It looks like Hanley Ramirez will get four, not five years for the guaranteed part of the contract, a total of $88 million guaranteed, and a fifth year that can vest. At $22 million per year, the Red Sox are overpaying for Ramirez as well, especially if they plan to move him to leftfield. I could see five years, $90 million the original rumor, as being a fair price. Boston is doing a good job of driving up the price of free agents. Of course, the huge contract the Marlins gave to Giancarlo Stanton, a player under their control, helped a lot also.
It looks to me like the going rate for one WAR is now $7 million.
Red Sox simply traded dollars per years, something most teams would be willing to do.
Revenues are way up and players share of the revenue are declining. If you adjust for payroll inflation the biggest deals were given out in 2001. Manny’s deal in 2001 topped Stanton in real dollars easily, as did Arods 2008 deal.
If adjusted for MLB revenue growth, $/WAR should be at least 8 ($/WAR=5 in 2006 w/MLB revenue 5.6 billion, 2014 MLB revenue estimated at 8.5 billion), Hanley is about 7 $/WAR, a bit less than what the MLB avg should be, and for a team like the Red Sox and Yankees, $/WAR should be much higher than average.
pft » Yes, I agree that $/WAR has grown very slowly over the last 13 years. Nice to see it taking off again.
I think there’s a mistake in this calculation of expected rise in WAR value.
Teams should pay the amount for expected WAR that WAR is expected to bring them in extra revenue. But a whole lot of the new revenue is completely independent of a team’s wins.
So what is the explanation for why teams are now willing to pay more for a win than they used to? Why don’t they just collect the money from tv contracts and keep it as profit?
I know there is a hidden incentive, namely, that a team that wins perennially gains capital value, eventually reaped in a sale. But I don’t see why winning would increase capital value more now than it did twelve years ago.
James » Maybe owners no longer fear the retribution of Bud Selig. I hope in the next few years we get a very interesting book about the Dear Leader. 🙂