CHICAGO, July 23, 2013 — Dustin Pedroia and the Boston Red Sox have agreed to an extension that is in the range of seven years and $100 million dollars. The deal will kick in after the last guaranteed year of his current contract, which ends after the 2014 season and run from 2015 until 2021.
Pedroia has played an integral role in the Red Sox early season success, as the currently have a 60-41 record sitting atop the American League East by a half game. To date, Pedroia has posted a .308/.385/.422 slash line, and provided solid defense at second base.
Now that the deal is done, it becomes a question of whether or not this was a good idea for the Red Sox and for Pedroia.
As for Pedroia, he is likely taking a bit of a discount while gaining security. After this season, Robinson Cano will become a free agent, unless he re-signs with the Yankees first. As a free agent, Cano would most likely set a new bar for what a second baseman can be paid.
Preliminary estimates on what Cano will make range from $160 to $200 million. Cano is ten months older than Pedroia meaning that they would have hit free agency at roughly the same age.
Pedroia would be unlikely to command the same dollar figures as Cano, but with the open market, and both the Yankees and Dodgers possibly needing a second baseman, it is likely that Pedroia could have made $120 million if healthy. However, he now has long term financial security while continuing his career for the only team for which he has ever played.
The Red Sox entered the day with only $29.75 million committed in 2015, thanks to the Nick Punto trade with the Dodgers last year. Since that trade, they have maintained their financial flexibility by only issuing contracts of three years or less in the past offseason to the likes of Shane Victorino, Ryan Dempster, Jonny Gomes, and Mike Napoli.
When signing a player in free agency or signing them to an extension, it can be expected that the team will pay about $5 million per Win Above Replacement (WAR). This is a number that will likely increase based on general inflation and teams continuing to lock up their good young players before they hit free agency.
Pedroia, who has produced 37 WAR over the last six and a half years, will likely have to produce somewhere between 16 to 20 WAR for this deal to make sense for the Red Sox. The key here is that the extension does not kick in until 2015, when Pedroia will be 31 year’s old.
If he can average even 3 WAR per year over the life of his contract, this will be a win for the Red Sox. Although, he is more likely to produce closer to 4-5 WAR for the first two or three years and then gradually less until the end of the contract.
The deal seems to provide both parties with a win. It gives Pedroia long term security in a town where he enjoys playing. The Red Sox were able to get Pedroia to give a hometown discount prior to hitting the open market. If the deal does take a turn for the worse though, well, hopefully Red Sox GM Ben Cherington still has the Dodgers’ phone number.
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