Valuing Nate Robertson

I was sort of surprised to see the Detroit Tigers locking up Nate Robertson for three years and $21.25 million. While I normally like buying out free agent years, I don’t think this was a good move. The Tigers bought out only one year for not much of a discount.

As a free agent, I have him valued at $30 million over the next three years. But the Tigers would have gotten him for about what they will pay him during his arbitration years—$4.5 (2008) and $7 million (2009)—without much risk. If he has a phenomenal year in 2008 it’s possible that he gets more in 2009, but if he pitches poorly they get him for less. Why not just go to arbitration and take a small risk? A small fluctuation in performance means little to the Tigers, but is quite significant to a single player whose livelihood depends on his talent. The cost savings are supposed to occur in 2010 when he gets $10 million. But I have him valued at about $11 million in his first year as a free agent, which isn’t much of a cost savings.

It doesn’t seem like the Tigers are getting much of a discount for insuring Robertson against a decline in his play. I think it would have been better to let the future play out, and if he continues to pitch as he has, then you suck it up and pay the extra million. But maybe this is a sign that salaries are in for an even bigger jump than I am anticipating.

Thanks to David Pinto for the pointer.

5 Responses “Valuing Nate Robertson”

  1. Derek says:

    Is there any particular reason you (and Voros) took down the musings about the Tigers’s season-ticket sales?

    I kind of like the Robertson contract, as a Tigers fan, because if he does retain his value over the next few years, the cost-control they’ve established will make him an asset if they ever want to move him; it’s like buying instead of renting.

  2. JC says:

    I didn’t post anything on Tigers season tickets.

  3. flournoy says:

    One benefit is that by signing this extension now, they get that extra year at market value with no further commitment. Suppose that by the end of 2009, Robertson has performed well enough to still be worth $10M or $11M in 2010. If he were a free agent at that point, he’d want a three-to-five year contract.

  4. The biggest problem I see with this deal is that if Robertson eats it for the next year or two, or simply just in the second year, they are stuck with him for a third. Is Robertson that vital of a player that not having him for the 2010 season is going to kill this team? Hell, I think this club would be better served going into the market, paying an inflated market rate for a Carl Pavano then Nate Robertson. Its not like the club really needs to save whatever small amount of cash they will here.

    Is his Elias grade out yet?

  5. Kevin says:

    Carl Pavano? Really?