Cabrera, 26, had a breakout year for the Tribe in 2011, hitting .273/.332/.460 (118 wRC+) with 25 homers, 92 RBI, 87 runs, and 3.6 fWAR. He was named the starting shortstop for the AL All-Star team, won a Silver Slugger, and was named a finalist for a Gold Glove for his efforts. Considering all that, it’s clear he deserved the $2.5 million raise he got.
So what are we to think of this contract? On the one hand, $4.55 million is a small price to pay for an All-Star shortstop, and he’d undoubtedly get a much higher annual salary on the open market. On the other hand, a more than 100-percent salary increase is quite a lot, and Cabrera got more than the $4.475 million midpoint between his $5.2 million filing salary and the $3.75 million the Indians were hoping to pay him.
In order to properly evaluate the deal the Indians got, we need to look at it through the lens of the arbitration process. A good rule of thumb for arbitration-eligible players is that they get about 40 percent of what they’d get per annum on the open market in their first year, 60 percent in their second year, and 80 percent in their final time through the process.
Based on that, the implicit agreement that the two sides came to is that Cabrera is worth about $7.583,333.33 per year—we’ll call it $7.6 million. That’s a pretty hearty chunk of change to you and me, but in the market for baseball players that actually seems like a good bargain for the Tribe.
Let’s take a look at how some other shortstops have cashed out recently. Jose Reyes was the top free agent middle infielder to sign this winter, and he got a deal that guarantees him an average of $17.7 million a year through 2018; he’s unquestionably better than Cabrera, but given Reyes’ inconsistent health I’d rather have Cabrera than get Reyes at more than twice the price.
A year ago, the top shortstop free agent contract of the offseason was the three-year, $51 million act of highway robbery that Derek Jeter
perpetrated against signed with the Yankees. That deal was an overpay and everyone knew it, but even so it’s at least worth noting that Jeter got $17 million a year while Cabrera is now valued at $7.6 million. I’d take Cabrera over Jeter even if their salaries were equal, and (with the possible exception of Brian Cashman) I’d bet 30 of 30 MLB GMs would agree.
A more accurate comparable for this situation might be Jimmy Rollins, who just inked a three-year, $38 million deal with the Phillies. The two players are in very different stages of their careers—Rollins is a former NL MVP who is on the decline, while Cabrera is just entering his prime—but they probably project to be similarly valuable in 2012. Yet Rollins’ average salary is 67 percent higher than what Cabrera’s estimated value is. Looks like a bargain to me.
But a look at some players who are in Cabrera’s price range really shows that his contract was a steal for the Tribe. In 2010, a soon-to-be 32-year-old Juan Uribe wrangled a three-year, $21 million deal after a season that was both worse than Cabrera’s 2011 campaign and far better than anyone would have reasonably expected him to perform in the future. A day later, then 36-year-old Miguel Tejada got a $6.5 million deal after posting a sub-.700 OPS.
Even forgetting about comparable players, this deal looks like a steal. Assuming that a marginal win is worth $5 million in the current player market, this deal pays Cabrera as though he is a 1.5 WAR player; even a more conservative $4 million/WAR conversion buts his estimated value at less than 2.0 WAR—i.e., a below-average player.
To put that in perspective, both FanGraphs and Baseball-Reference had Cabrera approaching 4.0 WAR last year—and that’s with quite poor defensive ratings. If you don’t think Cabrera is one of the worst-fielding shortstops in baseball (and many people don’t) he could easily be worth upwards of 5.0 WAR even if he doesn’t improve as he enters his prime.
The arbitration process works in mysterious ways, and the judges don’t always do a very good job of assessing player value. But it’s clear from this that the Indians are paying cents on the dollar for Cabrera in 2012—something that could bode well for a possible multiyear contract extension.