, he almost immediately ran into injury problems with his new team. He played in just 135 games in 2007, his OBP dropping back to normal levels. In the last two years he’s played in 109 and 117 games, and while the home runs have come not much else has. He’s entering his age-34 season, so there’s not much reason to remain optimistic that he’ll live up to the deal.

14. Vernon Wells: 7 years, $126 million (2007)

This deal looked bad before the extension even kicked in. Wells posted a stellar 2006 season, hitting .293/.357/.542, a 129 OPS+, while playing a good center field. Fearing he’d lose Wells to free agency a year later, then-GM J.P. Ricciardi signed Wells to his extension, which wouldn’t kick in until 2008. In 2007 Ricciardi was already having second thoughts. Wells hit .245/.304/.402. In 2008 he missed 59 days with a hamstring strain and wrist fracture, though he hit well while healthy. In 2009 he was mostly healthy, but again hit poorly. The worst part of this deal, other than Wells probably never living up to it, is that it’s highly backloaded. After earning $12.5 million this year, Wells will earn $23 million in 2011 and $21 million in 2012-14.

Where will this list stand in 5 years?

It’s tough to tell what the $100 million position player contract list will sit a few years from now, though that won’t stop me from speculating. I doubt anyone tops the Pujols contract, or even the Manny and A-Rod contracts. Teixeira’s ranks should rise, as should Cabrera’s. As for where Matt Holliday falls, I’ll bet right ahead of Giambi and Lee, but behind Helton and Beltran. Good production, but not 1.000 OPS good or premium position good. Though, as we can see from the list, he can really end up anywhere.