Yesterday, Joe Nathan agreed to a four-year, $47 million extension with the Minnesota Twins. I’ll get right to the point, I have him valued at $27.31 million over the life of the contract—$20 million less than what he is actually getting.
What is going on in the reliever market? I think high-end relievers/closers are getting way more than they are worth in the free agent market, as I have stated before (also see here and here). When I see one of my projections differ from the market outcome, I normally err on the side of thinking my projection is incorrect. But, in this case, I cannot fathom why teams are paying such a premium for closers, when there are decent set-up men out there making a lot less who could pitch in the same role.
I don’t get it. A guy who pitches a third of the innings of starters is getting decent starter money. And it’s not like the Twins are one piece of way from being something special. If he is so valuable, why not trade him and his $6 million salary to get some prospects with the surplus value?
Note: Please don’t bring up leverage in the comments unless it relates to a new take on the issue that I haven’t previously discussed. I’ve addressed this possible explanation in my previous posts, and why I don’t think it is sufficient to justify these contracts.